1. Sender unit ability and willingness

2. Receiver unit ability and willingness

3. The mechanisms to share knowledge

Definition: Explicit or codified knowledge is knowledge that individuals and organisations know that they have – objective, formal, systematic, incorporated in texts and manuals, and relatively easy to pass on to others at a low marginal cost. Virtually all knowledge stored in IT-based databases and systems is explicit. In contrast, tacit knowledge is personal, context specific, and hard or perhaps even impossible to formalise and communicate. Individuals may not even be conscious of the tacit knowledge they possess. Tacit knowledge often underlies complex skills and is built on the intuitive feel acquired through years of experience.

Same: Explicit, often can be articulated clearly in words and stored in computer databases and other relatively standardised means of record-keeping.

Different: Implicit, often hard to articulate, not easily communicated using standardised records or databases. Expatriates and person-to-person interaction have often been used to transfer tacit knowledge and skills. They remain the main ways of sharing tacit knowledge across boundaries.

1. Improving information about superior performance and knowledge

2. Structural mechanisms

3. Selecting expatriates with knowledge sharing in mind

4. Social capital, social norms and global mind-sets

5. Performance management and incentives

6. Gaining access to external knowledge

7. Scanning global learning opportunities

8. Partnering or merging

9. Playing the virtual market

The knowledge management groups at ArcelorMittal and BP have many of the features associated with open communities of practice. These communities are characterised by some form of collaboration around a common set of interests. They differ from project teams and committees in that the participants’ roles are not defined by the firm. Although the focus of these communities is on internal company issues, they may also broker relationships with outside experts. Communities of practice cannot and should not be fully controlled by the firm, building instead on voluntary participation, although support and guidance is essential (Probst and Borzillo, 2008; Wenger and Snyder, 2000).

Mittal refrained from appointing a ‘best plant’ for others to emulate, believing that all units had something to teach others. Some multinationals have appointed geographically dispersed centres of excellence that, among other things, are in charge of knowledge sharing. Such centres can for instance be formed in various locations around a small group of individuals recognised for their leading-edge, strategically valuable knowledge. These centres of excellence are mandated to make their knowledge available throughout the global firm and enhance it so that it remains at the cutting edge. Three types of centre have been identified in global service firms – charismatic (formed around an individual), focused (a small group of experts in a single location), and virtual (a larger group of specialists in multiple locations, linked by a database and proprietary tools). The charismatic and focused centres are well equipped to handle tacit knowledge, while the focused and virtual centres can process more firm-specific knowledge than a single individual (Moore and Birkinshaw, 1998). In contrast to parent-driven knowledge development, these centres tend to rely more on informal networks, often acting as a hub for knowledge sharing activities.

Working in project or so called ‘split egg’ roles (Evans et al., 2009) where managers and professionals have vertical and horizontal responsibilities, is at the heart of BP’s focus on global knowledge management in its oil exploration and production business (Hansen and von Oetinger, 2001). Peer groups of business unit heads meet regularly. They are given joint responsibility for capital allocation and for setting unit performance goals, complemented by a host of cross-unit networks on shared areas of interest. These ‘top of the egg’ knowledge sharing activities take up to 20 per cent of the manager’s time. ‘The model here is an open market of ideas,’ says one business unit head.

Scanning involves gaining access to external knowledge from what people read, hear, or experience at first hand. Important observations and innovative ideas can emerge from anywhere in the multinational. Although new insights often come as a by-product of ongoing operations and especially when lateral thinking is encouraged and rewarded in the organisation, specific investments in scanning may also enhance the external acquisition of new knowledge. The establishment of a ‘listening post’ is a fairly inexpensive way to begin. P&G appointed 70 technology entrepreneurs to work in the company’s regional hubs to scan their environments for ideas that might be useful for the corporation worldwide. The Taiwanese PC-manufacturer Acer established a small design shop in the U.S., through which it acquired skills in ergonomic design that were fed back to the parent organisation (Doz et al., 2001). Ericsson, the Swedish telecommunications firm, created ‘cyberlabs’ in New York and Palo Alto (next to Stanford University in Silicon Valley) whose task was to monitor developments in these markets and to build relationships with local companies (Birkinshaw, 2004).