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Knowledge sharing is a competition

Fri 22 January 2010

, Knowledge@Wharton, Leap

Why do multinational companies (MNC) act upon a certain idea while they don’t even notice another? Simply put, it’s a popularity contest, according to a study titled ‘Knowledge Flows within Multinational Corporations: Explaining Subsidiary Isolation and Its Performance Implications.’

Multinational companies harbor massive knowledge bases, but not all their subsidiaries are tapping into these ideas, Wharton professor of management Felipe Monteiro tells Knowledge@Wharton. Subsidiaries of multinational companies that are perceived by others as being strong performers are most frequently sought out as sources of help. Subsidiaries that perceived themselves to be high achievers are also much more likely to seek advice. And subsidiaries that perceived themselves as underachievers shy away from seeking help, even though they presumably needed it the most. 

 

 

These are the findings of a study that was published by Wharton professorFelipe Monteiro, Julian Birkinshaw from the London Business School, and Niklas Arvidsson from the Stockholm-based Centre for Banking and Finance, in the January 2008 issue of Organizational Science. Of the 171 subsidiaries surveyed, 22% learned about new product ideas or practices from their headquarters less than once a year, while 42% sent new product ideas and practices to their headquarters or to other subsidiaries less than once a year. More than 10% did neither.

 

After sifting through a database containing more than 100 assessments of external technologies of a large European telecom services provider, Monteiro identified two distinct groups of ideas: those that were embraced when they were introduced to the company and those that were ignored. According to his findings, which group an idea falls into does not necessarily depend on its strength or weakness, but rather on the people and organizations absorbing them.

An interesting subject for further research is whether men and women in MNCs share knowledge differently. Download the study here.