| In the process of business expansion, diversification strategy has become an important choice for the enterprises at home and abroad. Under the condition of knowledge economy, knowledge-based related diversification becomes a new and effective way. Therefore, promoting the transfer of knowledge and ability among each business unit and creating cross-business knowledge synergy is the key to acquire sustainable advantage for the diversified enterprises. Diversified firms usually consists many business units, which construct a network. This kind of network relations entail the nodes a way to gain knowledge and share knowledge.Based on the theories of diversification, knowledge management and social network, this paper combines the research results of both domestic and foreign scholars, especially the foreign ones. View a diversified enterprise as an internal network of headquarter and business units. Systematically analyze the types, process, influencing factors of cross-business knowledge transfer, construct the relevant forms and models. Chiefly and comprehensively analyze the effect of several network characteristics on knowledge transfer's four phases, and propose some hypotheses. Through theoretical analysis and case study, this paper aims to promote the theory development and provide theoretical reference and implication for diversified operation.The paper points out three network that influence cross-business knowledge transfer in diversified enterprises, they're the network inside business unit, social network among headquarter and business units, and the competitive relations among business units which account for small parts.The network inside business unit serves as the internal pull force for cross-business knowledge transfer, while the social network among businesses serves as the external push force. The combination of the two forces will eventually affect an individual business unit's knowledge transfer willingness.There're formal and informal social network among businesses, which have different formations, evolutions and functions. In general, weak ties are beneficial for knowledge search, while strong ties are good for the transfer of knowledge, especially the tacit knowledge. Dense network with strong ties are good for effective knowledge sharing in the firms. Centrality and network scale would benefit an individual business' cross-business knowledge transfer. The moderate concentration of the whole network will promote the knowledge transfer of a firm. A firm with large scale of network has difficulty in acquiring the overall effective knowledge sharing.Generally, competitive relations can motivate the cross-business knowledge transfer. However, the strong social ties especially the informal ones play an essential role in regulation, which is good for establishing ties, promoting emotions and trust among the business units.All in all, this paper proposes that the diversified corporations should emphasize the management of coordination and communication across different units, especially the management of informal social ties. It's better using social network analysis method to learn the formation and evolution of internal network. Figure out the key persons and businesses of the network so as to manage them properly, promote their connective function and prevent their monopolizing and running actions. Moreover, the enterprises should pay attention to managing the cross-business-unit relations of cooperation and competition, enhance their connections and trust, advocate cooperative culture so as to obtain the whole firm's advantage. |