assimilation 2009 knowledge - diva...

UPPSALA UNIVERSITYDepartment of Business StudiesMaster ThesisSupervisor: Peter Thilenius

Assimilation of repatriate knowledge

14 January

2009

A study of knowledge management in 39 Large Cap companies

Authors: Rikard Andersson & FridaHermansson

Master Thesis Assimilation of repatriate knowledge

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Abstract

It has been stated in many studies that MNCs1 are in the position of transferring and

combining market knowledge and by doing so are creating a competitive edge on national

firms. In addition, research has also pointed out the expatriates as one of the most important

vehicles for transporting this knowledge. However, recent studies have indicated that there is

a gap between what the expatriate learn and what their organization as a whole learn from the

expatriates’ international assignments. This study therefore investigates if Nordic MNC’s use

mechanisms to assimilate the knowledge expatriates have gained on their international

assignments. The findings from 39 Large Cap companies indicate that the participating MNCs

do not use mechanisms of knowledge assimilation in any wider sense. Formal methods of

sharing knowledge, for example through reports, seminars or IT systems were not common in

the studied MNCs nor were informal mechanisms such as fostering a common knowledge

sharing vision within the MNC. The findings suggest that the most commonly used methods

of assimilating repatriate knowledge are informal in forms of assigning the repatriates to

positions that take advantage of their international knowledge and by using different forms of

mentoring systems.

Key words: expatriation, repatriation, knowledge transfer, knowledge management, organizational learning.

1 Multinational Corporations


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Table of Contents

ABSTRACT ..........................................................................................................................................2

1 INTRODUCTION .........................................................................................................................41.1 PROBLEM DISCUSSION ................................................................................................................. 51.2 PURPOSE................................................................................................................................... 51.3 DISPOSITION.............................................................................................................................. 5

2 KNOWLEDGE AND THE MNC......................................................................................................62.1 THE VALUE OF KNOWLEDGE.......................................................................................................... 6

2.1.1 Defining knowledge ........................................................................................................... 62.2 EXPATRIATES AS KNOWLEDGE TRANSPORTERS & KNOWLEDGE CARRIERS .............................................. 72.3 ORGANIZATIONAL LEARNING ........................................................................................................ 92.4 MANAGING REPATRIATE KNOWLEDGE............................................................................................ 9

2.4.1 Transmission, motivation and socialization .................................................................... 102.4.2 Evaluation, information channels & strategic vision ....................................................... 112.4.3 Career development ........................................................................................................ 12

2.5 A CONCEPTUAL FRAMEWORK OF KNOWLEDGE ASSIMILATION ........................................................... 132.5.1 Model 1: mechanisms to assimilate knowledge.............................................................. 132.5.2 Formal mechanisms......................................................................................................... 132.5.3 Informal mechanisms ...................................................................................................... 14

3 METHODOLOGY.......................................................................................................................153.1 COLLECTION OF DATA................................................................................................................ 15

3.1.1 The web survey ................................................................................................................ 153.1.2 The interviews.................................................................................................................. 163.1.3 Company profiles ............................................................................................................. 18

3.2 SAMPLE SELECTION ................................................................................................................... 193.3 FALLOFF ANALYSIS .................................................................................................................... 203.4 LIMITATIONS............................................................................................................................ 20

4 FINDINGS .................................................................................................................................224.1 EXPATRIATION ......................................................................................................................... 224.2 REPATRIATION ......................................................................................................................... 244.3 KNOWLEDGE ASSIMILATION........................................................................................................ 254.4 TWO COMPANY EXAMPLES OF KNOWLEDGE ASSIMILATION .............................................................. 27

4.4.1 Formal mechanisms of knowledge assimilation in ABB and FLSmidth............................ 274.4.2 Informal mechanisms of knowledge assimilation in ABB and FLSmidth ......................... 28

5 ANALYSIS .................................................................................................................................335.1 FORMAL MECHANISMS OF KNOWLEDGE ASSIMILATION.................................................................... 335.2 INFORMAL MECHANISMS OF KNOWLEDGE ASSIMILATION................................................................. 35

6 CONCLUSIONS & IMPLICATIONS ..............................................................................................386.1.1 Model 2: mechanisms to assimilate knowledge in the studied MNCs ............................ 38

6.2 IMPLICATIONS .......................................................................................................................... 39

7 REFERENCES.............................................................................................................................41

8 APPENDIX 1: WEB SURVEY.......................................................................................................46

9 APPENDIX 2: LARGE CAP COMPANIES......................................................................................49

10 APPENDIX 3: LETTER TO HR-MANAGERS..................................................................................50


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1 Introduction

The ongoing globalization has changed the world of business in several different ways. One

of these changes is an increase in the use of expatriates, i.e managers or other employees who

are relocated on assignments overseas (Bolino, 2007). Another characteristic of the new world

of business is the knowledge economy. Research indicates that knowledge is one of the most

critical elements that are transferred within the MNC and because of that constitute an

important competitive edge. One of the competitive advantages of the MNC is that different

units can transfer local market knowledge between each other, combine the knowledge and

ultimately exploit it to create a competitive edge against national competitors (Bender & Fish,

2000). Riusala and Suutari (2004) explain how expatriates are in a position to acquire

knowledge about the rules of doing business internationally. Furthermore, expatriates are the

key for transferring tacit knowledge (i.e., based on individual experience, difficult to observe,

codify and teach) across units in the MNC. By sharing and transferring knowledge with the

rest of the organization, repatriates enable companies to learn from their previous

international experiences as well as gaining new knowledge, which in turn will enhance the

knowledgebase in the whole MNC (Downes & Thomas, 1999).

The increasing importance of knowledge as a strategic resource in MNCs has also resulted in

a shift in expatriate research. Earlier focus was pointed towards operational issues and on the

early stages of the expatriate experience (selecting candidates, support, compensation etc).

More recent work regarding expatriates has adapted a more strategic focus that often centres

on the significance of gained global knowledge and the related knowledge management

implications. This shift has also resulted in a renewed awareness to the return and adjustment

process of the expatriate to their home countries, the so called repatriation process (Lazarova

& Cerdin, 2007). However, many recent studies have suggested that MNCs often fail to take

advantage of expatriates’ knowledge and by doing so also lose an essential feature of the

MNCs competitive edge (Berthoin & Walker, 2005; Larazova & Cerdin, 2007; Riusala &

Suutari, 2004; Hermansson & Kilnes, 2008).


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1.1 Problem discussion

MNCs have the great benefit to leverage on knowledge gained by expatriates in their

international assignments. Even so, studies indicate that MNCs often fail to benefit from the

knowledge gained by their expatriates. As a result, a gap seems to exist between what the

expatriates learn and what their companies as a whole learn. Since individuals constitute the

essence of knowledge and knowledge management, the success of knowledge management is

dependent on the MNCs ability to manage its people in an effective way (Bender & Fish,

2000). Hence, the strategic leadership in MNCs can play a crucial role when it comes to

managing repatriates knowledge. How MNCs manage the repatriates knowledge is however

something that has not been fully investigated. Therefore we want to investigate the following

research question: Do MNC’s apply any mechanisms to assimilate the knowledge expatriates

have gained from their assignments abroad? If so, what mechanism do they apply?

1.2 Purpose

The purpose of this paper is to study how Nordic MNCs manage the complex procedure of

assimilating repatriates´ knowledge and more specifically what mechanisms they use to

assimilate this knowledge.

This is an important issue to study since gaining new knowledge and maintaining this

knowledge within the organization has become a very important competitive tool for MNCs

today. Since earlier studies have indicated that the knowledge gained by expatriates often is

not fully exploited by the MNCs we also believe that research of this nature can be of great

value for all firms that aim to improve their knowledge management procedures.

1.3 Disposition

The following chapter will give a general overview of the literature written in the area of

expatriation, repatriation and knowledge management. Chapter three will deal with the design

of the study, the arguments for the choices made and the limitations of the research. In chapter

four the findings from our data collection are presented and in chapter five these findings are

analyzed by using the presented theory. The study ends with our conclusions and the

implications of our research.


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2 Knowledge and the MNC

There is relatively little research done on the issue of managing repatriates knowledge in

MNCs. The following literature review is therefore going to highlight the few studies that

have drawn attention to this important issue, it also addresses the three bodies of literature

that deal with expatriation, repatriation and international knowledge transfers. In the very

last part of this section we will connect different theoretical aspects into a theoretical

framework, suggesting how assimilation of repatriate knowledge can occur in the MNC.

However, before we turn to these bodies of literature we first need to discuss the importance

and meaning regarding the phenomenon of knowledge.

2.1 The value of knowledge

Lank (1997) stated that knowledge, integrated in the expertise of employees, constitutes the

greatest asset for value creation in organisations. And as business activities are no longer

restricted by national boundaries many organizations now choose to operate on international

basis. Because of this shift it is invaluable for the organisation to manage their knowledge

and to transfer skills, knowledge and expertise in an efficient manner within the organization,

and particularly across boarders. (Lank, 1997)

According to Buckley and Casson (1976), the central feature of the MNC, vital for its

existence, is its ability to internalize externalities by combining resources from different parts

of the MNC. By doing so, the MNC can create a competitive edge towards other actors in

specific markets. Caves (1982) and Hymer (1976) argues that this is especially true for one

particular resource; knowledge.

2.1.1 Defining knowledge

In order to better understand the assimilation of knowledge in the MNC we shall now analyze

the wide scoop of the concept knowledge. Sveiby (1997) states that there are numerous

definitions of knowledge, but no one seems to be universally appropriate, as the definitions

tend to vary dependent on the context in which it is used.

When it comes to defining knowledge, and especially when it comes to the transferability of

knowledge, two different forms of knowledge are often acknowledged, namely tacit and

explicit knowledge. Tacit knowledge refers to knowledge that is difficult to codify and teach.


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This type of knowledge is attained trough experience and observations and not trough formal

learning. Explicit knowledge on the other hand refers to knowledge that is much easier to

share and formally transmitted through for example blueprints and manuals (Nonaka, 1991).

Another fruitful definition of knowledge has been developed by Bender and Fish

(2000).These researchers choose to distinguish between data, information, knowledge and

expertise. Huseman and Goodman (1999) describe data as objective facts that describe an

event without any judgement, perspective or context. The data will further constitute the raw

material for the creation of information. To fully be defined as information, fragments of data

must be drawn together, put into a context, added perspective and being delivered to peoples

minds (Huseman & Goodman, 1999). Knowledge is what the individual will convert the

information into by incorporating their own personal experiences and beliefs, contextual

information and expert insight (Wiig, 1993; Davenport & Prusak, 1998). What separates

knowledge from expertise is that the expertise represents a remotely deeper amount of

knowledge in a specific field that has been enriched by extensive experience, training and

education, built up from scratch by the individual (Starbuck, 1992; Sveiby, 1997). Through

this process individuals build up their own unique knowledge base and expertise (Fahey &

Prusak, 1998) that cannot easily be transferred to another part.

When we use the term knowledge in the following sections it can be of any four types

discussed above, namely data, information knowledge and expertise, and it can also be of tacit

or explicit nature. These different definitions of knowledge will however help us to break

down the concept of knowledge when analysing the result of our empirical findings to better

understand how these different types of knowledge can have diverse effect on the knowledge

assimilation.

2.2 Expatriates as knowledge transporters & knowledge carriers

As the former section acknowledged knowledge constitute a very important resource in

MNCs today. Expatriates and repatriates play a crucial role as unique vehicles of knowledge

transfer and organizational learning, a process essential for creating organizational

competitiveness in today’s global knowledge economy (Berthoin, 2001; Bonache & Brewster,

2001).


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The relevance of knowledge is well documented in the existing management literature (Grant,

1996; Kogut & Zander, 1993; Nonaka & Takeuchi, 1995). For the MNC, operating in an

international context, a lot of light has been shed on the importance of transferring knowledge

between headquarter and the subsidiaries of the MNC (Dunning, 1958; Vernon, 1966).

Downes and Thomas (2000) describe two main types of knowledge flows that are important

in the mission of the expatriate. The first flow concerns organizational knowledge (corporate

policies, philosophies and procedures), transferred from headquarter by the expatriates to the

subsidiary. The second flow of knowledge concerns market specific knowledge that is gained

by the expatriate and then transferred back to the parent company. This second knowledge

flow can occur both during the expatriate assignment as well as upon repatriation (Downes &

Thomas, 2000). Recently many studies have thus emphasized on the reverse flow, where

knowledge is transferred from the subsidiaries to headquarter. The results from this research

indicate that the reverse flows are expected to contribute comprehensively to the foundation

of the firm’s competitive advantage, (Frost, 1998; Hakanson & Nobel, 2000; Zhou & Frost,

2003) and accordingly, headquarters will increasingly act as a receiver of knowledge from

their internationally dispersed subsidiaries (Ambros, 2006).

Similar to Downes and Thomas (2000) Tsang (1999) acknowledge that expatriates can

function both as agents of knowledge transfer since they are responsible for transferring

headquarter routines to subsidiaries abroad as well as “agents of learning” by captivating new

knowledge on behalf of the headquarters. Expatriates are, for example, able to gain new

knowledge about local cultures and suppliers as well as knowledge about the way business is

done in different countries (Tsang, 1999).

As mentioned above tacit knowledge cannot be codified or contained in manuals and can only

be observed through its practical use. Therefore when MNCs decide to transfer tacit

knowledge between different units expatriates often are the most useful mechanism (Suutari

& Brewster, 2003; Risula & Suutari, 2004). In other words, expatriates are a basic mechanism

to transfer tacit knowledge. And as the learning occurs in more than one national market,

firms are able to capture synergies that result from accumulated market-specific knowledge.


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2.3 Organizational learning

According to Downes and Thomas (2000) individuals can learn by acquiring tacit knowledge

through experience, education or experimentation. Organizational learning on the other hand

occurs as the individual share his or hers experiences and the knowledge is transferred to

additional individuals in the organization. Downes and Thomas (2000) also describe how the

intellectual capital gathered by expatriates constitutes an important part of organizational

learning in the international context. However, studies have indicated that there often is a gap

between what the expatriates learn and what their companies learn. For example, a study done

by Berthoin (2001), illustrated that MNCs often fail to fully leverage on the knowledge

gained from their expatriates and that the expatriates felt that is was a problem that too little

value was placed on their international expertise. In same vein Bender and Fish (2000)

highlighted in their study that knowledge often is held locally in for example computer

technicians or brand managers and not diffused to the organizational level. Studies have also

indicated that companies often fail to assimilate the repatriates’ knowledge and that the

transfer, sharing and learning generally is up to the repatriates to initiate in the MNC

(Hermansson & Kilnes, 2008; Berthoin & Walker, 2005). Research has even shown that

companies, in some cases, do not care about the exploitation of the repatriates skills and

knowledge (Fish & Wood 1997).

2.4 Managing repatriate knowledge

To learn how to manage repatriates knowledge is a very important task for MNCs if the

organization wants to leverage from their repatriates expertise (Larazova & Cerdin, 2007).

Bender and Fish stress the crucial role management and particular the HR department can

play when it comes to exploiting and diffusing the knowledge expatriates bring home from

their assignment abroad (Bender & Fish, 2000). The former section, however, illustrated a

rather dismal picture of how organizations value and take advantage of repatriates’

knowledge. Bonache and Brewster (2001) state the importance of examining the repatriate

phenomenon from an organizational learning perspective and to analyze to what degree

MNCs utilize the knowledge that the repatriates have developed. For this reason the authors

state that it is important for the MNC to understand what kind of mechanism that exists that

can facilitate the assimilation of knowledge back to home countries and also to other units of

the organization (Bonache & Brewster, 2001). However, these authors never present any

examples of how these transfer mechanisms could work, but state that in the light of existing


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studies, it seems that MNCs most often fail to make use of repatriates’ knowledge. Some

studies have however acknowledged how MNCs can handle the issue of managing and

developing mechanisms with the purpose of transferring and assimilating expatriates and

repatriates knowledge.

2.4.1 Transmission, motivation and socialization

In order to respond to the demand for a model that could improve the intra MNC knowledge

transfer, Gooderham (2007) present three sets of mechanism that may be initiated by

management and applied to facilitate knowledge transfers within MNCs. These are

transmission channels, socialization mechanisms and motivational mechanisms.

Transmission channels refer to integrative mechanisms such as mentoring, workshops,

international committees and intranet systems. The importance of IT-based systems such as

intranets has moreover been acknowledged by Ciabuschi (2007). In his study regarding

Siemens AG Ciabuschi concludes that IT systems can function as an efficient mechanism for

knowledge duplication between units having similar capabilities, but also that IT systems can

function as a trigger for direct interaction resulting in knowledge development between units

with complementary capabilities (Ciabuschi, 2007). Similar to Ciabuschi, Sveiby (2001) has

also acknowledged that intranets and other IT systems can generate knowledge transfers

within company’s internal structure.

The second practice Gooderham (2007) introduces is a socialization mechanism which refers

to practices that promote shared values and mutual understandings within the MNC. In other

words Gooderham argues that a corporate culture that gets accepted by the employees

regardless of background, culture or ethnicity can enhance the internal transfer of knowledge.

To foster this type of shared culture Gooderham propose diversity training as well as training

all key employees in a common language. (Gooderham, 2007) Gupta and Govindarajan

(2000) have furthermore highlighted corporate mentoring programs as a mechanism that can

foster shared values within the MNC.

The last mechanism Gooderham presents is motivational mechanisms and this has to do with

rewarding behavioural outcomes that improve knowledge sharing (Gooderham, 2007).

Similar to Gooderham, Bender and Fish (2002) argue that support and reward can create a


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knowledge sharing environment where employees know that their knowledge is valued by

their company.

2.4.2 Evaluation, information channels & strategic vision

In a study made by Kamoche (1997), dealing with the implications concerning expatriates’

knowledge transfer, the author states that if an MNC is to benefit from expatriates’

knowledge, the organization must evaluate the expatriates’ experiences through, for example,

the use of mentoring and coaching. The use of mentorship as means to assimilate knowledge

has also been highlighted by Gupta and Govindarajan (2000) as well as Mezias and Scandura

(2005) who have suggested that informal networks such as mentoring can improve knowledge

transfer and knowledge assimilation within the MNC.

Further, according to Kamoche (1997) the MNC must form information channels such as

news-letters, manuals and databases that are accessible both across different functions and

different boarders. The use of these types of information channels is often argued to be

especially suitable for transferring explicit knowledge within the MNC (Nonaka, 1994;

Bonache & Cervino, 1997; Suutari & Brewster, 1998). Nonaka (1994) argues, for example,

that explicit knowledge can be created and transferred through telephone calls, meetings and

seminars. However, in order to make tacit knowledge explicit Nonaka highlight the

importance of interaction and experience sharing between individuals. As a result, this type of

knowledge transfer is only possible trough imitation, observation and practice (Nonaka,

1994). Hence, in order to stir this type of transfer organizations can provide opportunities for

employees to observe and imitate the repatriate by for example letting the repatriates hold

workshops where the other employees can participate in as well as inspire the repatriates to

share their international knowledge in their everyday work.

Additionally Kamoche (1997) suggests that the organisation must develop a strategy, linking

the international assignment with career management which is further discussed in the next

section. Kamoche also argues that one of the key explanatory factors to why MNCs fail to

take advantage of the expatriates’ learning occurs for the reason of inconsistencies at the

strategic level. The author explains how important it is for the organization to have a

consistent strategic vision about the significance of the expatriates’ knowledge. If not, the

organization will overlook the opportunity to create valuable support mechanisms to exploit

the gained knowledge (Kamoche, 1997). This is supported by Martiny (1998), who also states


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the knowledge management needs to be incorporated into the MNCs culture through the

design of the operation and overall strategy.

2.4.3 Career development

Downs and Thomas (1999) have studied in what ways organizations can benefit from the

knowledge gained by expatriates on international assignments. The authors stress the gravity

of the expatriates as a source of competitive advantage as they are in the position to transfer

tacit knowledge from different international assignments. Downs and Thomas (1999) also

argue for the importance of creating an infrastructure that supports the institutionalization and

adoption of expatriates’ knowledge.

Similar to Kamoches (1997) research regarding career development, Downs and Thomas

(1999) research suggest that the organization needs to incorporate the expatriate mission in to

the long term organizational plan and make strategic use of the expatriate knowledge upon

repatriation. This argument has also been highlighted by other researchers that have argued

that it is important that career support programs are developed, to ensure that the acquired

knowledge and expertise of the repatriated are not wasted (Bennett, 1993; Berthoin, 2001;

Handler & Lane, 1997). Repatriates expect to return to a meaningful position back home as

they return from overseas assignments, where the repatriate can utilize their new skills and

knowledge (Hauser, 1998; Black & Gregersen, 1999).

According to Berthoin (2001) MNCs are more likely to gain valuable knowledge from the

expatriates if they are assigned to a position that takes advantage of their international

knowledge, for example trough a position connected to the region that he or she has been

working within. Fish and Bender (2000) further state that MNCs that neglect repatriates’

career motivation by not offering them positions where they can utilize their gained

knowledge may risk to lose the employee, often to a competitor, taking with them important

knowledge.


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2.5 A conceptual framework of knowledge assimilation

The preceding literature has highlighted several different ways to manage the knowledge

expatriates have gained on their assignments overseas. We have summarised these in seven

points that represent seven different mechanisms that can be used to assimilate repatriate

knowledge. These mechanisms are limited to the repatriation process and will therefore not

take into consideration ways to assimilate knowledge while the expatriates are abroad. These

seven mechanisms are illustrated in model 1.

2.5.1 Model 1: mechanisms to assimilate knowledge

For questions (Q) see appendix 1.

We have divided these seven points in formal and informal mechanisms. By formal

mechanism we refer to ways of assimilating knowledge that can more effortlessly be

standardized within the MNC. By informal mechanisms we instead refer to mechanisms that

may be implanted by management although they are more difficult to standardize and control.

2.5.2 Formal mechanisms

As described in the literature review studies have indicated that writing reports about the

repatriates experience overseas can function as a way of assimilating the repatriates’

knowledge. For example, Kamoche (1997) Bonache and Cervino (1997) as well as Suutari

KnowledgeAssimilation


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and Brewster (1998) have highlighted formal manuals and reports as means of transferring

and store explicit knowledge within the MNC. Furthermore, to hold meetings and/or seminars

represent an additional way of assimilating repatriate knowledge, especially when it comes to

explicit knowledge (Nonaka, 1994). Regarding tacit knowledge research have instead

suggested workshops as one way of assimilating knowledge since this type of knowledge

often is transferred through imitation, observation and practice (Nonaka, 1994). Studies have

also indicated that IT systems such as an intranet can function as a mechanism of assimilating

repatriates knowledge. For example, Ciabuschi (2007) has shown that an IT system can

function both as a mechanism of knowledge duplication and as a trigger for direct interaction.

Sveiby (2001) has also pointed out that intranets can function as a mechanism of knowledge

assimilation since it can help to spread information throughout the organization (Sveiby

2001). The literature review also illustrated that rewards can function as a mechanism of

knowledge assimilation since it can result in improved knowledge sharing within a company.

Bender and Fish’s (2007) research suggested that support and rewards from management can

contribute to a knowledge sharing environment.

2.5.3 Informal mechanisms

In addition, informal networks were also highlighted as a method of assimilating repatriate

knowledge. For example Mezias and Scandura (2005) suggested that informal methods such

as mentoring could improve knowledge transfer and knowledge assimilation within the MNC.

Having a strategic vision concerning expatriation and/or knowledge management has also

been acknowledged as important when it comes to assimilating knowledge from repatriates.

For example, Kamoche (1997) suggested that the absence of a strategic vision of knowledge

management could result in failure when it comes to create support mechanisms for

knowledge exploitation. Finally, the literature review acknowledged that career development

could have an impact on the knowledge assimilation within MNCs. Many different studies

have shown that career support programs after return can enhance knowledge sharing within

companies (see for example Larazova & Cerdin, 2007; Thomas & Downs, 1999). Research

has also shown that expatriates that return to positions that take advantage of their

international knowledge also share more knowledge (Berthoin, 2001).


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3 Methodology

In the following part we will describe the design of our study and how we have accumulated

our empirical data. We will also argue for all the choices we have made and the

consequences of these. In the last part the limitations of our study will be presented

3.1 Collection of data

Since studies have indicated that MNCs often fail to exploit repatriates knowledge we wanted

to investigate knowledge assimilation from a company point of view. An alternative would be

to study the same issue but from the repatriates point of view. By choosing the repatriates

viewpoint we would be able to get a more detailed picture of the factors affecting the

knowledge assimilation and how the repatriates feel that their knowledge is valued and used

by their company. However, we chose the company point of view since we wanted to

investigate if Nordic MNCs actually acknowledge this important issue. By choosing this

viewpoint we were able to examine if Nordic MNCs in fact apply mechanisms to assimilate

the repatriates’ knowledge and also how they do it. To investigate this issue we chose to use

a two-step method of collecting the necessary data.

3.1.1 The web survey

The first step was to send out a questionnaire (Appendix 1) to HR managers in 94 Large Cap

companies registered on the Nordic Stock Exchange (Appendix 2). The purpose of this

questionnaire was to obtain a broad overview of how companies on the Nordic Stock

Exchange assimilate the knowledge their expatriates have gained abroad. This questionnaire

was executed on the website surveymonkey.com. We chose to conduct an online based web

survey for two main reasons. The first reason was the issue regarding the geographical

distance. This made the web survey an appropriate alternative (Bryman & Bell, 2007, p. 680).

The second factor was the limited timeframe for our research. Bryman and Bell states that

online web surveys are preferable under time constraints, as they represent a very time

efficient alternative (Ibid).

The web survey (see appendix 2) was divided into three parts. The first part of the survey

(General Information) concerned general information about the respondent such as working

place, position, and years working within the company. The second part (The Expatriation

Process) included questions about the expatriation. For example, the respondents were asked


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how many expatriates their company sent abroad each year and if they had any contact with

their expatriates during their mission abroad. The third part (The Repatriation Process)

focused on question about repatriation, knowledge sharing and learning within the MNC. In

this section the respondents were asked to rank different statements on a seven point Likert

scale.

After some preliminary testing of the questionnaire a few questions in the survey were

slightly changed in order to avert misunderstanding. However, these modifications did not

change the contents of the questions.

3.1.2 The interviews

The second step in our collection of data was to dig deeper into two of the MNCs by

conducting more comprehensive interviews. By conducting these interviews our intention was

to create a deeper understanding of knowledge management and explain the reasons to why

firms handle the repatriates’ knowledge the way they do. Qualitative interviews promote

flexibility, enable follow-up questions and give the questioner a greater possibility to receive

more comprehensive and more detailed answers (Bryman & Bell, 2007, p. 474).

We based our sample for the interviews on firms that, in the web survey, had answered that

they conducted some sort of knowledge assimilation. These firms were; ABB, Coloplast,

FLSmidth, SCA and TDC. From these five companies three persons from two firms agreed to

participate in an additional comprehensive interview. These persons where Per Åke Moe, HR

manager ABB Power System, Ulf H Gustavsson, HR manager ABB Substation and Network

management, Peter Larsen, Global Mobility manager and HR manager at FLSmidth. The

interviews were conducted during the 18th -19th December 2008. They were all conducted via

telephone and lasted between 25-35 minutes.

The interviews were recorded on the phone, transferred to a computer and transcribed within

5 hours of the interviews taking place. By recording the interviews we wanted to reduce the

risk of misinterpreting the respondent, it also gave us a chance to listen to the interview

repeatedly and as a result also spot if something had been disregarded (Bryman & Bell 2003,

p. 349). By transcribing the data shortly after it had been collected, we also diminished the

risk of not registering impressions and nuances from the interview. After a first draft, we

listened to the interviews again to rectify potential fuzziness. However, we do acknowledge


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the drawbacks the data collection might suffer from since we conducted the interviews by

telephone instead of meeting up face to face with the respondents. For example, a phone

interview does not give the interviewer the chance to interpret the body language of the

respondent. Is can also be hard to ask complicated questions via telephone and to establish

trust between the two parts (Eriksson & Wiedersheim-Paul, 2006, p. 99).

While the interview with Mr. Larsen from FLSmidth was conducted in English, the

interviews with Mr. Moe and Mr. Gustavsson from ABB were conducted in Swedish and

therefore translated into English when transcribing the data. As the raw data collected from

the three HR managers during the interviews were transcribed, and in two cases also

translated to a second language, we acknowledge the risk of information spill-over and also

the risk of data being interpreted in biased ways. However, by keeping an objective line, and

by transcribing the data close to the collection we believe that we managed to reduce spill-

over effects and also to minimize the risk of interpreting data to fit the theoretical framework.

We structured the interview setup as follows; first up we presented ourselves and our

objectives with the interview. We also asked for permission to record the conversation and for

a potential time constraint. Further we asked questions about the company and division the

respondent represented. We also asked questions connected to the title and commitments of

the respondent.

As we searched for qualitative data from the HR managers, we formed semi-structured

interviews. We chose semi-structured interviews since it is more flexible due to the fact that it

allows new questions to be brought up during the interview. (Bryman & Bell 2003, p. 363).

Another benefit is that we not only receive answers, but the reasons behind the answers. This

enabled us to collect information about our research problem in a structured but still open way

When constructing the interview questions we emanated from the web survey questions (see

appendix 1) and asked the respondents to elaborate on their answers. Towards the end of the

interviews we asked the respondents these three additional questions;

1. In order to create a better understanding regarding the career path of the repatriates

we asked the HR managers if the repatriates positions were something determined in

advanced or were something that was considered upon repatriation.


18

2. As the companies depend on their repatriates to communicate the knowledge in their

day-to-day work, we asked if the HR managers were concerned that their companies

will be the subject of losing valuable knowledge due to repatriate turnover.

3. Lastly we asked the HR managers if they saw any drawbacks with employing mentor

system and assigning the repatriates to strategic positions trusting the repatriates to

communicate the knowledge in the day-to-day work instead of adopting formal

mechanisms to dissimilate the knowledge, allowing the knowledge to be dissimilated

over a greater part of the organization.

The intention with these questions was to open up the respondent to share information that

otherwise might not have been brought to the table. We concluded the interview by asking if

the respondent would like to reflect over something regarding the repatriate management of

the company that hadn’t been ventilated so far, and ultimately asked if we had the permission

to contact the respondent in case of further questions.

3.1.3 Company profiles

ABB is a Swedish based company that is a provider of power and automation technologies.

As of 2007 ABB had 120.000 employees, operates in more than 100 countries and has offices

in 87 of those countries. (ABB, 2008)

We conducted interviews with two HR managers from different departments of ABB. Mr.

Moe is the HR manager of ABB Power System, a department located in Ludvika in Sweden

that develops systems for long distance transmission of electric power both below and above

sea level. The department today provide work for 418 employees where 14 employees at

present works as expatriates. (Per Åke Moe, 2008)

Mr. Gustavsson is the HR manager of ABB Substation and Network management. This

department is based in Västerås in Sweden and is the developer and provider of complete

systems for energy distribution facilities. The department employs approximately 450

employees where approximately 25 of them are expatriates. (Ulf H Gustavsson, 2008)


19

The second company, FLSmidth is a Danish based company operating in the cement and

minerals industry. From this MNC we conducted the interview with Mr, Larsen. He is the HR

and global mobility manager of the firm and is based in Copenhagen. The company has a total

workforce of approximately 11,000 employees, where around 1,800 of these are stationed in

Denmark. Most of FLSmidth employees work different project around the world. Only in a

few cases the employee will return to work at head office, instead the employee most often

will be assigned to an additional assignment abroad. (Peter Larsen, 2008)

3.2 Sample selection

When selecting a sample group it is important that the group is representative and that the

answers can be generalized to the whole population. (Bryman & Bell, 2007, p. 182) Since our

paper focus on repatriates, we chose to centre our selection of companies to large

multinational firms. Because we wanted to have a large sample of companies we chose to

contact all Large Cap companies traded on the Nordic stock exchange. These Large Cap

companies all have a market cap or market value exceeding 1 billion euro (Den Nordiska

Börsen, 2008). By collecting data from companies traded on the Nordic stock exchange, that

all share certain characteristics that can be generalized to other Large Cap MNCs, we hope to

create a high degree of transferability (Bryman & Bell 2003, p. 307).

Of the 106 Large Cap companies listed on the Nordic stock exchange we sent out our web

survey to the HR department of 94. Of the 94 addressed companies, we received 46

completed surveys from 39 different companies. The reason why we received multiple

answers from the same company could be explained by the reason that many of Large Cap

companies have different HR departments for different divisions.

The companies that responded and thereby are included in our study are; ABB *2, Alfa Laval,

Atlas Copco, Autoliv, Boliden Mineral AB, Cargotec Corporation, Coloplast A/S,

Datametrix, Electrolux AB, Elekta, Elisa, Ericsson AB *3, Fabege AB, FLSmidth A/S,

Fortum, Handelsbanken, Husqvarna, KONE Corporation, Lundin Petroleum SA, Millicom,

NCC, Norden A/S, Oriflame Cosmetics, Outotec, Pöyry Plc, SCA *2, Scania * 3, SEB AB,

Skanska AB, SKF, SSAB, Stora Enso, Swedish Match, TDC AB, TeliaSonera*2, Tele2,

Vestas, Volvo and West Siberian Oil.


20

As we received multiple answers from different HR departments (ABB*2, Ericsson*3,

SCA*2, Scania*3, TeliaSonera*2) of the same MNC we chose to treat each one of the

answers independently. We chose to do so since our purpose is not to investigate what

different mechanisms that are used within an MNC, but rather what different mechanisms that

are utilized. Since different divisions of the MNC may be the subject of assimilating different

types of knowledge and therefore utilize different assimilation mechanisms, we believe it is

beneficial to incorporate different divisions of the same MNC into our research.

3.3 Falloff analysis

As mentioned in our sample selection we contacted 94 of the 106 Large Cap companies

traded on the Nordic stock exchange. The additional twelve were companies that couldn’t be

regarded as MNCs, had gone bankrupt at the time of our survey, did not have any expatriates

or did not have any contact information to be found.

As we only managed to collect responses from 41, 5% of the addressed companies in our

sample for the survey, there is a risk that many of the companies that agreed to participate are

the ones that focus on and prioritize repatriate knowledge assimilation. This might lead to

answers from the HR managers that deviate from the average.

3.4 Limitations

As 80% percent of the respondents to the survey were Swedish based companies, and since

the interviews were conducted on one Swedish and on one Danish company, the result of this

study will tell us little about repatriation management in other countries. Moreover, since we

have interviewed HR managers at headquarters regarding how they manage repatriation, this

will not constitute a complete picture on the whole MNC per se. We chose to contact almost

all Large Cap companies on the Nordic OMX exchange and as a result we did not select a

specific industry. A limitation of our sample selection could therefore be that we are not

looking for potential industry-related differences. Since we only contacted large MNCs we

will not be able to draw any conclusions regarding repatriate management in smaller MNCs

either.


21

To give a complete picture of the knowledge and repatriate management in MNCs it is

important to include both the repatriates and management. However, as this study put a focal

point at the mechanisms implemented by HR department to assimilate repatriate knowledge,

we will not be able to give an inclusive picture of the knowledge assimilation within the

studied MNCs. Further, as an MNC often is constituted by various divisions, we acknowledge

the probability that other divisions from the same MNC may apply different approaches in

their repatriation management.

We find it is almost impossible to investigate knowledge assimilation mechanisms at the

repatriation stage of the assignment without taking the assimilation carried out between the

expatriate and the organization as the employee is posted abroad into consideration This kind

of assimilation will however only be treated in the periphery. With this said we do not by any

means want to downplay the significance of the knowledge assimilation taking place during

the assignment but rather emphasize our focus towards the repatriation phase.


22

4 Findings

In this section the results from our questionnaire and interviews are presented. These results

are based on answers from HR-managers and people responsible for international

assignments in 39 different Nordic companies. This section will begin with some general

information about the expatriation process within the studied companies and then continue

with the more specific findings about the repatriation process and knowledge assimilation in

these companies. This section will end with findings from the more comprehensive interviews

conducted with HR managers from ABB and FLSmidth.

4.1 Expatriation

Most of the respondents in our study had the position of HR manager, HR Head or HR

directors but some of them also worked as head of international assignments, talent managers,

CEOs, HR assistants, compensation and benefit managers as well as global mobility

managers. 83, 3 % of them were located at the corporate head quarters. Approximately 4/5 of

the respondents were located in Sweden while approximately 1/5 of the respondents were

located in Finland, Denmark, Switzerland, Spain or the United Kingdom. The respondents

were asked how many expatriates their division on average sent abroad. We collected the

following answers:

Almost half of the respondents answered that their division on average sent out between 0-10

expatriates while the other half of the respondents answers were spread between the other six

alternatives ranging from 11-20 up to more than a hundred expatriates.


23

Furthermore, 75, 6 % of the respondents answered that their company had a specific

person/group/division responsible for these expatriates and the expatriation process.

According to the respondents 77, 8 % of the expatriates usually hold the position of a

manager on their mission abroad, but some also hold positions such as engineers, accountants,

analysts as well as purchasers. When asked if the respondent’s company has contact with their

expatriates during their mission overseas the following answers were collected:

33, 3 % of the respondents answered that their company had regular contact with all of their

expatriates. However, 57, 1 % of the respondents answered that their company had contact

with their expatriates during their international assignment but that this contact often is

unsystematic and/or varies between the different expatriates.


24

4.2 Repatriation

The respondents were asked to evaluate three different statements about the repatriation

process within their company on a scale from one to seven, where one represented “not at all”

and seven “very much”. The following answers were collected:

As shown in the table the answers to statement one is spread out between all of the seven

different alternatives and therefore give a somewhat mixed result. Some have answered that

their company does not evaluate how their repatriates experienced their time abroad while

other answered that they evaluated their repatriates’ experience “very much”. The table also

reveals that most of the repatriates did not agree to the statement that their repatriates write

formal reports about their mission abroad nor did they agree to the statement that their

company gave the repatriates opportunity to hold seminars or workshops concerning their

mission abroad.


25

4.3 Knowledge assimilation

On the same scale from one to seven the respondents were asked to evaluate seven different

statements about knowledge sharing and learning within their company. The following

answers were collected.

As illustrated by the table most of the respondent agreed to the statement that their company

in general assign repatriates to positions that take advantage of their international knowledge.

However, over 60 % of the respondent answered “not at all” when asked if their company had

any IT based systems where the repatriates could share their knowledge. Most of the

respondents also disagreed to the statements “does your company reward repatriates that


26

communicate their knowledge” and “does your company have a specific

person/group/division responsible for knowledge management concerning repatriates”. The

remaining three statements revealed mixed results and an average score around 4.

The respondents were also asked if they would say that their company used formal

mechanisms to assimilate repatriate knowledge. 70 % of the respondents answered “no” to

that question, 27, 5 % answered “yes to some extent” and 2, 5 % of the respondents answered

“yes very much”. The respondents that answered that they did not apply any formal

mechanisms to assimilate knowledge were asked to specify the main reasons why they choose

not to. The following answers were collected:

As illustrated in the table a majority of the respondents answered that the reason to why they

do not apply formal mechanisms was the fact that the knowledge is difficult to communicate

and codify. 24% answered that the reason was that their company does not have time and/or

money while another 24 % of the respondents answered that their company had not been

interested in assimilating the repatriates’ knowledge.

The respondents that answered yes to this question were in addition asked to give examples of

these mechanisms. To state some of them the respondents mentioned surveys, questionnaires,

mentors, HR board meetings, job positioning and repatriation review.


27

4.4 Two company examples of knowledge assimilation

As mentioned above only 30 % of the respondents answered that they did use mechanisms to

assimilate the repatriates’ knowledge. To create a deeper understanding of these mechanisms

the following section is going to highlight two companies (three respondents) that answered

that their company actually does utilize formal mechanisms to assimilate knowledge from

their repatriates.

4.4.1 Formal mechanisms of knowledge assimilation in ABB and FLSmidth

The three HR managers were all asked to elaborate on their answers in the web survey

regarding formal mechanisms of knowledge assimilation. The following answers were

collected.

4.4.1.1 Reports, seminars, meetings & workshops

No one of the respondents answered that the repatriates were given the opportunity to fill out

reports or hold seminars/workshops concerning their mission abroad. According to Mr.

Gustavsson, ABB does not adopt any specific formal procedures for assimilating repatriates

knowledge to the rest of the organization, especially when it comes to experiential

knowledge. The simple reason behind this decision is, according to Mr. Gustavsson, that it is

considered too complicated. Mr. Gustavsson also stressed the time consuming aspect of

setting up meetings and workshops as well as writing and distributing manuals and reports.

Mr. Larsen from FLSmidth stated that the few mechanisms used to assimilate knowledge are

of a very informal nature. Seen from a knowledge management perspective FLSmidth could

therefore, according to Mr. Larsen, aim for formalization in order to create a more widespread

assimilation. However, as FLSmidth is constituted by a very mobile work force Mr. Larsen

stressed that the company has little opportunity to formalize and organize this kind of

information flow.

4.4.1.2 IT systems

According to Mr. Gustavsson, ABB has a lot of IT systems but none of them are designed to

assimilate knowledge from the expatriates and repatriates around the world. In contrast, Mr.

Moe explained that his division of ABB does utilize IT system to assimilate pure technical

knowledge from the repatriates. Nevertheless, Mr. Moe also stated that it is important to take

the nature of the knowledge into consideration. More commercial knowledge for example,

gained by expatriates working in close contact with customers (often in ventures involving a


28

political partner, our government departments) is, according to Mr. Moe, too delicate and

context-specific to be assimilated via IT systems as they are too rugged. Mr. Larsen from

FLSmidth explained how the existing IT-systems within the company, to some extent, could

be used for the purposes of assimilating knowledge. However, because the expatriates’

knowledge is very advanced and underpinned by experience, IT systems do not represent the

best way to assimilate knowledge within the company, according to Mr. Larsen.

4.4.1.3 Rewards

None of the HR managers claimed that their company use rewards in order to assimilate

knowledge from the repatriates. Instead they all argued that knowledge assimilation is

something that occurs rather naturally. For example, Mr. Gustavsson explained that the

repatriates in his division of ABB do not need to be motivated or rewarded. Instead, the

division trusts the mentoring system that they use to automatically function as an incubator to

the ongoing knowledge assimilation.

4.4.2 Informal mechanisms of knowledge assimilation in ABB and FLSmidth

The three HR managers were also asked to elaborate on their answers in the web survey

regarding informal mechanisms of knowledge assimilation.

4.4.2.1 Career development

Similar to the general findings, all of the HR managers acknowledged that their

companies/divisions assign repatriates to positions that can make use of their international

experience. Mr. Moe explained that assigning the repatriates to positions in which they have

the ability to put the gained knowledge and experience into use gives the repatriates the

opportunity to communicate experiential knowledge that often can be hard to codify. Mr.

Gustavsson also described that assigning repatriates to specific positions is logical in order to

communicate knowledge and influencing key employees. But also that it is logical to do from

“each and every aspect”. That is why assigning repatriates to specific positions is something

that is done almost automatically in Mr. Gustavssons division of ABB. Furthermore, Mr.

Larsen also stated that FLSmidth always tries to assign repatriates to positions within the

company that takes advantage of their specific international knowledge. However, Mr. Larsen

also stressed that this was not something they are “world champions” in.


29

In order to create a better understanding regarding the career path of the repatriates we

asked the HR managers if the repatriates positions was something determined in advance or

was something that was considered upon repatriation.

Concerning this question Mr. Moe clarified that even though having a long term strategy and

forming career paths for their repatriates may be the optimal solution, much can change in a

dynamic business environment during the time of the expatriation. Therefore it is, according

to Mr. Moe, hard to keep any guarantees and to plan ahead. Mr. Gustavsson also explained

how his division tries to approach the expatriation and repatriation process in a strategic

manner in order to find career paths that will benefit from the repatriates international

knowledge. However, Mr. Gustavsson also explained that the repatriate’s new position often

is decided upon repatriation since most assignments are the result of a rather sudden demand

that the division tries to fill under a tight time constraint. Mr. Larsen also highlighted that

FLSmidth strives for having a structured career program where the employees can put their

gained experience in practice. According to Mr. Larsen, the problem with this method of

assimilating knowledge is that the company can not always guarantee that they will have a

vacant or suitable position for the repatriate when he/she returns. If there are no suitable

positions available for the expatriate upon return the company faces the risk of losing this

person to a competitor and as a result the company will, according to Mr. Larsen, also lose the

experiential knowledge before it has been assimilated.

4.4.2.2 Mentoring

Mr. Larsen described in the interview that the repatriates in FLSmidth always serve as

mentors to junior staff enabling the latter to prepare for overseas assignments and to incubate

the knowledge gained in the home organization. To allow less experienced co-workers to

work with experienced repatriates back home before the assignment, was furthermore

highlighted as the best way to assimilate knowledge by Mr. Larsen. This view on mentoring

was also shared by the two HR managers from ABB. For example, Mr. Moe explained that

knowledge assimilation in the day-to-day work represent the best way to spread experiential

knowledge from the repatriates to the rest of the organization. However Mr. Moe also

acknowledged that other types of knowledge, for example knowledge regarding contracts in

different countries easily could be taught through books. This type of knowledge assimilation

was not regarded as something difficult by Mr. Moe. Instead, Mr. Moe highlighted the

assimilation of experiences gained by the repatriate as the most difficult task when it comes to


30

knowledge assimilation. Mr. Moe described that this was especially true for knowledge that

could be subject to sensitive information regarding for example certain customers,

competitors and strategies that under no circumstances can leave organizational boundaries.

As a result, Mr. Moe explained that ABB has adapted a mentoring system where the

repatriates can transfer unique, experiential knowledge to assigned adepts. Mr. Gustavsson

also acknowledged that his division of ABB utilizes a mentoring system where repatriates are

encouraged to communicate knowledge and experience in their every day work. Similar to the

other two respondents, Mr. Gustavsson also stressed that formal mechanisms often are both

time consuming and unsuitable for assimilating experiential knowledge.

4.4.2.3 Informal networks

Concerning informal networks Mr. Gustavsson underlined that a lot of the expatriates are

assigned to take part in new projects at other destinations when the former one is completed.

These experiences will, according to Mr. Gustavsson give the employees the opportunity to

communicate their experiences to other co-workers from other parts of the company. As a

result they will ultimately transfer their knowledge to their own adepts. This behavior, where

the repatriates create extensive networks, was highlighted by Mr. Gustavsson as a factor

enabling more widespread knowledge assimilation than the one that is achieved upon

repatriation to the home country. Mr. Gustavsson also pointed out the use of trainee programs

as another informal path to assimilate knowledge. In these programs, often newly acquired

employees are assigned to rotate between different divisions and units during approximately a

one-year period. Mr. Gustavsson explained that these programs enable the trainees in an early

stage of their career to create relationships with other trainees and other co-workers across

different divisions of the organization and also across borders. Nevertheless, Mr. Gustavsson

also stressed the fact that this type of networking is something that is carried out without any

structured interference from management, “it just happens”.

Mr. Larsen also argued for the importance of knowledge diffusion carried out in informal

networks. Mr. Larsen described that the expatriates often are going from one project site to

another project site where they work side by side with other specialist and exchanging

experiences. Further, Mr. Larsen explained that their repatriates are not returning to the head

quarter with the aim of sitting in their office and transferring their knowledge to colleagues.

Instead these repatriates want to have the opportunity to assimilate their knowledge to other

FLSmidth specialists that they meet in various projects around the world. Mr. Larsen pointed


31

out that this form of informal networking may be an optimal way to transfer knowledge, but

since it is strongly informal the firm will never be sure that this type of knowledge

assimilation takes place.

We asked the HR managers if they saw any drawbacks with employing mentor systems and

assigning the repatriates to strategic positions trusting the repatriates to communicate the

knowledge in the day-to-day work instead of adopting formal mechanisms to dissimilate the

knowledge, allowing the knowledge to be dissimilated over a greater part of the organization.

Regarding this question Mr. Moe responded that he recognized the problem and agreed that

the current way of approaching knowledge assimilation in his company may not be optimal.

However, if the company would apply more formal mechanisms Mr. Moe considered

seminars and workshops to have a greater impact than IT-systems since much knowledge is

impossible to communicate through wires. Mr. Gustavsson also acknowledged the hazards of

tying to much knowledge to certain individuals instead of assimilating it to the entire

organization. Mr. Gustavsson further stated that this is something that his division may need

to take into deeper consideration. Mr. Larsen answered that one immediate downside of this

type of knowledge assimilation is that the knowledge is transferred to a rather narrow group

of people. Mr. Larsen highlighted that even if FLSmidth wants to, they cannot think of any

better mechanisms to use in order to tap the experience from the repatriates.

As all the companies depend on their repatriates to communicate the knowledge in their day-

to-day work, we further asked if the HR managers were concerned that their companies will

be the subject of losing valuable knowledge due to repatriate turnover.

In order to manage these risks, Mr. Larsen explained how HR management always has a

dialogue with the employee before he/she goes out on the assignment. FLSmidth also tries to

come to an agreement with the assignee on how the parties will end the assignment in the best

possible way. However, Mr. Larsen also stated that the chances that the repatriates will come

back and find themselves comfortable are limited. Therefore, the management in FLSmidth

always agrees with the employees what path to choose if the they are not able to fully agree

on a place within the organization where the employee can grow further upon repatriation.

Mr. Larsen further explained that if this is not done the employee is likely to feel misplaced

and dissatisfied with the employment and it can also in the long run harm the mobility in the


32

organization and send out bad signals to future expatriates. By choosing this approach

FLSmidth have, according to Mr. Larsen been able to carry out an open discussion regarding

the issue without losing valuable knowledge.

On the other hand, Mr. Moe stated that he does not consider this to be a big problem for his

department. Mr. Moe explained that due to the ongoing dialogue and open climate in his

division few people with valuable experience and knowledge leave the company. Similar to

Mr. Moe, Mr. Gustavsson stated that this issue is something that has been resolved through

good communication within his division.

4.4.2.4 Strategic vision

Concerning the issue of having a strategic vision regarding knowledge management the three

HR managers answered that their companies did not have any specifically developed visions

about knowledge management, even though it had been discussed within the companies.


33

5 Analysis

In this section the findings from the previous section will be analyzed using the theory

presented in chapter two.

5.1 Formal mechanisms of knowledge assimilation

In general, the findings from our study clarify that most companies doesn’t utilize any

mechanisms to assimilate repatriates’ knowledge. This in correspondence with Berthoin

(2001), Bender and Fish (2000), Hermansson and Kilnes (2008), Berthoin and Walker (2005)

who all have indicated that there is incongruence between what the expatriates learn and what

their companies learn from the expatriates international assignments.

Bonache and Cervino (1997) as well as Suutari and Brewster (1998) suggested in their studies

that formal reports could function as a method of transferring and store knowledge within the

MNC. However, the results from our survey reveal that the companies participating in our

study do not give their repatriates the chance to write any formal reports about their mission

abroad. 41 % of the respondents answered “not at all” when asked if they gave their

expatriates the opportunity to write formal reports about their mission abroad. The reason for

this result could be, as highlighted by the respondents themselves in question 3.5, that the

knowledge repatriates carries with them often is tacit in nature and therefore hard to codify

into formal reports. However, not all the knowledge expatriates gain on their international

assignment is tacit. Market specific knowledge such as knowledge about cultural “do’s and

don’ts” and information about different suppliers could relatively easy be collected and stored

into formal reports. Reports that could become very useful for other employees travelling to

the same destination in the future. In addition, knowledge in forms of technical data that could

be useful for example engineers is also the type of knowledge that easily could be codified

into formal reports and stored for future use.

Nonaka (1994) pointed out in his study that holding meetings and /or seminars could function

as a way of sharing explicit knowledge in the MNC while experience sharing in the form of

for example workshops could be used as means of sharing tacit knowledge. None of these

formal mechanisms of knowledge assimilation seems to be commonly used in the studied

MNCs. 31, 7 % of the respondents answered “not at all” to the statement that their company

gave their repatriates the opportunity to hold seminars or workshops concerning their


34

international assignment. As noted earlier, workshops represent one of the few accessible

mechanisms of transferring tacit knowledge within MNCs since transferring tacit knowledge

only is possible trough imitation and practice. It is therefore especially unfortunate that

workshops are not used as means of assimilating knowledge in the studied MNCs. The

interviews indicated that the problem here seem to be that creating formal reports, as well as

setting up meetings, seminars and workshops are too complex and time consuming. For

example, Mr. Larsen explained that FLSmidth doesn’t have the administrate capacity to

manage these assimilating mechanisms. In addition, the nature of the knowledge was also

highlighted as an issue. For example, Mr. Moe argued that even though workshops and

seminars might be more appropriate than IT systems and reports, it’s important to consider

the nature of the knowledge. This argument from Mr. Moe is also in line with the existing

theory and the overall response in our survey. 52 % of the respondents answered that the

knowledge repatriates gain often is difficult to codify and communicate and because of that it

creates barriers to the use of formal mechanisms. It is, however, important to note that 24 %

of the respondents answered that that the reason to why they had not developed formal

mechanisms was that they did not have time or money to do so. Another 24 % of the

respondents answered that the lack of interest from the MNC was the main obstacle. These

findings are also in line with earlier research in the area, that is that there often exist a lack of

priority and interest when it comes to manage repatriate knowledge.

Ciabuschi´s research indicated that IT- systems could function both as a mechanism of

knowledge duplication and as a trigger for direct interaction. Our study illustrated that IT

systems, in general, are not used in the participating MNCs. 61 % of the respondents

answered that they did “not at all” use IT systems. The average score on the same question

was 1, 92 which indicates that only a few of the studied companies utilize an IT system as a

method of assimilating knowledge. In contrast to meetings or seminars, MNCs can by using

an IT-system as a method of assimilating knowledge spread the knowledge to a wider

audience. Even though the HR managers realized the potential of reaching out all over the

organization when utilizing an IT system for knowledge assimilation they all consider it to be

unsuitable or communicating expertise, i.e. deeper knowledge in a specific field that has been

maintained trough experience and education (Starbuck, 1992; Sveiby, 1997). This argument

from the HR managers is of course true but as argued by Ciabuschi (2007) is an IT system not

first and foremost a mechanism for communicating and transferring expertise, instead an IT


35

system can be used as a mechanism that can initiate communication between different parts of

the MNC and trigger direct contact between individuals.

In order to create a knowledge-sharing environment within MNCs Bender and Fish (2003) as

well as Gooderham (2007) suggested that rewarding knowledge sharing outcomes could be a

very useful tool. However, almost half of the respondents in our survey answered that their

company did “not at all” reward repatriates that share their knowledge and only one

respondent answered that they did reward their repatriates “very much”. Further, all of the

three HR managers stated that their firms/divisions to a substantial degree don’t utilize any

motivational mechanisms as mentioned by Gooderham (2007). On the other hand, the HR

managers explained that the reason behind why there is little use of motivational mechanisms

is because of the mentoring systems within their companies. To adopt a mentoring system

where almost every employee has both a trainer and a trainee may very well encourage the

work force to socialize, create mutual understandings and languages and other practises that

constitute the social mechanism as also mentioned by Gooderham (2007).

5.2 Informal mechanisms of knowledge assimilation

Kamoche (1997) as well as Bender and Fish (2001) research pointed out the importance of

having a strategic vision when it comes to knowledge management since the absence of such

a vision could result in a lack of knowledge assimilation mechanisms. However, the results

concerning this issue varied in the questionnaire.. Some companies seemed to have

acknowledged the importance of a strategic vision concerning knowledge management while

others had not. The respondents that answered that they did not apply formal mechanisms of

knowledge assimilation had even a higher average score (4, 38) on the statement “does your

company have a strategic vision concerning knowledge management” than the ones that had

answered that they did apply formal mechanisms (3,36). These findings give little support for

the argument that a strategic vision would automatically result in formal mechanisms of

knowledge transfer. Hence, having a strategic vision of knowledge management only seems

to represent the beginning of a MNCs knowledge management work and not a guarantee for

mechanisms to be developed. The findings tell us that in order to develop effective knowledge

assimilation mechanisms this vision also needs to be implemented in the everyday work of the

organization which is not an easy task to do.


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Informal networks such as mentoring were highlighted by several researchers as a way of

evaluating expatriates and improving knowledge assimilation and learning in international

organizations (see for example Mezias & Scandura, 2005; Gupta & Govindarajan, 2000). The

results from the survey revealed inconsistent answers regarding evaluation of the repatriates.

9, 8 % of the respondents answered that they evaluate their repatriates experiences “very

much” while 4,9 % answered that their company did “not at all” evaluate their repatriates

experiences. The same variations in the answers also applied for the question regarding

encouraging and inspiring knowledge sharing. Some companies did “not at all” encourage

and inspire their repatriates to share their knowledge while other companies encourage their

repatriates “very much”. This indicates that some of the companies have acknowledged the

important role of the repatriate and are trying to incorporate the assimilation of knowledge

into their overall knowledge management strategy, while other companies just seem unaware

of their potential or simply neglect it. Furthermore, the interviews with the HR managers

indicated that mentoring and informal networks were the most commonly used mechanisms to

assimilate repatriate knowledge into the rest of the organization. Both Mr. Gustavsson and

Mr. Larsen explained how international trainee programs and dynamic expatriate

assignments, where the assignee is transferred from project to project all over the world

allows the employees to dissimilate knowledge in the day-to-day work in informal networks

created around the world. The managers, however, acknowledged how these mechanisms

didn’t allow the experience to be assimilated in to a greater part of the MNC.

Several studies have also acknowledged career support programs as crucial when it comes to

sharing knowledge and learn from repatriates’ experiences (Larazova & Cerdin, 2007;

Thomas & Downs, 1999; Berthoin, 2001). Placing the repatriates in positions that take

advantage of their international experience is something that the MNCs participating in our

study also regard as important. Of all the questions in the survey the question concerning the

positioning of repatriates got the highest average score (4,95) indicating that this method of

assimilating repatriates knowledge is the most common method within the studied MNCs. To

place repatriates in positions that take advantage of their international knowledge give the

repatriate a unique opportunity to share and communicate their knowledge to co-workers in

their surroundings. However, the answers from the HR managers indicated that it can be

difficult for the MNCs to actually control where the knowledge is assimilated and who

actually carries the knowledge. Another shortcoming stressed by the managers was that the


37

knowledge, in general, only is spread to a rather narrow group of people in the repatriates

surroundings.

The MNCs in our study that answered that they do use mechanisms to assimilate the

repatriate knowledge stated that the mechanisms used were often informal. In the interviews

all three HR managers explained (also mentioned above) how the repatriates’ knowledge

mostly was assimilated to a narrow group of co-workers in the day-to-day work. The reason

for this was according to the respondents that a great portion of the repatriate’s knowledge

was what Starbuck (1992) and Sveiby (1997) describe as expertise, which is knowledge in a

specific field that has been enriched by extensive experience, training and education, built up

from scratch by the individual. This knowledge is also considered to be of tacit nature as it is

difficult to codify and teach (Nonaka, 1991) and cannot easily be transferred to another part or

individual. (Fahey & Prusak, 1998)

It seems as many of the respondents in our research acknowledge the importance of

expatriates as vehicles of knowledge transfer. However, it appears as if many of the

respondents do not fully acknowledge the potential of the reverse assimilation of market

specific knowledge as highlighted by Downes and Thomas (2000). Even if the HR managers

do recognize the potential of the reverse knowledge flow, the empirical data illustrates that

few actually make efforts to evaluate and use suitable mechanisms in order to assimilate this

knowledge into the MNCs. This implies that the assignees are more considered to be what

Tsang (1999) describes as agents of knowledge transfer before agents of learning. This

however indicates that the companies will fail to leverage from the competitive edge that

Caves (1982) and Hymer (1976) argues that MNCs are in the position to create by combining

knowledge from different parts of the MNC.


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6 Conclusions & Implications

A first conclusion that can be drawn from our research is that the MNCs participating in our

study do not use mechanisms of knowledge assimilation in any wider sense. Formal methods

of sharing knowledge, for example through reports, seminars and IT systems were not

common in the studied MNCs, nor was informal mechanisms such as fostering a common

knowledge sharing vision within the organizations. Hence, the findings from our study further

clarify that most companies do not utilize any mechanisms to assimilate the repatriates’

knowledge.

A second conclusion that can be drawn is that informal mechanisms such as assigning

repatriates to positions that take advantage of their international knowledge and using

different types of mentor systems and encouragement are the most common mechanisms of

assimilating knowledge within the studied MNCs.

6.1.1 Model 2: mechanisms to assimilate knowledge in the studied MNCs

KnowledgeAssimilation


39

A third conclusion that we can draw from our study is that our findings are in line with earlier

research in the area. Similar to previous research our study has illustrated that there often is

lack of priority and interest when it comes to managing repatriate knowledge.

However, it is important to note that these conclusions might be dependent on our sample

selection. As acknowledged in the section for limitations the companies that agreed to take

part in our study might be the ones that actually have a focus on repatriation. In addition, our

sample selection is rather small only 39 Nordic companies agreed to participate in our study.

6.2 Implications

Our study illustrated that few of the studied MNCs used mechanism, and especially formal

mechanism, to transfer and share knowledge. A majority of the respondents answered that the

main reason to why formal mechanisms were not used was difficulties of communicating and

codifying the repatriates’ knowledge. When the knowledge is hard to codify informal

mechanisms of transferring knowledge, for example through mentorship can be more

appropriate. However, almost 50% of the respondents in our study answered that they did not

apply formal mechanisms because they did not have time and/or money or because they were

not interested in accumulating this knowledge. Since knowledge is considered to be a very

important feature in organizations one suggestion for management is to devote more interest

and resources into this area. By doing so the MNC is also likely to gain essential value to the

organization and in the long run also an important feature of the MNCs competitive edge.

Our research also indicated that work assignments and mentorship were the most common

mechanisms of assimilating repatriates’ knowledge. These methods of assimilating

knowledge mostly gain individuals in the repatriates near environment and as a result the

knowledge is not often spread to other parts of the MNC. An implication for management

would therefore be to complement these informal mechanisms with formal mechanisms of

knowledge assimilation that can be diffused to many different parts of the organization, for

example trough IT systems or formal reports.

This study has only focused on Nordic MNCs and especially Swedish MNCs. An implication

for future research could therefore be to study the same issue but in other countries to see if

other countries of cultures are better at assimilating their repatriates’ knowledge. Another


40

suggestion would be to investigate how smaller MNCs handle knowledge assimilation and see

if it is harder or easier to assimilate knowledge in smaller MNCs. It would also be interesting

to make a case study on one company that actually have devoted much focus, time and

resources into this issue and investigate what a company actually can gain by focusing on

assimilating repatriates knowledge.


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7 References

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Bender, S. & Fish, A. (2000), The transfer of knowledge and the retention of expertise: the continuing need for global assignment, Journal of knowledge management, Volume 4, Issue2.

Bennett, R. (1993), "Meeting the challenges of repatriation", Journal of International Compensation and Benefits, pp.28-33.

Berthoin Antal, A. (2001) Expatriates contribution to organizational learning, Journal of General Management Volume 26, pp. 62-84.

Berthoin Antal, A. & Walker, E-M. (2005), Organizational Learning from Chinese Returners:An Exploratory Study of the Role of Cross-Cultural Interactions, Contribution to EGOS 2005, Subtheme 28 “Unlocking organizational learning in multinational corporations: Exploring the pivotal role of cross-cultural interactions”.

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Bolino, M. (2007), Expatriate assignments and intra-organizational career success:implications for individuals and organizations, Journal of International Business StudiesVolume 38, pp. 819-835.

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Bonache, J. & Cervino, J. (1997), Global integration without expatriates, Human Resource Management Journal Volume 73 pp. 89–100.

Ciabushi, F. (2007), On it systems and knowledge sharing in MNCs: a lesson from Siemens AG, Knowledge Management Research & Practice, Volume 3.

Downs, & Thomas. (1999), Managing overseas assignments to build organizational knowledge, Human resource planning, Volume 22, Issue 4, pp. 33-48.


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Fahey, L. & Prusak, L. (1998), The eleven deadliest sins of knowledge management', California Management Review, Volume. 40, Issue 3, pp. 265-76.

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Lazarova, M. and Cerdin, J. (2007), Revising repatriation concerns: organizational support versus career and contextual influences, Journal of International Business StudiesVolume 38, Issue 3, pp. 404-429.


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Internet

Den nordiska börsen 2008, Retrieved November 15 2008 from:http://www.omxnordicexchange.com/investors/handelsinformation/nordiskaborsen/

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Interviews

Larsen, P. FLSmidth, Copenhagen, December 19, 2008, Phone Interview.

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8 Appendix 1: Web Survey

ASSIMILATION OF REPATRIATE KNOWLEDGE

1. General information

1. Nationality

2. Which company are you currently employed in?

3. What is your position within the company?

4. How many years have you been employed by your company?

0-2 years

3-5 years

6-10 years

11-20 years 20 years or more

5. Where are you located right know?

Corporate HQ Divisional HQ Other (please specify)

6. In which country are you located right now?

2. The expatriation process

1. Approximately how many employees does your division send to work abroad each

year?

0-10

11-20

21-40

41-60

61-80

81-100 101 or more

2. What positions does your internationally assigned employee normally hold?

Managers

Engineers


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Analysts

Accountants

Other (please specify)

3 . Does your company have a specific person/group/division that is responsible for expatriates and the expatriation process?

Yes No

4 . Does your company have contact with the expatriates during their assignment

abroad?

Yes, we have a regular contact with all of our repatriates.

Yes, but the contact is unsystematic and/or varies between different expatriates.

No, only if necessary /if something happens

No, the expatriates have to contact us if they have any questions, comments or

suggestions.

3. The repatriation process

1. Please evaluate the following statements about repatriation (1= not at all, 7= very much):

Does your company evaluate how the repatriates experienced their time abroad? Do the repatriates from your company write any formal reports about their assignment

abroad? Does your company give the repatriates an opportunity to hold seminars and/or

workshops concerning their mission abroad?

2. Please evaluate the following statements about knowledge sharing and learning (1= not at all, 7= very much):

Does your company (in general) assign the repatriates to a position within the company that takes advantage of their specific international knowledge after they return?

Does your company have any it based systems (intranets or likewise) where the repatriates can share their knowledge with co-workers?

Does your company encourage and/or inspire the repatriates to share and communicate their international knowledge in their everyday work?

Does your company reward repatriates that communicate their knowledge? Does your company have a strategic vision concerning knowledge management? Does your company have a specific person/group/division responsible for knowledge

management concerning repatriates? Does your company learn from the knowledge repatriates have gained on assignments

abroad?


48

3. Would you say that your company applies formal mechanisms to assimilate the knowledge repatriates have gained on their assignment abroad?

Yes, very much. Yes, to some extent. No

4. If you answered yes to the former question, could you please give an example of these formal mechanisms?

5. If you answered no to the former question , what is the main reason to why your

company does not use formal mechanisms to assimilate the repatriates’

knowledge?

Because it is difficult to codify and communicate the knowledge in general and

repatriate knowledge in particular.

Because the company does not have the time and/or money to develop these kind of

mechanisms.

Because, the repatriates have not been interested in transferring or communicating

their knowledge. Because, the company have not been interested in assimilating this knowledge.

Other (please specify)


49

9 Appendix 2: Large Cap Companies

Large Cap Companies on the Nordic Stock Exchange, November 20, 2008

o ABB o Alfa Lavalo Autoliv SDBo ASSA ABLOY o Atlas Copcoo Axfoodo AstraZenecao Bakkavör o Bolideno Carlsberg o Castellumo Cargotec o Coloplast o Danske Banko Danisco o D/S Nordeno DSVo Elekta o Elisa o Electrolux o Ericsson o Exista o Fabegeo Fiskars o FLSmidth o Fortum o G4S plco Genmabo Getinge o Hexagon o H&Mo Holmen o Hufvudstao Husqvarna o Industrivärldeno Investor o JMo Jyske Bank

o Kaupthingo Københavns

lufthavneo Konecranes jo Keskoo Kinnevik o KONE o Kemirao Latour o Lindab Internationalo Lundin Mineralso Lundbecko Lundbergföretagen o Lundin Petroleumo A.P. Møllero Meda o Melker Schörlingo Metso o Millicom Into ModernTimesgroupo NCC o Nordea Banko Neste Oilo NKT Holdingo Nokiao Novo Nordisko Nokian Rekaato Novozymes o Oriflameo Orion o Outotec o Outokumpu o PA Resourceso Pohjola Pankkio Pöyry o Ratos Ao Rockwool Into Rautaruuki o Sanoma

o SAAB o Sampo o Sandviko SCA o SCANIA o SEB o Seco Tools o Securitas o Sv. Handelsbankeno Skanska o SKF o SSAB o Stockmann o Stora Enso o Straumur bankio Swedbank o Swedish Matcho Sydbanko TDCo Tele2 o TietoEnatoro TeliaSonerao Topdanmarko D/S Tormo Trelleborg o TrygVestao Uponor Oyjo UPM-Kymmeneo Vostok Gaso Volvo o Vestas Wind Systemso William Demant

Holdingo Wärtsilä o West Siberian

Resources o YIT


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10 Appendix 3: Letter to HR-managers

Uppsala UniversityDepartment of Business studiesNov 25, 2008

Dear sir/madam,

We are two business students from Uppsala University and we are currently writing our Master thesis in International Business. We are writing to you because we believe that your company can contribute with important information needed for our thesis.

We intend to investigate the interesting and important subject of repatriation and more specifically the assimilation of repatriates’ knowledge. In a prior study conducted by one of the authors behind this research it was concluded that multinational corporation often fail to exploit the knowledge gained by the expatriates. We would now like to keep building on this string of thoughts, and investigate exactly how a multinational corporation handles the issue of assimilating expatriates knowledge accumulated in international assignments.

We strongly believe that the findings of an investigation of this nature could contribute with valuable information on how multinationals can leverage on the knowledge created throughout the corporation. Therefore, we would be of great gratitude if you could to help us by answering a questionnaire consisting of 22 questions. The questionnaire will take approximately five to ten minutes to answer.

The collected answers will not be connected to any specific company. When our study is completed we will of course provide you with a brief report of our findings concerning this hot topic.

To participate please click on the following link: http://www.surveymonkey.com/s.aspx?sm=r1wJ7f_2bmltPqGKEPgodwIA_3d_3d

Thanking you in advance for your cooperation!

If you have any questions please do not hesitate to contact us.

Yours sincerely Frida Hermansson & Rikard Andersson

E-mail: [email protected] or [email protected] Mobile: Frida 070 302 25 12 or Rikard 070 441 43 44

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