Interfirm Alliance Linkages and Knowledge Transfer:An Exploratory Analysis of Mutual Cooperative Learning in an International Joint Venture in the Chinese Automotive Industry

Abstract

The purpose of this thesis is to extend existing knowledge in interfirm knowledge transfer research and provide a rich description of the dynamic knowledge transfer process in alliance arrangements. An exploratory case study methodology is employed, and one international joint venture (IJV) project is investigated. The empirical evidence was derived from the researcher’s involvement with one auto IJV – Shanghai GM, an IJV formed between Shanghai Automotive Industry Corporation (SAIC) from P.R. China and General Motors (GM) from the United States. Data collection was conducted through primary and secondary sources including fieldwork interviews with Chinese and American executives respectively in the IJV, selected published sources as well as government officials, and consultants who were directly or indirectly involved with the case companies. Using CATPAC software as an analytical tool for textual analysis of the collected data, the following findings emerged. First, partner firms in Shanghai-GM reinforce the development of international cooperation as a means of increasing knowledge exchange and adaptation, such as enlarging the product ranges, and developing new car models. Second, partner firms are motivated to increase their knowledge transfer activities to increase competitive advantage levels to match or exceed those of other competitors. Both partner companies initially contributed differentiated sets of idiosyncratic and nonsubstitutable resources that are distinctively under the control of each partner. The Chinese side brings in locally embedded resources and country-specific knowledge. The foreign side contributes technology, managerial abilities, brand image, and financial resources. There is thus an asymmetrical relationship between the objectives of partners and the resources brought into the alliance: each partner firm tries to gain access to what the other puts into the joint venture. Third, relevant important preconditions and situational factors regarding knowledge transfer effectiveness in alliance context are also mentioned. Certain elements are identified as a critical barrier during the process. Fourth, IJV knowledge transfer actually occurred over a longitudinal period involving intensive interactions between the partners. Different types of knowledge were transferred over time starting with key technologies, management skills, followed by the tacit social and cultural knowledge. As time passed, both partner firms demonstrated effort and commitment in facilitating interfirm knowledge transfer practices. The IJV knowledge transfer performance finally influenced the nature of the interfirm partnership. This thesis provides a unique example which looks at the two-way learning processes for true knowledge creation and sharing in a cross-border collaborative organisation, demonstrating the performance of partner organisations in the process of IJV knowledge transfer. Based on literature reflections, tangible facts and interpretations, this thesis provides a deeper understanding of the organisational activities involving cooperation and the dynamic knowledge transfer routines, which is a significant extension of past static cross-sectional conceptualisations. This thesis also proposes an interfirm knowledge transfer and cooperative learning framework, which is emphasised that the issue of sharing knowledge in IJVs and bringing IJVs into profitability requires partner companies to engage in interpartner learning and to be able to benefit from the transfer of knowledge. A key implication for the firm, therefore, is the critical ability to deal effectively and efficiently with the transfer of knowledge resources and in so doing to gain a competitive advantage.