Knowledge Sharing vs. Knowledge Appropriation: A Case Study of Contingent Relationship in the Role of Boundary Spanners in Asian Subsidiaries of Japanese Multi-National Enterprises

doi:10.21203/rs.3.rs-4924518/v1

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Knowledge Sharing vs. Knowledge Appropriation: A Case Study of Contingent Relationship in the Role of Boundary Spanners in Asian Subsidiaries of Japanese Multi-National Enterprises

https://doi.org/10.21203/rs.3.rs-4924518/v1

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In recent decades, Asian subsidiaries of Japanese manufacturing MNEs have faced heightened competitions from local firms to underscore the strategic importance of developing competent “host country nationals” (HCNs) to overcome their liability of foreignness. In addition, in recent literature on global MNEs, the importance of “boundary spanners” (BSs) has been pointed out in facilitating knowledge sharing across intra-organizational boundaries. Given these discussions, this study focuses on an interesting contingent relationship in the role of BSs observed in author’s interviews. i.e., In cases of “bad BSs,” “knowledge appropriation” can take place where newly promoted HCNs would monopolize their knowledge and information, and the mitigating processes of notion gap problem in grey areas management are heavily stagnated. Whereas in cases of “good BSs,” “knowledge sharing” would take place where newly promoted HCNs would be willing to share them with other members, and the mitigating processes of the notion gap problem are steadily progressed. The study proposes a framework illustrating conditions under which HCNs choose knowledge sharing over appropriation. The analysis identifies two key factors influencing this choice: dependence on personal skills and prospects for growth opportunities. The findings suggest a dynamic relationship where knowledge sharing leads to effective control and efficient knowledge transfer, fostering virtuous cycles, while knowledge appropriation results in inefficiencies, creating vicious cycles. The study calls for further research on dynamic aspects of this contingent relationship and suggests practical strategies for shifting from knowledge appropriation to sharing, thereby enhancing organizational performance in foreign subsidiaries.

International Business

Boundary Spanners (BSs)

Contingent Relationship

Knowledge Sharing

Knowledge Appropriation

Notion Gap Problem

Japanese MNEs.

<Main topic: “knowledge sharing” and two different approaches>

In the past several decades, Japanese manufacturing MNEs (multi-national enterprises) have increased their DFI (Direct foreign investment) to East Asian economies as they have achieved their high and sustainable growth to expand their local market. In the last a few decades, however, the local Asian firms have enhanced their technological capabilities to catch up with and/or to even exceed those of Japanese MNEs, and thus, the competitive pressures from their local rivals have been intensified with facing difficulties in exploring their local market [JBIC (2023), SME Support Japan (2024)]. And accordingly, the strategic importance of HRM (Human resource management) has been growing, so that the team of competent HCNs (Host country nationals) can be developed to overcome the liability of foreignness of Japanese MNEs [Zaheer (1995), Hara (2022)].

Given these circumstances, it should be noted that, as the key aspect in the literature on HRM, the knowledge sharing, or the degree of employees’ engagement in knowledge sharing activities, has been recognized as an important process contributing the organisational performance [Foss et.al. (2010), Llopis and Foss (2016), Andreeva and Sergeeva (2016)]. In their studies, possible links between human resource practices, the level of knowledge sharing antecedents of employees, and their organizational performance have been examined to explore the strategic system of human resource practices which would promote the organizational climate for their knowledge sharing behaviours, where those enhancing employees’ abilities, fostering motivations, and providing opportunities to perform are their major categories.

On the other hand, in the recent literature on the management of global organizations or that of MNEs, the importance of knowledge sharing has also been discussed. However, in their studies, a special attention has been focused on the role played by certain individual employees, or “boundary spanners” (BSs) [Barner-Rasmussen et.al. (2014), Schotter et. al. (2017), Roberts and Beamish (2017)]. According to their discussions, MNEs are characterized by geographical, cultural, and linguistic fragmentation with intra-organizational boundaries, and the efficient crossing of these internal boundaries can be a source for their significant advantage, where “boundary spanners” can play their crucial roles, who are perceived by other members of both their own in-group and/or out-group to engage in and facilitate significant interaction between the two groups. In their studies, the expected roles of boundary spanners as well as their required abilities have been discussed. For instance, in Roberts and Beamish (2017), global boundary spanning was viewed as a long-term commitment to help internal members become aware of foreign knowledge practices, see these practices as valuable, and adopt them internally. Then, using the framework of scaffold building, boundary spanning was conceived as a combination of ability, persistent willingness, and opportunity.

<Our focus: contingent relationship in the role of boundary spanners>

Noting these discussions in the literature, the author carried out his own research interviews with Asian subsidiaries of Japanese MNEs to examine their ongoing efforts on human resource and skill development, and then, observed an interesting contingent relationship for the promoted HCNs (Host Country Nationals) in their role of boundary spanners as follows.

As a typical cultural boundary for Japanese MNEs in human resource & skill development, the gap in the notion on grey areas was discussed in Ishida (1982, 1986), where grey areas are defined as the areas of tasks or jobs which are not clearly assigned to individual members1. Here, Japanese employees (PCNs: Parent Country Nationals) are relatively familiar with and capable of “flexible management” on these areas, whereas HCNs are relatively comfortable with and capable of “well-defined engagement” with the clearly defined jobs or tasks, and thus, due to this misalliance, these grey areas in Asian subsidiaries are not likely to be well managed by HCNs to cause significant inefficiencies in their daily operations as well as their human resource and skill development.

In fact, in most cases of author’s interviews in 1998 & 2002, this notion gap problem in gray areas management was pointed out as the major cultural boundary which would cause significant inefficiencies in their skill development of HCNs. At the same time, it was also pointed out that Japanese expatriates (PCNs) had carried out various efforts to mitigate this notion gap problem, which can be summarized as the stepwise hybrid of (1) 1st step static modifications (clarification of grey areas: e.g., preparing for user-friendly manuals, standardizing the skills and contents of tasks), and (2) 2nd step dynamic modifications (enhancement of grey areas managing capability: e.g., QC circle activities, systematic development of multiple skills) [T. Hayashi (2005)]2.

Then, in author’s interviews after 2007, similar to previous findings, the notion gap problem as well as the stepwise hybrid of static and dynamic modifications was observed, whereas an interesting contingent relationship of “knowledge sharing vs. knowledge appropriation” was also observed as follows. In some cases, the promoted HCNs played their crucial roles as “boundary spanners”, where “knowledge sharing” was observed. i.e., They had well acquired their grey areas managing capability, and they were willing to share their knowledge and information to offer their subordinate members sufficient learning opportunities to enhance their grey areas managing capability as a team. In contrast, in some other cases, the promoted HCNs would be reluctant to play their roles as “boundary spanners”, where “knowledge appropriation” was observed. i.e., Even though they had well acquired their grey areas managing capability, they would try to monopolize their knowledge and information, so that possible learning opportunities for their subordinate members would be limited to stagnate their grey areas managing capability as a team3.

<Research Question and Outline>

Hence, focusing on this contingent relationship in the role of boundary spanners, this study carries out a comparative case study to examine the arising mechanism of “knowledge appropriation (case of “bad” boundary spanners) vs. knowledge sharing (case of “good” boundary spanners)” in Asian subsidiaries of Japanese MNEs. i.e., The relative incentives of the promoted HCNs for “knowledge appropriation vs. knowledge sharing” are examined to derive a set of conditions which would affect their decision making. Furthermore, this set of conditions are explored to suggest further research topics on the dynamic perspectives of this contingent relationships.

In section II, focusing on the relative incentives of promoted HCNs, the conceptual framework and a set of working hypotheses are proposed. In section III, the methodology and the selected four sample cases are explained. In section IV, the applicability of these cases to the proposed working hypothesis is examined to derive two key explanatory factors as well as a contrasting set of conditions which would lead to the contingent relationship. In section V, the main results of the analysis are summarized, and possible topics for further research are suggested which are on the dynamic aspects of the contingent relationship on “knowledge appropriation vs. knowledge sharing”.

[1] In the literature of international HRM, to analyse the cultural boundary in Japanese MNEs, besides this gap in grey areas management (Ishida,1982), the notion gaps of (1) high context vs. low context (Yasumuro, 1982), and (2) analogue vs. digital (Y. Hayashi, 1994) have been discussed.

[2] Consistent with this finding, Yoshihara (1996) and Shiraki (2006) discussed that Japanese MNEs are more likely to rely on the transfer of tacit knowledge by direct instructions of PCNs, which is contrasted with the heavy reliance of US and European MNEs on the transfer of explicit knowledge by indirect instructions of written manuals. In addition, in more recent studies in Furusawa and Brewster (2018, 2019), for the transfer of tacit knowledge in Japanese MNEs, the importance of SIEs (Self-initiated expatriates) was pointed out, as they can play crucial roles as boundary spanners to be familiar with both cultures of Japan and local conditions.

[3] In the theoretical analysis in economics and business studies, this problem of knowledge appropriation has been discussed in Shleifer and Vishny (1989) and Prendergast (1995). On the other hand, in the context of HRM in Asian subsidiaries of Japanese MNEs, this problem has been observed in JMF (1997) and JRC (2012) as one of their important challenges.

In this study, a pair of conceptual frameworks and working hypothesis is proposed, which is the extension of the previous discussions on “negative effects” of localization in the literature of international HRM as shown in Fig. 1 (O’Donnell 2000, Gong 2003, Tan and Mahoney 2006, Wang et al. 2009, Ando 2014). i.e., When HCNs are promoted to higher executives in MNEs, both positive effects (e.g., retainment of competent HCNs) and negative effects might take place. Then, examining the size of these effects, the major two negative effects of “ineffective control” and “inefficient knowledge transfer” are likely to be greater in case of “greater cultural and institutional distances”.

[Fig. 1 is inserted here]

In author’s interviews, examining the cases where “knowledge appropriation” was observed, as a similar image of Fig. 1, the two major problems of “ineffective control & inefficient knowledge transfer” had taken place, where the promoted HCNs were reluctant to play their roles as “boundary spanners”, so that possible efforts for the stepwise hybrid of static & dynamic modifications were heavily stagnated as illustrated in Fig. 2(a). In contrast, examining the cases where “knowledge sharing” was observed, as a mirror image of Fig. 1, the two major performances of “effective control & efficient knowledge transfer” were realized, where the promoted HCNs were willing to play their roles as “boundary spanners”, so that ongoing efforts for the stepwise hybrid of static & dynamic modifications were steadily achieved as illustrated in Fig. 2(b).

[Fig. 2(a)&(b) is inserted here]

Following these discussions, “Fig. 2(a) vs. Figure 2(b)” is proposed as the conceptual framework to illustrate the contingent relationship in the role of boundary spanners. Then, based on this framework of “Fig. 2(a) vs. Figure 2(b)”, the following working hypothesis is proposed to explore possible key explanatory factors to derive this contingent relationship.

H_A

In conditions A, incentives of the promoted HCNs for knowledge appropriations is relatively

high, and then, “knowledge appropriation” is chosen by the promoted HCNs.

H_B

In conditions B, incentives of the promoted HCNs for knowledge sharing is relatively high,

and then, “knowledge sharing” is chosen by the promoted HCNs.

In section 4, using this framework, the applicability of H_A & H_B is examined. i.e., In cases of X & S, while possible efficiency losses due to “ineffective control & inefficient knowledge transfer” are illustrated, the first key explanatory factor which would lead to higher incentives for “knowledge appropriation” is explored. In cases of Y & Z, while possible efficiency gains due to “effective control & efficient knowledge transfer” are illustrated, the second key explanatory factor which would lead to higher incentives for “knowledge sharing” is explored.

III.1. Methodology: case study research with a step-by-step coding

Here, given this conceptual framework, this study conducts case study research using a qualitative coding of “step-by-step approach” (Sato, 2008), where both styles of deductive and inductive coding are utilized because of the following reasons.

Firstly, the case study approach has been shown to be appropriate for theory-building in research topics where theories have not been well-developed (Eisenhardt 1989; Doz 2011; Yin 2018). As such, this factor seems applicable to our study, where the arising mechanism of a contingent relationship of knowledge appropriation vs. knowledge sharing is newly explored.

Secondly, as discussed in Sato (2008), inductive coding & deductive coding are not necessarily exclusive with each other, but they might be utilized simultaneously. i.e., In cases where key notions in existing literatures or those derived from previous research are available and relevant, the deductive coding can be applied. On the other hand, in cases where these notions are not yet available, inductive coding can be applied to explore new analytical notions. The author has utilized this “step-by-step coding” in his interview series as summarized in Table 1. i.e., In each series of interviews, semi-structured interviews were designed, and deductive coding was applied to testify key notions proposed in existing literatures and/or those derived from the author’s previous interviews, while inductive coding was applied to explore possible analytical notions to theorize new findings.

[Table 1 is inserted here]

III.2. Sample data: theoretical sampling and our four sample cases

In selecting our cases, theoretical sampling (Eisenhardt and Graebner 2007) is applied; this approach selects cases that are particularly suitable for illuminating and extending relationships and logic among constructs to enable theory-building. Here, noting that the purpose of our study is theory-building with a given framework of Fig. 2, the four cases of X, S, Y and Z were selected.

Firstly, case X was selected as the sample, because knowledge appropriation was clearly observed as in Fig. 2(a), and a relatively detailed information for the decision making by the promoted HCNs was available, where “a higher degree of dependence on personal skills and knowledge” (= 1st key explanatory factor) was pointed out to be crucial for the choice of “knowledge appropriation by newly promoted HCNs.4

Secondly, case S was selected. It is because, like case X, knowledge appropriation was clearly observed, and the applicability of the 1st key explanatory factor was also pointed out (i.e., literal replication of case X), whereas an important and yet a different case specific factor from case X was pointed out for her “higher degree of dependence on personal skills and knowledge”. In addition, a longitudinal data set (2019 & 2023) was obtained, so that a relatively detailed information was available on her case specific factors.

Thirdly, case Y was selected. It is because knowledge sharing was clearly observed as in Fig. 2(b), and the applicability of 1st key explanatory factor was pointed out as the mirror image of case X (i.e., theoretical replication of case X). In addition, a longitudinal data set (2007, 2013 & 2021) was obtained, so that a dynamic change in the relative importance of 1st & 2nd key explanatory factors have been observed with the detailed information on her case specific factors.

Fourthly, case Z was selected. It is because, like case Y, knowledge sharing was clearly observed, whereas the first key explanatory factor was not applicable to this case. Instead, “a higher prospect for growing opportunities” (= 2nd key explanatory factor) was newly pointed out to be crucial for the choice of knowledge sharing by newly promoted HCNs. In addition, a longitudinal data set (2007, 2013 & 2021) was obtained, so that a relatively detailed information on case specific factors for her high prospects for growing opportunities has been observed.

III.3. Data sources and overview of interviews

<Data sources>

We used the following three data sources for the four sample cases of X, S, Y and Z:

Qualitative data from semi-structured interviews with CEOs and/or top managers in 2007 (cases of X, Y and Z) as well as their following up interviews in 2013 & 2021 (cases of Y and Z), and also in 2019 & 2023 (case S).

E-mails to follow up the interview results.

Archival data including company websites and materials provided by informants.

<Overview of the interviews>

As described in section II, the author carried out his research interviews with Asian subsidiaries of Japanese MNEs since 1998, which have aimed to examine the three elements of (i) major problems on HRM, (ii) ongoing efforts to mitigate and/or avoid problems as listed in (i), and (iii) historical development of (i) & (ii).

Including our four cases of this study, most of these interviews took 90–120 minutes, and all of them were transcribed. In addition, all the interviews since 2021 were tape recorded. In these interviews, a semi-structured template was used, where the key notions listed as “deductive coding & theory testing” in Table 1 were explicitly considered, while they were followed by open ended questions for “inductive coding & theory building”.

Here, the overview of these four cases is shown in Table 2-Table 4, where 1) key information, 2) Japanese parent, 3) overseas operations, 4) overview of operations in the subsidiary, 5) historical evolutions in the subsidiary are listed.

[Table 2 ~ Table 4 are inserted here]

[4] In case X, the interview was carried out only in 2007, however, some following up questions and the draft check have been carried out by e-mails in several times.

In this section, focusing on our 4 sample cases, the applicability of the framework of Fig. 2(a) & Fig. 2(b) is examined to illustrate the arising mechanism of the contingent relationship of boundary spanners on “knowledge appropriation vs. knowledge sharing” while deriving the two key explanatory factors as well as their underlying case specific factors.

IV.1. Two cases of knowledge appropriation: Case X & Case S

Firstly, two cases of knowledge appropriation are examined. In these cases, consistent with the framework of Fig. 2(a), promoted HCNs would not have played their expected roles as boundary spanners, where the stepwise hybrid processes of mitigating the notion gap problem were heavily stagnated. Then, examining possible factors to raise the incentive of promoted HCNs for knowledge appropriation, “degree of dependence on personal skills and knowledge” was pointed out as the key explanatory factor for “Condition A” in Fig. 2(a), which will be discussed with using Fig. 3 & Fig. 4.

IV.1.1 Case X: a case of higher degree of dependence on personal skills & knowledge

<A sudden rise in the degree of dependence after starting a new sector>

As shown in Table 2, case X started operating in 1994 as a manufacturing factory of components for AV (Audio Visual) products. In this case, knowledge appropriation took place soon after the new sector of automobile components was started, where the degree of dependence on personal skills and knowledge was suddenly raised in following manners.

When the automobile components sector was newly started in 2002, the core members of HCNs were requested by Japanese executives to shift from the OA (Office Automation) equipment sector to this new sector. However, some of them refused to take part in this shift and left the firm. As a result, the remaining core members’ degree of dependence on personal skills and knowledge was suddenly raised. These remaining members were highly expected to play critical roles as boundary spanners to mitigate the notion gap problem, and they were promoted to higher management classes including division heads. However, they did not play the role of boundary spanners, and instead, they took the knowledge appropriation behaviour. i.e., They were likely to monopolize their knowledge and information on grey areas management, so that these knowledge and information as well as learning opportunities for cross sectional collaborations could not be shared by their subordinate members. Accordingly, the stylized stepwise hybrid processes of (1) static modification of clarification and (2) dynamic modification of enhancement were heavily stagnated for this case.

<Higher degree of dependence to raise incentives for knowledge appropriation>

Here, noting the conceptual framework of Fig. 2, and looking into the relative incentive of “knowledge appropriation vs. knowledge sharing” for the promoted core HCNs, it was likely that “higher degree of dependence on personal skills and knowledge” would be the first key explanatory factor for our contingent relationship for the following two reasons as illustrated in Fig. 3.

Firstly, in case of higher degree of dependence, the promoted core HCNs would have higher incentive for appropriating their knowledge and information, as it was easier for them to keep their superiority over other members as compared with the case of lower degree of dependence, which implied the higher attractiveness of knowledge appropriation. Secondly, in case of higher degree of dependence, even if Japanese executives were dissatisfied with their knowledge appropriation behaviour and planned to replace them, Japanese executives would face difficulty in doing so, as considerable efficiency losses would have taken place without their full commitment in daily operations, which implied the lower penalty of knowledge appropriation.

Figure 3 is inserted around here.

<Underlying factors: resource constraint due to unfavourable case specific factors>

Then, what were possible underlying factors for this higher degree of dependence on promoted HCNs in the first place? Relating to this question, the resource constraint for skill development of HCNs was pointed out. i.e., “Insufficient time and efforts” to develop the grey areas managing capabilities were available, so that those capabilities were developed for only a limited number of HCNs, which was due to following two case specific factors. Firstly, regarding the market conditions, the growth rate for automobile components was quite high in China, and huge numbers of competitors were expected to enter the market. As such, for firm X, the immediate establishment of a reliable production base in China was given top priority, and full commitment from the remaining core members was essential. Secondly, regarding their business characteristics, geographical approxi-mation to the market was crucial for the type of components made by firm X, and thus, the number of overseas operational bases was relatively large. Accordingly, even in urgent cases where foreign subsidiaries were facing troubles, it would be difficult for Japanese HQs to send large-scale assistance to the specific subsidiary.

IV.1.2 Case S: another case of higher degree of dependence on personal skills & knowledge

As shown in Table 2, case S was established in 1998 as the joint venture of firm S (Japanese parent of case S) and firm T from Taiwan, and it started as a manufacturing factory of components for casters. In this case, very similar to case X, knowledge appropriation had been taking place with a high degree of dependence on personal skills and knowledge due to the resource constraint for skill development of grey areas managing capabilities of HCNs, whereas case specific factors for the resource constraint was rather different from those of case X in following manners.

<Higher degree of dependence on the top manager from partner firm>

At the time of establishment, “Mr. C” from firm T (partner of firm S for the joint venture) was assigned to the managing director, which was the critical position as a boundary spanner to mitigate the notion gap problem. However, the degree of dependence on personal skills and knowledge of Mr. C was very high, and he took a knowledge appropriation behaviour, where the similar story of case X was applicable to this case as illustrated in Fig. 3.

Since then, Mr. C had stayed at this position, and had monopolized his knowledge and information on grey areas management across neighbouring sections as well as those on the collaboration with other local business partners. And thus, useful knowledge and information as well as learning opportunities for these activities had not been shared by subordinate members including key HCNs such as division heads of these sections. As a result, these subordinate members had been heavily discouraged to develop their grey areas managing capability, so that some of the young and promising HCNs had moved away to other companies, and the stylized stepwise hybrid processes of mitigating the notion gap problem were heavily stagnated in this case.

As such, it is highly likely that, due to this high degree of dependence, higher attractiveness and lower penalty of knowledge appropriation had been the case for Mr. C, which had raised his incentive for knowledge appropriation behaviour. Then, examining possible reasons for this high degree of dependence, similar to case X, the resource constraint, or insufficient time and efforts for the development of grey areas managing capability were pointed out.

<Case specific factors: risk management policy against technological outflows>

However, further looking into case specific factors for this resource constraint, unlike case X, the policy of Japanese parent for technology transfer, or the risk management policy against technology outflows seemed to be crucial as follows. i.e., According to the knowledge of firm S (Japanese parent), quite a few subsidiaries of Japanese SMEs (Small & Medium Enterprises) had faced serious problems of technology outflows, where valuable assets such as technical know-how, local customers, and financial assets had been taken away along with the moving out of core HCNs’ employees, and sometimes, these damages had led to the withdrawal of the subsidiaries themselves. And thus, firm S had given the top priority to manage these risks, and she had not expected the subsidiary for an aggressive advance in technological upgrading, while she had been quite satisfactory that Mr. C had made notable contributions to develop and expand the local market with taking the advantages of his unique human network with local business partners.

IV.1.3 Description of “conditions A”

In brief, in both cases of X and S, the working hypothesis of H_A is likely to be satisfied as illustrated in Fig. 4, which is an extension of the framework of Fig. 2(a), and “conditions A” can be described as follows: A higher degree of dependence on personal skills and knowledge is derived as the first key explanatory factor to imply higher incentive of promoted HCNs for their knowledge appropriation. For both cases, as an underlying factor for this higher degree of dependence, the resource constraint, or the insufficient time and efforts for developing grey areas managing capability were observed, which was due to (i) case specific factors of market conditions, and business characteristics for case X, and (ii) those of risk management strategy for case S.

Figure 4 is inserted around here.

IV.2. Two cases of knowledge sharing: Case Y & Case Z

Secondly, cases of knowledge sharing (case Y and case Z) are examined. In these cases, consistent with the framework of Fig. 2(b), promoted HCNs have played their expected roles as boundary spanners, where the stepwise hybrid processes of mitigating the notion gap problem had been steadily promoted. Then, examining possible factors to raise the incentive of promoted HCNs for knowledge sharing, in addition to a theoretical replication of the first factor (i.e., lower degree of dependence on personal skills and knowledge to lower the incentives for knowledge appropriation), the relevance of the second factor (i.e., higher degree of prospects for growing opportunities to raise the incentives for knowledge sharing) is pointed out, both of which would imply the key explanatory factors for “Conditions B” in Fig. 2(b), which will be discussed with using Fig. 5 ~ Fig. 7.

IV.2.1 Case Y: a case of lower degree of dependence on personal skills and knowledge

<Relatively sufficient assistance from Japanese parents>

As shown in Table 3, case Y started operating in 1994 to produce processed materials for AV products. In this case, knowledge sharing had been taking place with lower degree of dependence on personal skills and knowledge, which illustrates the theoretical replication (mirror image) of case X and case S to imply that the degree of dependence would be the first key explanatory factor for the choice on “knowledge appropriation vs. knowledge sharing” in following manners.

During 1990s and early 2000s, unlike other two cases of case X & S, this case was able to receive relatively sufficient assistance from Japanese parents, and thus, Japanese executives took a strong leadership to carry out the stylized mitigating process of stepwise hybrid, so that grey areas managing capability had been developed for wider number of HCNs, and the degree of dependency on personal skills and knowledge had been significantly lowered. Accordingly, since the middle of 2000s, as the core HCNs had been gradually promoted to management classes including division heads, these HCNs showed the knowledge sharing behaviour to play crucial roles as “boundary spanners”. i.e., they were willing to share grey areas managing capabilities with their subordinate members, and actively promote mutual learning opportunities among them as well as across neighbouring sections.

<Case specific factors: high priority on the subsidiary & high communication skills of PCNs>

Here, noting the conceptual framework of Fig. 2(b) and looking into the relative incentives for the promoted HCNs, this finding would imply the theoretical replication of case X & S in following manners as illustrated in Fig. 5. i.e., Firstly, in case of lower degree of dependence, the promoted core HCNs can only have lower incentive for appropriating their knowledge and information, as it is more difficult for them to keep their superiority over other members, which implies the lower attractiveness of knowledge appropriation. Secondly, in case of lower degree of dependence, if Japanese parents are dissatisfied with their knowledge appropriation behaviour, Japanese parents would be able to replace them, as possible efficiency losses would not be substantial even without their commitment in daily operations, which implies the higher expected penalty of knowledge appropriation.

Figure 5 is inserted around here.

As underlying factor for this lower degree of dependence of this case, the following case specific factors were pointed out. The first factor was the relatively high priority given to the factory in China; for firm Y, this factory was indispensable, as it was the firm’s only foreign factory, and its production size was larger than the factories in Japan. As a result, the Japanese parent was obliged to provide large-scale assistance if required. The second factor was the distinguished communication skills of the PCNs, especially one particular Japanese executive who had studied in China during his undergraduate years. With his deep knowledge of the notion gap problem, he played a leading role in communicating with HCNs, which implies that he had played the crucial role as “a boundary spanner” to develop grey areas managing capabilities of HCNs at the beginning stages of its operation while his role was gradually succeeded by the core members of HCNs since the middle of 2000s.

Here, another point to be noted in this case is, in recent years after 2010s, in addition to the first key explanatory factor (lower dependency for personal skills and knowledge ➡ lower incentive for knowledge appropriation), the importance of the second key explanatory factor (higher prospects for growing opportunities ➡ higher incentive for knowledge sharing) had been growing, whose detailed explanation will be in the next subsection in the context of case Z. In case of Y, as the grey areas managing capability of the team of HCNs has improved in recent years, more opportunities taking advantages of their strength as HCNs (e.g., development of products for local market, utilization of local resources etc.) have become available, which has steadily raised their incentives for knowledge sharing.

IV.2.2 Case Z: a case of higher prospects for growing opportunities

<knowledge sharing even with a higher degree of dependency>

As shown in Table 4, case Z started operating in 1993 as a manufacturer of processed textile products. In this case, when looking at the “first key explanatory factor”, “degree of dependence of a certain top HCN (identified here as “Mr. A”)” was very high, which was similar to the two cases of X & S. However, unlike these two cases, “Mr. A” did not take a knowledge appropriation behaviour, and instead, he took a strong leadership as a “boundary spanner” to share his knowledge with his subordinate members. Here, noting the framework of Fig. 2(b), in addition to the incentive for “knowledge appropriation”, the incentive of “Mr. A” for his “knowledge sharing” is examined to derive “prospects for growing opportunities” as the “second key explanatory factor” for his choice of “knowledge appropriation vs. knowledge sharing”.

In other words, examining the interview results of this case, it is highly likely that, deeply inspired by “Mr. B” (president of firm Z and part of the founder’s family), his incentives for knowledge sharing were sufficiently large to overweigh his incentives for knowledge appropriation, whose story can be described as follows as is illustrated in Fig. 6

Figure 6 is inserted around here.

<Case specific factors: strong leadership of “Mr. A” inspired by “Mr. B”>

Firstly, it was pointed out that his fateful encounter with Mr.B had unleashed his potential abilities to bring high growth opportunities to this case as well as to himself. Mr A graduated from a college in China, majoring in Japanese language, and worked for a local textile manufacturer. Then, at the time of the establishment of firm Z’s subsidiary, Mr A was introduced to “Mr B”. Hearing stories about firm Z from Mr B, Mr A was very much impressed, and felt a deep empathy with firm Z as well as with the management philosophy of Mr B. Due to a deep mutual trust and understanding, Mr B asked Mr A to be the vice president of the newly established subsidiary. Since then, with his sincere and persistent efforts for the steady growth of case Z, as the vice president (1993–2005) and then as the president (2005-), Mr A has engaged in strong leadership to expand the business field of the subsidiary: starting as a contract manufacturer ➡ adding sales function for the local market ➡ enlarging sales function and starting product designing function for the global market.

Secondly, it was also pointed out that the management philosophy of firm Z as well as his original vision for the subsidiary in China had played crucial roles as follows. In firm Z, as an important principle for human resource development, there was a saying of “leave it to him/her, while not leaving it to him/her”, which was based on the management philosophy of Mr B. This meant that the boss was supposed to entrust a subordinate with challenges and goals, while respecting his/her own ideas and initiatives. At the same time, the boss was always supposed to care for the subordinate, helping him/her to share his/her challenges and goals while also keeping some distance. Indeed, in keeping with this philosophy, Mr B entrusted Mr A with challenging missions such as developing new product designs and initiating new market channels. Again, sharing this philosophy, Mr A entrusted his members in the subsidiary in China with their own challenges. In particular, when proposing his original vision for the subsidiary, he strove for sincere efforts to achieve this vision together with his members, namely through the slogan “Sense the global trend, and create our own design from China”. Accordingly, through persistent efforts to develop their grey areas managing capability, they have recently had more opportunities to improve themselves and become a more sophisticated “one team”.

IV.1.3 Description of “conditions B”

In brief, in both cases of Y and Z, the working hypothesis of H_B is likely to be satisfied as illustrated in Fig. 7, which is an extension of the framework of Fig. 2(b), and “conditions B” can be described as follows: From findings of case Y, as the theoretical replication of case X & case S, a lower degree of dependence on personal skills and knowledge was observed to imply lower incentive of promoted HCNs for their knowledge appropriation. Then, as an underlying factor for this lower degree of dependence, the resource availability, or relatively sufficient time and efforts for skill development was observed, which was due to case specific factors of (i) relatively high priority given to this factory, and (ii) distinguished communication skills of PCNs. From findings of case Z, as the second key explanatory factor, a higher prospect for growing opportunities was derived to imply higher incentive of promoted HCNs for their knowledge sharing. Then, as an underlying factor for this higher prospect for growing opportunities, sharing a vision as a team with challenging missions was pointed out as one of her case specific factors.

Figure 7 is inserted around here.

V.1. Summary of the analysis

Noting the growing importance of boundary spanners to promote the knowledge sharing in Asian subsidiaries of Japanese MNEs which are facing the intensified pressures from their local rivals, this study has focused on an interesting contingent relationship in the role of boundary spanners observed in some cases of subsidiaries in China and has examined the arising mechanism of this contingent relationship.

Noticing that the observed negative effects of “knowledge appropriation behaviour” by promoted HCNs (i.e., ineffective control and inefficient knowledge transfer) had been discussed in the existing literature of global HRM as the two major negative effects of the localization of HCNs, while also noticing that the observed positive effects of their “knowledge sharing behaviour” (i.e., effective control and efficient knowledge transfer) are illustrating their “mirror images”, H_A & H_B are proposed as a set of analytical framework. i.e., As illustrated in “Fig. 2(a) vs. Figure 2(b)”, “conditions A vs. conditions B” (case of “bad” boundary spanners vs. case of “good” boundary spanners) are explored which would explain the relative size of incentives for “knowledge appropriation vs. knowledge sharing” of promoted HCNs in foreign subsidiaries.

Then, examining our 4 cases (K-appropriation: cases X & S, K-sharing: cases Y & Z), as illustrated in Fig. 4 and Fig. 7, the two key explanatory factors are derived, where a greater degree of dependence on personal skills and knowledge is likely to raise their incentives for “knowledge appropriation”, and a greater prospect for growing opportunities is likely to raise their incentives for “knowledge sharing”. In addition, case specific factors are pointed out which would affect the relative size of the two key explanatory factors, e.g., market condition & business characteristics of the product (case X), risk management policy of Japanese HQ (case S), high communication skill of Japanese executives (case Y), and attractive vision with challenging missions (case Z).

V.2. Limitations and implications for theories and practices

Of course, this derived set of “conditions A vs. conditions B” (“bad” boundary spanners vs. “good” boundary spanners) is obtained only from our four interviewed cases, and thus, its general applicability must be carefully examined by further detailed and extensive research. Nonetheless, this set of conditions might have an important implication for a dynamic feedback mechanism, which would suggest following interesting research topics on the dynamic perspectives for the contingent relationship of “knowledge appropriation vs. knowledge sharing”.

Firstly, there can be a dynamic contingent relationship of “vicious cycles vs. virtuous cycles” of “knowledge appropriation vs. knowledge sharing” in following manners. i.e., On one hand, as was discussed in Fig. 2(a) in section 2, “knowledge appropriation” can cause the major two problems of “ineffective control” and “inefficient knowledge transfer”. And here, at the same time, there can be an opposite causality where the resulted “inefficient knowledge transfer” would lead to a higher degree of dependence on personal skills and knowledge, which can cause another round of “knowledge appropriation” as shown in the middle part of Fig. 4. On the other hand, just as a mirror image of this, as discussed in Fig. 2(b), “knowledge sharing” can achieve the major two performances of “effective control” and “efficient knowledge transfer”. And then, there can be an opposite causality where the resulted efficient knowledge transfer would lead to a lower degree of dependence on personal skills and knowledge as well as higher prospects for growing opportunities, both of which can cause another round of “knowledge sharing” as shown in the middle part of Fig. 7.

Here, it should be noted that these double mutual causalities would imply a dynamic contingent relationship of “vicious cycles vs. virtuous cycles” as follows. Starting from an unfavourable set of conditions [Conditions A in Fig. 4], Asian subsidiary would be trapped in an equilibrium of “bad boundary spanners”, or a vicious cycles of “knowledge appropriation ➡ stagnation in stepwise hybrid modification ➡ higher dependence on personal skills and knowledge ➡ knowledge appropriation ➡ཥཥ”. In contrast, starting from a favourable set of conditions [Conditions B in Fig. 7], Asian subsidiary would be in an equilibrium of “good boundary spanners”, or a virtuous cycles of “knowledge sharing ➡ steady progresses in stepwise hybrid modification ➡ lower dependence on personal skills and knowledge ➡ knowledge sharing ➡ཥཥ”.

Secondly, looking into the cases of “good boundary spanners”, we might be able to illustrate some stylized dynamic pattern of persistent improvement in problem-solving capabilities. As illustrated in Fig. 7, suppose “virtuous cycle of knowledge sharing” is achieved, the grey areas managing capabilities for the team of HCNs might be steadily enhanced, so that a sustainable growth of Asian subsidiaries can be expected with a better access to local market as well as with an efficient utilization of local resources, which is practically relevant to Japanese MNEs to overcome their liability of foreignness with facing intensified competitive pressures from their local rivals.

Then, following this scenario, in 2021 interviews with case Y and case Z of our samples, a recent persistent improvement in their problem-solving capabilities is likely to be observed as shown in Table 1 in section 3, where the linkages among “four types of knowledge” (Kim 2013; i.e., explicit & tacit knowledge, and home country & local knowledge) had been gradually developed in a stylized manner. Accordingly, it might be an interesting research topic to examine a general applicability of this stylized pattern as well as possible case specific factors to affect this pattern.

Thirdly, looking into the cases of “bad boundary spanners”, it is an interesting topic for theoretical investigation to explore the possible shift from “bad boundary spanners” equilibrium to “good boundary spanners” equilibrium. For instance, using a game theory framework, the decision-making process of the promoted HCNs on the choice between “knowledge appropriation vs. knowledge sharing” might be examined, so that the satisfying conditions for each of bad & good equilibrium can be more explicitly obtained. Then, using these obtained conditions, the effects of implementing possible policy devices (e.g., technical assistance from Japanese parents, bonus payment to promoted HCNs to encourage their knowledge sharing behaviour, etc,) and their required costs can be derived, which would give useful practical hints to Asian subsidiaries of “bad boundary spanners” with some unfavourable conditions, so that they can choose the cost effective policy devices for their possible shift to “good boundary spanners”.

Compliance with Ethical Standards: Funding: This study was funded by the Japan Society for the Promotion of Science (Grant number 24K15445).
Ethical approval: This article does not contain any studies with human participants performed by any of the authors.
Informed consent: Informed consent was obtained from all individual participants included in the study.

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Tables 1 to 4 are available in the Supplementary Files section.

The authors declare no competing interests.

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Knowledge Sharing vs. Knowledge Appropriation: A Case Study of Contingent Relationship in the Role of Boundary Spanners in Asian Subsidiaries of Japanese Multi-National Enterprises

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Abstract

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I. Introduction

II. Conceptual framework and working hypothesis

III. Methodology and sample data

III.1. Methodology: case study research with a step-by-step coding

III.2. Sample data: theoretical sampling and our four sample cases

III.3. Data sources and overview of interviews

IV. Comparative analysis of the contingent relationship of boundary spanners

IV.1. Two cases of knowledge appropriation: Case X & Case S

IV.1.1 Case X: a case of higher degree of dependence on personal skills & knowledge

IV.1.2 Case S: another case of higher degree of dependence on personal skills & knowledge

IV.1.3 Description of “conditions A”

IV.2. Two cases of knowledge sharing: Case Y & Case Z

IV.2.1 Case Y: a case of lower degree of dependence on personal skills and knowledge

IV.2.2 Case Z: a case of higher prospects for growing opportunities

IV.1.3 Description of “conditions B”

V. Summary and further Discussions

V.1. Summary of the analysis

V.2. Limitations and implications for theories and practices

Declarations

References

Tables

Additional Declarations

Supplementary Files

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