Transnational corporations and strategic challenges : An analysis of knowledge flows and competitive advantage

Purpose – The purpose of this paper is to analyse knowledge transfers in transnational corporations. Design/methodology/approach – The paper develops a conceptual framework for the analysis of knowledge flow transfers in transnationals. Based on this theoretical framework, the paper propose's research hypotheses and builds a causal model that links the constructs of the model (knowledge stickiness factors, internal/external knowledge flow transfer, and competitive advantage). Findings – The competitive advantage of a transnational organisation lies to a great extent in its ability to identify and transfer strategic knowledge between its geographically dispersed and diverse locations. Transnational corporations face major challenges in the current competitive environment. The transnational corporation must learn how to exploit its specific resources – either acquired in the country of origin or in foreign markets. It cannot forget that the source of a long‐term competitive advantage is focused on the variety of skills and diversity of knowledge. Transnationals can benefit from international fertilisation, because knowledge exploration and exploitation activities are closely related with the concepts of synergies, interdependences and interactive organisational learning. Practical implications – The paper proposes a causal model that links strategic variables in the knowledge flow transfer to the achievement of a competitive advantage for the firm. As a further avenue for research, there are plans to test this model with a sample of USA pharmaceutical companies with subsidiaries abroad. Originality/value – The paper provides great value both for academics and executives interested in the analysis of the complexity of knowledge transfer in transnational corporations.