September 2004, Volume 35, Number 5, Pages 428-442

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Article

Managing tacit and explicit knowledge transfer in IJVs: the role of relational embeddedness and the impact on performance

Charles Dhanaraj¹, Marjorie A Lyles¹, H Kevin Steensma² and Laszlo Tihanyi³

¹Kelley School of Business, Indiana University, Indianapolis, USA

²University of Washington, Seattle, USA

³Michael F Price College of Business, University of Oklahoma, Norman, USA

Correspondence to: Charles Dhanaraj, Kelley School of Business, Indiana University, 801 West Michigan Street, Indianapolis, IN 46033, USA. Tel: +1 317 274 5694; E-mail: dhanaraj@iupui.edu

Drawing on organizational learning and economic sociology, we address how relational embeddedness between the foreign parent and international joint venture (IJV) managers influences the type of knowledge (i.e., tacit and explicit) transferred to the IJV, and how the importance of relational embeddedness varies between young and mature IJVs. We also examine the influence of tacit and explicit knowledge on IJV performance. Our results show the importance that tie strength, trust, and shared values and systems play in the transfer of tacit knowledge, especially for mature IJVs. Our findings are consistent with Uzzi's tenets: tacit learning is accumulative, assists in explaining explicit knowledge, and is enhanced by social embeddedness. We also find that the influence of transferred tacit knowledge on IJV performance stems principally from its indirect effect on the learning of explicit knowledge.

Journal of International Business Studies (2004) 35, 428-442. doi:10.1057/palgrave.jibs.8400098
Published online 2 September 2004

organizational learning; international joint ventures; relational embeddedness

Received: 12 April 2003; revised: 2 March 2004; accepted: 9 April 2004

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