The Knowledge Transfer to Subsidiaries in Overseas

Knowledge is the organizations’ main strategic asset. The headquarters’ creation and stock of knowledge represent a source of competitive advantage on the markets where the company is competing. The competition of the subsidiaries in overseas is based on the replication of the parent company’s operative process. There are, however, difficulties in the knowledge transfer to a Least Developed Country. The lack of business expertise and the weak local absorptive capacity cause the process of knowledge transfer to slow down and become more expensive. The success in the process of knowledge transfer is the result of (1) the source’s transfer capability, (2) the environment of cooperation between the source and the recipient and (3) of the recipient’s absorptive capacity. In this process, the expatriates play a fundamental role in transmitting to the recipient the source’s business philosophy as well as best practices. In order for the transfer of knowledge to be efficient and sustainable, there must be a shared work ethics between transmitter and receiver, where knowledge is not transmitted by imposition, but upon recognizing a need on the part of the receiver.