Socialization and Communication Technologies

Team relationships can firstly be reviewed during focusing on the local relationships of MNC subsidiaries. There are team activities that show how knowledge is created across teams for a project. Knowledge creation in marketing and R&D subsidiaries can be observed in an integrated model of Nonaka and Takeuchi (1995). The model has four different stages of knowledge development: socialization that means tacit to tacit knowledge, externalization that means tacit to explicit knowledge, combination that means explicit to explicit knowledge, and internalization that means explicit to tacit knowledge. As seen in Figure 4.1, both MNC subsidiaries and its parent company will have repeatedly four processes in a specific project.

The whole point of Nonaka’s framework is that firms need to go through these four stages to create knowledge effectively. This model is a within-firm model and Nonaka does not deal with knowledge processes across firms. However, MNC knowledge transfer studies inevitably have two objects of observation: a subsidiary and the parent company. They are independent organisations located in different geographical areas but work together in a specific project. In particular, the study of Minbaeva and Michailova (2004) reviews such cross-national co-work with expatriates, international working groups, and international assignments. This fact means that they have a separated knowledge creation process but their intermediate and final outcomes are shared. It is not easy for tacit knowledge to be shared long distance. Thus, explicit knowledge formed through the externalization or combination process is mostly shared between a subsidiary and the parent company. My research does not empirically test or theoretically develop this model, but borrows its explanatory variables to explore team relationships and work structures. Again, information can be transferred across countries in the processes of externalization and combination. This is because these two processes deal with explicit knowledge which makes it easy to share knowledge at a long distance. Well-developed video conference call systems in MNCs have made knowledge transfer across countries more conveniently in these processes.

When the knowledge creation model is understood in the multinational environment of my research, both marketing and R&D

knowledge are initiated from tacit ideas that individuals have. Such tacit ideas are accumulated through previous internalization and socialization processes. For a new project outcome, knowledge should be explicit to produce necessary data in the process of externalization. Even technical knowledge in R&D units is likely to go via the process in which the units share idea or experience to gain required information. Then a kind of knowledge is combined and reformed with another in the combination process. For example, a laptop computer will need an LCD monitor and some other components as well as the main chip board. Several technologies for them will be knowledge units that should join together for a final product. Thiscombination process can be much longer because new ideas and skills are possibly required to assemble different knowledge units. This situation will require additional internalization, socialization, externalization, and combination for other sorts of knowledge. The four key processes are thus repeated through trials and errors in an MNC project. At this time, new know-how and ideas can be gained through theinternalization process.

Most MNC subsidiaries need co-work with other subsidiaries or the parent company across countries (Schulz, 2001). Teams across countries will share and improve data with each other in transnational externalization and combination as depicted in Figure 4.1. Explicit knowledge rather than tacit knowledge will be transferred easily across countries in these two processes. This chapter does not deal with a knowledge process in the relation with the parent company but focuses

on local knowledge creation in a foreign country. The left part of Figure 4.1 is focused on for the review of local team activities in knowledge creation. In addition, it mainly explores socialization, externalization, and combination because these three can be observed clearly in MNC projects. Tacit knowledge from internalization is regarded as a prerequisite for a new project. The internalization process is an individual process rather than a team process as well. My research takes an interest in team relationships in both knowledge creation and transfer.

Figure 4.1. Applying the Nonaka and Takeuchi (1995) Model into an MNC project

Socialization is thus a starting point of the knowledge creation process, and tacit individual ideas and experiences are shared with team

members at this stage. Socialization was originally defined as the process of creating tacit knowledge through shared experiences (Nonaka, 1994). It is more extensively used as interactions between individuals in the knowledge creation process. However, acquiring tacit knowledge without language through observation, imitation, and practices is a key point here. It is necessarily accompanied with person to person joint activities and its success depends on shared feelings, beliefs, and emotions among individuals (Rynes et al., 2001). Socialization is thus face-to-face interactions formed when working offline for sharing of experiences (Athanassiou and Nigh, 2000; Pedersen et al., 2003). It typically occurs in sharing experiences directly at work through a tutor-apprentice relationship (Nonaka et al., 2000; Nonaka and Takeuchi, 1995). However, face-to-face interactions can also be based on informal communications through social activities (Gupta and Govindarajan, 2000; Minbaeva and Michailova, 2004). Marketing knowledge has often appeared in research of knowledge ambiguity (Simonin, 1999a; 1999b). This tacit feature may be weakened in more systematic MNC projects. To test relevant hypotheses, formal and informal activities identified in Huang and Wang (2002), Martín-de-Castro et al. (2008), Nonaka and Toyama (2003), and Subramaniam and Venkatraman (2001) are employed.

H 4.1. There is a difference between R&D and marketing project teams in terms of the frequency of formal socialization activities.6

H 4.2. There is a difference between R&D and marketing project teams in terms of the frequency of informal socialization activities.

Information and communication technologies have changed organisational structures (Te’eni, 2001). These technologies enable employees to have both formal and informal communication (Kiesler and Sproull, 1992). In particular, their effect on face-to-face interactions has been explored in MNC knowledge transfer studies. Electronic communications can support or substitute face-to-face meetings between globally dispersed teams (Kirkman et al., 2004; Walsham, 2001). They will be helpful for cost efficiency in the interaction of widely-dispersed organisations (Walsham, 2001). However, tacit knowledge cannot be shared easily through information and communication technologies. An effective mix of face-to-face and electronic interactions is needed in global teams for this reason (Maznevski and Chudoba, 2000). A concern is that web-based technologies such as e-mails and IT databases make knowledge more explicit as codified knowledge (Zack, 1999). This explicit nature of communication technologies themselves brings about a

6 _{For an unpaired (independent samples) t-test, a null hypothesis (H}

0) and a

research hypothesis (H₁) are indicated in equations: H₀:μ₁= μ₂(Their means have a difference.), H₁: μ₁ ≠ μ₂ (Their means do not have a difference.) To see why hypotheses in the chapter do not use the terms of ‘greater than’ or ‘smaller than’,

question about how they influence tacit knowledge in the socialization process. Even marketing subsidiaries have well-developed electronic communication systems in world-famous MNCs. Tacit marketing knowledge may tend to be ruled out in cross-national MNC projects. The effect of communication technologies for formal and informal use on socializationis thus explored with the following hypotheses.

H 4.3. There is a difference between R&D and marketing project teams in terms of using IT as a communication tool mainly for formal work.

H 4.4. There is a difference between R&D and marketing project teams in terms of using IT as a communication tool mainly for informal talk.