Research to date has clearly established that the ability of the Multinational Corporation (MNC) to exploit the significant knowledge bases contained within their boundaries is the key to realising competitive advantage. Therefore, pressure is increasingly placed on the MNC to ensure that knowledge is captured and adequately transferred throughout its internal networks. The notion of absorptive capacity defined by Cohen and Levinthal as the ‘ability to recognize the value of new information, assimilate it, and apply it to commercial ends’ has been determined to have a significant effect on the ability of the organisation to transfer knowledge. Subsequent research has indicated that absorptive capacity has two distinct although interactive constructs. That is ability and motivation. While earlier investigation has been able to conceptualise and somewhat operationalise absorptive capacity, it is only recently that researchers have started investigating absorptive capacity as an endogenous part of the organisational model. The primary construct of this paper is to draw attention to organisational mechanisms, such as HR systems, and their potential link with absorptive capacity in terms of supporting both the ability and the motivational constructs inherent in the knowledge transfer model.
23rd Conference of the Association of Industrial Relations Academics of Australia and New Zealand. Labour, Capital and Change: Proceedings of the 23rd Conference of the Association of Industrial Relations Academics of Australia and New Zealand, Volume 1: Refereed Papers (Newcastle, N.S.W. 4-6 February, 2009)