Conceptualizing knowledge transfer between expatriates and host country nationals: The mediating effect of social capital

Abstract

This paper aims to propose a conceptual model of knowledge transfer by relating two specific personal factors of expatriate and host country national (HCN) dyads as antecedents of knowledge transfer, and mediated by social capital factors. An intensive literature review method was employed to identify and analyse relevant literatures. The paper used a dyadic bi-directional approach in theorizing knowledge transfer by integrating the social capital theory, and the anxiety and uncertainty management theory. The paper considers two personal factors (cultural intelligence and knowledge-seeking behaviour) and two social capital variables (trust and shared vision) as mediators of knowledge transfer. Upon model validation, the paper could offer practical interventions for human resource practitioners and managers to assist multinational corporations towards managing knowledge transfer involving expatriates and HCNs.

Keywords:

• knowledge transfer
• expatriate
• host country national
• cultural intelligence
• knowledge-seeking behaviour
• dyadic relation

Public Interest Statement

What should managers in multinational companies know in relation to the success of knowledge transfer between expatriates and local professionals? Knowledge transfer essentially involves a two-way process: (i) from expatriates to local professionals; and (ii) from local professionals to expatriates. This two-way process, called a bi-directional approach of knowledge transfer, is different from past research that primarily focuses on a one-way process of knowledge transfer from expatriates to local professionals. What affects the bi-directional approach of knowledge transfer? This article proposes two personal factors of expatriates and local professionals, namely cultural intelligence and feedback seeking behaviour; and recommends the use of two common social capital factors, namely trust and shared vision as perceived by both employees in the knowledge transfer process. The strength of this model is that the analysis is based on the expatriate-local professional dyad. The proposed model invites future researchers to find its empirical evidence.

1. Introduction

Knowledge transfer is generally defined as a learning process through which one unit (e.g. group, department, division or firm) is affected by the experience (knowledge and skills) of another (Argote & Ingram, 2000). As the term originates from the field of communication, knowledge transfer can also be defined as a process of dyadic exchange of knowledge between the sender and the receiver in unidirectional and bi-directional forms (Rogers, 2003; Szulanski, Cappetta, & Jensen, 2004). Knowledge transfer in this paper refers to the transmission and receipt of knowledge by an expatriate and a host country national (HCN) that affects the experience (knowledge and skills) of another in bi-directional ways. At the individual level success of knowledge transfer depends on the characteristics of individuals involved as the provider and recipient of knowledge (Easterby-Smith, Lyles, & Tsang, 2008; Szulanski, 1996). This implies that both parties in the knowledge transfer process possess similar functions in a reciprocal manner.

An expatriate-centeredness prevails in much expatriate management research, the main focus is on expatriates’ leadership role in multinational corporations (MNCs), their adjustment to and socialization in the host country (Paik, Vance, Gale, & McGrath, 2008), as well as their role in knowledge transfer from parent companies to subsidiaries (Anne Crowne, 2009; Nery-Kjerfve & McLean, 2012). On the other hand, the HCN perspective requires expatriate management researchers to broaden the scope of study to include HCNs as a key factor affecting the expatriate performance and knowledge transfer process (Toh & Srinivas, 2012), and to support the significance of reverse knowledge flow within MNCs by exploiting the prospect of knowledge transfer from subsidiaries located in developing countries to headquarters (Kumar, 2013). Expatriates and HCNs in MNCs are heterogeneous in backgrounds and abilities. The diverse knowledge, skills and attributes that they possess are valuable assets that MNCs should capitalize on. Knowledge transfer is one of the fundamentals in knowledge management and in the wider construct of organizational development. In any MNC where there are experienced and less experienced employees, knowledge transfer becomes an avenue for converting the experience of the former to the latter. Hence, knowledge transfer is very significant to MNCs as these conglomerates are not only geographically dispersed, but also employ individuals with varying degrees of skills and knowledge (Barry Hocking, Brown, & Harzing, 2004; de Pablos, 2006; Hocking, Brown, & Harzing, 2007).

There are several terms used interchangeably with knowledge transfer in the literature, such as knowledge sharing, technology transfer, knowledge spillover and knowledge diffusion. Knowledge sharing is defined as interpersonal-level knowledge exchanges taking place during ongoing social interactions between individuals (Barner-Rasmussen, 2003a). Others view knowledge sharing, which may or may not be planned or even intentional, as typically referring to a formally organized activity with specific boundaries (Szulanski, 2000). Knowledge transfer, however, differs from technology transfer. Specifically, knowledge transfer implies a broader, more inclusive construct that is directed towards understanding the reasons for change. Technology transfer is a narrower and more targeted construct that usually embodies certain tools for changing the environment (Gopalakrishnan & Santoro, 2004). Knowledge spillover, on the other hand, refers to the positive externalities that firms receive in terms of knowledge from the environment in which they operate (Anselin, Varga, & Acs, 1997). Knowledge transfer is different from knowledge diffusion in that the word transfer is used rather than diffusion in order to emphasize that the movement of knowledge is a distinct experience, not a gradual process of dissemination, and it depends on the characteristics of both the provider and receiver.

Knowledge transfer in MNCs is a complex process involving two types of knowledge, viz. tacit and explicit knowledge. Tacit knowledge, which emanates from the human mind, is not easy to articulate and formalize, and is best transferred through direct and extensive social interactions (Phang & Foong, 2010; Subramaniam, 2006) involving relationship qualities between expatriates and HCNs, such as trust and a shared vision. Polanyi (1961 cited in Anatan, 2013, p. 308) defines tacit knowledge as “know more than we can tell”, and views such knowledge as largely not articulable; it is primarily reflected by the individual’s actions rather than through specific explanations of what he/she knows. Differences in culture and language may hinder such a transfer. Additionally, tacit knowledge does not diffuse easily unless the expatriates with the knowledge have certain personal qualities such as cultural intelligence (CQ) and feedback seeking behaviour (FSB) to facilitate the transfer of knowledge (Argote, McEvily, & Reagans, 2003). Expatriates often possess a huge store of tacit knowledge accumulated through years of experience. Such knowledge is extremely useful for global corporations as it provides a deeper understanding of the realities of international businesses (Lazarova & Tarique, 2005). On the other hand, explicit knowledge is highly codified and is transferred via written documents, information technology or training, coaching and mentoring initiatives, and other formal and informal learning activities. Explicit knowledge, unlike tacit knowledge, is more tangible and observable.

Managerial expertise of MNCs’ employees is more tacit than knowledge of a product or technology development (Dhanaraj, Lyles, Steensma, & Tihanyi, 2004; Lane, Salk, & Lyles, 2001). However, the two aspects of knowledge, tacit and explicit, are not completely distinct because knowledge tacitness and codifiability should be considered as a continuum that is sometimes inseparable when they are involved in a knowledge transfer process (Nonaka & Takeuchi, 1995). Both tacit knowledge and explicit knowledge are especially difficult to transfer without face-to-face communication (Barry Hocking et al., 2004; Suppiah & Singh Sandhu, 2011). This implies the significance of establishing relationship qualities between the provider and receiver of such knowledge.

As relationship qualities between expatriates and HCNs are vital for knowledge transfer purposes, one way to achieve this is through strong social capital (Argote et al., 2003; Chang, Gong, & Peng, 2012; Kostova & Roth, 2002; Rhodes, Hung, Lok, Ya‐Hui Lien, & Wu, 2008). Social capital simply refers to the links, shared values, vision and understanding in any organization that enable employees and groups to trust one another and so work together through a mutual social network. Based on Rogers’ communication theory, actor homophily increases the probability of positive relationship qualities (Rogers, 2003). As expatriates and HCNs are from different backgrounds, it is not inconceivable that they face more challenges in forging positive relationship qualities than dyads from the same country of origin. This is further supported by Norling and Retz (2013) who assert that while knowledge transfer by expatriates at the subsidiaries to headquarters is difficult due to geographical distance, knowledge transfer between expatriates and HCNs is more challenging despite their being in the same organization. Employees may resist accepting new knowledge from other teams or divisions because it is not related to their prior knowledge. This inward-looking bias may lead to the “not-invented-here” syndrome at the organizational level, as pointed out by Cohen and Levinthal (1990 cited in Kang & Sauk Hau, 2014, p. 756).

Against such a backdrop, several pertinent questions arise: How do personal qualities such as CQ and FSB influence knowledge transfer from expatriates and HCNs, and vice versa? How do social capital variables mediate the relationship between antecedents (CQ and FSB) and knowledge transfer between expatriates and HCNs?

For a bi-directional knowledge transfer, HCNs too become sources of knowledge. Their perspectives and approaches to the transfer of local knowledge to expatriates and conversely, their responses to the knowledge gained from the expatriates are significant. However, this aspect of knowledge transfer has largely been ignored in existing studies which mostly adopt a unidirectional approach, generally focusing on how to successfully facilitate expatriates’ knowledge transfer without considering how to prepare HCNs transferring local knowledge to expatriates. As HCNs also need to learn how to work with individuals from different cultures, it is arguable that there is a need to look at the social capital factors as mediators in the influence of personal qualities on knowledge transfer.

The objectives of this conceptual paper are: (i) to examine the influence of two selected personal factors, namely CQ and FSB, on knowledge transfer between expatriates and HCNs; and (ii) to examine the mediating effects of two social capital factors (trust and shared vision) in the relationship between the personal factors (CQ and FSB) and knowledge transfer of expatriates and HCNs. Based on the objectives, this paper proposes a conceptual framework and a set of propositions. This analysis is a response to a suggestion by Argote and Ingram (2000) calling for more investigations regarding individual characteristics of international assignees in knowledge transfer as they may be knowledge providers and/or recipients. The mediating function of relationship qualities (trust and shared vision) implies that there is a need to look at the fact that expatriates and HCNs are from different cultural backgrounds and so they have to depend on other mediating factors or social capital factors to facilitate the transfer. This study is crucial because it responds to Kamoche’s (1997) call for an international HRM theory and practice to be viewed within a framework of knowledge and learning. This perspective shows (i) the importance of the continuing relevance of long-term expatriate deployment within MNCs, and (ii) the value of such assignment experience in knowledge management specifically in relation to knowledge transfer between expatriates and HCNs bi-directionally as knowledge transfer is an integral part of a learning organization. In addition, this concurs with the suggestion of Toh and Srinivas (2012) to consider the role of HCNs in investigating expatriate performance in international knowledge management.

The significance of this study is as follows: First, existing knowledge transfer research generally takes a macro lens by focusing on organizational structure and processes. This paper takes a micro level approach by exploring how personal qualities (CQ and FSB) of expatriate-HCN are instrumental to knowledge transfer. Second, this study goes beyond the tradition of unidirectional knowledge transfer from expatriates to HCNs by considering a two-way knowledge transfer to and from both expatriates and HCNs. Instead of the expatriate-centric approach used in previous research, this study highlights the role of local employees or HCNs as the source as well as the recipient of knowledge. Third, this study adopts the mediating functions of relationship qualities in linking the personal qualities (CQ and FSB) of expatriate-HCN that are instrumental to knowledge transfer. This is because knowledge transfer is not a direct process as it is bound to be influenced by other intervening variables. This study is among the first to empirically propose an investigation on bi-directional knowledge transfer in MNCs specifically in a developing economy and thereby expand the literature that has focused predominantly on MNCs located in developed countries.

In Section 2, we shall look at each of the theories used in this analysis and examine how do the personal variables of expatriates and HCNs, together with social capital factors, are crucial in the dyadic process of knowledge transfer in MNCs.

2. Theorizing knowledge transfer between expatriate and HCN

2.1. Social capital theory

Following Nahapiet and Ghoshal’s (1998, p. 243) conceptualization that is supported by Inkpen and Tsang (2005, pp. 150–151), social capital is defined as the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual. The social capital theory is therefore centrally concerned with meaningful interactions and linkages as sources for social action (Audretsch & Aldridge, 2012; Burt, 1992; Coleman, 1990). As knowledge transfer refers to how one is affected by the experience of the other, the social capital theory, which is about how relationships or networks influence social behaviour, provides a useful framework for understanding knowledge transfer. The theory supports knowledge transfer as it takes place within networks of individuals in an organization. Indeed, networks become the avenue for firms to gain access to knowledge, resources, markets and technologies (Inkpen & Tsang, 2005).

In the context of expatriate-HCN linkages, social capital highlights interactions between expatriates and HCNs that facilitate coordination and cooperation for mutual benefit. Social capital is a complement to human capital and physical capital in that it contributes a social component to those factors generating positive economic value of organizations (Putnam, 1993). However, it is important to emphasize that the meaning of social capital does not suggest that linkages and interactions are homogeneous. Rather, some types of social interactions with particular individuals generate richer social capital than do others, depending upon the complementarities between the individuals. For instance, social interactions among expatriates or among HCNs would generate stronger social capital than social interactions between expatriates and HCNs. According to past research, one of the predictors of successful knowledge transfer is the quality of the dyadic relationship (Song, Almeida, & Wu, 2003; van Wijk, Jansen, & Lyles, 2008) that involves, among others, the two types of social capital mentioned above (trust and shared vision). Both Bourdieu (1985) and Coleman (1990) place emphasis on the intangible qualities of social capital relative to other forms. As Shariq (1999) argues, the knowledge transfer process is ultimately a human-to-human process. Hence, this article uses social capital (trust and shared vision) in the form of dyadic relationship between expatriates and HCNs to look at their role in the knowledge transfer process.

Gao and Riley’s (2009) analysis shows that current literature sees knowledge transfer as a socialization phenomenon and seeks explanations through structural and cognitive determinants of communication. Trust (structural relation) and shared vision (cognitive relation) are two qualities of inter-individual communication that determine the outcome of interactions between individuals such as in knowledge transfer. Therefore, it is appropriate to consider them as social capital variables in this analysis.

2.2. Anxiety and uncertainty management theory

Another theory used in this analysis is Gudykunst’s (1995) anxiety and uncertainty management (AUM) theory that considers the personal qualities of people in organizations. Anxiety is an affective or emotional equivalent of uncertainty. It is regarded as one of the fundamental problems which all individuals have to deal with when interacting with others (Yoshitake, 2002). However, research shows that when people get to know one another, anxiety decreases (Gudykunst, 1995). Uncertainty, on the other hand, can be categorized as cognitive or behavioural. As a cognitive phenomenon it highly influences the way people think about others, while behavioural uncertainty is the extent to which people are relatively certain that their counterparts will behave in an expected way. Berger and Calabrese (1975 cited in Hsu, 2012) further enrich the meaning of uncertainty by including two types of uncertainty, viz. predictive uncertainty i.e. when strangers are unable to foretell which of several alternative behaviours their host would employ, and explanatory uncertainty i.e. when they are unable to explain their host’s behaviour.

The AUM theory proposes that anxiety and uncertainty are critical factors in influencing the effectiveness of intergroup communication, particularly in a cross-cultural context involving expatriates and HCNs. Feelings of anxiety and uncertainty are magnified in events that take place between people of different cultural backgrounds because in a diverse social environment, people tend to have their ethnocentric views while ignoring individual differences (Hsu, 2012).

Gudykunst (1995) further incorporates the concept of mindfulness, which also relates to CQ, to improve the AUM theory. Mindfulness includes openness to novelty, alertness to distinctions, and sensitivity to different contexts of messages, being implicitly and explicitly aware of multiple perspectives including cultural differences. Mindful description, acting with awareness, and non-judgemental acceptance were found to be associated with better identification and description of perception, and less social anxiety among groups with different cultures in an organization (Dekeysera, Raesa, Leijssena, Leysena, & Dewulfb, 2008). As such, by being more aware of cultural differences around them, i.e. by being culturally intelligent, expatriates would be in a better position to manage their anxiety and uncertainty and would interact more often with HCNs, thus facilitating the knowledge transfer process. This underlines the significance of CQ in the knowledge transfer process involving expatriates and HCNs. The basic argument of the AUM theory is that the lower the level of anxiety and uncertainty among actors, the better the intercultural interaction (Gudykunst, 1995) that facilitates the knowledge transfer process. As expatriates and HCNs come from different cultural backgrounds, they may have dissimilarities that create anxiety and uncertainty and, in turn, these become barriers of action. Therefore, the potential of reducing anxiety and uncertainty through effective social interactions should be profitably explored.

Bengoa and Kaufmann (2014) argue that when managers neither see nor want to observe cultural differences, they limit their ability to manage cultural diversity and reap its benefits. In other words, the problems arising from cultural diversity must be minimized, while the benefits of cultural diversity should be exploited to facilitate transfer of knowledge between individuals in MNCs. Expatriates and HCNs in an MNC are bound to face anxiety and uncertainty as they may not have cross-cultural knowledge or they lack experience with cross-cultural interactions (Molinsky, 2007). According to the AUM theory, when uncertainty and anxiety are reduced, social interaction is smoother. As such, MNCs should take up the challenge to innovate by learning from global sources and take advantage of the exposure to new management practices, foreign cultures and businesses.

Section 3 describes the direct relationship between each personal quality and knowledge transfer.

3. CQ and knowledge transfer

CQ, first coined by Earley and Ang (2003), is advanced by the impact of globalization in the workplace (Ang, Van Dyne, & Koh, 2006). The authors define CQ as a person’s capability to function effectively in a culturally diverse setting. Individuals need to be socially sensitive and adept in deciding on the most suitable behaviour in an intercultural interaction. Research has also shown that CQ is an important social skill for cross-cultural interactions (Nery-Kjerfve & McLean, 2012). CQ also found to enhance the likelihood that individuals on international assignments would actively engage in the four stages of experiential learning (experience, reflect, conceptualize, experiment), which in turn leads to global leadership development including role in knowledge management (Ng, Van Dyne, & Ang, 2009). CQ is a significant predictor of an expatriate’s work adjustments and interaction with other employees, which consequently shows positive effects on both the expatriate’s task and contextual performance, including knowledge transfer (Abdul Malek & Budhwar, 2013). CQ, a multidimensional construct consisting of meta-cognitive, cognitive, motivational and behavioural components (Ang, Van Dyne, Koh, & Ng, 2004), is a concept anchored on the theory of multiple intelligences (Gardner, 1993). Meta-cognitive CQ refers to one’s knowledge or controls over cognitions that lead to deep information processing relating to culture. It is the individuals’ cultural consciousness, and is related to strategies to cope with cultural diversity (Ang et al., 2007).

Cognitive CQ is more universal as it includes knowledge of the economic, legal and social systems of different cultures. Those with high cognitive CQ understand the challenges of cross cultures and are not too ethnocentric. Cognitive CQ has been found to associate significantly with knowledge transfer and firm performance such as in Uganda (Musasizi, 2010). Motivational CQ reflects interest in the desire to adapt to the other culture that goes beyond the boundary of cultural differences (Ang et al., 2007). This type of CQ includes the motivation to feel good about oneself, desire to improve oneself, and to sustain one’s performance. Lastly, behavioural CQ involves the capability to engage in adjustment behaviours in accordance with cognition and motivation based on specific cultural values, which include having a flexible pattern of behaviours. Those with high behavioural CQ are capable of exhibiting situational behaviours such as displaying culturally appropriate language in conversation, with proper body gestures and verbal expressions. Previous studies have demonstrated the ability of CQ to predict various behavioural outcomes of expatriate and local employees, one of which is knowledge transfer (Ang et al., 2004).

CQ is also relevant to the adaptability of expatriates as learners (Feitosa, Kreutzer, Kramperth, Kramer, & Salas, 2014) and in knowledge transfer (Kodwani, 2012; Tsang, 2001). Specifically, those who have high CQ are more likely to make accurate cultural judgments faster (Ang et al., 2007; Kodwani, 2012) and would feel comfortable interacting with people from diverse cultures. The choice of CQ variable in this study is also according to a suggestion by Chang et al. (2012) that expatriates must also be willing to cope with cultural difficulties in their social interactions with HCNs and establish relationships with them and vice versa. Therefore, given the advantages of interacting with people from culturally diverse backgrounds, those who have high CQ are more likely to have meaningful interactions that facilitate the transfer of knowledge. The above evidences show that CQ is recognized as a unique explanatory variable in knowledge transfer. It is thus proposed that:

P1: Cultural intelligence promotes knowledge transfer between expatriates and HCNs in bi-directional forms. (P1a, P1b)

4. FSB and knowledge transfer

“FSB” had its origins in a performance appraisal issue (Ashford & Cummings, 1983). The concept has evolved beyond the feedback employees received from their bosses to an understanding of the ways that employees seek and use feedback for work enhancement (Anne Crowne, 2009). As an element in a self-regulatory action, it refers to the “conscious devotion of effort towards determining the clarity and adequacy of behaviour for attaining valued ends” (Ashford, 1986, p. 466). FSB then becomes both an employee practice and a managerial issue because it helps individuals achieve their goals. It is a proactive personal behaviour that is appropriate for professionals such as medical educators in adapting, learning and performing (Crommelinck & Anseel, 2013) as well as expatriates, repatriates and top management teams to increase cross-border assignment (Anne Crowne, 2009). FSB is a process by which individuals assess themselves through comparisons to others (Krasman, 2010). This behaviour also refers to how individuals use social relationships to overcome difficulties when transferring knowledge (Chang et al., 2012). Thus, knowledge workers such as expatriates and HCNs who are interested in feedback devise creative ways to ascertain whether they are on the right track.

Ashford, Blatt, and VandeWalle (2003) identify five key aspects of FSB, namely (i) frequency, or how often individuals seek it; (ii) the method used to seek feedback, whether by observing, comparing or asking for it; (iii) the timing of feedback seeking; (iv) the target of feedback seeking and (v) the topic on which feedback is sought, for example, on successes versus failures or on certain aspects of performance such as annual assessment. In addition, three primary motives that underlie FSB are identified, viz. the instrumental motive to achieve a goal or perform well, the ego-based motive to defend or enhance one’s ego, and the image-based motive to protect or enhance the impressions that others hold of oneself (Ashford et al., 2003).

The effectiveness of FSB has been frequently linked to three psychological variables that can influence knowledge transfer, viz. task information, self-efficacy and feedback utilization (VandeWalle, 2003). Task information requires feedback for expatriates and HCNs to correct errors. Self-efficacy is one’s belief that one has the capacity to execute a course of action required to produce the desired outcome such as knowledge transfer. Feedback utilization is defined as the degree to which feedback is used by each expatriate and HCN to make the suggested changes. According to Gupta and Govindarajan (2000), the headquarters of an MNC should shape the self-regulatory behaviour for employees to improve work performance because the greater the reliance on formal mechanisms to transfer knowledge, the greater the knowledge outflow. Moreover, other researchers have posited that in order for knowledge transfer to be effective, corporations have to provide the right atmosphere to capture knowledge (Lazarova & Tarique, 2005), such as by inculcating trust relationship between expatriates and HCNs (Kang & Sauk Hau, 2014). FSB provides the opportunity for peers to interact more frequently, particularly in diverse organizations such as MNCs. Kumar (2013) further asserts that behaviour to seek knowledge and feedback from subsidiaries is one of the managerial attentions that should be capitalized on by MNCs in developing countries.

Organizations are themselves control systems that continuously evaluate employee performances. Individuals in an organization engage in feedback seeking through one or both of two mutually non-exclusive strategies: monitoring and inquiry (Crommelinck & Anseel, 2013). The former entails observing the situation and the behaviour of both expatriates and HCNs for cues useful as feedback; this is thus a process of meaning construction. In contrast, the latter is the individual’s attempt to actually increase the amount of personally relevant data by directly asking and observing members in that environment for their evaluation of the behaviour in question. These two methods of monitoring and inquiry thus have direct and indirect impact on trust and the shared vision of expatriates and HCNs alike, influencing knowledge transfer. It is thus proposed that:

P2: Feedback seeking behaviour encourages knowledge transfer between expatriates and HCNs in bi-directional forms. (P2a, P2b)

5. Relationship of antecedents (CQ and FSB) with mediators (trust and shared vision)

The success of knowledge transfer depends to some extent on the ease of communication and on the overall relationship between the parties involved. According to Szulanski (1996), a distant relationship between the source of knowledge and the recipient is one of the major barriers to knowledge transfer. The AUM theory (Gudykunst, 1995, 1998) identifies potential antecedents of relationship in knowledge transfer. Therefore, this study proposes potential antecedents of relationship on the basis of their ability to reduce the anxiety and uncertainty of expatriates and HCNs, thus enabling effective social interactions. Specifically, the study will look into how CQ and FSB are likely to enable such relationships. Each personal quality (CQ and FSB) is discussed in relation to trust and shared vision.

5.1. CQ and trust

For both expatriates and HCNs, cross-cultural interactions are likely to be associated with anxiety and uncertainty as they may lack experience with cross-cultural interactions (Molinsky, 2007). CQ, a quality that may help to reduce anxiety and uncertainty associated with cross-cultural interactions. Specifically, those who have high CQ, not only do they make cultural judgments faster (Ang et al., 2007), they also feel comfortable interacting with people with diverse culture (Thomas et al., 2008). More importantly, CQ engenders trust. Trust entails being vulnerable to harm from others, and yet believing that these others would not do harm even though they could (Kramer, 1999).

Uncertainty and anxiety about culturally diverse others are likely to be high for individuals low in CQ because it would be more difficult to anticipate the attitudes, thoughts or behaviour of others. Empirical evidence also suggests that CQ affects interpersonal trust in cross-cultural dyads (Rockstuhl & Ng, 2008). Thus, the following propositions are developed:

P3: Expatriates’ cultural intelligence is positively related to trust in their HCNs in bi-directional forms. (P3a, P3b)

5.2. CQ and shared vision

In addition to trust, those who have higher CQ are also more capable to have a shared vision of the firm’s strategy and goals. Shared vision refers to the behaviour of giving priority to group goals rather than personal goals. High CQ individuals have lower anxiety and uncertainty during intercultural communication because they are more likely to see things from culturally diverse perspectives, making it easier for them to understand and communicate with others. Indeed, research has shown that high CQ individuals are more likely to see themselves as interdependent with in-groups, giving priority to in-group goals rather than to personal goals (Choi, Nisbett, & Norenzayan, 1999; Triandis & Suh, 2002). Along the same lines, research has demonstrated that individuals with higher CQ are more likely to approach a situation with a cooperative mind set and less likely to maintain strong in-group and out-group distinctions (Imai & Gelfand, 2010). Thus, it is proposed that:

P4: Expatriates’ cultural intelligence is positively related to shared vision with their HCNs in bi-directional forms. (P4a, P4b)

5.3. FSB and trust

Ashford et al. (2003) identify three primary motives of FSB, one of which is to protect or enhance one’s image. Image considerations need not be strictly defensive since an individual’s image can be enhanced as well as be harmed by feedback seeking. Accordingly, they find that combining monitoring and inquiry modes of FSB enhances role clarity. Both image enhancement and role clarity would develop mutual trust between expatriates and HCNs because positive feedback to a subordinate would lead a supervisor to have a more favourable impression of that person (Ashford & Northcraft, 1992). Trust could also be an antecedent to FSB (Barner-Rasmussen, 2003b) by which leaders would build a trust relationship with their subordinates (expatriates or HCNs), and this would then help to contribute positively to organizational performance and knowledge transfer. Thus, it is proposed that:

P5: Expatriates’ FSB promotes trust in their HCNs in bi-directional forms. (P5a, P5b)

5.4. FSB and shared vision

FSB is a self-regulatory productive behaviour. In this connection, individuals tend to obtain feedback in order to modify their behaviour to become more acceptable to others. One of the consequences of this tendency is a shared vision (Ashford et al., 2003). Stimulated by an internally derived vision, FSB that places emphasis on the strengths or attributes where the performer is at his best communicates a stronger message that leads to effectiveness (Ashford & Northcraft, 1992). FSB helps to clarify the performer’s vision of what he could do in an organization as individuals are likely to achieve excellence and distinction in work settings where they have goal clarity and are able to work together towards goal achievement (Roberts, Dutton, Spreitzer, Heaphy, & Quinn, 2005). Thus, it is proposed that:

P6: Expatriates’ FSB promotes shared vision with their HCNs in bi-directional forms. (P6a, P6b)

6. Trust and shared vision relationships with knowledge transfer

Social exchanges between expatriates and their HCN colleagues are particularly important in the transfer of tacit knowledge. Indeed, the importance of social capital for learning and knowledge transfer has been acknowledged (Kostova & Roth, 2002). Social capital has been highlighted as a critical resource for accessing and exploiting individual and collective knowledge (Reiche et al., 2009). Furthermore, empirical evidence supports the role of positive interpersonal relationships between international and local staff in the successful transfer of knowledge (Bonache & Zárraga-Oberty, 2008). Following Nahapiet and Ghoshal’s (1998) framework, the expatriate-HCN relationship is conceptualized here in terms of three dimensions of social capital, viz. structural, relational and cognitive, and discussed with respect to how they are related to knowledge transfer.

The structural dimension, the basic component of the pattern of interactions within a firm’s social network (Kaše, Paauwe, & Zupan, 2009; Nahapiet & Ghoshal, 1998), is operationalized as face-to-face interactions between expatriates and HCNs. Inkpen and Tsang (2005, p. 146) are also of the opinion that knowledge transfer is facilitated by intense social interactions of organizational members. Similarly, it has been suggested that an assignment that entails increased interactions with HCNs is likely to create wider opportunities for learning and knowledge transfer than an assignment that requires fewer contacts with locals (Lazarova & Tarique, 2005). Therefore, it is believed that the more frequent the interaction between expatriates and HCNs, the more likely they would exchange knowledge with each other. While the frequency of interaction is not considered in this research, it is believed to further foster other social capital factors such as trust and shared vision.

Trust is the relational dimension of social capital. Trust is the expectation that one’s exchange partner would act benevolently, and not opportunistically, within a relationship (Nahapiet & Ghoshal, 1998). Building an atmosphere of trust within an organization is among the important guidelines in knowledge transfer. Trust facilitates the transfer of knowledge since it increases partners’ willingness to commit to helping each other understand new external knowledge (Kang & Sauk Hau, 2014; Lane et al., 2001). It also affects knowledge exchange and sharing by creating a number of necessary conditions (Kang & Sauk Hau, 2014; Nahapiet & Ghoshal, 1998; Tsai & Ghoshal, 1998), such as openness in communication.

Shared vision is the cognitive dimension of social capital. It refers to resources providing shared representations, interpretations and systems of meaning among parties (Cicourel, 1973 cited in Hsu, 2012). This attribute facilitates a common understanding of collective goals and proper ways of acting in a social system (Tsai & Ghoshal, 1998). Previous studies suggest that shared vision, the extent to which different individuals share long-term visions and goals, is an important cognitive element characterizing social relations that influence knowledge transfer (Inkpen & Tsang, 2005). For example, a study by Chow and Chan (2008) on managers in Hong Kong firms showed that social trust and a shared vision affected their intention to share knowledge. Similarly the extent to which the parties share similar knowledge bases and the strength of interactions between the source and the recipient affected knowledge transfer success among R&D executives at the US high technology companies (Cummings & Teng, 2003).

A shared vision promotes mutual understanding and provides a crucial bonding mechanism that helps different actors integrate knowledge. For expatriates and HCNs, the communication process involves more than a simple transfer of information between individuals. In the social context, knowledge transfer in either direction may be hindered by differences in shared vision, values and beliefs between the two groups (Oddou, Osland, & Blakeney, 2009). Research also suggests that a shared identity (Kane, Argote, & Levine, 2005) and a shared vision (Fey & Furu, 2008) increase knowledge sharing and knowledge transfer. As suggested by Wood (1997), communication takes place within a shared field in the transactional communication model, which highlights the importance of the source and recipient’s relationship. The common ground created between individuals having a shared field and vision plays a pivotal role in knowledge transfer between expatriates and HCNs.

Based on the above discussion, it is proposed that:

P7: Expatriates’ trust in their HCN colleagues is positively related to knowledge transfer in its bi-directional forms. (P7a, P7b)

P8: Expatriates’ shared vision with their HCN colleagues is positively related to knowledge transfer in its bi-directional forms. (P8a, P8b)

7. Trust and shared vision as mediators on the relationship of CQ and FSB with knowledge transfer

The social capital theory suggests that individuals achieve desirable outcomes (such as knowledge transfer) through two sequential processes, viz. access to and mobilization of social capital (Coleman, 1990). It is, therefore, anticipated that individuals obtain knowledge transferred from others by first utilizing CQ to access to social capital in terms of trust and shared vision. With these forms of social capital at hand, they then proceed to acquire knowledge from others. Based on the social capital theory and discussion above, it is argued that social capital (trust and shared vision) serves as an underlying mechanism that links personal qualities (CQ and FSB) and the process of knowledge transfer.

Trust is “the extent to which a person is confident in and willing to act on the basis of the words, actions, and decisions of another” (McAllister, 1995, p. 25). It is also viewed as the positive expectation that another individual will make the effort to fulfil commitments (Dirks & Ferrin, 2002). In a study by Toh and Srinivas (2012) in Oman, it was found that trust mediated the relationship between perceived task cohesiveness and HCNs’ willingness to share and transfer knowledge with expatriates.

Trust and a shared vision have often been used to refer to social aspects of a cooperative relationship (Murnighan, 1994). Trust and shared vision are psychological determinants of cooperative social bonds of relationships which entail familiarity, friendship and confidence in a relational exchange, including knowledge transfer (Rodriguez & Wilson, 2000). As Li (2005) observed among expatriates and HCNs of MNCs in China, shared vision is a necessary condition for exchanges to occur because the identification and combination of strategic resources can only be realized if the interacting firms have systems and cultures that are adequately compatible to facilitate coordinated action. According to Nahapiet and Ghoshal (1998), shared norms and vision increase the level of mutual understanding about different cultures among organizational members, which in turn acts as a resource influencing knowledge share and transfer. Yli-Renko, Autio, and Sapienza (2001) further emphasize that a shared vision enhances the relative absorptive capacity of a firm in knowledge acquisition and exploitation in the dyad of expatriates and HCNs. Bresman, Birkinshaw, and Nobel (1999), as well as Cummings and Teng (2003) assert that the transfer of tacit knowledge is very communication-intensive and therefore needs intensive interaction; this underlines the importance of trust and a shared vision. Thus, it is proposed that:

P9: Expatriates’ trust in their HCNs mediates the relationship between CQ as well as FSB and knowledge transfer in its bi-directional forms. (P9a, P9b, P9c, P9d)

P10: Expatriates’ shared vision with their HCNs mediates the relationship between CQ as well as FSB and knowledge transfer in its bi-directional forms. (P10a, P10b P10c, P10d)

A proposed dyadic relationship of expatriate-HCN in knowledge transfer from the expatriate and HCN perspectives are shown in Figures 1 and 2, respectively.

Figure 1. A conceptual framework of knowledge transfer of expatriate-HCN (from expatriate’s perspective).

Note: HCN is host country national.

Figure 2. A conceptual framework of knowledge transfer of expatriate-HCN (from HCN’s perspective).

Note: HCN is host country national.

8. Dyadic bi-directional approach of analysis

Dyad is a group of two people distinguishable by a certain characteristic or identity. In this study, a dyad consists of a pair of expatriate and HCN that can be differentiated from each other based on one’s functional identity. The dyad maintains a sociologically significant relationship in a workplace or organization and they are interdependent in achieving an organization mission and vision. When data from a pair of individuals is used in a statistical analysis it is generally called dyadic analysis (Kashy & Kenny, 2000). The interdependence could occur resulting from reciprocity, compensation and synchrony in the responses of the members of the dyad. The interdependence is useful in dyadic analysis to study how the behaviour of one person influences the behaviour of the other dyadic partner or how an individual perceives the other dyadic partner on certain research construct. In this study, the dyads will be distinguished by function and identity in the knowledge transfer process; as the sender and the receiver and vice versa. Therefore, the reciprocity between the dyad members leads to the process of bi-directional or two-way manner of knowledge transfer. This means that the pair of the dyad members is linked via mutual tasks in the knowledge transfer process. The strength of the dyadic relationship is evaluated on the basis of time the individuals spend together and other social relation factors. In this study, the relevant social factors of mutual trust and shared vision at workplace facilitate the two people into a sphere where each person influences the other in the knowledge transfer process.

The research subject of this study would be expatriate-HCN dyads. Expatriates should be identified first and each expatriate will then be required to identify one HCN that s/he works with most comfortable in an MNC or international organization in terms of knowledge transfer in order to establish an expatriate-HCN dyad. Data will be obtained first from the perspective of expatriates (from expatriate sample), followed by data from the perspective of HCN (from HCN sample) based on the constructs in the suggested framework. Data analysis would proceed separately from the perspectives of each group of expatriates and HCNs according to the framework in Figures 1 and 2. As the proposed framework involves a set of mediating variables (social capital of trust and shared vision) it would be appropriate to use structural equation modeling in the data analysis and the interpretation would be based on the propositions indicated above.

9. Conclusion, practical implication and future research

This paper underscores the importance of bi-directional knowledge transfer between expatriates and HCNs and proposes two personal factors, viz. CQ and FSB of both employees. The paper also offers two social capital variables, trust and shared vision, and explains their role in mediating the influence of the personal factors on knowledge transfer in MNCs. The model further concludes that owing to the importance of bi-directional knowledge transfer between expatriates and HCNs, firms should try to promote personalization methods of knowledge transfer by capitalizing on the two personal qualities, CQ and FSB, using social capital values of trust and shared vision. However, as suggested by Anne Crowne (2009), in this era of technology sophistication, the use of digital tools should not be ignored in the transfer process because electronic document systems are used extensively to manage knowledge (Hansen, Nohria, & Tierney, 1999).

Practical implication of this paper is obvious to MNCs from the perspective of organizational learning. A knowledge transfer model of the dyadic relationships between expatriates and HCNs can be useful in instituting productive change in organizations, such as a better understanding of the local market, knowledge about foreign culture, understanding the macro-economic environment and/or distribution infrastructure. Employees who are on international assignments are likely to gain knowledge and skills that cannot be acquired through other means, such as training or reading. Specific knowledge of the market, understanding the socio-cultural environment, and exposure to the political and legal environment which are crucial for management and corporate governance are some of the areas of knowledge that can be acquired by an expatriate by interacting with HCNs. Continuous knowledge transfer promotes organizational learning which occurs with the “acquisition of knowledge by individuals and groups who are willing to apply it in their jobs when making decisions and influencing others to accomplish tasks important for the organization” (DeNisi, Hitt, & Jackson, 2003, p. 15). Creating an environment of continuous learning has major implications as continuous learning impacts organizations exponentially (DeNisi et al., 2003). Therefore, managers must be proactive and organize various learning interventions such as knowledge sharing/exchange sessions, internal and bi-directional mentoring and coaching activities, and structured on-the-job-training particularly pertaining to cross-cultural issues, all of which aims to inculcate better level of CQ, FSB, trust and shared vision among expatriates and HCNs.

As Kumar (2013) argues that MNCs lack efficiency in exploiting knowledge from distant subsidiaries, particularly from those located in developing countries; hence this paper therefore useful to MNCs’ managers as a guide to encourage knowledge transfer in their organizations. The bi-directional knowledge transfer of expatriate-HCN dyads implies that an MNC is not only receiver of knowledge but it can also be a source of knowledge and contribute to the organization as a whole. It is being argued that many MNCs lack these appropriate CQ and FSB types of managerial attention (Kumar, 2013). By doing so, while capitalizing on social capital factors of trust and shared vision, it supports the need for knowledge transfer from subsidiary to headquarters or termed as reverse knowledge flow in MNCs (Kumar, 2013).

This paper seeks to narrow the gap in the literature involving both personnel in terms of individual behaviour, and the power of trust and a shared vision in determining knowledge transfer. This paper further contributes to both AUM theory and social capital theory in that it expands our understanding of how both theories are interrelated in deriving and supporting the personal variables as antecedents of social capital, and consequently in influencing knowledge transfer.

Future research can be undertaken to validate this framework and to present empirical evidence that trust and a shared vision between expatriates and HCNs are important components for building cooperative relations between the two groups of personnel (Toh & Srinivas, 2012). The strength of personalization methods of knowledge transfer involving person to person interaction should also be further examined. Finally, this framework is recommended for use in MNCs located in the fast emerging economies of Asia such as those in China, India, Malaysia, South Korea, Singapore and Thailand. In these countries, cultural differences between expatriates (if they come from western countries) and HCNs are potential hurdles to knowledge transfer and close work cooperation. A limitation of this framework is that it considers only two personal variables and the traditional aspects of social capital as variables even though knowledge transfer occurs in the context of a more complex structure found in MNCs. Hence, future research is recommended to include other organizational and knowledge characteristics as well as embedded resources dimension within those networks (Kang & Kim, 2013). Another limitation in the present study is that the framework is confined to the expatriate-HCN dyad specifically. Future research on knowledge transfer may therefore consider other types of dyads such as leader–member, superior–subordinate, mentor–protégé or repatriate–employee of a firm.

Additional information

Funding

Funding. The authors received no direct funding for this research.

Notes on contributors

Maimunah Ismail

Maimunah Ismail, PhD, is a professor in human resource development (HRD) in the Department of Professional Development and Continuing Education, Faculty of Educational Studies, Universiti Putra Malaysia, Serdang, Selangor, Malaysia. Her current research interests include work adjustment of returnees and expatriates, knowledge transfer, career development, and the human side of mergers and acquisitions of organizations from the perspective of intergenerational workforce. She has authored 12 books and numerous articles in international journals. She sits on the Editorial Advisory Board of Human Resource Development International, European Journal of Training and Development, Gender in Management, Organizations and Markets in the Emerging Economies, and Advances in Human Resource Development. She is a member of the Academy of HRD and the British Academy of Management.