Exploring tacit knowledge transfer and innovation capabilities within the buyer–supplier collaboration: a literature review

Figures & data

Table 1. Differences between tacit and explicit knowledge

	Tacit knowledge	Explicit knowledge
Definition	Know-how, know-why: skills expressed through performance	Know-about: comprise facts, theories and instructions
Quality, speed, cost of transfer	Slow, costly and uncertain (high stickiness)	Fast, may be costly, accurate (low stickiness)
Diffusion	Difficult to convey	Easier to convey
Residence	General information, experiences and memories	Books, documents, databases policy manuals
Complexity	Relative complex	Relatively simple
Teachability	Not teachable	Teachable
Observability	Not observable	Observable
Codifiability	Difficult	Easy

Adapted from Giannakis (2008, p. 65) and Cavusgil et al. (2003, p. 9).

Figure 1. Operational and managerial knowledge transfer.

Table 2. Inclusion and exclusion criteria for the literature study

Inclusion criteria	Exclusion criteria
Peer-reviewed journals	Articles focusing on innovation in general
Articles emphasising knowledge transfer within the buyer–supplier collaboration	Articles focusing on supplier development without knowledge transfer/management
Articles addressing innovation within the buyer–supplier collaboration	Articles not peer-reviewed
Articles emphasising knowledge management within the buyer–supplier collaboration.	General articles in purchasing and supply
Articles focusing on supplier development in new product development	No emphasis on creativity or innovation
Studies in the subject area from 2003 to 2019	Studies in the subject area earlier than 2003

Figure 2. Summary of facilitators of tacit knowledge transfer.

Table

Facilitators of knowledge transfer and innovation within buyer–supplier collaboration
Author	Methodology applied	Key issues highlighted	Contribution to the question
Gonzalez and Melo (2018)	The research surveyed 250 Brazilian automobile industry companies. The data were analysed using Structural Equation Modelling Technique using Partial Least Squares (PLS) which is suitable for small samples	The findings indicate that human resource management (HRM), leadership, culture, autonomy and ICT systems have influence over the processes of innovation from the knowledge exploration or exploitation. In addition to the above factors, interactive applications such as discussion boards are cited as important facilitators of tacit knowledge exchanges	Five organisational contextual factors supporting KT are identified: HRM, collaborative leadership practices, learning culture (characterised by mutual trust), ICT systems and autonomy influence the innovation practices of the organisation (suppliers) through knowledge exploration and exploitation. These factors facilitate the transfer and exploration of tacit and explicitly knowledge
Cavusgil et al. (2003)	An empirical study tested the tacit knowledge construct through survey of 182 manufacturing and service organisations in the USA. The study also considered the moderating role of relationship experience and organisational size	Close inter-organisation relationships are characterised by frequent interactions, extended history and mutual confiding Close relationships also rely on mutual trust, commitment and frequent communications. These attributes are very important in enhancing tacit knowledge transfer and organisational innovation. An organisation with high innovation capabilities employs learning by doing approach which is associated with tacit knowledge transfer. Close relationship also allows members of the organisation to interact freely, to share feelings, emotions, collaborative experiences and shared meaning. These are necessary for high degree of tacit knowledge transfer and innovation	Tacit knowledge can be transferred from a partner through close and frequent interactions Tacit knowledge makes a significant contribution to an organisation’s innovation capability. Further, organisation collaborative experience contributes to tacit knowledge transfer via shared meaning Direct interactions with partner organisation allow gradual experiential learning essential for tacit knowledge transfer. Further, open-mindedness between partner organisation employees is key to tacit knowledge transfer
Giannakis (2008)	The study followed a qualitative method employing multiple case studies of supplier development programmes in four large organisations in the UK	The focus of supplier development should not be on rehabilitating poorly performing suppliers; but to proactively develop new skills and capability of suppliers. This should take a strategic approach requiring support from top management and proactive procurement management. Codification of knowledge via e-channels, development of formal channels of interactions and training are useful for effective knowledge transfer	The study suggests appointment of internal knowledge brokers such as supplier development specialists to facilitate tacit knowledge transfer. Knowledge brokers can be used to assess and transfer good practices The study also proposes the development of organisation routines and networks for transfer knowledge across operations. Development of hybrid skills by supplier development managers that can encompass technical, managerial and social behavioural areas is important for tacit knowledge transfer
Kotabe et al. (2003)	The study surveyed US and Japanese automotive suppliers. 104 questionnaires were received from the USA and 123 from Japan for analysis. Data were quantitatively analysed using a regression model	Organisations with long-established relationships are better able to share their technology. Long-term partners are able to overcome the hazards of opportunism in the relationship and hence, create an environment for tacit knowledge transfer. While such relationship may be susceptible to complacency, close supplier monitoring and continuous improvement may overcome complacency. Small scale technical exchanges also promote supplier performance improvement especially in USA compared to Japan	The effect of technology transfer in the buyer–supplier relationship increases with the duration of the relationship (link duration). Link duration, for example, in Japan is 9 years while in the USA is 16 years for technology to make an impact on supplier performance Further, prior link duration is necessary for more effective complex and high-level technology transfer. And high-level technology transfer works better in long established buyer–supplier collaboration
Rottman (2008)	Interviews were conducted with US manufacturers and their Indian partners over two years. The study used an interpretative qualitative study approach	Utilising multiple suppliers and social capital increase the organisational ability to create and manage tacit knowledge transfer. Knowledge retention is also important, this can be achieved by having shadows for key suppliers. Relational trust among partners further creates an enabling environment for tacit knowledge transfer	Cultural understanding is key to tacit knowledge transfer between diverse partners Communication and transparency have also been cited as facilitators of tacit knowledge transfer as they allow partners to clarify goals and to be open minded. Internal trust is important for managing knowledge between buyers-suppliers
Balboni et al. (2017).	A survey of an Italian manufacturer consisting of 105 relationships was conducted. Data were analysed using a hierarchical multiple regression analysis	The study indicates that both formal and informal mechanisms are important in supporting knowledge transfer between customers and suppliers. Trust (credibility, benevolent and competence) positively support knowledge transfer between the parties. And formal mechanisms of knowledge transfer are weakened with high trustworthiness	The study distinguishes between formal (databases and reports) with informal interactions mechanisms of knowledge transfer. Informal mechanisms based on social interactions and open communication favour tacit knowledge transfer through transfer of experiences. Trust has been cited as an important moderating variable in tacit knowledge transfer
Md-saad et al. (2016)	A conceptual study focusing on strategic alliances in the form of international outsourcing demonstrates the importance of prior knowledge, business relatedness and interactive involvement tacit knowledge transfer	Findings indicate that absorptive capacity is a critical requirement to tacit knowledge acquisition which is facilitated through prior knowledge, business relatedness and interactive involvement between the supplier and the buyers	Tacit knowledge transfer within buyer–supplier strategic alliance will require the absorptive capacity of the supplier and its employees. Further, prior knowledge, business relatedness and interactive involvement mediates tacit knowledge transfer between the buyer and supplier
Liu, Li, Shi, and Liu (2017)	A matched dyadic survey of 255 buyer–supplier pairs of home appliance manufacturers in China was conducted. Data were analysed quantitatively using hierarchical regression, descriptive statistics and Pearson correlations	Focus on how governance mechanisms such as transactional (contracts and transactional specific-investments) and relational (trust and personal relationship) facilitate transfer of credible knowledge within vertical relationships	Contracts may increase knowledge quantity than transactional specific investments within the transactional mechanism. While trust improves the quantity and credibility of knowledge transferred within the buyer–supplier relationship Credibility is an important antecedent to knowledge transfer and supplier performance Contracts are vital forms of formal knowledge transfer through formal channels of communication and interaction, thereby supporting knowledge credibility
Lin and Wei (2018).	The study uses simulation to understand the impact of innovation intermediary on the knowledge transfer and growth with network systems	The findings indicate that innovation intermediary provide an enabling environment for knowledge transfer. And selecting partners based on innovative ability greatly improves their performance as opposed to random selection or absorptive capacity	Innovative intermediary improves the efficiency of knowledge transfer in a network. Collaboration with innovation intermediary minimises market inefficiencies in terms of knowledge transfer
Seidler-de Alwis, Hartmann & Gemünden (2004)	A literature review study was conducted. And an integrated model developed focusing on the impact of tacit knowledge on innovation	Tacit knowledge is an important driver of innovation success in an organisation. The study supports adaptation of innovation to specific company requirements	The study proposes a model which enables organisations to adapt tacit knowledge management to contextual innovation requirements, and therefore, optimise their innovation success
Chang (2017).	The study was conducted in the manufacturing industry in China. A sample of 277 questionnaires was considered for the study and data were quantitatively analysed using multiple hierarchal linear regression analysis	The study focused on channel integration mechanisms (supplier involvement and joint planning) on knowledge acquisition and product innovation. The study also distinguishes the importance of product knowledge and customer product knowledge of product innovation and argues that the latter is important even though it has received less attention in supply chain literature	The findings reveal that supplier involvement in knowledge acquisition and innovation has a greater influence than supplier join planning Secondly, economic incentives within buyer–supplier collaborations positively moderate the relationship between supplier joint planning and knowledge acquisition
Zhao, 2013)	The study focused on suppliers working with manufacturers in new product development (NPD) in China	The finding from the study indicates that relationship strength facilitates tacit knowledge transfer to suppliers and that tacit knowledge transfer to suppliers positively influences suppliers’ new product performance. The study also supports that trust and knowledge transfer supports knowledge transfer	Relationship strength and frequent interactions are important antecedents of tacit knowledge transfer in buyer–supplier collaboration Tacit knowledge influences supplier performance in terms of shortening new product development and improving product quality
Chen (2015).	The study conducted a literature review focusing on collect 30 supplier development activities. The data were then consolidated and synthesised. This was followed by co-occurrence coefficient analysis	Buyer–supplier involvement in knowledge transfer such as knowledge acquisition, knowledge emission and joint knowledge transfer has been recognised in buyer–supplier collaboration. Supplier development may involve knowledge acquisition, selection, generation, assimilation and emission (first-order activities) as well as knowledge measurement, leadership, coordination and control (second-order activities)	Managers must detect potential activities (pre-requisites) before engaging in supplier development (buyer–supplier collaboration) Knowledge transfer is also a precursor to knowledge transfer within the buyer–supplier collaboration. Supplier development may involve first-order knowledge management activities (i.e., knowledge acquisition, selection, generation, assimilation and emission) as well as second-order knowledge management activities (i.e., knowledge measurement, leadership, coordination and control)
Hur and Kim (2014):	A survey of 136 SME suppliers of major Korean firms was conducted and quantitatively analysed hierarchical regression analyses to test the hypotheses of the study	Supplier development must proactively focus on either managerial objectives such as creativity and innovation practices or routine practices such as cost, quality and delivery times. For the purposes of supplier innovation capabilities, managerial objectives must the focus in supplier development	The study distinguishes between managerial knowledge transfer and operational knowledge transfer. Managerial knowledge transfer results in significant improvement such as innovation while operational knowledge transfer focuses on routine activities such as cost, quality and delivery
Marina Du Plessis (2007).	A literature review and syntheses, with personal experiences in knowledge management was conducted in South Africa	Knowledge management ensures accessibility of the knowledge generated through innovation. The study proposes knowledge integration that can results in innovation. The study further argues that there should be a linkage between knowledge integration and adaptability of the knowledge. The study also suggests effective communication, absorptive capacity and knowledge exchanges as facilitators of knowledge transfer for innovation	Knowledge management facilitates the creation of tools, platforms and processes for tacit knowledge. Tacit knowledge, in turn, plays an important role in innovation process Knowledge management provides an enabling environment for transfer tacit knowledge. Further, knowledge management facilitate the transformation of tacit knowledge into explicit knowledge through transfer of meaning in communities of practice centred on innovation Knowledge management facilitates collaboration in the innovation process
Mollahosseini and Barkhordar (2010).	The study utilised secondary data of key literature on knowledge management and supplier development and applied the Modi and Mabert (2007) model	Good supplier relationship is important to respond to dynamic and uncertain environments. Knowledge management facilitates supplier development which in turn may lead to competitive advantage through superior performance	Developing good supplier relationship is an important facilitator of knowledge transfer. Knowledge management is a facilitator of supplier development
Modi and Mabert (2007).	A survey was conducted of 215 manufacturing organisations in the USA. The study focused on testing buying organisation’s perceptions of supplier development efforts. Data were quantitatively analysed using latent variable structural equation modelling	The study emphasises the role of collaborative communication in supplier development. The study further introduces the concept of operational knowledge transfer activities and value creation within the supplier development context	Operational knowledge transfer activities help an organisation to improve supplier capabilities in form of improved organisation performance. Operational knowledge transfer activities also facilitate collaborative communication between partners and knowledge transfer The study further proposes the development of special functional groups within organisations to support supplier development programmes. The study recommends evaluation and certification efforts as a minimum requirement before supplier development can be carried out
Schoenherr et al. (2014).	A sample of 195 SME importers working in the manufacturing industry was used. Structural equation modelling using partial least squares was used to test the hypotheses	The supply chain knowledge management provides an enabling environment for the transfer of tacit and explicit knowledge. Supply chain knowledge management capability positively influences prior knowledge present within the supply chain	Tacit knowledge has a greater impact on supply chain performance compared to explicit knowledge. Greater collaboration and interactions among supply chain partners facilitates the transfer of tacit knowledge
Squire et al. (2009).	The study surveyed 104 UK manufacturing companies and data were quantitatively analysed using multiple hierarchical regression analysis	The findings reveal that cooperation supports knowledge transfer; however, this is positively moderated by trust and supplier performance. Relationship duration negatively support knowledge transfer, organisation share more knowledge in the early stages of the relationship compared to mature relationship	Inter-organisation trust and supplier performance facilitate knowledge transfer in the buyer–supplier collaboration. While relationship duration has a negatively effect on knowledge transfer. This is because companies tend to share more knowledge in the early stages of the relationship compared to mature relationship
Wagner and Krause (2009)	A survey of 61 European research institutions was conducted. Data were quantitatively analysed using descriptive statistics, correlation analysis and hierarchical regression analysis	The study summaries supplier development activities into two categories: indirect or externalised (evaluation of the supplier and provision of explicit information among others) and direct or internalised (provision of in-depth technical knowledge and interactive transfer of tacit knowledge). The study also reveals that buyers invest in communication systems at varying degrees depending on the goals they need to achieve within buyer–supplier collaborations	Organisations distinguish between two supplier development goals: product delivery performance and supplier capability improvement Buyer’s supplier development goals are not influenced by the buyer’s feedback and evaluation of the supplier Knowledge transfer is facilitated by supplier development goals and employee exchanges between partners Buyer’s focus on supplier capability improvement through knowledge transfer also entails more reliance on supplier human resources and interactions

Table

Barriers of knowledge transfer and innovation within buyer–supplier collaboration
Author	Methodology applied	Key issues highlighted	Contribution to the question
Li (2012)	A survey of 110 Executives in Taiwanese original equipment manufacturers (OEM) was conducted. Data were analysed quantitatively using multiple regression analysis was used to test hypotheses	Knowledge stickiness (difficult of transferring practical knowledge) has been proposed to provide both positives and negatives. On the one hand, it acts as a barrier to supplier capability development while on the other side it supports problem-solving activities. Further, it can be argued that difficult but achievable goals motivate suppliers to overcome the stickiness of knowledge	The study proposes a curvilinear relationship between knowledge stickiness and supplier capability. High levels of knowledge stickiness only lead to high supplier capability up to a certain point thereafter, it decreases performance due to diminishing returns Knowledge transferred from the buyer to the supplier can enhance supplier capabilities which in turn can contribute to product innovation Supplier capabilities facilitate supplier commitment which in turn supports supplier performance Knowledge transfer is also influenced by social embeddedness, which is characterised by close ties, trust and culture
Lawson et al. (2015)	A survey of 153 medium- to large-sized and 10 semi-structured interviews were conducted in the UK. Data were quantitatively analysed using structural equation modelling	The findings of the study indicate that supplier’s greater responsibility contributes significantly to new product development through creativity and innovation. However, similarity of technical skills between the buyer and supplier only facilitate knowledge transfer and limit the need for supplier development. Further, there is a negative relationship between single sourcing and supplier development and finally, supplier development in new product development improves supplier performance in terms of creativity and technical capabilities	Complementarity of skills (cross-functional) between the buyer and supplier supports supplier development but may hinder knowledge transfer. When a supplier is given more responsibility in new product development project, the supplier may enhance its creativity and technical skills Investment in relationship-specific may enhance tacit knowledge transfer between the buyer and supplier, and hence contribute to supplier innovative capabilities which can be manifested through relationship rents (superior performance) The study emphasises on proactive supplier development in new product development
Saini et al. (2019)	The study is a mixed study conducted within the construction sector which identifies six challenges of tacit knowledge transfer from literature which are quantitatively validated	The study findings indicate that that fragmented (lack of integration) nature of the supply chain, traditional organisation structures and working processes within the construction sector some of the challenges hindering tacit knowledge transfer	Construction sector supply chain fragmentation, traditional organisation structures and working processes are the main barriers to tacit knowledge transfer

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