Question

The fundamental challenge that a multinational firm faces in knowledge transfer is _________.

• A. Transferring explicit knowledge across borders
• B. Transferring tacit knowledge across borders
• C. Creating tacit knowledge in overseas subsidiaries
• D. Transferring tacit and explicit knowledge across borders

Answer 1

The correct option is B Transferring tacit knowledge across borders

Tacit knowledge is the kind of knowledge that is difficult to transfer to another person by means of writing it down or verbalizing it. For example, that London is in the United Kingdom is a piece of explicit knowledge that can be written down, transmitted, and understood by a recipient.

An organization is what it knows. The strength and importance of tacit knowledge are that it is often very difficult for competitors to imitate it and, therefore, to be transferred. Organizations that use and recognize the employees' wealth of tacit and explicit knowledge achieve a competitive advantage.