| Firms confront numerous challenges, including a number of different "liabilities of foreignness," when entering new international markets. Key among these difficulties is a lack of foreign market knowledge--a lack of local knowledge of the new market--its economics, politics, culture, society, history, etc. This lack of knowledge makes the formulation and implementation of successful entry strategies difficult at best.; This study examines two questions. First, what are the key factors that influence the transfer and sharing of foreign market knowledge (sometimes referred to as "local" knowledge) among different parts of the diversified, multidivisional corporation? Second, what is the effect of this knowledge-transfer and knowledge-sharing (or the lack thereof) on the performance of different parts of the firm as they enter new international markets?; The conceptual model developed in this study draws from three relevant perspectives: the international management literature, the knowledge management literature (including perspectives on organizational learning), and the corporate strategy literature. The model was tested using a sample consisting of numerous divisions of diversified, U.S.-based corporations that had recently made substantial investments in three new international markets: China, India, and Russia. Appropriate corporations and divisions were identified through the use of a variety of archival data sources. Subsequently, the appropriate executives within these firms were contacted and surveyed to gather data on key variables. Some data also was gathered from archival sources.; Several factors proved to be significant influences on the transfer and sharing of foreign market knowledge within the firm, including: the nature of the knowledge itself, various aspects of organizational structure, and the use of different types of communications mechanisms. Furthermore, the transfer and sharing of foreign market knowledge was positively and significantly associated with divisional performance in new international markets. |
