Knowledge management in SMEs and MNCs: matching knowledge mobility mechanisms to supply network configuration profiles

Abstract

While ‘knowledge mobility’ presents significantly different challenges for SMEs and MNCs, it is strongly influenced by two common factors: the type of knowledge to be integrated and the configuration of the operations network. Here, SMEs and MNCs are required to make critical decisions about ‘levels’ of collaboration and knowledge sharing with network partners. A Knowledge Mobility Configuration (KMC) framework was developed, tested and refined using five case studies indicative of a growing shift towards information and knowledge-intensive activities. In terms of contribution, there has been limited empirical research to-date into the determinants of successful knowledge transfers in MNC-SME network contexts. The network configuration element of the KMC framework provides insights on how such networks evolve, and how specific knowledge mobility profiles may evolve over time. This more nuanced approach may be used as a basis for a proactive and differentiated approach to knowledge mobility and integration across SME and MNC networks.     

Re-positioning the supplier: an SME perspective

As manufactured products become more complex, their design and manufacturing demands more and more resource which is being increasingly shared between the supply/value chain members. Competition is being typified less by firm versus firm and more by supply chain versus supply chain. The final assemblers are simplifying their supply chain to reduce logistics complexity and provide best value to the final customer. To suppliers, particularly SMEs, this gives rise to both opportunities for increasing 'added value', as well as threats of being dropped from rationalized supplier bases. Historically, SMEs have been sandwiched between large customers and suppliers and have always reacted to their superior bargaining power. Now, if the SMEs want to survive and grow, they have to adopt a more proactive stance to re-position themselves in response to these supply chain trends. In this paper, we present a technique for re-positioning the supplier in terms of'physical value added' and competency/practice-based 'differentiation'. We use the proposed approach to see how one supplier has successfully changed his business and another has developed plans to change, in line with the trends in their industry structure.     

Global operations strategy: Coordinating manufacturing networks

This paper presents a concept that describes how companies can manage their international operations so as to facilitate the coordination of their manufacturing networks. The research presented originates from a model that was developed at the Swedish telecommunications company Ericsson in the mid-1990s, but has since then been further elaborated. More specifically, the purpose of this paper is to show how Ericsson Radio Systems incorporated the recent research on manufacturing networks found in literature in their global operations strategy, and to present the conceptual model that was the result of these efforts. The conceptual model described in this paper focuses on the blending of cost competitiveness, flexibility, and innovativeness; a combination termed the “transnational solution” in the literature. In addition to a literature review on manufacturing networks and global operations and the proposed conceptual model, the paper also contains a case illustration showing how Ericsson has implemented a version of the conceptual model so that their global operations strategy realizes the transnational solution.     

Building resilience in SMEs of perishable product supply chains: enablers,barriers and risks

SMEs of perishable product supply chains (PPSCs) are critical to sustaining fresh food supply and global economy. However, they face immense challenges given the nature of their operations. Surprisingly, the literature lacks research on the distinct intra- and inter-organisational factors intertwined to build resilience in these firms. From the semi-structured interviews conducted with 30 managers of a PPSC in Australia, we developed a holistic framework to build resilience in SMEs of PPSCs. The findings offer novel insights into research and practice including an optimal portfolio of enablers, barriers and risks towards building resilience. The analysis reveals that most risks stem from the factors that are internal to the supply chain, thus necessitating a strong supply chain collaboration. The level of resilience, barriers and risks varies considerably within SMEs depending on their size (small vs. medium) and location of nodes in the supply chain. Interestingly, the SMEs with consortium support demonstrate better resilience and performance.     

Gender diversity management in foreign subsidiaries: A comparative study in Germany and Japan

Gender (in)equality varies strongly across countries. However, research has not sufficiently addressed how subsidiaries of multinational companies respond to differences in gender equality between home and host countries. Based on interviews with 34 managers, our study explores how subsidiaries experience gender-related challenges in their home and host countries, what kinds of practices they implement to increase gender equality, and which role the headquarters play in the implementation of these practices. We do so by examining the cases of German subsidiaries in Japan and Japanese subsidiaries in Germany, two countries that differ greatly in gender equality. Building on our analysis, we systematically compare how subsidiaries respond to the institutional pressures from their home and host countries and develop a theoretical model that illustrates how gender diversity management in a subsidiary is contingent on the interaction of (1) global integration pressure from the headquarters and (2) the level of gender equality in the home country relative to the host country, linked via different types of collaboration and practice transfer from the headquarters. Theoretical and practical implications of our findings are discussed.     

A learning perspective on the offshoring of advanced services

Based on longitudinal case studies of offshoring of advanced IT and engineering services from Danish firms to Indian firms, this paper explores organizational learning that occurs over time in both home and host firms and uses learning as a measure of the firm impact of advanced services offshoring. The findings are consistent with the theoretical view that advanced services offshoring must be understood as an antecedent for strategic business development and organizational change in both home and host firms. The study shows that when offshoring partnerships mature and firms gain experience, learning in both home and host firms evolves over time and differs in many cases from their initial objectives and expectations. In some of the Danish firms engaging in offshoring even ignites a process of strategic transformation. Both Danish and Indian firms use the input from their offshoring partnership to upgrade their organizations and business processes.     

An interaction orientation approach to SME-Intermediaries relationships

Small and medium-sized enterprises (SMEs) engaging in foreign operations have drawn significant research attention in recent years. One of the aspects linked to such operations is SMEs’ expansion to foreign markets, often relying on local intermediaries. These intermediaries provide the firms with valuable resources such as market knowledge and recognition and reduce foreign operations’ costs. Hence, they are often considered as strategic partners. The current study aims to expand the existing knowledge regarding the relationships between business to business SMEs and their intermediaries by exploring interaction orientation as an organizational cultural aspect and its linkage to the trust-conflicts balance. Based on a survey of 165 international venture managers, complemented by in-depth interviews with 16 senior export managers, we found that by incorporating interaction-orientation constructs into the relationship management, SMEs can enhance affective trust while mitigating conflicts. We also reveal that the impact of emotional and task conflicts on SMEs’ performance is mediated through calculative trust, indicating the benefits of balancing between relational and formal governance.     

The organizational design of offshoring: Taking stock and moving forward

Offshoring can be defined as the relocation of organizational tasks and services to foreign locations. At the same time as the scale and scope of offshoring have reached unprecedented levels in recent years, firms have increasingly been exposed to the challenges relating to managing an organization consisting of a number of offshored activities. In this special issue introduction paper, we argue that an organizational design perspective on offshoring can benefit research and practice in understanding how firms can coordinate and integrate offshoring activities. Specifically, we argue that offshoring implies an organizational reconfiguration consisting of three stages: disintegration, relocation and reintegration. We discuss the implications of this perspective and outline a research agenda.     

An exploratory study of manufacturing strategy practices of machinery manufacturing companies in India

This paper presents findings of a survey on manufacturing strategy practices adopted by the Indian machinery manufacturing companies (IMMC). Based on the survey, three companies have been selected for detailed case studies. Their experiences in the manufacturing strategy process are analyzed. Although the companies represented diversity in terms of product type, sales volume, and geographic location, they share several commonalties including use of advanced manufacturing technologies and use of several improvement techniques. The process of strategy formulation varied among the companies in terms of participants, complexity and degree of formalization. Competitive priorities, order winners and critical success factors are also identified for these companies. Based on strategic manufacturing issues, manufacturing competence index and business performance index for the companies has been worked out.     

Implementation of manufacturing strategy: A select study of Indian process companies

This paper presents findings of an extensive survey of Indian process companies. Based on the survey, three companies have been selected for detailed case studies. Their experiences in the manufacturing strategy process are analysed. Although the companies represented diversity in terms of product type, sales volume, longevity and geographic location, they shared several commonalities including use of advanced manufacturing technologies. The process of strategy formulation varied among the companies in terms of participants, complexity and degree of formalization. Competitive priorities, order winners and critical success factors are identified for these companies. Based on strategic manufacturing issues, manufacturing competence index for the companies has been worked out.     

Product architecture,global operations networks,and operational performance: an exploratory study

Abstract

This paper investigates the relationships between product architectures and global operations networks and their impact on operational performance, based on survey data from 82 Swedish manufacturers. We find that modular and integral product architectures are associated with different characteristics of the global operations network, and that global operations network designs are characterised by three dimensions: network, plant and supply chain. The key aspects are network structure (configuration as well as coordination), plant focus (scale or scope) and the locus of supply chain capabilities (internal or external).     

Implementation of just-in-time in a small company: A case study

This paper deals with the implementation of JIT in a small company in Taiwan that produces different kinds of automobile lamps such as rear combination lamps and front turn signal lamps. JIT systems have tremendous effects on all operations of a firm, including design, accounting, finance, marketing, distribution, etc., and thus are of interest to all levels of a firm's management. Realizing the success of JIT, large-scale manufacturing companies all over the world have implemented JIT in their production systems with the objective of improving their competitiveness. Nevertheless, small and medium enterprises SMEs play a major role in the national economy. However, JIT has not received serious attention from SMEs. Realising the importance of improving the performance of SMEs, a case study is presented to motivate practitioners to implement JIT in their SMEs. In addition, future research directions in the areas of implementing JIT in SMEs are presented.     

The perceptions of human resource development professionals in Taiwan regarding their working relationships with subject matter experts (SMEs) during the training design process

While the literature supports the importance of establishing a relationship between designers and subject matter experts (SMEs) in the training design process, this approach is not followed in all global practices. The purpose of this study was to identify the perceptions of human resource development professionals in Taiwan regarding their working relationships with SMEs. The respondents of the study were HRD professionals who worked in high-tech companies located in a science park in Taiwan. The study found that a significant relationship exists between the ability to work with SMEs and current ability in the training design process among HRD professionals who had worked with SMEs. This study provides implications for the professional development of HRD practitioners and HRD practice in Taiwan companies. Cross-cultural issues are discussed to explain inconsistencies between the results and US-based perspectives on the training design process.     

International offshoring of services: A parity study

Conventional wisdom suggests that firms engage in international offshoring of services primarily to reduce wage costs associated with a given service activity. Drawing on international business research on the costs of doing business abroad (CODBA), liability of foreignness (LOF), and institutional theory, we investigate the factors that contribute to the location choices for services offshoring activity, including wage differentials between the home and host countries. We find that consistent with a parity perspective but contrary to conventional expectations, a country is more likely to be a destination of services offshoring as the average wage of a country increases. We also find that education level and cultural similarity are significant drivers of offshoring location choices, again consistent with a parity perspective. This study contributes to debates about the economic impact of services offshoring by showing that firms locate offshoring facilities in destinations that are closer in wages to the home country and those with higher education levels and cultural similarity.     

Constructing a typology for networks of firms

Companies are now economically bound to collaborate with other enterprises, forming horizontal networks that are generally goal-based and are of a limited duration. This article specifically addresses networks of industrial small and medium enterprises (SMEs). Thanks to a five-years study, some of the main characteristics of such networks will be clarified. One upshot from the experiment was that such networks are rarely guided by formal and deliberate strategies, and that their evolutions and mutations cannot be forecast with the usual strategic planning tools. This paper presents a formal framework to analysis and design the trajectories of networks of firms, with the aim of facilitating the strategic guidance of the network. First, approaches dealing with strategic evolution are presented. Next, organizational trajectories are examined, based on the relative situation of activities and competencies between the companies inside the network. Then, a typology of SMEs networks is given and illustrated by industrial cases. Finally, a formal frame based on the typology and on the degree of achievement of the network (as expressed by a six-levels Maslow's pyramid) is presented, which allows location and guidance of SMEs networks according to their needs. As an illustration a real network trajectory is also given.     

Where business networks and institutions meet: Internationalization decision-making under uncertainty

Both business networks and institutional forces are relevant to firm internationalization but they have seldom been studied together. We investigate under what circumstances firms are more likely to adopt non-predictive strategy in light of the influence of the business networks, the institutional forces, and the home market background affecting their internationalization. Based on survey data from 758 small and medium-sized enterprises (SMEs) from Brazil, China, Poland, Italy, and Sweden, our results support the effects of formal institutional distance and cultural differences on the use of non-predictive strategies by SMEs in internationalization decisions, as well as the contingency effects of business network stability and of having an emerging market background. We integrate research on the liability of foreignness and the liability of outsidership and find that business network stability is critical. It does not moderate the relation between cultural difference and NPS adoption but attenuates the negative relation between institutional distance and NPS adoption, indicating that the liabilities of foreignness and outsidership play different roles in internationalization.     

R&D (Re)location and Offshore Outsourcing: A Management Perspective

The paper reviews and systematizes the management literature directly and indirectly related to (re)location of research and development (R&D), in the form of both insourcing and outsourcing. The focus in particular is on R&D offshore outsourcing and its main drivers, including locational constraints and opportunities, motives, strategic decisions and managerial challenges. The analysis synthesizes and links the main propositions and findings of the theoretical and empirical work to build an original management and strategy centred framework which looks at R&D (re)location from a client–vendor perspective. In this case, the client is the offshoring company, and the vendors are the firms located in the host country. The characteristics of the firms and locations considered vis‐à‐vis the offshoring firm's goals are examined, the strategies implemented, the management and organizational challenges that R&D offshore outsourcing entails, and the ways in which offshoring impacts on both home and host locations are investigated.     

Proactive international strategies of cluster SMEs

In this conceptual paper, proactive international strategies of small- and medium-sized enterprises (SMEs) in the cluster context are discussed. The majority of cluster SMEs assume passive roles as network participants in the process of internationalisation. However, a smaller fraction adopts proactive strategies to foreign expansion acting as leaders of networks. SMEs as network leaders are embedded in the source clusters and dependent on local networks that provide them with complementary resources. We assert that this mutual dependence between a firm's resources and the development of industrial agglomeration should be reflected in the strategic options that SMEs adopt when going international. This paper contributes by synthesising and evaluating a comprehensive range of SME-strategic options and by proposing the proactive competitive strategies of SMEs in the international arena that are both feasible and effective. The feasibility of adopting a specific strategy means the suitability for this group of companies, considering their characteristics. The evaluation of the effectiveness of each strategy was performed according to the objectives of avoiding lock-in and of protecting and developing the core competencies embedded in cluster networks. We address the research gap in evaluating the outcomes of SME international strategies and in synthesising a comprehensive range of cluster SMEs' strategic options.     

A Decisional Framework of Offshoring: Integrating Insights from 25 Years of Research to Provide Direction for Future*

Mirroring the growing trend for firms to support their operations by locating activities abroad, research on the practice of offshoring has increased considerably in recent years. However, despite the mounting research, understanding of the key factors influencing decision‐making for offshoring remains surprisingly limited due to fragmentation. In this study, we synthesize and integrate insights from different research domains in order to develop a comprehensive decisional framework for key offshoring decisions. The integrative decisional framework is based on a systematic review of offshoring research published in the most influential management and business journals in the past 25 years. In addition to providing a snapshot of the state of research on decision‐making for offshoring, this study aims to stimulate future research by identifying promising research opportunities. In particular, we propose that future research should use alternative theories to incorporate overlooked aspects of decision‐making, integrate different theories to account for the interdependencies between decisions, and adopt a portfolio perspective that considers each decision as part of an overall offshoring strategy.     

MADE IN THE WORLD: THE GLOBAL SPREAD OF PRODUCTION

We are moving rapidly into an age of transnational manufacturing, where things made in one country are shipped across national borders for further work, storage, sales, repair, remanufacture, recycle, or disposal; but our laws, policies, and management practices are slow in adjusting to this reality. They are often based on inaccurate premises. This article examines these premises and suggests what they imply for management of manufacturing. First, a common view is that manufacturing investment in the industrialized nations is declining and shifting to the developing countries. This is not true. Investment in manufacturing in both industrialized and developing nations is increasing and, in absolute value, there is a lot more investment in industrialized countries than in developing countries. Second, a related view argued by many is that manufacturing does not have a bright future in the rich countries. I argue that manufacturers can thrive in the industrialized countries if they learn how to add more value for the end users. They must go beyond productivity improvement to producing more technologically advanced and customized products, responding faster to changing customer demands, and appending more services to their products. Doing all this is easier in the industrialized countries because the needed skills and infrastructure are more readily available there. Third, another potentially misleading notion is related to why companies invest in manufacturing abroad. Access to low-cost production is not the main motivation in most cases; rather it is access to market. Superior global manufacturers use their foreign factories for much more: to serve their worldwide customers better, preempt competitors, work with sophisticated suppliers, collect critical marketing, technological, and competitive intelligence, and attract talented individuals into the company. They build integrated global production networks, not collections of disjointed factories that are spread internationally. Thus their investment in manufacturing abroad is not a substitute for investment at home, it is a complement. Building and managing such integrated global factor networks is the next challenge in manufacturing.