. International Review of Management and Marketing | Vol 6 • Special Issue (S4) • 2016132 International Review of Management and Marketing ISSN: 2146-4405 available at http: www.econjournals.com International Review of Management and Marketing, 2016, 6(S4) 132-137. Special Issue for “Asia International Conference (AIC 2015), 5-6 December 2015, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia” Framework for Effective Cross-border Knowledge Transfer Chong Mahn Ling1*, Yuen Yee Yen2, Wendy Teoh Ming Yen3 1Faculty of Business, Multimedia University, Jalan Ayer Keroh Lama, 75450 Melaka, Malaysia, 2Faculty of Business, Multimedia University, Jalan Ayer Keroh Lama, 75450 Melaka, Malaysia, 3Faculty of Business, Multimedia University, Jalan Ayer Keroh Lama, 75450 Melaka, Malaysia. *Email: pabo_mahn91@hotmail.com ABSTRACT Effective cross-border knowledge transfer can help to improve the competitiveness of the multinational companies, improve production process or product development, lower the operation cost, reduce errors, and improve profitability. However, cross-border knowledge transfer has always been a challenge for most of the companies especially when it involves communication and trust among a group of local and employees from different cultural background. Cultural diversity always causes the failure of knowledge transfer in actual implementation. Therefore, this study intends to propose a framework for managing cultural diversity and trust of cross-border knowledge transfer in Iskandar Development Region. The objective of this study is to propose a comprehensive framework to examine the key factors that affect employee’s participation in cross-border knowledge transfer. Based on focus group study with management of selected multinational companies in Iskandar Development Region, a comprehensive research framework is developed with ten independent variables (individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions), and a dependent variable (participation in cross-border knowledge transfer). Apart from contributing to the literature of knowledge management, the findings of the study also serve as a strong foundation for academics and future researchers to conduct future study in related industry and region. Keywords: Cross-border, Knowledge Transfer, Framework, Key Factors JEL Classifications: O1, O2, O4 1. INTRODUCTION As Malaysian government plans to transform the country into a knowledge-based economy by the year 2020, it is extremely important for multinational companies to understand how to transfer knowledge between geographically dispersed individuals and companies, and across cultural and national boundaries (Duan et al., 2010). According to Argote and Ingram (2000), there is a higher chance of success if a multinational company can effectively transfer knowledge to their counterparts in another country who are less effective and experienced. Employees who are lack of understanding on knowledge transfer are less likely to participate in transferring their knowledge to their counterparts in subsidiaries (Szulanski, 1996) due to high degree of complexity in the process of knowledge transfer (Yee et al., 2015). Culture and trust are key issue in the cross-border knowledge transfer of multinational companies. Culture is commonly refers as common beliefs that influence what people consider and believe to be meaningful and valuable, which will significantly influence the trust and communication between employees in headquarters and (Yoo and Torrey, 2002). The primary issue of cross-border knowledge transfer within multinational companies is the cultural diversity between the knowledge source and recipient (Yoo and Torrey, 2002). According to Qin et al. (2011), culture and trust affects the success of cross-border knowledge transfer not only in Malaysia, but a worldwide context. It is believed that cultural differences and lack of trust among employees might lead to unsuccessful negotiations, communication difficulties, and time-consuming problem solving (Anh et al., 2006). These barriers can significantly affect knowledge transfer process between headquarters and subsidiaries (Anh et al., 2006). If culture diversity and trust are managed well in a multinational organization, it is believed that the knowledge transfer process will become more efficient and effective (Almeida et al., 2002; Gold et al., 2001). Ling, et al.: Framework for Effective Cross-border Knowledge Transfer International Review of Management and Marketing | Vol 6 • Special Issue (S4) • 2016 133 Previous literature such as Khamseh and Jolly (2013) measured the impact of inter-firm knowledge transfers in strategic alliances and Frank et al. (2013) examined the emergent and the engineering approaches of knowledge transfer within local companies, without taking into consideration the cross-border knowledge transfer. Filatotchev et al. (2011) focused on the contribution of skilled returnees towards new knowledge creation in a multinational organization without measuring the cultural impact on effective cross-border knowledge transfer. Boh et al. (2013) examined the knowledge transfer between the headquarters of a multinational company in Norway and its Vietnamese subsidiaries but the survey was administered to only 70 employees in the Vietnamese subsidiaries. Finestone and Snyman (2005) discovered a difference in the employee intention to share knowledge in the organization without investigating their participation in effective cross-border knowledge transfer. Voel and Han (2005) discovered that respondents from China were more willing to share their knowledge compared with respondents from the United States without including cross-border knowledge transfer in their studies. None of the above studies has examined ways to manage the cultural diversity and trust of cross-border knowledge transfer in Iskandar Development Region, an important business hub in Malaysia. Therefore, there is a need for the development of a comprehensive framework which captures how cultural diversity and trust can affect the cross-border knowledge transfer in Iskandar Development Region. This study is therefore conducted to propose a research framework that could be used to manage cultural diversity and trust of cross-border knowledge transfer in Iskandar Development Region. The findings of this study will help Malaysian government to achieve the key objectives of Economic Transformation Programme, which is to create an information rich, high income and intelligent nation by recommending ways to attract more local and foreign employees to jointly participate in the cross-border knowledge transfer to contribute innovative ideas towards the creation of a K-economy (Economic Planning Unit, 2015). Besides, as economic transformation programme focuses on private sector-led growth and designed to drive Malaysia towards a high income economy nation that is both inclusive and sustainable by the year 2020. This study will also encourage more entrepreneurs and business men to invest in Iskandar Development Region and contributes to the development of the region. Iskandar Development Region has been positioned as “international city” to attract more foreign companies to invest. According to Iskandar Regional Development Authority (2015), this region is estimated to have 3 million population sizes with the initiatives provide by government Malaysia by the year 2025. The labour force is also predicted to increase to 1.46 million by the year 2025. According to Malaysia Investment Development Authority (MIDA, 2015), Johor still remains as the top investment destination for manufacturing sectors in Malaysia. It continues to attract domestic and foreign investors to invest in the state. Johor has a strategic location where the state is close with Singapore and it brings advantages to attract foreign investors from all over the world to set up operations in Iskandar Development Region. This study provides a deeper understanding on dimensions that would affect success of knowledge transfer for multinational companies so that effective knowledge management and transfer can be carried out in these multinational companies. 2. LITERATURE REVIEW 2.1. Participation in Cross-border Knowledge Transfer Cross-border knowledge transfer is defined as a process to introduce and adopt knowledge through one experience entity to another (Darr and Kurtzberg, 2000; Joshi et al., 2007; Argote and Miron-Spektor, 2011). It focuses on learning at workplace through the process of knowledge creation and application, knowledge exchange, information search and transformation (Awang et al., 2009). In multinational companies, transmission of knowledge occurs from the parent company to the subsidiary company. Participation in cross-border knowledge transfer involves employees in headquarters and subsidiaries in the communication of a particular company procedure or problem (Darr and Kurtzberg, 2000). Participation in cross-border knowledge transfer is believed to be influenced by the following factors. 2.2. Individualism/Collectivism The first factor, individualism and collectivism refers to the degree to which an individual concerns his/her own well-being against the well-being of others (Lucas, 2006). Individualism refers to the condition where one’s personal interests exceed the interests of the groups (Hofstede and Hofstede, 2001) and it is an important element that will hinder knowledge transfer (Hansen and Løvås, 2004). Individualism weakens the bonds between individuals and each and everyone is assumed to be able to take care of their own self (Amir et al., 2009). Collectivism refers to the condition where the overall importance of interests and demands in groups supersedes the personal interests of an individual (Hofstede and Hofstede, 2001). It also refers to the situation where an employees in a multinational company acts primarily for the good of all employees and willing to transfer knowledge to their counterparts in the subsidiaries (Amir et al., 2009). Hypothesis 1: There is a relationship between individualism and collectivism and participation in cross-border knowledge transfer. 2.3. High Power Distance/Low Power Distance Power distance is also one of the cultural dimensions that influence the success of cross-border knowledge transfer. Power distance refers to inequalities in the distribution of power and authority (Hofstede and Hofstede, 2001). Hofstede and Hofstede (2001) presented that collectivism is related to high power distance whereas individualism is related to lower power distance (Hofstede and Hofstede, 2001). Employees from low power distance culture are expected to be more motivated in cross-border knowledge transfer as they are more willing to share knowledge with others when needed (Thomas, 2015). Power distance is often associated with the hierarchy and status has affected knowledge transfer especially in masculine societies (Bengoa et al., 2015). Therefore, the following hypothesis is formed: Hypothesis 2: There is a relationship between power distance and participation in cross-border knowledge transfer. Ling, et al.: Framework for Effective Cross-border Knowledge Transfer International Review of Management and Marketing | Vol 6 • Special Issue (S4) • 2016134 2.4. High Uncertainty Avoidance/Low Uncertainty Avoidance Uncertainty avoidance can be defined as the degree a culture (Hofstede and Hofstede, 2001) or the members of a society accustomed to the acceptance of ambiguity and vague prospects (Rallapalli and Montgomery, 2015). Uncertainty avoidance can be fearful because it is a change that lead to an individual or organization or even country to take a leap of faith into the unknown, and will often prompt a general feeling of being cautious towards new approaches or new things (Laukkanen, 2015). Although the new approaches or new things have the potential to increase efficiency, the general feeling of feeling unsecure and cautious towards something new can be seen because it involves taking risks and have the chance for a potential disaster, and the best way to deal with it is to avoid these new approaches (Laukkanen, 2015). Therefore, in order for people to embrace the unknown and leaving their old patterns behind, it is vital that both partners create a trustful atmosphere to minimize the fear of change and insecurity behaviours, and focus more on the potential to willing to change, transferring knowledge and adapt new approaches of thinking and doing things (Bengoa et al., 2015). Therefore, the following hypothesis is formed: Hypothesis 3: There is a relationship between uncertainty avoidance and participation in cross-border knowledge transfer. 2.5. Affective/Neutral Employees from affective culture dislike to hide their feelings (Trompenaars and Hampden-Turner, 1998) but employees from neutral culture feel that it is improper to show their feelings obviously and they accept, aware and in good controls of feelings (Trompenaars and Hampden-Turner, 1998). Both neutrality and affectiveness represents the nature of interactions. Affectiveness is defined as an emotional approach that accepts and generally supports different points of view, whereas neutrality strives to bring an agreement, to reduce and control the differences between opinions (De Bliek and Burger, 2015). Hypothesis 4: There is a relationship between affective/neutral and participation in cross-border knowledge transfer. 2.6. Achievement/Ascription Employees from achievement-oriented culture will gain more respect based on their accomplishment (Ardichvili et al., 2006). People respect their colleagues based on past achievements and knowledge demonstration, and show job titles only when relevant (Trompenaars and Hampden-Turner, 1998). Meanwhile, employees from a scriptive culture believe that achievement is not so important compared to family background or wealth in determining his/her success and they are not so keen to participate in knowledge creation and transfer (Trompenaars and Hampden- Turner, 1998). Hypothesis 5: There is a relationship between achievement/ ascription and participation in cross-border knowledge transfer. 2.7. Monochronic/Polychronic In monochronic culture, individuals make sure they do task at a time without interruptions (Yahyagil and Otken, 2011). Employees in this culture tend to focus on the time compartmentalization, schedule their tasks one at a time, and meet every deadlines and appointments on time (Frei et al., 1999). Hall (1984) introduced that this kind of people see time as an organization system in setting priorities, and do not like any interruption from surrounding. Employees from monochronic culture strongly prefer planning (Trompenaars and Hampden-Turner, 1998). They stay on schedule and make sure that a task can be completed within the stipulated period (Trompenaars and Hampden-Turner, 1998). Hypothesis 6: There is a relationship between monochronic/ polychronic and participation in cross-border knowledge transfer. 2.8. Trust Trust can be defined as the willingness for a person to put oneself in a situation where they are vulnerable (Edelenbos and Klijn, 2007; Huang and Van de Vliert, 2006) to the actions of someone else based on the belief that the other person will perform a certain action significant to that person (Mayer et al., 1995). According to Abrams et al. (2003), trust will lead to an increase in the chances for knowledge to be effectively understood and applied by a person, increase in overall knowledge exchange and lastly makes knowledge exchanges process a little less expensive. Hypothesis 7: There is a relationship between trust and participation in cross-border knowledge transfer. 2.9. Attitude towards Cross-border Knowledge Transfer When it comes to knowledge transfer of employees with other colleagues during the daily work, it is most likely to depend on the attitude of the employees hold towards the behavior on knowledge sharing (Kwok and Gao, 2005). Researchers believed that employee’s attitude toward a certain behavior can affect the actual work performance and employee intention to perform this sharing behavior (Ajzen and Fishbein, 1980). Hypothesis 8: There is a relationship between attitude and participation in cross-border knowledge transfer. 2.10. Social Support Social support measures the encouragement of top management and co-workers towards the participation in cross-border knowledge transfer (Taylor and Todd, 1995). Kelloway and Barling (2000) discovered that leadership commitment and support towards cross-border knowledge transfer is important to encourage participation in cross-border knowledge transfer. Social support in an organization must be encouraging rather than coercive so that employees are free to decide on what and how much information to share with their colleagues (Davenport, 1994). Hypothesis 9: There is a relationship between social support and participation in cross-border knowledge transfer. 2.11. Facilitating Conditions Facilitating conditions are the next indicator which may play an important role in cross-border knowledge transfer. Facilitating conditions is defined as the level to which an individual believes Ling, et al.: Framework for Effective Cross-border Knowledge Transfer International Review of Management and Marketing | Vol 6 • Special Issue (S4) • 2016 135 that an organizational and technical infrastructure presents to aid the use of the system (Venkatesh et al., 2003). Facilitating conditions refer to the availability of resources such as written documents and technological infrastructure in supporting of the practices of knowledge acquisition and transmission (Ajzen and Driver, 1992; Dignum and Dignum, 2003; Riege, 2005). The availability of facilitating conditions determines the likelihood of participation in cross-border knowledge transfer (Ajzen and Driver, 1992; Riege, 2005; Syed-Ikhsan and Rowland, 2004). Hypothesis 10: There is a relationship between facilitating conditions and participation in cross-border knowledge transfer. 3. PROPOSED RESEARCH FRAMEWORK DEVELOPMENT The proposed research framework in Figure 1 is developed after intensive literature reviews and focus group study administrated to senior managers in 9 randomly selected multinational companies in Iskandar Development Region Malaysia. The results of the review of past studies and survey questionnaires indicated that individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions are ten most important factors affecting participation in cross-border knowledge transfer, from the perspective of managers in multinational companies in Iskandar Development Region Malaysia. Therefore, the ten important constructs are listed as important independent variables affecting participation in cross-border knowledge transfer, the dependent variable of this study. 3.1. Literature Reviews This study adopts keyword literature reviews searching to identify and select the most relevant past literature in cross-border knowledge transfer (Wijk et al., 2008: Qureshi et al., 2014). Detailed search in online databases such as Science Direct, Pro Quest and Web of Science had been carried out by using the search strings in such as (cross-border knowledge transfer and multinational companies) or (knowledge transfer success and multinational companies) or (knowledge transfer participation and success). Based on the literature reviews, the researchers managed to identify a list of 15 possible factors, which might affect cross-border knowledge transfer in multinational companies in Iskandar Development Region. The 15 factors are individualism/ collectivism, power distance, uncertainty avoidance, affective/ neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions, knowledge characteristics, recipient characteristics, relationship quality, network characteristics, source characteristics, and reward system. 3.2. Focus Group Study 3.2.1. Focus group participants After intensive literature reviews, focus group study was conducted to determine the most important and relevant factors affecting participation in cross-border knowledge transfer in multinational companies in Iskandar Development Region. Target companies in this study were identified using the 2015 MIDA directory, which incorporating computer hardware, environmental, manufacturing and software industries. Target multinational companies in this study need to fulfill two criteria, (a) have a minimum of 100 employees and (b) have at least 10% in international sales in 2015. A total of 9 multinational companies in Iskandar Development Region fulfill the above criteria and was selected as target respondents in the focus group study. Managers of the 9 selected companies were required to rank the most important factors affecting cross-border knowledge transfer from a list of 15 possible factors identified from literature reviews such as individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/ polychromic, trust, attitude, social support, and facilitating conditions, knowledge characteristics, recipient characteristics, relationship quality, network characteristics, source characteristics, and reward system. 3.2.2. Focus group results Focus group study is conducted in this study as it gives the researchers an opportunity to build rapport with target respondents and clarify target respondent’s doubts through direct communication (Sekaran, 2003). The focus group study results show that ten factors (individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions) are perceived as critical determinants of participation in cross-border knowledge transfer, from the perspective of managers in multinational companies in Iskandar Development Region Malaysia. 4. FUTURE RESEARCH This paper develops a research framework to examine participation in cross-border knowledge transfer in multinational companies in Iskandar Development Region Malaysia based on literature reviews and focus group study. In future, 300 questionnaires will be distributed to randomly selected employees of the 9 targeted multinational companies to test the hypotheses formed in Section 2 of this paper. Results will be published in the forthcoming publications of the researchers. 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