Knowledge Transfer in Multinational Subsidiaries: Tabeebak Case

This research investigates the influence of cultural differences on knowledge transfer within multinational subsidiaries, using Tabeebak Healthcare Services as a case study. It explores the impact of cultural alignment, particularly focusing on Hofstede's cultural dimensions such as power distance and individualism versus collectivism. Through mixed-methods research, including quantitative data analysis and regression analysis, the study confirms a positive correlation between cultural alignment and effective knowledge transfer. The findings suggest that greater cultural alignment leads to improved knowledge transfer effectiveness. The study concludes by recommending strategies like fostering openness to diversity to bridge cultural gaps between Tabeebak Healthcare Services and its subsidiaries, ultimately enhancing organizational performance.

Running head: PROJECT REPORT
Examining the cultural effects of knowledge transfer in multinational subsidiaries - “A case
study of Tabeebak healthcare services"
Name of the student
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Abstract
This research has focused on the impact of cultural differences on knowledge transfer in
Tabeebak healthcare services and other member companies. Knowledge transfer is a key
source of competitive advantage for the organizations in the global market and cultural
alignment is one of the major factors affecting the transfer of knowledge. The Hofstede’s
cultural dimension has been taken into consideration while identifying the influence of
culture on the knowledge transfer. Power distance and individualism versus collectivism are
the two most relevant cultural dimensions affecting the transfer of knowledge. The study has
conducted a mixed research and used both quantitative and qualitative data analysis to
identify the relationship. The study had also developed two hypothesis which have been
proved using the regression analysis. The results showed that there is positive association
between cultural alignment and knowledge transfer. This means that with increase in cultural
alignment, effectively of knowledge transfer will also increase. The study has concluded from
the results that there is positive relationship between knowledge transfer and cultural
alignment and have suggested strategies such as openness to diversity to bridge the gap
between Tabeebak healthcare services and their subsidiaries.

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Table of Contents
Chapter 1: Introduction..............................................................................................................4
1.1 Introduction..........................................................................................................................4
1.2 Background of the study......................................................................................................4
1.3 Research Aim and Objective................................................................................................6
1.4 Research Question................................................................................................................6
1.5 Research hypothesis.............................................................................................................7
1.6 Conclusion............................................................................................................................8
Chapter 2: Literature review......................................................................................................9
2.1 Introduction..........................................................................................................................9
2.2 Cultural Alignment...............................................................................................................9
2.3 Hofstede’s Cultural Dimension..........................................................................................10
2.4 Transfer of Knowledge......................................................................................................13
2.5 Impact of Cultural alignment on Transfer of Knowledge..................................................15
2.6 Conceptual Framework......................................................................................................16
2.7 Literature Gap....................................................................................................................17
2.8 Conclusion..........................................................................................................................17
Chapter 3: Research Methodology...........................................................................................18
3.1 Research Methodology.......................................................................................................18
3.2 Research Philosophy..........................................................................................................19
3.3 Research Approach............................................................................................................21
3.4 Research Design.................................................................................................................22

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3.5 Data collection and analysis...............................................................................................23
3.6 Sampling............................................................................................................................23
3.7 Reliability and Validity......................................................................................................24
3.8 Ethical consideration..........................................................................................................25
Chapter 4: Findings and Analysis............................................................................................26
4.1 Quantitative data analysis..................................................................................................26
4.1.1 Questions on Transfer of knowledge..............................................................................29
4.1.2 Questions on cultural alignment......................................................................................34
4.2 Regression analysis............................................................................................................43
4.3 Qualitative analysis............................................................................................................48
Chapter 5: Conclusion..............................................................................................................53
5.1 Conclusion..........................................................................................................................53
5.2 Recommendation................................................................................................................54
References................................................................................................................................55
Appendix..................................................................................................................................60

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Topic: Examining the cultural effects of knowledge transfer in multinational subsidiaries - “A
case study of Tabeebak healthcare services"
Chapter 1: Introduction
1.1 Introduction
Multinational companies face immense challenge in dealing with knowledge transfer
across national borders. This research has focused on the impact of cultural differences on
knowledge transfer in multinational companies and other member companies. The issues
faced by the companies while transferring knowledge to its overseas subsidiaries is diverse
but the study will focus on the cultural aspect of knowledge transfer. The study will take a
case study of Tabeebak healthcare services which provides solutions for healthcare and other
services. The study will take context of this organization for identify the importance of
culture in knowledge transfer and improving organizational performance.
1.2 Background of the study
The key source of knowledge acquisition, integration and transfer are the
multinational companies. The ability of the company to systematically exploit the knowledge
that they have gained in the local market by spreading worldwide and throughout the diverse
networks of the organization. This has been separated by space, culture, language and time
but operationalizing the process of knowledge transfer from between the host company and
the subsidiary is difficult often due to the cultural distance between host and the home
company (Cavaliere and Lombardi 2015). Cultural distance is one of the most important
factors in managing knowledge but the understanding of the cultural aspect is very less due to
limited research. Subsidiaries play an important role in gaining competitive advantage for the
organizations by effectively transferring local knowledge. The subsidiaries can strengthen
their performance and knowledge by effectively sharing knowledge with other units of a

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multinational organization so that both the global performance of the multinational
organization improves and the local performance of the subsidiary increases. Majority of
literatures have been asserted and there are very few researchers that have empirically
substantiated the relationship between knowledge management and cultural distance
(Peltokorpi and Vaara 2014). Moreover, there are no literatures that have focused on the
impact of cultural distance and other cultural factors on transfer of knowledge in both the
subsidiary and the headquarters.
The main consideration for research is the fact that knowledge flows in different
directions and managing this diverse flow of knowledge will require different approaches to
management. However, different studies have not been able to explicitly differentiate
between the flows of information in different directions. There is also lack in clarity between
the diverse impact between the inflow and outflow of knowledge by cultural factors
(Peltokorpi and Vaara 2014). The assumptions that has been taken suggests that in order to
measure the impact of cultural factors on the knowledge transfer, along with measuring the
scalar knowledge, direction knowledge will also have to be evaluated.
Globalization have increased significantly and it is common for multinational
companies to set up subsidiaries in diverse countries to take advantage of the unique features
and available expertise. The most important strategic resource for the organization in the
modern market is knowledge and Tabeebak healthcare services have been making efforts to
effectively transfer knowledge (Cavaliere and Lombardi 2015). Various researchers have
identified that successful knowledge transfer is essential for gaining competitive advantage in
the market. Knowledge is embedded within the human brain and sharing of information
between the employees is difficult as sharing of perfect knowledge is almost unachievable
due to cultural barriers and other barriers. There are significant amount of literatures focusing
on the factors acting as a barrier to knowledge transfer between company and its subsidiaries.

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However, less amount of emphasis has been given on the role of variations in culture in
hindering the transfer of knowledge.
1.3 Research Aim and Objective
The aim of the study is analysing the different cultural factors influencing the transfer
of knowledge among multinational organizations and their subsidiaries. The study will
develop various hypotheses based on the factors influencing the knowledge transfer between
the subsidiaries and their main headquarters of Tabeebak healthcare services. The developed
hypotheses will be tested in context to Tabeebak healthcare services so that the findings can
be used to develop relevant recommendations and conclusion which can be used by the
managers of the organization to improve transfer of knowledge.
The objective of the current research are as follows:
 To identify the different cultural elements affecting transfer of knowledge
 To investigate the impact of cultural factors on knowledge transfer in multinational
subsidiaries in Tabeebak healthcare services
 To recommend suitable strategies for effective transfer of knowledge between the
subsidiaries and their respective
1.4 Research Question
Primary Research Questions
 What are the different cultural elements affecting transfer of knowledge?
 What is the impact of cultural factors on knowledge transfer in multinational
subsidiaries in Tabeebak healthcare services?

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1.5 Research hypothesis
The research hypotheses have been developed based on the theoretical cultural factors
affecting the transfer of knowledge in multinational subsidiaries. Cultural alignment mainly
focuses on the cultural beliefs and values that is being shared by a large group of individuals.
Culture within an organization exists at different levels where it represents both the country
culture and the corporate culture. According to the Hofstede’s theory on national culture
there are distinctive factors which define the culture of a company in different countries.
H01: The lesser the absence of cultural alignment between the national culture of the
subsidiaries and the multination companies, in respect to collective orientation versus
individualistic orientation, greater will be the struggle in transfer of knowledge from the
subsidiary to the parent company and vice versa
H11: The greater the absence of cultural alignment between the national culture of the
subsidiaries and the multination companies, in respect to collective orientation versus
individualistic orientation, greater will be the struggle in transfer of knowledge from the
subsidiary to the parent company and vice versa
H02: The lesser the absence of cultural alignment between the national culture of the
subsidiaries and the multination companies, in respect to power distance, greater will be the
struggle in transfer of knowledge from the subsidiary to the parent company and vice versa
H12: The greater the absence of cultural alignment between the national culture of the
subsidiaries and the multination companies, in respect to power distance, greater will be the
struggle in transfer of knowledge from the subsidiary to the parent company and vice versa

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1.6 Conclusion
This chapter has introduced the purpose of the research along with the research
background and problem. The research objective and the question has been developed and
the hypotheses have been defined which will be proved later on in the research.

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Chapter 2: Literature review
2.1 Introduction
As stated by Mudambi and Navarra (2015), globalization have removed the trade
barriers and the national boundaries have become penetrable than before, the transfer of
knowledge between the subsidiaries and their multination parent companies have become
important. There has been significant increase in the transfer of knowledge even if the parties
have no intention of proceeding with it. According to Li and Lee (2015), researches have
emphasized on the fact that there is significant important of knowledge transfer as it is both
uni-dimensional and linear sequence. There are subsidiaries that are knowledge creators and
the multinational headquarters direct the transfer of knowledge so the subsidiaries are
perceived as being the appropriators rather than being the generators of knowledge. A
different body of knowledge suggest that their subsidiaries can be considered as network of
relationships that aids in knowledge transfer (Drogendijk and Holm 2015). Some that
suggests that transfer of knowledge can be either independent or dependent of the
multinational main branch. This transfer of knowledge is highly affected by cultural
differences between the subsidiaries and their respective multinational headquarters. The
critical issues faced while conducting transfer of knowledge and different cultural factors
affecting the transfer will be identified in this chapter of the research.
2.2 Cultural Alignment
As opined by Eriksson et al. (2015), culture has been defined as the collective
principles and beliefs that is shared by a group of individuals. In modern day organization,
the organizational culture is shaped by both the corporate culture and the national culture.
According to Bryant and Nguyen (2017), cross border transfer of knowledge between
companies and their subsidiaries have proved that companies face serious issues due to the

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cultural differences. Transfer of knowledge is facilitated by the individuals working in the
organization and cultural alignment of the individuals defines the effectiveness of transfer.
According to the Hofstede’s cultural dimension, every country has their unique sets of values
and culture. There are multiple dimensions based on which the cultural values of a country
are analysed and these dimensions have different effects in diverse nations which causes
issues and ineffectiveness in transfer of knowledge. Corporate culture is shaped by the
organizational practice in different organizations (Morgulis-Yakushev, Yildiz and Fey 2018).
Hofstede’s has provided distinction between organizational culture and national culture,
considers both as occurrences of diverse orders. Hofstede’s cultural dimension will throw a
light on implication of national and organization within multinational organizations and their
respective subsidiaries.
2.3 Hofstede’s Cultural Dimension
According to Zhou, Fey and Yildiz (2018), organizations should be considered as a
multitude of subcultures or a single culture. There are certain organization that are able to
define their particular culture but there are organizations they face difficultly in identifying
the key characteristic of their culture. Multinational companies make effort to unify their
organization culture by infusing the culture of the parent company to their respective
subsidiaries. However, the implementation of unified culture will depend upon the practices
implemented by the parent company in to their subsidiaries (Ado, Su and Wanjiru 2017).
Socialization of the subsidiaries determine the effectiveness of knowledge transfer within the
company. Prior research has identified openness of diversity as a crucial aspect of corporate
culture that impacts of the sharing of knowledge and teamwork between firms. The most
problems are that the multinational organization organizations are unable to implement the
organizational in the headquarters to that of their subsidiaries. Therefore, it is essential to
evaluate the alignment in the culture between the organizational headquarters along with their

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subsidiaries. The four major dimensions identified by the Hofstede’s cultural dimension are
power distance (PDI), individualism versus collectivism (IDV), uncertainty avoidance (UAV)
and Masculinity/femininity (MAS). These factors tend to differ in different organization due
to their different cultural orientation (Helmreich and Merritt 2017).
The first factor is power distance (PDI) shows the extent to which power has been
distributed within the organizations and the level of the acceptance of the lower level
employees about the inequality in power. Individualism versus collectivism (IDV) is the next
factor which identifies the importance of group goals or common goals compared with the
personal goals of the employees (Erdman 2018). Uncertainty avoidance (UAV) shows the
extent to which the employees prepare for the future uncertainties and their approach towards
the future which can be either defensive or offense. The last factor is Masculinity/Femininity
(MAS) defines the extent to which there is differentiation between the characteristics of men
and women. However, it is important to identify the factors that have impact on transfer of
knowledge. Power distance, and Individualism versus collectivism are the factors having
majority of the influence on the transfer of knowledge (Santoro, Bresciani and Papa 2018).
Frim the point of view of an individual culture, the individuals have loose ties and
people consider themselves to be independent of collectives. Therefore, in such cultures
people put more emphasis on their personal goals and live in a culture which is more self-
centred. Therefore, employees in such culture will aim to promote themselves when they are
presented with such opportunities and be defensive towards their benefits (Shin, Hasse and
Schotter 2017). However, considering the other end in the band, collectivism is totally
opposite where people tend to work in cohesive groups. The people in collective culture are
bound by the obligations, norms and values of the society. These people can readily accept
family security, interdependence, social hierarchies, low level of competition and
cooperation. They are concerned about the impact of their decisions and actions on the