Knowledge transfer in a cross-cultural context : Case study within a Swedish R&D company: Offshore outsourcing to India

University essay from Örebro universitet/Handelshögskolan vid Örebro universitet

Abstract: The global competition and as the worldwide market has become more open a company’s ability to outsource activities to external companies based in other countries, i.e. offshore outsourcing, has increased dramatically. Companies are starting to transfer higher value-added activities that require certain skills, domain knowledge and experience, i.e. Knowledge Process Outsourcing (KPO). These activities are getting more difficult and complex to manage compared with standardised activities such as payroll, and predict another kind of co-operation and communication between the companies. When the sender and receiver are based in different context, such as organisational and cultural, other aspects might be added to the difficulty. The purpose of this thesis is to describe, and analyse knowledge transfer in a cross cultural context based on three categories identified in the theoretical framework: character of knowledge, distances between sending and receiving context and mutual understanding. Also to answer how cultural differences might affect the knowledge transfer process. The objective of this study is mainly from a Swedish R&D company’s perspective that has an established relation with an external consultancy company based in India. The activities are within the area of dynamical changing software development of complex, communication and knowledge intensive products. A qualitative case study has been performed based on open target interviews. The findings show that the character of knowledge is an important factor to consider when establishing the knowledge transfer process. It was a need to transfer knowledge not only related to the product itself but also knowledge embedded in organisational routines, processes, practises and norms. This is related to distances between sending and receiving context: organisational and knowledge differences shown in organisational skills and previous experience, and cultural differences mainly visible in communication such as raising problems and an expected top-down approach by managers. The geographical distance adds to the difficulty due to the missing face-to-face contact. The sending company must therefore be very active and can not just expect the receiving company to handle the activity, and especially when the companies’ prerequisites differ as much as in this case. Culture awareness and mutual understanding are factors that improve knowledge transfer.

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