Multinational company The MNCs have the ability to transfer and share the specialised skills or expertise to their cross-border network of the subsidiaries. In addition, the knowledge transfer could be two way, when a subsidiary transfers the valuable knowledge to HQ through reverse diffusion (Ferner & Varul, 2000). Another important term in this essay is the corporate social responsibility (CSR) which is broadly defined by Watts & Holme (1999) as the ethically committed behaviour of a company towards the society where ...
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...of the HQ to its subsidiaries.
One example of efficient knowledge management in an MNC is that of Toyota. Dyer & Nobeoka (2000) studied the comparison of the Toyota and its competing auto maker networks. Dyer & Nobeoka (2000) noted that Toyota has converted its capacity of knowledge management into its competitive advantage through a highly integrated network with its suppliers to facilitate knowledge sharing. Furthermore, Toyota has set rules regarding the knowledge sharing and the knowledge related to its manufacturing skills is considered as Toyota’s property. As a result, a common problem of free riding is efficiently avoided. In addition, the close knitted network of Toyota with its suppliers enables the multi-dimensional flow of knowledge sharing. As a result, the cost of finding new knowledge is reduced and its access to the existing knowledge becomes easier.
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