Organizational integration mechanisms and knowledge transfer effectiveness in MNCs: The moderating role of cross-national distance

Abstract

Building on the knowledge-based view of the firm, this study investigates the usefulness of two organizational integration mechanisms (i.e., formal inter-unit communication and informal connectedness and shared values) to effectively transfer knowledge between MNC units and explores how their effectiveness is affected by different dimensions of cross-national distance. Data on 131 knowledge transfer relationships between units of five Spanish MNCs were used to test the hypotheses. Results reveal that, although both mechanisms are positively associated with knowledge transfer effectiveness, the effect of formal inter-unit communication is comparatively higher. Moreover, this formal integration mechanism seems to work independently of the type of distance that separates the units involved in the transfer. By contrast, the effectiveness of informal integration mechanisms is influenced by economic, geographic and administrative dimensions of distance. Adopting a contingent perspective, and taking into account the multidimensional character of cross-national distance, this article contributes to the literature on knowledge management in international firms by showing which organizational integration mechanisms are more useful to transfer knowledge within MNCs depending on the type of distance that separate their units.