2.3 Knowledge and competitive success
The knowledge based view of the firm suggests that there is a need to focus upon firm specific knowledge and to do this to gain advantage in a way that stimulates success. Knowledge can be a valuable and unique capability that in turn inspires both competitive advantage but also sustainable transfers and growth. Knowledge flows in strategic alliances and the value of such has however been questioned with Jiang et al (2013) arguing that trust and competence are drivers of effective knowledge transfers and yet these two factors are often lacking. Knowledge exchanges regularly take place and often such knowledge exchanges and transfers have been positioned as having the potential to facilitate growth and to promote sustainability (Zhang et al, 2010). However, a great deal of literature has also been directed towards the negative impact of such knowledge flows particularly if they weaken the capabilities or specific knowledge of one firm (Carlile, 2004; Matusik & Hill, 1998). Knowledge leakage (firm specific knowledge that spills out to competitiors) could therefore be an issue and one, which may need to be contained for knowledge transfers to be positive. Relating to the concept of knowledge spillover, one important source of opportunity is often deemed to be the facilitation of knowledge transfers to improve an overall focus on learning and development. Knowledge creating firms have to be able to exploit learning opportunities and do so in a way which can allow overall capabilities to be increased. Entrepreneurial opportunities may for example be realised through the potential of spillovers.
Inkpen (1998) highlights the importance of learning and knowledge acquisition as part of international strategic alliances and in particular draws out that one of the central areas of importance is that it questions the existing knowledge base within the organisation. Drawing on this Hitt et al (2004) argue that for Chinese firms one of the central motivations relates to a need to learn unique capabilities which support competitive advantage based on Barney's (1991) ideas of intangibility. Relating this to why Chinese firms partake in international strategic alliances to fuel economic growth, Inkpen and Beamish (1997) articulate that this is due to the bargaining power knowledge and capabilities provide which allow for entry into perhaps challenging or unknown international markets. This is particularly the case due to the consideration of China being a culturally different market (Pan & Zhang, 2004). Pan and Zhang (2004) reflect upon such unique cultural considerations by highlighting that Chinese managers have to develop a cultural competence to do business in the West which is vastly different to their own practices.
Further exploring the link between knowledge transfers and competitive success, inter-organisational learning theory highlights the notion of the 'boundary paradox' that emerges from a focus within the alliance context. The paradox positions that in order for an organisation to learn they must be willing to open up the transfer of knowledge to the alliance firm and must be willing and receptive to new learning opportunities to stimulate advantage. However, a difficult situation can occur when, once such knowledge boundaries are opened such knowledge could be misappropriated by the alliance firm which in turn thus results in knowledge being protected from the offset. This type of knowledge protection can however greatly reduce the value of learning and access to entrepreneurial opportunities in an alliance context. Inter-organisational theor
