Factors in the effective transfer of knowledge from multinational enterprises to their foreign subsidiaries: a Mozambican case study

The purpose of this article is to better understand the role ofinternal stakeholders in subsidiaries of multinational companies (MNCs) in order to offer potential insights into the cross-border transfer of knowledge from those companies' headquarters to their subsidiaries. The focus is upon subsidiaries in developing countries, here Mozambique. More specifically, the article is concerned with identifying factors that influence the learning of internal stakeholders and noting practices which seem associated with a high level of absorptive capacity and performance of subsidiaries. The starting point is evidence of ineffective transfer of knowledge by MNCs to their subsidiaries in developing countries, with consequent sub-standard performance. The research reported involves four case studies of Portuguese companies operating in Mozambique and draws on data from interviews with senior and middle managers in the firms' Mozambican subsidiaries. The results obtained suggest that successful knowledge transfer to overseas subsidiaries is found under the following conditions. First, the parent company knows the local context and provides a flow of relevant information. Second, application of knowledge locally is done flexibly to suit local circumstances. Next, a participatory approach is used so that local staff can see why the knowledge conveyed is necessary. Fourth, explanation and demonstration are key techniques, with major roles for on-the-job training, continuous improvement and training at headquarters. Finally, issues arising from local culture may need to be addressed.