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The journal explores the role of trust, as well as, knowledge tacitness in mediating mechanisms involved in partner characteristics and the related alliance outcomes. It presents study results on the role of trust and knowledge tacitness in achieving learning and innovation between cooperating partners. The sample study had involved 120 International Strategic Alliances across 1851 companies. It also analyses background information on the already available literature.
Nielsen Bo and Nielsen Sabina (2009, 1050) established that learning and innovation can be achieved be simultaneously, although they result from different mix of relational quality, partner characteristics as well as knowledge characteristics. They demonstrate that inter-firm learning may create innovative outcomes.
However, this purely depends on the relation characteristics of the alliance and the quality of the relationship. These characteristics are classified as knowledge protectiveness and collaborative know-how. Knowledge protectiveness inhibits both learning and innovative outcomes of international strategic alliances since it creates mistrust, which in turn negatively impacts on open collaboration.
Collaborative know-how, on the other hand, enhances transfer and internalization of knowledge, as well as the ability to utilize effectively the acquired knowledge. It enhances innovation since it helps eliminate mistrust and perceptions of opportunism between cooperating partners.
Knowledge tacitness can hinder knowledge transfer as well as learning between cooperating firms, but at the same time, can create opportunities for innovation. According to Collinson (1999, 342) knowledge management practices may not be easily transferred between cooperating organizations due to differing organizational values, culture, and structure as well as knowledge resources.
For example, Gray and Yan (1994, 1486) established that Chinese firms always experienced significant problems in acquiring complex manufacturing skills from US Companies. More specific example is the differences in quality of Nokia and Huawei phones which are cooperating partners. Trust, on the other hand, increases knowledge transfer between the cooperating firms, and strengthens the potential advantages tacitness which is significant for innovation.
Trust reduces uncertainty, facilitates social interaction and increases transparency. This increases sharing of valuable information as well as knowledge. The study established positive interaction between trust and learning as well as trust and innovation. Most important, it established a positive correlation trust and knowledge tacitness versus learning, and the same for trust and knowledge tacitness versus innovation (Nielsen Bo & Nielsen Sabina 2009, 1049).
Implications of the results of the study
Innovation is highly related to knowledge sharing where each partner has access to its partner’s information reserve so as to exploit complementarities. Innovation, therefore, requires means of coordination which can reduce costs of extensive inter-firm learning. High costs of codifying tacit knowledge can undermine the benefits of mutual learning.
Close collaboration can enable partners to utilize their know-how in developing innovating outcomes without having to transfer the tacit knowledge. According to Serat (2009, 3) it is important to understand the requirements of joint task initiatives in order to develop a working interface with the partner. This should be enhanced by leadership commitment sharing, monitoring and evaluating the progress of joint innovation initiatives (Doz & Hamel 1998, 23).
The study reveals that it is possible to achieve innovative outcomes without codifying the partner’s knowledge (Nielsen Bo and Nielsen Sabina 2009, 1052). For an organization to benefit from tacit knowledge, it has to adopt ways codifying the knowledge so as to transfer it for its application.
It must also develop ways of retaining the information in its tacit form for purposes of innovative application. It should maintain a distinctive base for the tacit information and be able to codify the knowledge in a way that does not reduce its value.
Collinson, S., 1999. Knowledge management capabilities for steel markers: a British–Japanese corporate alliance for organizational learning. Technology Analysis and Strategic Management, Vol. 11, pp. 337–358.
Doz, Y., & Hamel, G., 1998, Alliance advantage: The art of creating value through partnering. Boston, MA: Harvard Business School Press.
Gray, B., & Yan, A., 1994. Bargaining power, management control, and performance in United States–China joint ventures: a comparative case study. Academy of Management Journal, Vol. 37, pp.1478–1517.
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Nielsen, B., B., & Nielsen, S., 2009. Learning and innovation in international strategic alliances: An empirical test of the role of trust and tacitness. Journal of Management Studies, Vol. 46, No. 6.
Serat, O., 2009, Learning in strategic alliances. Manila: Asian Development Bank.