Learning from the world? Horizontal knowledge flows and geopolitics in international consulting firms

Abstract

This paper examines the nature of the contemporary multinational corporation (MNC) through a study of the use of knowledge management systems (KMS) in four major international consulting firms. In particular, we explore whether and how such systems facilitate horizontal (inter-subsidiary) flows of knowledge, as described in the network view of the MNC. Our analysis reveals the presence of horizontal flows within the four firms, but flows that are contextually constrained and partly shaped by geopolitical power relations. Thus, our study gives some support to the image of the MNC as a network whilst highlighting the contextual limits of horizontal knowledge transfer and, importantly, the geopolitical conditions under which such knowledge transfer takes place. At the same time, it challenges the claim that consulting firms are model organizations in the area of knowledge management as well as the more negative view that questions the ability of KMS to facilitate knowledge transfer.

Keywords::

• consulting
• geopolitics
• knowledge management systems
• multinationals
• professional service firms

Notes

^1. Frenkel (2008) reminds us of the importance of retaining the ‘First-World/Third-World’ (as opposed to ‘developed/developing’) terminology in order to avoid the West-centric ‘modernization’ assumption underpinning much of the IM literature. She suggests employing the term ‘First-World’ to refer to the part of the world that is ‘rich, influential, and composed mostly of countries with a European majority or former colonial powers’ (p. 924) and the term ‘Third-World’ to refer to ‘countries characterized by a non-European majority, most of which were subjected to colonial rule’ (p. 924). Whilst we appreciate this definition and very much agree with the need to problematize modernization theory, we feel the ‘First-World/Third-World’ dichotomy is also inadequate, given that it does not accurately reflect the socio-economic and political geography of the modern world and its continually changing character. For these reasons, we prefer to use the ‘core–periphery’ terminology (Wallerstein 2004), which is of course also too simplistic but nevertheless allows to retain an element of differentiation between rich/powerful nations and the rest of the world without depicting all of the former as necessarily Western/imperial and all of the latter as necessarily Eastern/ex-colonized. Many Western nations are not so wealthy/influential and, indeed, as we shall see in this paper, are more ‘peripheral’ than ‘core’ actors in the world economy. Equally, it is becoming increasingly difficult to classify the so-called ‘rising powers’ (e.g. Brazil, China and India) or indeed the Gulf States (e.g. Kuwait, Qatar and the UAE) as part of the ‘Third-World’. Furthermore, we believe the core–periphery divide is particularly useful for our purpose because the global consulting market is clearly divided between a handful of core Western nations (USA followed by Germany and the UK and, to a lesser extent, France, Italy and Spain) and the rest of the world, which includes not only the non-West but also small European nations (Western and Eastern) (see International Financial Services 2005; Gross and Poor 2008; FEACO 2009). So we use the term ‘core’ to refer to the biggest and most powerful Western nations, all of which are or have been imperial powers, and the term ‘peripheral’ to refer to the many small nations based in the West and in the so-called ‘developing’ or ‘emerging’ world.

^2. Knowledge in consulting firms can be classified in terms of three interacting elements: structured consulting methods, individual consultant experience and cases of particular projects (Werr and Stjernberg 2003). Our focus is on the latter, which help connect the former two types of knowledge.

^3. A UK slang term meaning ‘go away’ in an assertive tone.