Perceptions on Knowledge Transfer

Effectiveness in Multinational

Corporations within the Renewable

Energy Industry in South Africa

Asante Phiri

Student number 423080

A research article submitted to the Faculty of Commerce, Law and Management,

University of the Witwatersrand, in fulfilment of the requirements for the degree of

Master of Business Administration

Johannesburg, 2022

Protocol number: WBS/BA423080/781

DECLARATION

I, Asante Phiri, declare that this research article is my own work except as indicated

in the references and acknowledgements. It is submitted in partial fulfilment of the

requirements for the degree of Master of Business Administration in the Graduate

School of Business Administration, University of the Witwatersrand, Johannesburg. It

has not been submitted before for any degree or examination in this or any other

university.

Asante Andrew Phiri

Signed at Johannesburg

On the 20th day of May 2022

ACKNOWLEDGEMENTS

My acknowledgements go out to the following people for their support:

▪ My supervisor, Dr. Nomusa Mazonde, for her support, time, guidance, and

invaluable inputs.

▪ My survey respondents for their time and insights provided.

▪ My wife and family for the unending support and love.

▪ My sponsors, WBS staff and fellow students for making this part of the

journey possible.

iii

SUPPLEMENTARY INFORMATION

Nominated journal: African Journal of Management Research

Supervisor / Co-author: Dr. Nomusa Mazonde

Word count †: 12 077

Supplementary files: None

† Including abstract references, etc.

ABSTRACT

The purpose of this quantitative study was to examine how employees working in

multinational companies in the South African renewable energy industry, specifically

those working for companies participating in the Renewable Energy Independent

Power Producer Programme (REIPPP), experience and perceive the knowledge

transfer initiatives of their companies and the effectiveness thereof. The REIPPP has

a strong prevalence of multinational companies and one of its goals is the transfer of

skills. With the application of knowledge identified as a precursor to the development

of skill and multinational companies identified as vehicles for knowledge transfer, the

study investigates the effectiveness of knowledge transfer within the REIPPP.

A survey questionnaire was used to assess the degree to which the elements

identified by seminal models and as critical success factors for knowledge transfer

were applied by multinational companies in the renewable energy industry in South

Africa. Exploratory statistics techniques and regression analysis was used to identify

relationships and verify expected relationships between critical factors and the

benefits of as well as satisfaction with knowledge transfer.

The findings indicate that multinational companies within the REIPPP apply the

knowledge transfer practices aligned with the critical success factor identified in

knowledge transfer literature. Respondents predominantly had positive views of all

aspects of the strategies, processes and systems used in the transfer of knowledge.

Most respondents were satisfied with and identified the benefits of their company’s

knowledge transfer initiatives, 65.98% and 69.01% respectively. Critical success

factors that negatively affect knowledge transfer were found to be largely overcome

within the industry resulting in negligible effect on the satisfaction with and benefits of

transfer. Potential areas for improvement were identified based on analysis of

respondent responses. Improvement areas include the periodic assessment of

knowledge transfer program effectiveness by multinational companies, as well as the

encouragement and monitoring of transfer effectiveness by government programme

sponsors.

Keywords: knowledge transfer, multinational, critical success factors, REIPPP

Table of Contents
1 INTRODUCTION ........................................................................................................... 1

2 LITERATURE REVIEW .................................................................................................. 3

2.1 Multinational Companies within the Renewable Energy Industry in South Africa ..... 4

2.2 Knowledge Management Frameworks .................................................................... 5

2.3 Knowledge Transfer ................................................................................................ 6

2.4 Knowledge Transfer Benefits .................................................................................. 6

2.5 Knowledge Transfer Mechanisms ........................................................................... 7

2.6 Effective Knowledge Transfer Critical Success Factors and Impediments ............ 10

2.7 Knowledge transfer within South African renewable energy industry .................... 13

2.8 Conclusion ............................................................................................................ 15

3 METHODOLOGY ......................................................................................................... 17

3.1 Research Approach .............................................................................................. 17

3.2 Research Design .................................................................................................. 18

3.3 Population ............................................................................................................. 19

3.4 Sample and Sampling Method .............................................................................. 19

3.5 Research Instrument ............................................................................................. 20

3.6 Procedure for Data Collection ............................................................................... 20

3.7 Data Analysis and Interpretation ........................................................................... 21

3.8 Limitations of the Study ......................................................................................... 21

3.9 Reliability and Validity ........................................................................................... 21

3.10 Ethical Considerations .......................................................................................... 22

4 ANALYSIS OF DATA AND INTERPRETATION OF RESULTS .................................... 22

4.1 Descriptive Data for Survey Responses ................................................................ 22

4.1.1 Demonstration of strategic mandate by parent company to transfer knowledge

4.1.2 Value of knowledge stock within holding company ......................................... 24

4.1.3 Perception of high cultural distance between holding and local company ...... 25

4.1.4 Perception of high organisational distance between holding and local company

4.1.5 Perception of company knowledge transfer capabilities ................................. 26

4.1.6 Perception of knowledge transfer effectiveness ............................................. 30

4.2 Statistical Analysis of Variables............................................................................. 31

4.2.1 Correlation Analysis ....................................................................................... 31

4.2.2 Regression Analysis ...................................................................................... 33

4.2.3 Reliability Analysis ......................................................................................... 36

4.3 Evaluation of Hypothesis....................................................................................... 37

5 DISCUSSION .............................................................................................................. 39

5.1 Study Confidence Level and Error or Margin......................................................... 39

5.2 Study Reliability and Validity ................................................................................. 39

5.3 Study Representation of the REIPPP Industry ...................................................... 39

5.4 Discussion of Findings .......................................................................................... 41

5.4.1 Demonstration of strategic mandate by parent company to transfer knowledge

5.4.2 Value of knowledge stock within holding company ......................................... 41

5.4.3 Perception of high cultural distance between holding and local company ...... 41

5.4.4 Perception of high organisational distance between holding and local company

5.4.5 Perception of company knowledge transfer capabilities ................................. 42

5.4.6 Perception of knowledge transfer effectiveness ............................................. 43

6 CONCLUSION AND RECOMMENDATIONS ............................................................... 43

6.1 Experiences and perceptions of the local subsidiary employees regarding

knowledge transfer .......................................................................................................... 43

6.2 Applicability of critical success factors and seminal models .................................. 44

6.3 Theoretical Implications ........................................................................................ 45

6.4 Practical Implications ............................................................................................ 45

6.5 Limitations of the study ......................................................................................... 45

6.6 Recommendations ................................................................................................ 46

6.7 Future Studies ...................................................................................................... 47

7 REFERENCES ............................................................................................................ 48

APPENDIX A: SURVEY INSTRUMENT ............................................................................. 52

1 INTRODUCTION

The purpose of this quantitative study was to examine how employees working in

multinational companies in the South African renewable energy industry,

specifically those working for companies participating in the Renewable Energy

Independent Power Producer Programme (REIPPP), experience and perceive the

knowledge transfer initiatives of their companies and the effectiveness thereof.

The South African renewable energy industry has a significant presence of

multinational companies. Within the renewable energy industry, the South African

Government’s Renewable Energy Independent Power Producer Programme

(REIPPP) seeks to create the benefit, amongst other benefits, of bringing in new

skills to the market (South African Government, 2021).

Whilst the difference between knowledge and skill is well known and it is generally

clear that knowledge alone does not lead to skill, it has been argued that

knowledge and the correct attitudes in the application of the knowledge precedes

skill (Varughese & D’Silva, 2018; Ferris, Von Guten, & Emanuel, 2007). Hence in

order for skills to be developed knowledge must be transferred (Varughese &

D’Silva, 2018) from its source to the recipient and the recipient must internalise

the knowledge as the basis on which skills can be developed (Ferris, Von Guten,

& Emanuel, 2007).

One distinguishing characteristic of multinational companies is their ability to

transfer knowledge (Peltokorpi, 2015 ; Pedersen, Petersen, & Sharma, 2003). In

their paper on knowledge transfer within organisations, titled “Knowledge

Transfer: A Basis for Competitive Advantage in Firms”, Argote & Ingram (2000)

highlight the importance for multinational companies to transfer knowledge to their

foreign subsidiary. Knowledge, itself, within multinational organisations has also

been recognised by researchers as a means for the multinational companies to

establish and maintain a competitive advantage (Jasimuddin, Li, & Perdikis, 2019;

Peltokorpi, 2015; Nonaka, 2000, as cited in Rahman & Mohd Shamsul Mohd,

2017).

Research has also identified critical success factors and models for succesful

knowledge transfer initiatives within multinational companies (Chini, 2004).

The problem statement for this research was framed as follows. Multinational

companies have the propensity to transfer knowledge to their local subsidiaries

(Peltokorpi, 2015). There is however little identified literature that examines the

effectiveness of knowledge transfer from multinational parent companies to their

local subsidiaries in the South African renewable energy industry under the

REIPPP. Specifically, there is little literature that examines if knowledge transfer is

occurring, the mechanisms through which that knowledge transfer is happening,

the benefits of that knowledge transfer and the alignment of knowledge transfer

practices in the South African renewable energy industry with best practices

through the application of critical success factors for knowledge transfer.

Furthermore, there is little identified literature that examines the views of local

subsidiary employees’ perceptions of the knowledge transfer efforts of their parent

company. Considering the above, this research sought to understand two

objectives. Firstly, to determine the experiences and perceptions of the local

subsidiary employees regarding knowledge transfer. Secondly, to determine the

applicability of critical success factors for and seminal models of knowledge

transfer to the transfer present in multinational companies under the REIPP.

The context of the South African renewable energy industry is important for two

reasons. Firstly, the renewable energy industry will develop more as the South

African government increases capacity for renewable energy generation (Eskom,

2020 ; South African Government, 2019), as such it was important to understand if

local employees were being given a chance to acquire new knowledge through

knowledge transfer. Secondly, the major competitors in the industry are

multinational corporations (Eberhard & Naude, 2017; GreenCape, 2021) and there

was need to understand if there were benefits of knowledge that were being

realised as part of the renewable energy tenders.

The significance of the research is to contribute the knowledge base on

knowledge transfer within this industry and sector. This could be of use to

stakeholders of the Renewable Energy Independent Power Producer Programme,

and similar government programs, that have substantial involvement of

multinational companies with local subsidiaries (Eberhard & Naude, 2017;

GreenCape, 2021) and where knowledge transfer is one of the goals of the

program.

The study was delimited to the multinational companies in the renewable energy

industry, specifically those participating in the Renewable Energy Independent

Power Producer Programme in South Africa and the employees that work at or

have previously worked at those companies’ subsidiaries in South Africa.

A key assumption of the study was that the perceptions and experiences of

employees provide a reasonable proxy of the status of knowledge transfer

initiatives within the industry. In this study the knowledge transfer was not

examined directly with the multinational company but through the experiences and

perceptions of the employees.

2 LITERATURE REVIEW

The literature review provided the theoretical background, prior research findings

and context of the research. The study was contextualised by exploring the

definition and importance of multinational corporations in general as well as their

prevalence within the South Africa renewable energy industry, specifically in

relation to the Renewable Energy Independent Power Producer Program. The

literature review then proceeds to cover the overarching frameworks and value

chains of knowledge management before proceeding into knowledge transfer, a

subsection of knowledge management (Shongwe, 2016). Within knowledge

transfer, the literature review expands on the definitions, benefits, and related

transfer mechanisms before identifying the critical success factors and impeding

factors. Lastly a conclusion is provided for the entire literature review to

summarise and conclude on the findings of the literature review.

2.1 Multinational Companies within the Renewable Energy Industry in

South Africa

A multinational company is a firm that transfers knowledge by operating in a

foreign country and maintaining control of the entity in the foreign country (Kogut

& Reuben, 2015). Firms can be classified as multinational companies if they have

significantly directly invested in a foreign country and are actively involved in the

management of these foreign investments with the investments reporting to the

head office (Bartlett &Ghoshal, 1989, as cited in Chini, 2004).

The Renewable Energy Independent Power Producer Programme (REIPPP) is a

subset of South Africa’s Independent Power Producers Procurement Programme

(IPPPP) that is focused on the procurement of energy from renewable sources

such as wind, small hydro, and biomass (South African Government, 2021). As at

March 2021, foreign equity, and financing under the REIPPP totalled R41.8 billion

(Independent Power Producers Procurement Programme, 2021) thereby

indicating substantial foreign investment in the sector.

There is a is a substantial prevalence of multinational companies within the

REIPPPP as evidenced by past industry complaints regarding multinational

corporation dominance (Eberhard & Naude, 2017) as well as a review of the

REIPPP’s first three bid windows indicating that the main equipment suppliers

were foregn multinational companies (Eberhard, Kolker, & Leigland, 2014). During

the operational phase of the project multinational companies the equipment

supplier tended to also stay on as operations and maintenance service providers

(GreenCape, 2021). As of 2019, thirty one of the eighty-seven members listed on

the South African Wind Energy Association’s (South African Wind Energy

Association, 2019) website could be identified as subsidiaries of multinational

companies. Similarly, thirty-four of the one hundred and thirty-eight members of

the South African Photovoltaic Association’s (South African Photovoltaic Industry

Association, 2021) are multinational subsidiaries.

2.2 Knowledge Management Frameworks

Knowledge management frameworks, models that describe interrelated

processes, instruments and systems (Pawlowski, 2013), have been used within

organisational context to provide understanding of cultural patterns (Bhagat,

Kedia, Harveston, & Triandis, 2002), identify traits that explain processes within

knowledge management (Ward, House, & Hamer, 2009), as well as to provide

common terminology, structure and understanding (Pawlowski & Bick, 2012).

Pawlowski & Bick (2012) have also noted the importance of knowledge

management frameworks as a means of identification of research gaps (Alavi &

Leidner, 2001; Grover & Davenport, 2001 as cited in Pawlowski & Bick, 2012).

The literature provides many knowledge management frameworks as evidenced

by a review of around one hundred and sixty by Heisig (2009) and twenty-eight by

Ward, House, & Hamer (2009). Whilst some frameworks highlight business

processes and the interaction with the surrounding environment (Pawlowski &

Bick, 2012; Meher & Mahajan, 2016), Shin et al. (2001) provide a useful

conceptualisation of the role of knowledge transfer within a knowledge

management framework, reffered to as the Knowledge Management Value Chain

(Shin, Holden, & Schmidt, 2001), as illustrated in Figure 1.

Figure 1: Knowledge Management Value Chain (Shin, Holden, & Schmidt, 2001)

The Knowledge Value Chain, based on review of prior research, demonstrates

that organisational knowledge transfer forms part of a sequence in which

knowledge is created, stored, distributed, and then applied with an overarching

vision and strategy governing the process (Shin, Holden, & Schmidt, 2001). The

model also highlights that knowledge transfer is referred to in different ways but

ultimately involves the intermediate step between the storage of knowledge and

the use or application of the knowledge (Shin, Holden, & Schmidt, 2001).

2.3 Knowledge Transfer

Knowledge transfer refers to the distribution of knowledge between a source

where the knowledge is stored and a user or receiver of the stored knowledge

(Shin, Holden, & Schmidt, 2001). The flow in the transfer of knowledge can be

from source to recipient as noted by Shin et.al. (2001) but this can also extend to

a transfer from initial recipient to the initial source in a process known as reverse

knowledge transfer (Dobra, Farkas, Karoliny, & Poór, 2012). The reciprocal nature

of knowledge transfer was also found by Bresman et al. (1999) in their case study

data analysis study on international firm acquisitions in which the evolution of

knowledge transfer process over time from a one way transfer to a reciprocal

transfer was noted between acquiring firms and the acquired firm (Bresman,

Birkinshaw, & Nobel, 1999) . Expansions of the definition of knowledge transfer

include intergroup, interdepartmental, and interdivisional experience sharing

(Argote & Ingram, 2000); and cognitive mental constructs and skills are also found

in literature (Chini, 2004). Of critical importance, they indicate that organisational

knowledge is created, stored, distributed, and applied all within the organisation’s

overarching vision and strategy (Shin, Holden, & Schmidt, 2001). Knowledge

transfer is hence a process and area of study that emanates from the concept of

the distribution of knowledge within the knowledge management frameworks.

2.4 Knowledge Transfer Benefits

Some researchers have highlighted that organisational knowledge represents a

key and sustainable competitive advantage (Peltokorpi, 2015 ;Dobra, Farkas,

Karoliny, & Poór, 2012 ; Rahman & Mohd Shamsul Mohd, 2017 ; Argote &

Ingram, 2000) through which firms can introduce new products and services to

increase the value of management and the firm (Miśkiewicz, 2018). The success

of organizations is linked to its capability to easily distribute the knowledge created

throughout the organisation, although it is noted that this does not guarantee

success (Pedersen, Petersen, & Sharma, 2003). Further to competitive

advantage, Rahman et al. (2017) note the importance of knowledge management

and transfer to improve organisational innovation, decision making and ultimately

performance (Rahman & Mohd Shamsul Mohd, 2017).

There is substantial monetary value for firms to ensure adequate knowledge

transfer practices, Babcock (2004) highlighted an estimated annual loss in excess

of thirty one billion dollars amongst Fortune 500 companies due to the inadequate

knowledge transference (Babcock, 2004 as cited in Vlajic et al, 2019).Dobra et al.

(2012) noted that the subsidiaries also benefit from knowledge transfer because of

the opportunity it affords them to increase their importance and positioning in the

organisation with the caveat that the parent company would share this knowledge

to its own benefit (Dobra, Farkas, Karoliny, & Poór, 2012).

Hence, several benefits are noted for the transfer of knowledge within

multinational organisations, these include monetary benefits (Babcock, 2004 as

cited in Vlajic et al, 2019), competitive advantage (Nonaka, 2000, as cited in

Rahman & Mohd Shamsul Mohd, 2017), improved innovation and decision

making (Rahman & Mohd Shamsul Mohd, 2017) as well as a means to ensure

success for the organisation (Pedersen, Petersen, & Sharma, 2003).

2.5 Knowledge Transfer Mechanisms

Within knowledge management there is a distinction made between tacit and

explicit knowledge (Nonaka, 1994), although Polanyi (1966) argues that all

knowledge contains both elements (Polanyi 1966, as cited in Chini, 2004). Tacit

knowledge refers to knowledge that is personal, interna to individuals, cognitive,

subjective, and based on learning and experience whilst explicit knowledge is

objective, externalised, and structured (Virkus, 2014). Researchers have defined

several other types of knowledge such as implicit knowledge (Nickols 2000, as

cited in Virkus,2014), declarative, procedural, causal and relational knowledge

(Zack 1999, as cited in Virkus,2014), human, social and structural knowledge

(DeLong & Fahey 2000, as cited in Virkus,2014) as well as substantive and

entrepreneurial knowledge (Aguayo 2004, as cited in Virkus,2014) however tacit

and explicit knowledge represent the major knowledge types in knowledge

management (Virkus, 2014).

Tacit knowledge can be codified into explicit knowledge and this codification into

explicit knowledge allows for the transfer of the knowledge with the caveat that

codified proprietary firm information is always at risk of uncontrolled dissemination

(Pedersen, Petersen, & Sharma, 2003). Nonaka (1994) provides a model in

which tacit and explicit knowledge can be interchanged in four ways. The first of

these, Socialisation, refers to the transfer of tacit knowledge in an individual to

another individual’s tacit knowledge. The second, Externalisation, describes the

conversion of tacit knowledge to explicit knowledge. Combination, the third, is an

interchange of explicit knowledge from an explicit source to an explicit destination.

Lastly, Internalisation describes the process of turning explicit knowledge into tacit

knowledge with the individual (Nonaka, 1994).

Figure 2: Nonaka (1994) Modes of Knowledge Creation

The use of the right transfer mechanisms is important as the incorrect method

results in lost knowledge and ultimately potentially results in a poor result for the

organisation’s performance (Pedersen, Petersen, & Sharma, 2003). Nunes

&Simion (2014) also highlight the importance for multinational companies to

develop strategies and identify transfer mechanisms for the dissemination of

knowledge to subsidiaries whilst noting that human capital development,

investment in information systems and incentives for people transfering

knowledge are an important factor (Nunes & Simion, 2014).

In their research into the knowledge transfer performance of multinational

companies, Pedersen et al. (2003) noted that managers in multinational

companies are responsible for ensuring a proper fit between the type of

knowledge to be transferred and the mechanism or medium through which to

affect the transfer. Two types of mechanisms were identified: namely Rich

Communication Media and Written Media (Pedersen, Petersen, & Sharma, 2003).

Rich communication media refers interactions at a face-to-face level or within

team-based settings or informal settings whilst written media refers to

documented knowledge or databases that can be disseminated across the

organisation. Consequently, tacit knowledge is best transferred through rich

communication media whereas explicit knowledge is best transferred using written

media (Pedersen, Petersen, & Sharma, 2003). Organisational knowledge is often

in its databases (Mazorodze & Buckley, 2020), documents, processes as well as

routines and norms (Davenport, 1998, as cited in Chini,2004). Pawloski & Bick

(2012) collated knowledge transfer mechanisms from literature to identify human-

based mechanisms and technology-based mechanisms. Human-based

mechanisms included activities such as mentoring, team development, career

planning as well as job rotations whilst technology-based mechanisms included

documentation management, messaging, and videoconferencing (Pawlowski &

Bick, 2012).

Expatriates play a vital role in the dissemination and interpretation of knowledge

(Nunes & Simion, 2014; Jackson & Horwitz, 2017), especially tacit knowledge,

from the parent organisation to the local subsidiary whilst also identifying new

knowledge in the subsidiary (reverse knowledge transfer) (Dobra, Farkas,

Karoliny, & Poór, 2012). Expatriates are able to play this role as a substantial

amount of the knowledge available within organisations is tacit knowledge within

its members (Argote & Fahrenkopf, 2016). The choice of knowledge transfer

mechanisms is highly dependent on the type of knowledge to be transferred

(Pedersen, Petersen, & Sharma, 2003).

Though there are several types of knowledge identified in literature (Virkus, 2014),

the most frequent distinction of knowledge types identified in the literature review

is that of tacit and explicit knowledge with tacit knowledge being internal to

individuals and explicit knowledge being external and documented (Nonaka, 1994

; Virkus, 2014). Polanyi (1966) argues that all knowledge contains both elements

(Polanyi 1966, as cited in Chini, 2004).

2.6 Effective Knowledge Transfer Critical Success Factors and

Impediments

Critical success factors are defined as the individual events or activities that are

required to ensure success (Rahman & Mohd Shamsul Mohd, 2017). Pawloski &

Bick (2012) found several critical success factors for knowledge management as

shown in Table 1.

Table 1: Pawloski & Bick (2012) knowledge management critical success factors

Context: Success factors Success factors for

KM in organizations

▪ Integrated Technical Infrastructure

▪ Knowledge Strategy that identifies users,

sources, processes, storage strategy, knowledge
▪ Clear knowledge structure

▪ Motivation and Commitment

▪ Organizational culture supporting sharing and
use of knowledge

▪ Senior Management support including allocation

of resources, leadership, and providing training
▪ Measures are established to assess the impacts

▪ Clear goal and purpose for the KMS

▪ Search, retrieval, and visualization functions
▪ Work processes incorporate knowledge capture

and use

▪ Learning Organization
▪ Security/protection of knowledge

Maier (2007), Bick

(2004), Fahey &

Prusak (1998)
Davenport &

Prusak (1998)

Lehner & Haas
(2010)

In his analysis of one hundred and sixty frameworks, Heisig (2009) identified four

critical success factors for knowledge transfer in a general knowledge

management context, not specific to multinational companies. The four critical

success factors are human-oriented (inclusive of the culture, the leadership, and

its people), organisational (inclusive of the organisation’s processes and

structures), the technology infrastructure and applications and lastly,

management’s strategy and goals (Heisig, 2009).

Within knowledge transfer specific to multinational companies, several

researchers have identified critical success factors for the successful

implementation of transfer of knowledge from multinational companies to their

local subsidiaries. Conversely the literature also notes factors that are

impediments to the successful transfer of knowledge from multinational

companies to their local subsidiaries. The difference in national cultures between

the parent company country and the local subsidiary’s country is one of the critical

success factors noted (Dobra, Farkas, Karoliny, & Poór, 2012 ; Vlajcic, Caputo,

Marzi, & Dabic, 2019). Clashing cultures between the parent company country

and the recipient subsidiary country culture also impede the success of knowledge

transfer and as such adjustments need to be considered when rich

communication media is used to transfer knowledge (Pedersen, Petersen, &

Sharma, 2003).

In addition to national culture, organisational culture is also indicated as one of the

most important (Prasarnphanich, 2003) aspects for the success or failure of a

knowledge transfer initiative (Dobra, Farkas, Karoliny, & Poór, 2012 ; Pedersen,

Petersen, & Sharma, 2003 ; Rahman & Mohd Shamsul Mohd, 2017 ; Vlajcic,

Caputo, Marzi, & Dabic, 2019 ; Argote & Ingram, 2000 ; Chini, 2004). To this

extent, Vlajcic et al.(2019) identified the cultural quotient of expatriates an

important factor in the effectiveness of the expatriate.

Cultural quotient is subdivided into cognitive cultural quotient (relating to

knowledge of values, practices and beliefs), metacognitive cultural quotient

(relating to one’s awareness of the nuances of cultural interaction and one’s ability

to strategise and navigate cultural interactions), motivational cultural quotient

(relating to one’s motivation and interest to acquire knowledge of other cultures)

and behavioural cultural quotient (relating to one’s ability to appropriately adapt

one’s behaviour in cross cultural interactions) (Vlajcic, Caputo, Marzi, & Dabic,

2019). Cultural quotient is important for the interpretation of knowledge coded by

the multinational company with cognitive cultural quotient and metacognitive

cultural quotient being the most important subsets of cultural quotient in the

transferring of knowledge to the local subsidiary (Vlajcic, Caputo, Marzi, & Dabic,

2019).

The geographic locations of and distance between the multinational company and

the local subsidiary are also identified as a critical success factor (Pedersen,

Petersen, & Sharma, 2003 ; Vlajcic, Caputo, Marzi, & Dabic, 2019 ; Chini, 2004 ;

Dobra, Farkas, Karoliny, & Poór, 2012) , whilst also noting that distance has an

effect on the chosen transfer mechanism and the need for multinational

organisations to implement a framework that can support the distance to its

subsidiaries (Dobra, Farkas, Karoliny, & Poór, 2012). Geographic proximity is

better (Pedersen, Petersen, & Sharma, 2003) and proximity in general will

determine the level of face-to-face interactions and coordination versus

technology-based coordination (Dobra, Farkas, Karoliny, & Poór, 2012).

The organisation’s strategy, its structure, and processes as well as technological

infrastructure have also been defined as critical success factors for knowledge

transfer in organisations (Rahman & Mohd Shamsul Mohd, 2017). Contextual

similarity and personnel mobility are also identified as success factors for

knowledge transfer (Argote & Fahrenkopf, 2016). Chini (2004) provides a

comprehensive review of knowledge transfer within multinational companies and

provides a model, illustrated in Figure 3, for effective knowledge transfer that

highlights strategic mandate, value of the knowledge stock, cultural distance,

organisational distance, transmission channels, infrastructure, and process

capabilities as critical success factors (Chini, 2004).

Figure 3: Chini (2004) Model for Effective Knowledge Transfer in Multinational Companies.

2.7 Research questions on knowledge transfer within South African

renewable energy industry

Given the literature identified, the following research questions are posed relating

to knowledge transfer in multinational companies in the South African Renewable

Energy Independent Power Producer Program:

1. What are the experiences and perceptions of the local subsidiary

employees regarding knowledge transfer?

2. Is there knowledge transfer occurring within the subsidiaries of

multinational companies under the REIPP?

3. Is the knowledge transferred within subsidiaries of multinational companies

under the REIPP valuable to the local subsidiary?

4. What are the transfer mechanisms used in subsidiaries of multinational

companies under the REIPP?

5. What, if any, are the impediments to knowledge transfer in subsidiaries of

multinational companies under the REIPP?

6. What is the perceived effectiveness of knowledge transfer in subsidiaries

multinational companies under the REIPP?

7. What is the applicability of critical success factors for and seminal models

of knowledge transfer to the transfer present in multinational companies

under the REIPP?

To determine the knowledge transfer experiences and perceptions of employees

in the South African renewable energy industry the following null hypothesis were

formed to examine the knowledge transfer initiatives against established critical

success factors and models identified in the research:

1. H0 – MNC employees feel that their parent companies have a strategic

mandate to transfer knowledge to the local subsidiary

2. H0 – The perceived level of strategic mandate to transfer knowledge to the

local subsidiary has a positive effect on the perceived effectiveness of

knowledge transfer.

To test the perceived value of the knowledge within the parent company and its

effect on the perceived effectiveness, the following null hypothesis were formed:

3. H0 – MNC employees feel that their parent companies have knowledge that

is valuable to the local subsidiary

4. H0 – The perceived level of parent company knowledge value has a

positive effect on the perceived effectiveness of knowledge transfer.

The perceptions regarding MNC knowledge transfer capabilities are tested

through the following hypothesis:

5. H0 – MNCs in the South African renewable energy industry use different

transfer mechanisms to transfer knowledge

6. H0 – Expatriates in MNCs in the South African renewable energy industry

are culturally adept and affect perceived knowledge transfer effectiveness

positively

7. H0 –MNCs in the South African renewable energy industry have processes

and information systems that are perceived to positively contribute to

knowledge transfer

The perceptions regarding MNC organisational distance and cultural distances

and their effects on perceived knowledge transfer effectiveness were tested using

the following:

8. H0 – Employee perceptions of high cultural distance between parent

company country and South Africa negatively affects perceptions of

transfer effectiveness

9. H0 – Employee perceptions of high organisational distance between parent

company country and South African subsidiary negatively affects

perceptions of transfer effectiveness

The last hypothesis is used to test the overall fit of the Chini (2004) to the

perceptions of knowledge transfer within MNCs in the South African renewable

energy industry as follows:

10. H0 – The perceived effectiveness of knowledge transfer within the South

African renewable energy industry can be represented by a regression

model with independent variables Strategic Mandate, Knowledge Stock

Value, High Cultural Distance, High Organisational Distance and MNC

Knowledge Transfer Capabilities (

2.8 Conclusion

The knowledge within multinational organisations has also been recognised by

research as a means for the multinational companies to establish and maintain a

competitive advantage (Jasimuddin, Li, & Perdikis, 2019; Nonaka, 2000, as cited

in Rahman & Mohd Shamsul Mohd, 2017). As such knowledge must be managed

and within multinational companies it must be transferred to subsidiaries in order

create a competitive advantage. Knowledge management frameworks provide an

understanding of the different concepts, processes, and interactions within

knowledge management. Whilst also providing a common understanding

(Pawlowski & Bick, 2012) of the field and assisting in identifying research gaps,

they describe the members, tools and tasks that form part of the interactions

(Argote & Fahrenkopf,2016).

The literature review generally indicates that there are substantial benefits for

multinational organisations to invest the time and resources required for

knowledge transfer as it is generally beneficial for the organisation.

Having established the need and benefits of knowledge transfer within

multinational organisations, knowledge transfer mechanisms provide an indication

of how multinational organisations, as well as in organisations in general, can

transfer knowledge to the subsidiaries. The preferred mechanism for the transfer

of tacit knowledge is the personal interaction at a face-to-face level, individually or

within team-based settings, also referred to as rich communications media

(Pedersen, Petersen, & Sharma, 2003). In contrast, the preferred mechanism for

the transfer of tacit knowledge is the dissemination of documentation and

databases within the organisation and is referred to as written communication

media (Pedersen, Petersen, & Sharma, 2003).

The literature highlights the use of expatriates as an important aspect in the use of

rich communications media and the dissemination and interpretation of knowledge

(Nunes & Simion, 2014) from the multinational corporation’s head office. Further

reviews of the literature show that knowledge transfer researchers have in recent

years focused on specialised topics within the field, moving away from general

effectiveness and critical success factors, and that no studies were identified that

have tested for effectiveness of knowledge transfer or the application of

knowledge transfer critical success factors within the South African renewable

energy industry.

As the literature review has identified a significant prevalence of multinational

companies within the renewable energy industry in South Africa as well as the

propensity of multinational companies to transfer knowledge to their subsidiaries,

as well as in some cases gain new knowledge from the subsidiaries through

reverse knowledge transfer, the study sought to understand the perceptions and

experiences of local multinational subsidiary employees within the renewable

energy industry in South Africa relating to the knowledge transfer between the

multinationals and their local subsidiaries and benchmarked against critical

success factors identified in the research.

3 METHODOLOGY

In the context of this study, the following elements and steps are highlighted in the

following subsections.

3.1 Research Approach

Quantitative research, defined as research targeting objectives with the use of

numerical measurements and analysis (Zikmund et al., 2009), was performed for

the study. The choice for quantitative research was motivated by quantitative

research’s ability to provide good objectivity and universality (Basias & Pollais,

2018; Lee, 1992). In addition to increased objectivity, quantitative research allows

for a systematic investigation of observations through statistics (Basias & Pollais,

2018). Quantitative research would hence provide an objective and universal view

of the status of knowledge transfer within the South African renewable energy

industry.

The underlying assumption within the study was that employee’s perceptions and

experiences of knowledge transfer within the renewable energy industry in South

Africa are a proxy for the status of knowledge transfer practices by the

multinational companies. As such, quantitatively measuring those perceptions and

experiences would provide an indication of practices in the industry.

3.2 Research Design

The selected basic research method was a survey questionnaire with questions

designed to assess the degree to which the elements identified as critical success

factors for knowledge transfer were applied by multinational companies in the

renewable energy industry in South Africa. A quantitative approach was selected

in order to be able to collect survey responses from multiple respondents and

aggregate the responses and findings as a representation of the overall industry.

The survey questionnaire employed a seven-point Likert-scale to describe the

degree to which respondents experienced, had experienced, or perceived the

application of the identified critical success factor. This approach allowed for the

stated null hypotheses to be evaluated against the feedback from multiple

respondents. A seven-point Likert-scale was chosen as it measures respondent

predisposition and provides better reliability and user preference (Taherdoost,

2019).

In addition, general questions relating to demographics and qualification criteria

were posed in the survey questionnaire. The purpose of these was to allow for a

demographic understanding of the respondents and ascertain if there were any

significant differences in responses according to the demographics as well as a

means of measuring if there was adequate representation of multinational

companies from different parts of the world within the final respondents. This was

measured against the indications of the Independent Power Producers

Procurement Programme (2021) reported indications of multinational company

parent company origin.

For the current study, the advantage of this approach is that it allows for a more

aggregated view of the industry by using multiple respondents’ subjective

experiences and perceptions to create a more objective aggregate indication of

the application of the critical success factors.

For this study, the disadvantage of this approach was that it requires a substantial

number of responses and diversity of respondents, in alignment with industry

representation, to ensure that the results were representative of the industry.

3.3 Population

The population for the study was the employees, current and past, of multinational

companies participating in the Renewable Energy Independent Power Producer

Programme in South Africa. This population was chosen as the employees within

a multinational company should have experience and perceptions on the

application of knowledge transfer initiatives within the multinational company and

should be able to provide adequate responses to the questions relating to the

application of knowledge transfer critical success factors within the multinational

companies. No credible data was available on the size of the population i.e.,

employees and former employees of multinational companies operating in the

Renewable Energy Independent Power Producer Programme (REIPPP). The

REIPPP has created 59 071 jobs since inception but the nature of some of these

jobs has been temporary, during construction, and 12 435 of these have been

permanent during operations (Independent Power Producers Procurement

Programme, 2021). There is however no credible indication of how many of these

have been in multinational corporations. Over a third (35.6%) of SAPVIA’s

members are identified as multinationals (South African Photovoltaic Industry

Association, 2021). As there is no published figure of the population size, a

reasonable estimation of 4 399 for the population size can hence be calculated as

4399, (using 35.6% multiplied by 12 435).

3.4 Sample and Sampling Method

Using the estimated 4399 for the population size, the sample size required for

95% confidence level and 5% margin of error size can be calculated at 354

(Ahmad & Halim, 2017). Reduction of the confidence level to 90% would yield a

required sample size of 255 (Ahmad & Halim, 2017). Assuming a response rate of

75%, a sample size of 472 respondent will be targeted. An acceptable level of

margin of error in organisational research is generally 5% but this could decrease

or increased depending on the required precision (Ahmad & Halim, 2017).

Sample selection was based on non-probabilistic sampling based on access to an

extended network in the renewable energy industry in South Africa. Data

collection was conducted via an online survey questionnaire. The desired

population was employees (current and former) of multinational companies that

participate in the REIPPP. The online survey was sent to individuals identified as

part of the desired population via their LinkedIn profile. There was no desired

demographic of the sample except the origin of the multinational company parent

company and an alignment of this with the reported origins of multinational

companies by the Independent Power Producers Procurement Programme

(2021). Participation was solicited through direct contact with and request of

respondents via direct messaging, email, and other electronic communications.

3.5 Research Instrument

A survey questionnaire was used as the research instrument and captured in

Appendix A. The survey questionnaire was designed with twelve questions. The

first question serves as a filter to ensure that the respondent qualifies as part of

the desired population. This question provided determined if the respondent works

for or has worked for a multinational company. The second question is designed

to provide data to test how well the overall sample is representative of the

multinational companies in Renewable Energy Independent Power Producer

Programme as reported by the Independent Power Producers Procurement

Programme (2021). This question provides continental options for parent

company origins. The remaining 10 questions in the survey were based on a

seven point Likert-Scale with each question addressing one of the ten null

hypothesis indicated.

3.6 Procedure for Data Collection

Data was be collected through emailing or direct messaging potential respondents

a link to the online survey questionnaire. Potential respondents were identified via

LinkedIn based on the indications on their profiles. This method was chosen as it

allows easy access to potential respondents.

3.7 Data Analysis and Interpretation

Analysis was conducted using exploratory statistics techniques resulting in the

findings that were interpreted for the final conclusions and reporting. Regression

analysis (Denis, 2018) was employed to test the relationship between

effectiveness of transfer with independent variables Strategic Mandate,

Knowledge Stock Value, Cultural Distance, Organisational Distance and MNC

Knowledge Transfer Capabilities. The choice of regression analysis and

descriptive statistics was driven by the nature of the research questions.

Interpretation was based on the findings and critically discussed, concluded on,

and reported.

3.8 Limitations of the Study

Limitations of the study that could influence the results included the biases and

predispositions of the respondents and the relatively large number of respondents

required for the sample. Another limitation was that the respondents need to be

diversified enough, i.e., employees from as many different multinational

companies as well as several employees from within the same multinational

company, for the sample to be truly representative of the population and the

chosen industry sector.

3.9 Reliability and Validity

Validity and reliability are two intertwined measures of the quality of research (Idris

& Chan, 2017). Reliability measures the stability and consistency of a

measurement process and can be measured using Cronbach’s Alpha (Idris &

Chan, 2017). A Cronbach’s Alpha score of 0,8 and higher represents a very good

level of reliability for a study (Idris & Chan, 2017). There are however differing

views regarding acceptable levels of alpha, generally ranging from 0.7 to 0.95

(Tavakol & Dennick, 2011). Cronbach’s Alpha was used to measure the reliability

of this study.

Validity describes the degree to which a research instrument achieves its purpose

and is subdivided into internal and external validity (Andrade, 2018). Internal

validity measures whether the design, execution and analysis provide for credible

responses to the highlighted research questions and whether there are systematic

errors in the design, execution, or analysis (Andrade, 2018). Andrade (2018)

notes that internal validity is judged and not computed. External validity provides a

measure of the generalizability of a study to other areas (Andrade, 2018).

Internal validity of this study was maintained through diligently referencing the

aims and objectives of the study. External validity for this study is of little

relevance as the study does not seek to be a generalised study capable of

extension to other contexts.

3.10 Ethical Considerations

The study was conducted with informed and voluntary consent of the participants.

Confidentiality and anonymity of the participants was also be maintained. No harm

or ethical violations resulting from this study have been identified. The ethical

guidelines and processes of the University of the Witwatersrand were adhered to.

4 ANALYSIS OF DATA AND INTERPRETATION OF
RESULTS

This section presents the summary of the findings from the online survey. A total

of 213 participants responded to the survey. The number of participants that

completed the survey in full was 200, approximately 90% of the total participants.

The following sections describe the data collected and the respondents’ answers

to the survey questions.

4.1 Descriptive Data for Survey Responses

The final survey data comprised of entries from 215 respondents. The first two

questions in the survey were designed to provide a filtering mechanism to

determine whether respondents were part of the target population, namely people

that work or have worked in multinational companies in South Africa in in the

renewables industry under the REIPPP. The data was also filtered for missing and

incomplete data. Due to the unrelated nature of the questions, there was no

opportunity to fill in missing data based on answers from other questions. Hence

responses from participants that did not complete the survey were discarded. A

total of 27 participants did not complete the survey. A further 17 respondents

completed the survey but indicated that their company did not have a holding or

parent company that controlled the local entity and hence were excluded from the

target population. The remaining data set consisted of 171 entries that were

useable and represented the target population.

The geographic origin of the respondents’ holding companies is shown in Figure 4

below. Most of the respondents in the survey worked for European multinational

companies, followed by a few Asian and little representation from multinationals in

the rest of the world.

Figure 4: Respondents' Holding Company Origin

4.1.1 Demonstration of strategic mandate by parent company to transfer

knowledge

The responses relating to whether participants felt the parent company

demonstrated a strategic mandate to transfer knowledge to the local subsidiary

were as demonstrated in Figure 5 below.

Figure 5: Perception of Strategic Mandate for Parent Company to Transfer Knowledge to Local Subsidiary

A positive perception, agreement to some or other degree, was observed in

approximately 83% of the responses.

4.1.2 Value of knowledge stock within holding company

In response to whether the participants felt that the holding company had

knowledge that would be of value to the South African subsidiary, the respondents

answered as shown in Figure 6 with 10.52% having a neutral or negative

perception of the value of the parent companies’ knowledge stock.

Figure 6:Perceived Value of Knowledge Stock of Parent Company

4.1.3 Perception of high cultural distance between holding and local company

In response to whether the cultural distance between holding company and local

subsidiary can be described as high, most respondents agreed to different

degrees as shown in Figure 7.

Figure 7: Perception of High Cultural Distance Between Parent Country and South Africa

4.1.4 Perception of high organisational distance between holding and local

company

In response to whether the organisational distance and practices between holding

company and local subsidiary can be described as high, most respondents also

agreed to different degrees. The responses are shown in the Figure 8 below.

Figure 8: Perception of High Organisational Distance Between Parent and Subsidiary

4.1.5 Perception of company knowledge transfer capabilities

Four questions were posed to gauge the perceived knowledge transfer

capabilities of the respondents’ companies. The first enquired if the company has

dedicated systems databases and repositories for knowledge transfer. This was

answered as per Figure 9 below.

Figure 9: Presence of Dedicated Information Systems, Databases and Repositories for Knowledge Transfer

The second question looked at the different types of knowledge transfer

mechanisms employed by the company and allowed respondents to select more

than one where applicable. The total responses are summarised in Figure 10

below. The number of transfer mechanisms used within the companies is

highlighted in Figure 11.

Figure 10: Knowledge Transfer Mechanisms

Figure 11: Number of Transfer Mechanisms Used for Knowledge Transfer

The third question enquired whether expatriates in the company were perceived to

be culturally aware and able to navigate cultural differences well. The responses

to this question are shown in Figure 12.

28,1%

18,1% 17,5%

35,7%

0,6%

Use Four Transfer
Mechanisms

Use Three
Transfer

Mechanisms

Use Two Transfer
Mechanisms

Use One Transfer
Mechanism

Use None of the
Transfer

Mechanisms

Number of Knowlege Transfer Mechanisms Used

Figure 12: Expatriates perceived as cultural aware and able to navigate cultural differences

The last question enquired whether the company’s processes allowed the

respondents to gain new knowledge. The responses to this question are shown in

Figure 13 and highlight positive responses by the majority.

Figure 13: Company processes Support Knowledge Transfer

4.1.6 Perception of knowledge transfer effectiveness

The effectiveness of knowledge transfer was gauged through two questions. The

first examined the respondents’ satisfaction with their company’s know transfer

initiatives and is summarised in Figure 14 below.

Figure 14: Satisfaction with company knowledge transfer initiatives

The second question measured the degree of perceived benefit of the company’s

knowledge transfer initiatives as summarised in Figure 15 below.

Figure 15: Knowledge Transfer Initiatives Perceived to be of Benefit

4.2 Statistical Analysis of Variables

Analysis of the association between variables as well as multinomial logistics

regression was conducted to explore the relationship between variables in the

data. The following subsections present the results

4.2.1 Correlation Analysis

Nonparametric correlation analysis of the data using Spearman’s rho to measure

the strength of the association between the different variables is summarised in

Table 2 below. The strongest correlations were between p= 0.601 and 0.653 but

no strong correlations were identified, i.e., p>0.7.

Table 2: Spearman's Coefficients of Correlation

Strategic
Mandate

Value
Knowledge

Stock

High
Cultural
Distance

Expatriate
Cultural

Awareness

Dedicated
Transfer
Systems

Transfer
Processes

High
Organisational

Distance
Transfer

Satisfaction
Transfer
Benefit

Knowledge
Transfer

Mechanisms

StrategicMandate Correlation
Coefficient

1.000 .310** -0.013 .497** .564** .493** -.285** .601** .524** .323**

Sig. (2-
tailed)

0.000 0.862 0.000 0.000 0.000 0.000 0.000 0.000 0.000

ValueKnowledgeStock Correlation
Coefficient

.310** 1.000 0.093 .253** .263** .372** -0.028 .217** .398** .182*

Sig. (2-
tailed)

0.000 0.228 0.001 0.000 0.000 0.715 0.004 0.000 0.017

HighCulturalDistance Correlation
Coefficient

-0.013 0.093 1.000 -0.081 -0.048 0.052 .366** -0.080 0.031 -0.075

Sig. (2-
tailed)

0.862 0.228 0.290 0.532 0.503 0.000 0.298 0.690 0.328

ExpatriateCulturalAwareness Correlation
Coefficient

.497** .253** -0.081 1.000 .446** .450** -.220** .487** .443** .203**

Sig. (2-
tailed)

0.000 0.001 0.290 0.000 0.000 0.004 0.000 0.000 0.008

DedicatedTransferSystems Correlation
Coefficient

.564** .263** -0.048 .446** 1.000 .715** -.317** .648** .498** .282**

Sig. (2-
tailed)

0.000 0.000 0.532 0.000 0.000 0.000 0.000 0.000 0.000

TransferProcesses Correlation
Coefficient

.493** .372** 0.052 .450** .715** 1.000 -.249** .620** .570** .280**

Sig. (2-
tailed)

0.000 0.000 0.503 0.000 0.000 0.001 0.000 0.000 0.000

HighOrganisationalDistance Correlation
Coefficient

-.285** -0.028 .366** -.220** -.317** -.249** 1.000 -.359** -.187* -.195*

Sig. (2-
tailed)

0.000 0.715 0.000 0.004 0.000 0.001 0.000 0.014 0.010

TransferSatisfaction Correlation
Coefficient

.601** .217** -0.080 .487** .648** .620** -.359** 1.000 .653** .221**

Sig. (2-
tailed)

0.000 0.004 0.298 0.000 0.000 0.000 0.000 0.000 0.004

TransferBenefit Correlation
Coefficient

.524** .398** 0.031 .443** .498** .570** -.187* .653** 1.000 .211**

Sig. (2-
tailed)

0.000 0.000 0.690 0.000 0.000 0.000 0.014 0.000 0.006

KnowledgeTransferMeans Correlation
Coefficient

.323** .182* -0.075 .203** .282** .280** -.195* .221** .211** 1.000

Sig. (2-
tailed)

0.000 0.017 0.328 0.008 0.000 0.000 0.010 0.004 0.006

*. Correlation is significant at the 0.05 level (2-tailed). **. Correlation is significant at the 0.01 level (2-tailed).

4.2.2 Regression Analysis

Chini (2004) identified two component of knowledge transfer effectiveness,

namely, satisfaction and benefit. Two regression analyses were conducted using

multinomial logistic regression to test the dependence of these two on the

independent variables identified in the model.

The first examined the dependence of the variable “Knowledge Transfer

Satisfaction” as a function of all other variables independent variables. The results

of this analysis are detailed in tables 3 to 5 below.

The final model indicates a significance less than 0.05 hence the regression

model developed outperforms the theoretical intercept only model.

Table 4: Pseudo R-Square for "Transfer Effectiveness Satisfaction" Regression Model

The Pseudo R-Square values for the model indicate the final R-Squared values

reached for were satisfactorily high. The Likelihood ratio tests identify “Holding

Company Mandate” and “Expatriate Cultural Awareness” as the two effects that

Table 3: Model Fit Information for "Transfer Effectiveness Satisfaction"
Regression Model

have significance less than 0.05 and hence contribute to the regression model for

Transfer Effectiveness Satisfaction.

Table 5: Likelihood Ratio Tests for "Transfer Effectiveness Satisfaction" Regression Model

The second, likewise, examined the dependence of the variable “Knowledge

Transfer Benefit” as a function of all other variables independent variables. The

results of this model were as per tables 6-8 below.

Table 6: Model Fit Information for "Transfer Effectiveness Benefit" Regression Model

The final model indicates a significance less than 0.05 hence the regression

model developed outperforms the theoretical intercept only model.

Table 7: Pseudo R-Square for "Transfer Effectiveness Benefit" Regression Model

The Pseudo R-Square values for the model indicate the final R-Squared values

reached for were satisfactorily high. The likelihood ratio tests identify that all the

effects except for “Company Knowledge Transfer Systems Used” have

significance less than 0.05 and hence contribute to the model.

Table 8: Likelihood Ratio Tests for "Transfer Effectiveness Benefit" Regression Model

4.2.3 Reliability Analysis

Analysis of the internal reliability of the survey was conducted using Cronbach’s

Alpha. The results highlight an alpha of 0.765 as shown in the table below.

Table 9: Reliability Analysis

4.3 Evaluation of Hypothesis

The following subsections review each of the hypothesis investigated in this study

in view of the results of the survey and statistical analysis. A summary table of the

hypothesis, the acceptance/rejection and evidence thereof were included in Table

10.

Table 10: Summary of Hypothesis Tests

Hypothesis
# Null Hypothesis

Null
Hypothesis
Accepted Evidence

1
H0 – MNC employees feel that their parent companies have a strategic
mandate to transfer knowledge to the local subsidiary Yes 83% of respondents answered affirmatively, Figure 5

H0 – The perceived level of strategic mandate to transfer knowledge to the
local subsidiary has a positive effect on the perceived effectiveness of
knowledge transfer. Yes

Significant and modest positive correlation with Transfer Satisfaction
and Transfer Benefit. Table 2

3
H0 – MNC employees feel that their parent companies have knowledge that is
valuable to the local subsidiary Yes 89.48% of respondents answered affirmatively, Figure 6

4
H0 – The perceived level of parent company knowledge value has a positive
effect on the perceived effectiveness of knowledge transfer. Inconclusive

Significant but weak positive correlations with Transfer Satisfaction and
Transfer Benefit. Table 2

5
H0 – MNCs in the South African renewable energy industry use different
transfer mechanisms to transfer knowledge Yes

Respondents indicated different types of transfer mechanisms used.
Figures 10 and 11

H0 – Expatriates in MNCs in the South African renewable energy industry are
culturally adept and affect perceived knowledge transfer effectiveness
positively Yes

57.31% of respondents affirmed cultural awareness of expatriates,
Figure 12. Significant and modest positive correlation with Transfer
Satisfaction and Transfer Benefit. Table 2

H0 –MNCs in the South African renewable energy industry have processes and
information systems that are perceived to positively contribute to knowledge
transfer Yes

74.27% affirmed presence of dedicated knowledge transfer systems,
Figure 9. 80.5% affirmed processes support knowledge transfer.
Significant and modest positive correlation for both dedicated systems
and processes with Transfer Satisfaction and Transfer Benefit. Table 2

H0 – Employee perceptions of high cultural distance between parent company
country and South Africa negatively affects perceptions of transfer
effectiveness Rejected

Insignificant and low correlations with Transfer Satisfaction and
Transfer Benefit. Table 2

H0 – Employee perceptions of high organisational distance between parent
company country and South African subsidiary negatively affects perceptions of
transfer effectiveness Inconclusive

Significant but weak negative correlations with Transfer Satisfaction
and Transfer Benefit. Table 2

H0 – The perceived effectiveness of knowledge transfer within the South
African renewable energy industry can be represented by a regression model
with independent variables Strategic Mandate, Knowledge Stock Value, Cultural
Distance, Organisational Distance and MNC Knowledge Transfer Capabilities

Yes
Successful regression models developed for both Transfer Satisfaction
and Transfer Benefit. Tables 3-8

5 DISCUSSION

This section discusses the findings in relation to the scholarly literature. The

overall characteristics of the study are first discussed followed by a discussion of

the findings of the study.

5.1 Study Confidence Level and Error or Margin

This study set out with a targeted a minimum sample size of 255 respondents to

obtain a 90% confidence level and 5% error margin based on the estimated

population size of 4399. Due to challenges in obtaining responses, a total

workable sample of 171 respondents was achieved after filtering out 44

incomplete and non-qualifying responses from respondents not in the target

population. This sample size calculates to a 7% margin of error at a 95%

confidence level. Although this is not the desired sample size, the achieved

margin of error and confidence level is acceptable for this research (Ahmad &

Halim, 2017).

5.2 Study Reliability and Validity

The reliability of the study was calculated at a Cronbach’s Alpha of α=0.765.

Whilst a level of α>0.8 is deemed as very good (Idris & Chan, 2017), a level of

0.7< α<0.8 is deemed as an acceptable level of internal reliability (Tavakol &

Dennick, 2011).Hence the study was designed and executed in a manner that

was consistent with the aims of the research. As indicated by the research,

internal validity is judged (Andrade, 2018) and external validity was highlighted in

the methodology section as not applying to this research.

5.3 Study Representation of the REIPPP Industry

The survey included an indication of the geographic origin of the parent company.

This was included to firstly be able to conduct an analysis of variance across the

different categories of parent company origin and secondly to be able to analyse

how well the sample represented the expected distribution of multinational

companies in the REIPPP reported as equity partners by the literature. The

literature indicates an equity contribution in the REIPPP as highlighted in the table

below (Independent Power Producers Procurement Programme, 2021).

Table 11: Equity contribution sources into the REIPPP (Independent Power Producers Procurement
Programme, 2021)

Europe 63.2%

North America 1.9%

Africa 0.9%

Asia 33.5%

Australasia 0.5%

In comparison to the equity contribution to the REIPPP, the distribution of study

respondents was as per Table 12 below.

Table 12: REIPPP Equity Contribution vs Distribution of MNCs in Survey Response

REIPP Equity Contribution MNC Parent Origins for Survey Respondents

Europe 63.2% 85.38%

North America 1.9% 0.580%

Africa 0.9% 1.170%

Asia 33.5% 6.430%

Australasia 0.5% 0.580%

Other

4.60%

The REIPPP Equity Contribution can be viewed as a proxy indication of the

distribution of multinational companies within the REIPPP. The difference in

distribution between respondents and the equity contribution indicates that the

study does not fully represent the industry. There was overrepresentation of

European and African multinational companies, whilst North American and Asian

multinational companies were underrepresented. Australasian companies were

relatively well represented from a percentage point of view but numerically only

translate to 1 respondent and can hence not adequate to make judgements. It is

noted that not all multinational companies participating within the industry around

the REIPPP would be equity holders. However, given that an overwhelming

majority of respondents represented European multinational companies, the study

results would be more applicable to European multinationals and not the industry.

5.4 Discussion of Findings

5.4.1 Demonstration of strategic mandate by parent company to transfer

knowledge

Respondents positively affirmed the perceptions of parent companies having a

strategic mandate to transfer knowledge, one of the critical factors identified by

Pawlowski & Bick (2012), and this was shown to have a modest corelation with

transfer effectiveness as well as shown to be a significant factor for both the

regression models for satisfaction and benefit. This finding is in line with the model

developed by Chini (2004) in which strategic mandate is one of the key factors

that lead to knowledge transfer effectiveness. Heisig (2009) also highlighted

management strategy as a critical success factor in the transfer of knowledge.

Rahman & Mould (2017) noted strategic mandate as a key determinant of

knowledge transfer and the results of this study indicate that strategic mandate is

present in REIPPP industry and a key driver of knowledge transfer.

5.4.2 Value of knowledge stock within holding company

Value of the knowledge stock of parent companies within the industry was

positively acknowledged by approximately 89% of respondents. Notably this was

calculated as a significant factor in the perceived benefit of knowledge transfer, as

shown by Chini (2004), but was insignificant in the regression model for

satisfaction in keeping with the finding by Minbaeva (2007) that transfer success is

a function of the knowledge characteristics.

5.4.3 Perception of high cultural distance between holding and local company

High Cultural Distance was affirmed as being present in the study however it was

shown to have low correlations with both satisfaction and benefit of -0.08 and

0.031 respectively. This finding shows that in the context of this study high cultural

distance has very little effect on the perceived effectiveness of knowledge

transfer. Literature highlights cultural distance as a critical negative factor (Dobra,

Farkas, Karoliny, & Poór, 2012 ; Vlajcic, Caputo, Marzi, & Dabic, 2019) whilst also

noting this should be overcome by adjustments in communication media

(Pedersen, Petersen, & Sharma, 2003). Contrary to the indication that high

cultural distance would adversely affect knowledge transfer (Dobra, Farkas,

Karoliny, & Poór, 2012 ; Vlajcic, Caputo, Marzi, & Dabic, 2019), the study found

this not to be the case in the REIPPP industry.

5.4.4 Perception of high organisational distance between holding and local

company

High Organisational Distance was affirmed by majority of respondents and was

shown to have a moderate to low negative effect on transfer effectiveness. Whilst

organisational distance is a critical success factor (Dobra, Farkas, Karoliny, &

Poór, 2012 ; Pedersen, Petersen, & Sharma, 2003 ; Rahman & Mohd Shamsul

Mohd, 2017 ; Vlajcic, Caputo, Marzi, & Dabic, 2019 ; Argote & Ingram, 2000 ;

Chini, 2004), the study found this to have a low to moderate negative association

with knowledge transfer effectiveness.

5.4.5 Perception of company knowledge transfer capabilities

With respect to knowledge transfer capabilities of multinationals in the industry

respondents indicated the presence of dedicated systems for knowledge transfer,

processes that support knowledge transfer, use or different transfer mechanisms

and the presence of culturally aware expatriates that navigate cultural differences

well.

There were several combinations of transfer mechanisms used in the

respondent’s companies, this is in line with the highlighted the importance of

selecting a particular transfer mechanism to support the distance between

countries (Dobra, Farkas, Karoliny, & Poór, 2012). Notably Expatriate Cultural

Awareness, Dedicated Knowledge Transfer Systems and Processes have the

positive correlations with satisfaction and benefit all ranging between 0.443 and

0.643. These three, together with strategic mandate which in the Chini (2004)

model feeds into transfer capabilities, represent the strongest correlations with

transfer benefit and satisfaction.

Of particular interest was the regression model for transfer satisfaction which

highlighted that only strategic mandate and the presence of culturally aware

expatriates were significant factors for knowledge transfer satisfaction. These

observations support the findings of Vlajcic et al.(2019) that cultural quotient of

expatriates is an important factor for effectiveness.

5.4.6 Perception of knowledge transfer effectiveness

Respondents in the study positively affirmed the satisfaction with and benefit of

knowledge transfer. The perceived satisfaction with knowledge transfer was

positively affirmed by 65.98% of respondents and the perceived benefit of

knowledge transfer was positively affirmed by 69.01%. The remaining expressed

perceptions of neutrality or disagreement with others strongly disagreeing, 6.43%

for satisfaction and 5.85% for benefit. With respect to satisfaction, those

disagreeing were the third category. These results can be interpreted to highlight

an overall positive perception of knowledge transfer effectiveness within

multinationals in South Africa under the REIPPP but there is room for

improvement based on the indication of 30%+ who could not positively affirm.

There were also pockets of the sample that strongly disagreed to the satisfaction

with and benefit of knowledge transfer thereby further emphasising the room for

improvement in some companies.

6 CONCLUSION AND RECOMMENDATIONS

This section draws conclusions to the two research questions posed, provides an

indication of the implications and limitations of the study, and then concludes with

recommendations to stakeholders and recommendations for future studies.

6.1 Experiences and perceptions of the local subsidiary employees

regarding knowledge transfer

The study found that most respondents were satisfied with and identified the

benefits of their company’s knowledge transfer initiatives, 65.98% and 69.01%

respectively. Respondents predominantly had positive views of all aspects of the

strategies, processes and systems used in the transfer of knowledge. This was

despite the identification of high cultural distance and high organisational

distance. It is noted that there were respondents who disagreed and sometimes

strongly disagreed to the effectiveness as well as to the presence of transfer

strategy, processes and systems. This suggests that there is room for

improvement in some companies.

The study found that there was a high cultural distance between the home

countries multinational companies within the REIPPP and South Africa. There was

however a low correlation between high cultural distance and the perceived

effectiveness of knowledge transfer. The low correlation between suggests that

companies in the industry have found effective ways to manage cultural distance.

These include the use of systems, processes, technology as well as expatriates to

bridge the cultural distance gap.

High organisational distance between parent company and the local subsidiaries

was affirmed by the study. However, the study could not determine the effect this

has on knowledge transfer as the evaluation of this hypothesis proved

inconclusive. Likewise, the study could not identify the value of the company

parent knowledge stock as being a determinant in the satisfaction of transfer

effectiveness. This was however found to be significant for benefit of transfer.

6.2 Applicability of critical success factors and seminal models

The study found that multinational companies within the REIPPP apply the

knowledge transfer practices that were aligned with the critical success factor

identified in knowledge transfer literature. Most of the respondendts’ companies

seem to have in place the structures, processes and technological infrastructure

that Rahmad & Mohd Shamul Mohd (2017) identified as critical success factors.

These include strategic management mandate, the use of dedicated knowledge

transfer technological platforms and processes as well as the use of expatriates

that were generally culturally aware and able to navigate cultural differences.

There were however small pockets of individuals who felt negatively about the

knowledge transfer initiatives of their companies thereby indicating that there was

room for improvement within some companies.

Lastly, the Chini (2004) model was found to be largely applicable to knowledge

transfer in the multinational companies within the REIPPP. Within the study group,

perceptions of transfer satisfaction were linked to parent company strategic

mandate and cultural awareness of the expatriates. Perceptions of the benefit

derived from knowledge transfer were linked to all aspects of the model except for

the use of dedicated knowledge transfer systems. The implication was that the

benefit of knowledge transfer is perceived even when there is no dedicated

knowledge transfer system employed by the company.

6.3 Theoretical Implications

The significance of the research findings is that they contribute to an area that

has not been well studied in the renewable energy industry in South Africa. The

study provides an indication of application of knowledge transfer strategy,

systems, mechanisms and processes in the sector. The study also highlights the

idea of a high association strategic mandate and culturally aware expatriates with

knoweldge transfer satisfaction.

6.4 Practical Implications

This study affirms to multinational companies in the study areas that the

strategies, methods, structures, processes and technological systems employed

in the transfer of knowledge were predominantly perceived as adding value to

South African employees. Furthermore it provides an indication of the key

associated elements for knowledge transfer effectiveness benefit and satisfaction.

6.5 Limitations of the study

No sources were identified that provide an accurate indication of the target

population, consequently the population was estimated but the desired sample

size to achieve a 5% error margin for this estimated population was not reached,

only 7% was attained.

Due to the relative overrepresentation of European multinational company

respondents, the study is more representative of knowledge transfer in European

multinationals.

The study was performed using a Likert-scale for the core questions. Likert scale

surveys are affected by the central tendency bias (Douven, 2017).

6.6 Recommendations

Based on the study the following recommendations could apply to stakeholders of

the Renewable Energy Independent Power Producer Programme and other

government programs that have substantial involvement of multinational

companies with local subsidiaries.

Firstly, multinational companies within the sector must periodically asses the

effectiveness of their knowledge transfer initiatives to allow for adjustment of

strategy and ensure optimal results. This is in view of the the modest 65-69%

reported for transfer effectiveness.

Given the benefits of knowledge transfer identified in the literature and the

research findings that some employees have yet to realise these benefits,

multinational companies should continue to intentionally invest in knowledge

transfer initiatives to their local subsidiaries with the view of maximising the

benefits to the local subsidiary and the parent organisation through increased

productivity and possible reverse knowledge transfer opportunities.

There is a relatively high correlation between Strategic Mandate, Dedicated

Knowledge Transfer Systems, and Dedicated Knowledge Transfer processes with

Transfer Benefit and Transfer Satisifaction. Given this, multinational companies

should ensure the presence of these factors and focus on these factors in order to

maximise the benefits of their transfer initiatives to local subsidiary employees.

Lastly, government programmes such as the REIPPP must find ways to

encourage and measure effective knowledge transfer. It is logical to suppose that

knowledge transfer will happen without encouragement but the moderate level of

satisfaction and benefit identified by the study as well as the strong disagreement

by some respondents suggests that not all multinational companies are embracing

the spirit of knowledge transfer optimally. If the government programmes are to

achieve the desired goal of knowledge transfer then measures and targets must

be looked at.

6.7 Future Studies

Possible further studies the expansion of the sample to a larger and more

representative one, the implications of knowledge transfer within the renewable

energy industry on the development and transfer of skills, as well as the

development of the local commercialisation of transferred knowledge.

Research can also be undertaken within the renewable energy industry in South

Africa relating to the improvements in productivity following the application of

knowledge transfer initiatives by the parent company to the local subsidiaries. This

could possibly also be expanded to investigate the quantification of the monetary

benefits of the possible increases in productivity by the local subsidiary.

Furthermore, future studies could investigate the benefits of knowledge transfer to

previously disadvantaged groups within the South African renewable energy

industry in alignment with national initiatives towards the empowerment of these

groups.

Additionally , research could also be aimed at investigating the benefits of

reverse-knowledge transfer from South African subsidiaries to their parent

companies as a by-product of the parent companies knowledge transfer initiatives.

Lastly, studies could be directed at investigating the difference in obtained

benefits in organisations with focused and dedicated knowledge transfer initiatives

versus those organisations that do not have structured knowlegde transfer

programmes. This could provide a means of investigating whether or not

knowledge transfer requires intentional dedicated programmes in order to be

effective.

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APPENDIX A: SURVEY INSTRUMENT

Information of survey purpose (masters research, results to be published in

journal article), anonymity, informed consent (no personal data besides age

requested).

General Questions/Demographics and qualification criteria

1. Does your company have a holding/parent company outside of South

Africa that actively manages the South African company [Y/N]?

2. Origin of the parent company/Location of Head Quarters [Asia, Middle

East, Africa, North America, South America, Europe, Australasia, other]

Questions based on Chini (2004) MNC Knowledge Transfer Model

3. Strategic mandate: The parent company has or demonstrates a strategic

mandate to transfer knowledge to the local subsidiary [ 1-7 Likert scale,

Strongly Disagree – Strongly Agree]

4. Value of knowledge stock: The parent company has knowledge that would

be valuable to the South African subsidiary [ 1-7 Likert scale, Strongly

Disagree – Strongly Agree]

5. Cultural Distance: The level of difference in culture between the parent

company and South Africa is [ 1-7 Likert scale, Very Low, Very High]

6. Knowledge transfer capabilities: Our company uses the following means to

transfer knowledge (select all applicable) [Expatriates, Documentation and

Databases, Group Interactions, Personal Interactions]

7. Knowledge transfer capabilities: The expatriates in our company are

culturally aware and navigate the culturally differences well [ 1-7 Likert

scale, Strongly Disagree – Strongly Agree, option for N/A]

8. Knowledge transfer capabilities: Our company has information systems,

databases, and repositories etc dedicated to knowledge transfer and

accessible to me [ 1-7 Likert scale, Strongly Disagree – Strongly Agree]

9. Knowledge transfer capabilities: Our company processes have allowed me

to gain new knowledge and know how [ 1-7 Likert scale, Strongly Disagree

– Strongly Agree]

10. Organizational distance: The difference in organisational practices between

head office and the South Africa offices is [ 1-7 Likert scale, Very Low, Low,

Very High]

11. Transfer effectiveness: I am satisfied with the knowledge transfer initiatives

in our company [ 1-7 Likert scale, Strongly Disagree – Strongly Agree]

12. Transfer effectiveness: I believe the knowledge transfer initiatives within my

company to be of great benefit to me [1-7 Likert scale, Strongly Disagree –

Strongly Agree]