Multinational enterprises’ knowledge management strategies: exploring the sensemaking and sensegiving interactions Open Access

The creation, integration and application of new knowledge enhance organizations’ global business operations (Goswami and Agrawal, 2020). Innovative and idiosyncratic knowledge is a critical strategic resource for organizations in sustaining competitive advantage (Kumar et al., 2022). Organizations need to develop systematic processes to manage the creation, acquisition and application of knowledge to past and prospective functional activities within the organization (Lopez and Esteves, 2013; Intezari et al., 2017). Effective knowledge management involves identifying what knowledge an organization might lack, ensuring that its comprehensibility leads to successful internal integration as well as in requisite networks (Pérez‐Nordtvedt et al., 2008; Abualqumboz et al., 2021).

Multinational enterprises (MNEs) acquire knowledge from various sources. These include strategic alliances as well as partners in business, franchising and licensing. Mergers and acquisitions are one source of new knowledge as are clients, subsidiaries and joint ventures, as well as occasional contracts and collaborations (Battistella et al., 2016; Pérez‐Nordtvedt et al., 2008). Often global alliance partners offer opportunities for these relations to occur (Inkpen, 2008). To overcome barriers, including language and cultural differences, organizations need to optimize international knowledge transfer processes and activities (van Marrewijk et al., 2016; Hsu et al., 2024).

Knowledge-intensive organizations frequently sustain revenues and competitive advantage in national and international market environments by operating in collaboration with business partners and strategic alliances (Gupta and Govindarajan, 2000; Pérez‐Nordtvedt et al., 2008; Szulanski, 1995). Innovation is central to maintaining sustainable competitive advantages. Opportunities for innovation by transferring and translating ideas occur when the interconnection of local and international knowledge networks increase (Ganguly et al., 2019; Abualqumboz et al., 2021). The transfer involves explicitly documenting knowledge. Documenting that which is tacit is never seamless. Not all tacit knowledge can be converted into an explicit form, as the transfer of tacit to explicit documented knowledge presents challenges for locally embedded and culturally and geographically dispersed sensemaking (Bathelt et al., 2018), at either the center or the periphery of operations. Widespread tacit knowing on the part of peripheral organizational actors and agencies is frequently subject to relations of power/knowledge (Foucault, 1980); tacit know-how may be formally in breach of authoritative processes. It is through translation, interpretation, contextualization and modification of such know-how that it can be effectively used in a different setting (Khatri et al., 2025). For locally embedded tacit knowledge to travel elsewhere requires achieving a degree of shared sensemaking and sensegiving in interactions between key actors in MNE networks (Rouleau, 2005). Sense-giving refers to the intentional efforts of individuals to influence others’ understanding of events, whereas sensemaking involves how individuals interpret and make sense of complex or ambiguous situations (Urquhart et al., 2024). In the context of MNE operations, sensemaking and sensegiving has not been extensively studied. Specifically in the areas of knowledge management including knowledge creation and transfer have not used this context to study how MNEs manage their activities across borders. Using this context provides a different lens to approach these activities and understand in-depth how organizations view and manage cross-border transfer of knowledge. Therefore, in this study, we address one of the core challenges in modern knowledge management of the transfer and translation of tacit knowledge across organizational and cultural boundaries. Thus, we attempt to answer the following research question:

In answering this question, we address how knowledge is translated within MNEs and their networks by critically reviewing the literature on knowledge and technology transfer. We do so from the perspective of both source and recipient organizations, considering the quality of their relationship as an antecedent of a successful cross-border knowledge translation process. We emphasize technology knowledge transfer, involving the transfer of tacit technical knowledge that is not formally recorded. We challenge the traditional linear view of knowledge transfer, which is often characterized as diffusion from center to periphery (Rogers, 2003). We comprehensively reviewed the core knowledge management literature, with a particular focus on how tacit and explicit knowledge are conceptualized and managed within organizations. This includes deep engagement with seminal works in the field, most notably Polanyi’s (1974) original conceptualization of tacit knowledge and its subsequent interpretation by Nonaka and Takeuchi (1995).

We integrate multiple theoretical perspectives to build novel connections and insights by integrating together three major theoretical strands. These are the knowledge-based view of the firm (KBV), organizational knowledge creation theory and sensemaking. This integration is particularly noteworthy because it brings together perspectives not commonly considered in conjunction. We develop a new conceptual framework that advances our understanding of how knowledge is transferred and transformed within MNEs. While recent reviews, such as Urquhart et al. (2024), offer valuable syntheses of sensemaking across education, information science and general organizational contexts, we focus specifically on how sensegiving and sensemaking operate within MNEs to support the translation of tacit knowledge across borders. This contextual focus addresses a notable gap in the literature and underscores the significant contribution of this study to both knowledge management and international business scholarship. Henceforth, significant gaps in the extant literature are identified and an agenda for future research is contributed to knowledge management and international business literature. This paper contributes to the literature by:

• clarifying the role of sensemaking and sensegiving in translating tacit knowledge across borders;

• developing a conceptual framework tailored to MNE contexts; and

• distinguishing translation from traditional views of transfer, particularly in knowledge-intensive, culturally diverse environments.

In doing so, the research integrates and extends existing theoretical insights to offer a refined lens for future research and practice.

This study employs an integrative literature review methodology (Torraco, 2005) to explore the dynamics of knowledge transfer and translation in MNEs, with a specific focus on tacit knowledge and sensemaking/sensegiving processes. To identify relevant scholarly works, we conducted an extensive search across Google Scholar. Our keyword strategy included combinations such as “knowledge transfer”, “tacit knowledge”, “sensemaking,” “sensegiving”, “multinational enterprises” and “cross-border knowledge translation”. In the screening phase, we carefully examined titles and abstracts to ensure alignment with our research focus, specifically studies that examined cross-border knowledge management in the context of MNEs and addressed either knowledge-based theory or the creation of organizational knowledge. In addition, we reviewed the reference lists of selected articles to ensure that no key studies were omitted.

This process yielded 75 core publications, encompassing peer-reviewed journal articles, book chapters and conceptual frameworks that collectively informed our analysis. Although only a limited number of studies directly addressed the intersection of tacit knowledge transfer and sensemaking/sensegiving in MNE contexts, we integrated complementary research from the broader organizational knowledge management and international business literature to provide a robust analytical foundation. This integration ensures a comprehensive contextualization of our conceptual framework and highlights areas that require further research attention.

Knowledge is information that is processed into a form that is understandable and usable (Stevens, 2010). Knowledge is an essential strategic resource, playing a significant role in value creation in organizations (Lopez and Esteves, 2013). Effective and efficient utilization of knowledge is a major resource asset for an organization’s competitiveness in its business environment (Nonaka and Toyama, 2005). Achieving this is the primary responsibility of managers, for which the capacity to manage knowledge-based capabilities is a critical capability. Knowledge management entails proficiently managing evidence and concepts relevant to organizational performance (Kuah and Wong, 2011). In MNEs, effective knowledge management facilitates competency-based/human resource development, sales growth, the development of new products in high-tech corporations, as well as enhanced business performance in organizational units worldwide.

Knowledge dimensions are usually categorized into tacit and explicit knowledge (e.g. Dhanaraj et al., 2004). Tacit knowledge is embedded in personal, subjective knowing that is difficult to formalize and share as it is inherent in practices rather than formally communicated through documents and data files (Polanyi, 1966). In contrast, explicit knowledge encompasses documentary information, including web pages, databases, systematic records and various printed and digital materials, such as books, journals and magazines. Explicit knowledge can be codified and expressed as numbers, words and other forms of visual and auditory data (Stokvik et al., 2016) that is easily transmitted in an abstract form. Tacit knowledge is embedded, embodied and embrained and thus more valuable as its translation is more difficult than for explicit knowledge (Polanyi, 1966).

Conventionally, knowledge management (henceforth KM) regards tacit knowledge as a “problem” that can be “solved” by translating what is not acknowledged formally into explicit knowledge. Fueled by the impact of Nonaka and Takeuchi’s (1995) account of tacit-explicit knowledge-conversion in Japan’s knowledge-creating companies, the Western fashion for knowledge management seized on Polanyi’s concept of tacit knowledge as the label for a “hidden” organizational resource or asset that could be converted into explicit knowledge. Tacit knowledge, by definition, is not tangible. Tacit knowledge is more appropriately rendered as tacit knowing or know-how, terms that better capture the personal and locally embedded qualities involved. It is these that make tacit translation and transfer more challenging because of their dependence on being and doing in a specific context.

Polanyi’s concept of tacit knowing addresses problems of verification, meaning and discovery that fall beyond the scope of explicit knowledge. In The Tacit Dimension,Polanyi’s (1983, p. 4) acknowledgment that we can know more than we can tell was the point of departure for his view of the capacity to know. As he explained (Polanyi’s, 1983, p. 4): “We know a person’s face and can recognize it among a thousand, indeed among a million. Yet we usually cannot tell how we recognize a face we know. So, most of this knowledge cannot be put into words.” Borrowing from Gestalt psychology, Polanyi differentiated between being conscious of recognizing a familiar face and the tacit integration of unspecified particulars that enable that act of recognition. Thus, it was possible to be “focally” aware of unspecified “subsidiary” clues ^[1]. We recognize the face in an instant and can do no more than speculate about what might have acted as subsidiary clues. If we shift our focal attention to possible subsidiary clues – such as the person’s eyes – their face goes out of focus. Subsidiary and focal aspects of knowing depend on each other and are mutually exclusive: it is not possible to be consciously aware of both at the same time.

Tacit knowledge is imperceptible, communicated through social practices (Nonaka and Toyama, 2005; Dhanaraj et al., 2004). Nonetheless, it has been argued that possessing tacit knowledge is “the key to the development of individual expertise and is critical to an organization’s capacity to build and sustain a competitive advantage” (Hadjimichael and Tsoukas, 2019, p. 14). Yet, tacit knowledge is something that persons, rather than organizations, possess (Thomas and Gupta, 2022). Hence, from the point of view of many managers, the prospect of making tacit knowledge explicit affords the possibility of “capturing” and controlling an organizational resource or capability that had hitherto remained intangible. The personal knowing embedded in tacit knowing is valuable, rare, inimitable and non-substitutable. Tsoukas (2003) makes the crucial point that Nonaka and Takeuchi’s (1995) book, The Knowledge-Creating Company, helped to institutionalize an erroneous view of tacit knowing. As Tsoukas (2003, p. 413) notes, Polanyi (1966), who first coined the term tacit knowledge, saw all knowing as personal. The capacity to know is not a transferable commodity; it is inherently personal and inherently tacit:

Extant research on knowledge transfer identifies different contexts in which knowledge can be translated between agencies: the context of the source of knowledge, the knowledge recipient, type of knowledge being shared, the relationship among source and recipient organizations, the intermediary in the transfer process and mechanisms involved in the implementation of transferred knowledge (Battistella et al., 2016; Kang and Sauk Hau, 2014; Lopez and Esteves, 2013; Pérez‐Nordtvedt et al., 2008). MNEs intent on an effective and efficient international knowledge transfer process tend to focus on readily available knowledge from international sources, especially when transferring advanced knowledge, such as technological information (Maurer et al., 2011; Simonin, 2004; Tsang, 2002).

Explicit knowledge, because of its explicitness, makes mimesis possible and cannot be a long-term source of sustainable competitive knowledge. Moreover, successful technology transfer involves both explicit and tacit knowledge. Because tacit knowledge must be shared in practices to create explicit knowledge (Thomas and Gupta, 2022), it can be difficult to communicate, except through a process of translation that involves all the provisional aspects of sensemaking (Weick, 1995). As knowledge is translated, it changes, as different sensemaking (Weick, 1995) comes into play.

Nonaka’s organizational knowledge creation theory posits a dynamic process of social interaction between individuals’ tacit and explicit knowledge (Nonaka, 1994). According to Nonaka, the conversion of tacit and explicit knowledge is based on four knowledge modes: socialization, externalization, combination and internalization. When an individual intends to share tacit knowledge, the socialization mode creates a field in which individuals share their mental models and personal experiences to synthesize their knowledge. In this mode, tacit knowledge is shared with others to create elaborated tacit knowledge. Collective reflections and dialogues among individuals trigger the externalization mode of knowledge. In an externalization mode, tacit knowing embedded in individual minds and practices is learnt and articulated by other individuals, using analogies and metaphors. Where meaning is not automatically clear or self-evident, plausible and provisional accounts suffice for translation. However, even in expert contexts, sensemaking that does not incorporate interpretation of subtle cues, as a well-known experiment in psychology suggests (Latham et al., 1988; also see Flyvbjerg’s, 2002a account of training), misses a great deal: what is described explicitly does not adequately describe expertise in practice.

According to Nonaka (1994), when conceptual knowledge is articulated, communicated and intersubjectively shared, it moves the knowledge spiral to a combination mode. In combination mode, new explicit knowledge is produced systematically in forms such as documents, databases and reports. In this way, new managerial systems and the development of new products/services can be designed. Developing a new system leads to the internalization mode of knowledge, which depicts the “learning by doing” conception. By applying newly created knowledge in conjunction with existing explicit knowledge, individuals can convert explicit knowledge into new tacit knowledge.

The theoretical foundation for the cross-border knowledge transfer processes is based on Grant’s (1996) knowledge-based view (KBV) of the firm and Nonaka and Takeuchi’s (1995) theory of organizational knowledge creation. The KBV illustrates the assumptions made regarding an organization’s requirements for new external knowledge, the rationale of its existence and the analysis of inter-organizational collaborations. Knowledge is identified by the KBV as a vital resource of the firm due to its strategic significance and additional value to an organization. Moreover, the KBV further conceptualizes knowledge in terms of information, know-how, skills and technology, insisting on a critical distinction between the communication of tacit and explicit knowledge. Knowledge recipients are required to gain an in-depth understanding of external knowledge, which is acquired by learning from formal expertise systems and the knowledge of organizations worldwide, in relation to the actors engaged in these systems (Park et al., 2022). The KBV describes inter-organizational collaboration and efficiency in international knowledge processes in terms of a close relationship between the recipient and source organization and their actors, arguing that this is necessary for the effective and efficient transmission of knowledge processes, especially in the case of tacit knowledge (Guo et al., 2020).

Continuous improvement in acquiring and sharing knowledge to achieve long-term goals and objectives is said to move in an organizational knowledge spiral. In applying organizational knowledge creation theory, the literature conceptualizes the criticality of knowledge, types of transferred knowledge, sources of an organization’s motivation to transfer their knowledge to the recipient organization and motivation of the knowledge recipient to acquire external knowledge (Antal and Walker, 2011). The recipient’s learning intention and readiness to learn new knowledge are integral (Bender and Fish, 2000). The quality of these relationships between the source of knowledge and the recipient organization determines how easily tacit know-how associated with technology transfer is translated (Czerniawska and Sevón, 2005). Successfully translating tacit knowledge requires a relationship between the source and recipient based on trust and commitment. The attractiveness of the knowledge source depends on the source’s credibility, perceived competence, reliability and tacit know-how about strategically valuable knowledge or resources (Gupta and Govindarajan, 2000; Pérez‐Nordtvedt et al., 2008). These attributes influence the recipient’s willingness to engage in learning and knowledge translation. Mutual compensation and planning coordination can accelerate the evolution of translation processes (Battistella et al., 2016); excessive reliance on formal and authoritative protocols can hinder this process (Keegan and Turner, 2002). Existing power circuits (Clegg, 2023) can restrict knowledge translation, especially that which promises innovation in existing states of affairs and may lead to a possible loss of relative power.

Nonaka and Takeuchi’s (1995) interpretation of Polanyi (1974) suggest a linear relationship between tacit knowledge and its conversion into explicit knowledge that can be understood by anyone. Although Nonaka and Takeuchi (1995, p. 60) mentioned Polanyi’s concept of “indwelling” and “tacitly integrating particulars”, the idea of the conversion of tacit to explicit knowledge contradicts rather than expands “his idea in a more practical direction” (Nonaka and Takeuchi, 1995, p. 60). Nonaka and Takeuchi’s representation of Polanyi has become institutionalized as an accepted part of the KM “paradigm” (Nonaka and Takeuchi (1995). Far more realistic is Czarniawska and Sevón’s (2005) view of knowledge exchanges as a matter of translation, a process in which, as knowledge travels, sensemaking is made by different parties in different contexts, at different times, with the nature of what is being known consequently changing. When tacit knowledge is transferred, it is translated from one sensemaking to others; with the implication being that the sense made is never the sense that is given but the sense that is taken (Gordon, 2001).

In the theory of knowledge transfer, the technical know-how required by MNEs involves exploiting both explicit and tacit knowledge. Explicit technological knowledge relates to tools and techniques primarily codified in user manuals, operating procedures and instructions. However, making use of these formal resources requires tacit knowledge. Knowledge needs a knower: a person who knows, one who, in Flyvbjerg’s (2002b) adoption of Aristotle’s phrase, practices phronesis. Practice depends on phronesis, practical wisdom, rather than literal description. One factor that frames when tacit knowledge becomes explicit is the power relations framing whose practices and understanding are regarded as significant. Knowing is often accomplished by individuals but is always socially organized through communities of practice, within which some forms of knowledge are defined as more legitimate, as well as their opposites (Maurer et al., 2011).

Jones and Mahon (2012) discussed the importance of tacit and explicit knowledge in the organizational context. They argue that tacit knowledge is required for successful organizational strategy and its decision-making processes. For explicit knowledge to be successfully formulated, it must be translated into practice (Whittington, 1996). Strategy requires more than its formulation; it needs to become strategy in and as practice, entering into the know-how and application of everyday work. The translation into practice is facilitated by specifically structured network relations for both new and existing ventures in MNEs, particularly those involving technological knowledge.

Due to increasing innovation-based competition, technology transfer has become an important component in cross-border knowledge relations within and among organizations. Tacit knowledge, especially important in adopting innovative technologies, cannot be easily formalized and communicated because it is entrenched in personal experience and is not easily transferred through codified documents. Specific knowledge about products and services, technologies and know-how related to skills and expertise in practice mostly consists of tacit knowledge (Battistella et al., 2016; Jones and Mahon, 2012). Using technological knowledge is critical and challenging for any organization that receives it from other organizations; this is because applying it in practice requires both tacit and explicit knowledge capabilities (Khan et al., 2015). Successful translation of knowledge requires both the source and recipient organizations to be sufficiently engaged with each other’s knowing, as partners in translation, so that what is exchanged fits the new organizational context. To ensure that external networks can interact equally with internal networks of other organizations, structured training and communication plans need to be designed. These structures and procedures will be contingent upon the type of knowledge being translated, with different processes applied to tacit and explicit knowledge (Park, 2011).

Technological knowledge does not always flow unidirectionally and without problems between source and recipient organizations. The translation of knowledge and knowing involves continuous interaction between source and recipient organizations, followed by feedback activities. Hence, the quality of the relationship between organizations and their personnel has a significant impact on successful knowledge/technology transfer (Battistella et al., 2016; Günsel, 2015). Relationships are vital in an era of sub-contracting, partnerships, alliances and supply chain management, especially for knowledge-intensive organizations, such as telecommunication firms in the ICT industry. These outsource over 50% of new product or service development and operationalization projects (Günsel, 2015). Therefore, intermediaries within source organizations play a vital role in transferring and translating knowledge, particularly in conveying tacit knowledge to and from the recipient organization. Translating tacit knowledge is challenging for organizations (Al-Salti and Hackney, 2011) because recipient organizations need time and resources to implement the knowledge exchange and the acquisition of the tacit know-how that makes it effective for them. Technical knowledge requires training end users to understand the skills and competencies of specific individuals training them or using the technology successfully; hence, recipient organizations need to understand and fully implement the required knowledge translation.

Translating personal knowledge and knowhow is especially difficult where different languages and quite distinct cultures are involved (Mohiya, 2023). Many more issues are involved in cross-cultural than in singular cultural and language translation. As Easterby-Smith et al. (2008, p. 677) stated, “transferring knowledge between organizations brings more complexity because of the multifaceted nature of the boundaries, cultures, and processes involved”. MNEs with their headquarters in developed economies must communicate tacit knowledge to their subsidiaries or international joint ventures in developing and emerging economies (Khan et al., 2015). Subtle cues and taken-for-granted assumptions may become lost in translation.

The manager’s role in MNEs often involves sensemaking in the transfer of tacit knowledge. For instance, a manager’s deep-seated, unspoken understanding constitutes tacit knowledge, which shapes the knowledge transfer process. When managers engage in knowledge transfer, they do so by drawing on tacit understanding, passing on insights and interpretations that are not easily formally articulated but are crucial for others to grasp the complexities of translation (Boland and Yoo, 2004). Thus, the tacit sensemaking process becomes a key mechanism for transferring tacit knowledge within MNEs. Intermediaries in the translation process are critical to the success of the operations. With constant variation in tacit knowledge characteristics associated with technology, organizations frequently rely on learning-by-doing processes to accumulate and acquire knowledge.

Organizations from emerging economies especially depend on acquiring external knowledge from international strategic alliance partners to fulfill their technological knowledge requirements. The reason is evident: they are likely to lack knowledge about the latest technology and innovation requirements (Dhanaraj et al., 2004). With their business operations spread globally, MNEs must be able to transfer their knowledge among subsidiaries continuously and through a constant knowledge flow (Martinkenaite, 2011; Patriotta et al., 2013). That knowledge flow needs to translate in both directions (Park et al., 2022) as learning is best when not unidirectional. Collaborating with other organizations can aid the development of innovative concepts, strategies and procedures (Kuah and Wong, 2011), translating knowledge into a usable form (Fang et al., 2010). MNEs are constantly upgrading and evolving technological requirements for innovation in the implementation of new products or service ideas and new product development, upgrading existing products and processes in their market environment. Doing so successfully entails sometimes overcoming considerable issues in translation and sometimes of resistance in partner organizations (Balogun et al., 2011) and sometimes learning from these occasions. Knowledge transferred by a foreign source will be comprehensibly translated if the recipient organization acquires a fully useable and explicable grasp (Zahra et al., 2000; Spraggon and Bodolica, 2012). If the knowledge contains technical information that requisite members of the receiving organization cannot easily comprehend, the knowledge will not be fully translated unless there is intermediation that provides basic training, drawing on tacit knowing (see Flyvbjerg, 2002a, on implicit knowing, as well as Paulin and Suneson, 2012).

The sensemaking model of knowledge management and transfer is grounded in the idea that knowledge in organizations is neither static nor isolated but constantly shaped and reshaped through sensemaking processes working at different levels of reality. These processes are individual, collective, organizational and cultural, each contributing to the broader knowledge ecosystem within the organization (Cecez-Kecmanovic, 2004). Therefore, the implementation of tacit technological knowledge requires social interaction among knowledge sources and recipients. Training in how knowledge translation works in practice is essential for the processes of learning and doing, as it involves acquiring new technologies and the skills to use them efficiently and effectively. Simply importing explicit knowledge is unlikely to be adequate, except in relatively simple exchanges.

The speed of knowledge translation is described according to the rate at which the recipient organization receives and adopts knowledge from external sources (Zahra et al., 2000; Wang and Wang, 2012). As market conditions vary across countries, the ability to acquire knowledge rapidly depends on the recipient organizations’ ability to absorb such knowledge speedily (McDermott and Corredoira, 2010; Mehreen et al., 2022). In addition, the economy is important in the process of knowledge sharing between source and recipient organizations (Szulanski, 1995; Casimir et al., 2012). When MNEs exploit their knowledge assets to develop innovative products and services and disseminate them internationally (Almeida et al., 2002), they strive to control applications, entailing that tacit knowing also is translated. To develop innovative products and services, special skills and capabilities need to be translated across national and organizational borders. In practice, due to the tacit nature of skills and abilities, these processes incur more costs the further organizational and national borders are from the home MNE’s culture and language (Mohiya, 2023). Translation and sensemaking are necessarily intertwined and entangled.

Applying the sensemaking approach to knowledge management enhances our understanding of the nature of knowledge within organizations (Othman et al., 2011). Knowledge is continually formed and reshaped through the ongoing and mutual interaction of all forms of sensemaking. For instance, the intra-subjectivity of its members and their inter-subjective exchanges, are constantly evolving, influencing and shaping each other. Generic subjective sensemaking that typically endures becomes resistant to change. Cultural sensemaking, that supports and facilitates all other sensemaking processes, envelops all forms of sensemaking. Thus, to optimize knowledge transfer procedures, MNEs need to develop both their absorptive capacity and that of their subsidiary or partner organizations if they are to transfer knowledge economically (Song, 2014).

To perform these knowledge processes successfully, organizations must achieve both effectiveness and efficiency (Pérez‐Nordtvedt et al., 2008; Andersson et al., 2015a, 2015b). Achieving a successful translation process is highly dependent on these two dimensions (Pérez‐Nordtvedt et al., 2008). Effectiveness may be defined as the extent to which an individual attains fluency in using the technology being exchanged, whereas efficiency concerns the economy (cost) of resources utilized to produce this outcome (Andersson et al., 2015a, 2015b). Effective knowledge translating technology is a priority for global and globalizing MNEs (Günsel, 2015). Their knowledge infrastructure and research and development resources continuously collaborate in cross-border knowledge flows. Efficiency in organizations’ technological resource innovation and translation decisions is critically important and requires cost-effectiveness (Zhang-sheng, 2012; Ganguly et al., 2011) for successful knowledge management processes. Narteh (2008) argued that the advancement of technological resources worldwide makes it imperative for organizations in developing countries to seek knowledge from developed countries. Cross-cultural translation can subsequently travel either way, with variable effects in terms of sensemaking and power/knowledge relations.

Some studies focus on the effectiveness and efficiency of a one-way knowledge transfer process, examining its direct relationship in the context of cross-border knowledge processes (Al-Salti and Hackney, 2011). Others investigate tacit and explicit knowledge transfer in terms of technology transfers, including information system outsourcing of processes and products decided in terms of the current international market environment (Günsel, 2015; Jones and Mahon, 2012). The extant literature on management and knowledge transfer identifies the relations between recipient and source organizations along with the quality of their relationships, as significant entities in the knowledge process (Pérez‐Nordtvedt et al., 2008).

MNEs typically focus on mergers, acquisitions and international joint ventures as preferred modes of entry into global markets to expand their business operations (Khan et al., 2015). As much of the knowledge required for implementation is tacit, extensive training will be necessary if the local workforce is to efficiently and effectively implement the knowledge acquisition process. However, when MNEs source new and innovative products and services from foreign sources, the tacit learning will be in the other direction (Guo et al., 2020). Achieving effectiveness and efficiency in knowledge border-crossing depends on the knowledge recipient’s learning capability, irrespective of whether this is the MNE or the outsourced agents, the quality of relationships amongst them, or the attractiveness of the knowledge source. If these are well-aligned, then the communicative translation of tacit knowledge is more likely, with organizational sensegiving and sensemaking likely to be more closely aligned (Maitlis and Lawrence, 2007).

To receive external knowledge, organizations must be motivated and prepared to learn new knowledge (Gupta and Govindarajan, 2000; Tsang, 2002). When recipients find an external knowledge source attractive for any reason, they will be more predisposed to translation (Pérez-Nordtvedt et al., 2008). Changing global market environments, whether through outsourcing or other relationships, often serve as a cue to periodically internalize and disseminate new knowledge. Due to the continuous evolution of innovation requirements of MNEs, their knowledge requirements constantly vary (Ko et al., 2005). Knowledge transfer will occur between sources chosen according to the recipient organization’s requirements and its networks (Inkpen and Tsang, 2005).

As MNEs subcontract their projects to other organizations, they will seek alliances to facilitate the dissemination of knowledge processes from different sources and destinations. Al-Salti and Hackney (2011) indicated four factors that expedite success in such knowledge processes. These factors consist of the content, recipient and source of knowledge, as well as the relationship between the recipient and the knowledge source. The recipient organization’s ability to acquire knowledge is conditional on its absorptive capacity, its capability in decoding and receiving communication, as well as its openness to and spontaneity in developing externally derived knowledge.

Absorptive capability refers to an organization’s ability to identify, integrate and implement acquired knowledge, conceptualized as a relation-specific factor. Kang and Sauk Hau (2014) described the impact of the recipient organization’s absorptive capability on the knowledge exchange relationship between the source and recipient organization during these processes. The capabilities of the recipient organization’s workforce depend upon their training and expertise regarding specific projects that require external knowledge acquisition. Research has examined learning attitudes, competencies, relationship with the source organization and willingness to transfer knowledge (Zhang-sheng, 2012; Zhang and Jiang, 2015). From the perspective of the source organization, for learning to occur, it needs to be supported by organizational systems that facilitate learning; it should not be left to chance. In addition, learning should be acquired through adequate organizational and technological knowledge channels and personnel skills. In terms of technical capacity, specific capabilities become attractive sources for recipient organizations. These include managing the technical system efficiently, determining baseline knowledge requirements for recipients and utilizing managerial flexibility to cope with the uncertainties that will arise. Such MNEs outsource information systems (Zhang and Jiang, 2015), which enable access to international innovation systems, in preparation for collaborating with strategic alliance partners (Awate et al., 2015). Strategies for becoming a more attractive source of knowledge for recipient organizations include competence creation and exploitation (Cantwell and Mudambi, 2005, 2011; Awate et al., 2015).

Not surprisingly, the recipient organization’s attitude toward learning and implementing external knowledge affects the knowledge source’s translation of knowledge (Zhang and Jiang, 2015). Attractiveness of the knowledge source in the MNE refers to the extent to which a knowledge source is perceived as credible, competent and influential across units that is shaped by factors such as expertise, reputation, resource access and relational trust within the organizational network (Pérez‐Nordtvedt et al., 2008). In terms of information system outsourcing (Al-Salti and Hackney, 2011), the attractiveness of a knowledge source depends on organizational characteristics such as reliability and trustworthiness, as well as the capability to translate strategically significant sources of knowledge (Jensen and Szulanski, 2004). MNEs translate their knowledge to geographically dispersed regions through international assignments (Reiche, Harzing and Tenzer, 2019) in which international assignees are expected to learn and to bring that learning back to base. An example of an organization that has developed a dedicated program for international assignments is Samsung Electronics (Choi, 2022). The Samsung Global Centre seeks to prepare international placements with an understanding of the host culture. Best practice includes familiarity with the host language, some preparedness for the different cultural norms to be experienced, as well as an introduction to local norms, mores and relevant laws (Harzing and Ruysseveldt, 2004). To transfer tacit-based technological knowledge successfully, MNEs typically send an international assignee overseas for direct knowledge transfer with the recipient units, as tacit knowledge is embedded personally and must be translated in context (Hsu et al., 2024). The highly tacit nature of knowledge should be supported by prior training and organizational skill development related to effective management and an appropriate organizational structure.

There should be a close and trustworthy relationship between the knowledge source and recipient organizations in international knowledge transfer processes (Ko et al., 2005; Minbaeva, 2013; Pérez‐Nordtvedt et al., 2008). Yli‐Renko et al. (2001) argue that a quality relationship is vital because it signifies close, strong and trustworthy connection. Quality relationships are considered crucial when evaluating business relationships among organizations that acquire external knowledge (Nguyen and Nguyen, 2010). Source organizations need to invest in their network relationship with recipient organizations to maintain business relationships (Claycomb and Frankwick, 2010; Rampersad et al., 2010). Commitment entails stable and long-term continuity of relationships (Walter et al., 2003) and motivates investments in customer-specific innovative products and processes and frequent exchange of information (Chang et al., 2012).

Frequent knowledge exchange assists recipient organizations with product and process development, enhancing their absorptive capacity (Hughes and Wareham, 2010). The frequency of contact between the source and recipient organization demonstrates the intensity of interaction. More frequent interaction may initially signal issues that require attention, while generating a better understanding of knowledge exchanges that aids rapid innovation (Herrera et al., 2010; Pérez‐Nordtvedt et al., 2008). For Chang et al. (2012), it is trust, commitment, the source’s flexibility, as well as the frequency of contact that influences the overall process.

For optimal long-term relationships among source and recipient organizations, it is not only explicit knowledge that is transferred but also tacit knowledge, even if geographical and cultural distance accentuate the costs entailed (Al-Salti and Hackney, 2011). The willingness and motivation of both source and recipient organizations are crucial to facilitate successful international knowledge transfer and translation processes. The key topics are summarized in Table 1.

The literature emphasizes that successful knowledge management in MNEs, particularly the transfer and translation of tacit knowledge, depends on the complex interplay of sensemaking and sensegiving processes (Bathelt et al., 2018; Rouleau, 2005). These processes are shaped by various factors, including the quality of relationships between the knowledge source and the recipient, the nature of the knowledge being transferred and the role of intermediaries in bridging the gap between the knowledge source and the recipient. However, the challenge for MNEs is effectively navigating these complexities while maintaining both efficiency and efficiency of knowledge transfer.

The extent literature identifies a gap in how effectively MNEs incorporate these processes into their knowledge management strategies. While much focus is placed on explicit knowledge transfer, less attention is given to the mechanisms that facilitate the deeper sensemaking and sensegiving necessary for the translation of tacit knowledge. That tacit knowledge is deeply embedded poses additional challenges. Its effective transfer requires more than just the movement of information. The successful transfer of knowledge requires it to be interpreted correctly in practice as it is being adapted to new environments (as presented in Figure 1). This is where sensemaking and sensegiving become crucial. As sensemaking involves how individuals understand and internalize knowledge, it is essential for MNEs to help their employees comprehend the tacit knowledge often associated with new technologies and related processes (Hadjimichael and Tsoukas, 2019). Moreover, sensegiving focuses on how that knowledge is communicated and shaped to fit the local organizational context. This process ensures that the tacit knowledge is not only transferred but also contextualized in a way that aligns with the recipient’s operational needs.

Implementing technology at the organizational level requires diverse knowledge. The processes involved in transferring technology for tacit and explicit knowledge differ due to their distinct characteristics. The transactional costs associated with translating explicit knowledge, due to the minimum involvement of the source and recipients in the process, are much less than those for translating tacit knowledge (Andersson et al., 2015a, 2015b: Wang et al., 2021). It is essential for the knowledge recipient to understand the tacit characteristics associated with acquiring technological knowledge, regardless of the direction of the communicative flow. Simple transfer of information from one point to another is insufficient.

Tacit knowledge requires translation as an interactive, embodied and embrained process of interpretation and understanding (Thomas and Gupta, 2022). Hence, translating tacit knowledge requires sensemaking from the translating partners engaged in the transfer. Where there is a lack of familiarity and codification associated with tacit knowledge about technological knowledge, recipients need to develop individual experiences, intuitions and insights to grasp what is being communicated and to train employees in technical issues related to the transferred technology.

Global knowledge sources are diverse and heterogeneous, so much of it is tacit. Transferring knowledge, individuals struggle to facilitate and integrate its translation in the receiving organization due to coordination issues, cultural differences and language barriers across borders (Mors, 2010; Mohiya, 2023), reflecting the tacit knowledge required to make such processes work. Cross-border knowledge transfers significantly contribute to organizational development and innovation in the global market. The absorptive capacity of organizations plays a vital role in knowledge acquisition (Park, 2011; Mehreen et al., 2022), which is greatly aided by diligence in tacit translation (Czarniawska and Sevón, 2005). Organizations’ managers’ tacit and explicit knowledge is critical for individuals in information and knowledge flows in cross-unit knowledge transfer (Zhao and Anand, 2013; Thomas and Gupta, 2022).

Difficult to codify and individually sticky in practice, transferring and translating tacit knowledge across national borders requires trust and social ties among sources and recipients of knowledge (Szulanski, 1996). Relationships that work best are embedded in social networks in which organizational commitment and the trustworthy strength of relationships are vested. Trust “reflects the belief that a partner’s word or promise is reliable and that a partner will fulfil its obligations in the relationship” (Inkpen, 2000, p. 1027). A lack of trust and commitment affects the quality of the relationship between the source and recipient in a way that disrupts the knowledge transfer process, negatively impacting innovation processes and reducing the mutual confidence of both parties. Due to recent rapid innovations in the last decade, sustainable organizational development and performance increasingly depends on successful knowledge and technology transfer that is dependent on learning by and from tacit knowing (Wang et al., 2021); hence, organizations use boundary spanners as formal mechanisms to manage trust and commitment as informal governance mechanisms to ensure effective and efficient international knowledge exchange processes (Khan et al., 2015).

Given the geographic dispersion and cultural diversity within MNEs, sensemaking and sensegiving interactions are shaped by context-specific challenges such as language asymmetries, national institutional logics and reliance on boundary-spanning roles. When multinational organizations transfer knowledge and technology across borders to improve business operations and sustain competitive advantage, they improve their learning capabilities. Recipient organizations need to generate internal capabilities to integrate and absorb new external knowledge so that they can undertake functional activities effectively and efficiently. Park and Kim (2015) argued that organizations need to improve their capabilities in social communities of practice. In these, groups of experts can collaborate and innovate products and services for successful knowledge exchanges. Doing this best enables tacit knowledge to be communicated. To be successful such international knowledge processes require constant collaboration through specified communication conduits between source and recipient across national boundaries (Williams and Lee, 2011; Pérez‐Nordtvedt et al., 2008). Coordination among higher managerial levels plays a vital role, including identifying new external knowledge, discovering where acquisition of external knowledge is required (Williams and Lee, 2011) and realizing that there is more to the process than a transfer of explicit knowledge.

From the perspective of source organizations, evidence from previous research is limited. Most of the knowledge management and international knowledge transfer literature is focused on a unidimensional knowledge transfer process in which knowledge is transferred from headquarters to subsidiaries and their other international joint ventures. There is a lack of problematization of the translation processes involved in knowledge transfers the other way; not all wisdom resides in HQ. While the intermediaries involved in transfer processes are extensively studied in the international business and global mobility literature, the concept of reverse knowledge transfer is neglected, despite tacit knowing being a two-way street.

Skills, knowledge and global management competencies are embedded in the minds and bodies of individuals who act as intermediaries for transferring tacit knowledge from the source organization to the recipient organization. They act as the source organizations’ experts and provide individuals in the recipient organization with learning opportunities by building relationships not only through formal but also informal organizational settings. Relationships are strengthened through regular company presentations, lab demonstrations, meetings, resource-sharing, casual visits and networking events. Meanwhile, appreciation of both organizational and national cultures, practices and routines, enriches the performance of bidirectional communication back to headquarters.

Multinational organizations must focus on reverse knowledge transfer and tacit knowledge to utilize the capabilities and skills that individuals learn during their international experience and use this knowledge for innovation and continuous improvement. Knowledge transferred by the source organization as a valuable resource for the recipient organization is mainly based on tacit knowledge. As Battistella et al. (2016, p. 1211) stated, “tacit knowledge is not the result of a static storage, but a process of continuous and dynamic construction, a constant change in the characteristics of the knowledge already stored is needed, which are continuously increased through the accumulation of new experience”. Therefore, the dynamic nature of tacit knowledge (Polyani, 1966) cannot be completely transferred through the processes outlined by KM gurus such as Nonaka and Takeuchi (1995). Knowledge transferred in working operations and practices in which there is direct contact among source and recipient is the most effective and efficient way to transfer technical knowledge and knowhow (Battistella et al., 2016: Goswami and Agrawal, 2020). In such contexts, tacit knowing pervades the background and provides the foundation for interpreting explicit transferred knowledge.

Accounts of the transfer of technological knowledge are mainly limited to explicit knowledge transfer which, despite its strategic significance, diminishes the importance of transferring tacit knowledge (Johannessen et al., 2001). Ultimately, a lack of tacit knowledge hinders innovation, continuous improvement and learning within organizations. Knowledge-based economies strive to manage their resources so that organizations with global business operations thrive in their respective industries (Goswami and Agrawal, 2020). Hence, multinational organizations focus on the “personalization” of tacit knowledge when transferring technical knowledge with tacit components. They prioritize personal contact to minimize the challenges with methods, solutions to technical issues and preparedness to carry the costs of employees assigned to work on the task associated with the technology for the first time (Wang et al., 2021), who may later be expected to be called upon to perform a similar task. Socialization is essential to making tacit knowledge evident to employees at the recipient organization, as well as learning from the tacit knowledge that they may have.

Future research should examine the effectiveness and efficiency of the impact of tacit knowledge on inter and intra-organizational knowledge and technology processes by rethinking the socialization mode of knowledge creation in Nonaka and Takeuchi’s (1995) model. Tacit knowing requires individuals to be involved in social interaction to translate and create new organizational knowledge. The gap in achieving effectiveness (quality of knowledge transfer) and efficiency (cost of transfer) lies in the failure to acknowledge the role of sensemaking and sensegiving. While resources are often allocated to streamline the process, insufficient attention is paid to how knowledge is understood and shared at a deeper level. Future research should integrate sensemaking and sensegiving interactions among sources and recipients to minimize misunderstandings and loss of tacit knowledge, utilizing ethnographic research to achieve this (Flyvbjerg, 2002a).

In addition, using the same theoretical foundation, future research should focus on reverse knowledge transfer as well prioritizing center to periphery. Incorporating sensemaking and sensegiving interactions among repatriates and domestic employees, reverse knowledge transfer can shift the direction of knowledge transfer. Doing this promotes the bi-directional flow of knowledge and information from foreign alliances to headquarters. Unfortunately, the literature on reverse knowledge processes is scarce and needs more attention from both researchers and practitioners. To add to the literature on knowledge translation and international business, future research should emphasize reverse knowledge processes by focusing on the willingness and motivation of repatriates to communicate knowledge to their home country organization, as well as the willingness of domestic work-unit employees’ receptivity to repatriate knowledge. Fostering sensemaking and sensegiving among repatriates helps them integrate and interpret their international experiences more effectively.

Future studies can contribute to research by investigating how domestic organizational networks effectively provide specific repatriation support, including the acquisition of global management competencies and other valuable knowledge, for their repatriated employees. This investigation should consider their absorptive capacity, repatriate knowledge dissemination capacities, as well as opportunities for interaction among knowledge sources and recipients. The component of trust can also be included in the conceptual model and subsequent empirical investigation while examining the knowledge transfer process upon repatriation.

The intricate dynamics of knowledge and technology diffusion, especially tacit knowledge’s conveyance, are important in driving growth and innovation for globally active organizations. Unraveling and leveraging the multi-dimensional facets of tacit and explicit knowledge transfer lies at the heart of successful knowledge diffusion strategies. While translating explicit knowledge might be cost-effective, the strategic significance of tacit knowledge stands unmatched. Its pivotal role in fostering profound understanding, spurring innovation and sustaining an improvement-oriented organizational culture is undeniable. This necessitates emphasizing the cultivation of individual experience, intuition and insights among those receiving knowledge, bolstering social interactions and nurturing trust within knowledge-sharing partnerships. Sensegiving and sensemaking are critical in achieving tacit knowledge transfer. Moreover, the layered challenges accompanying cross-border knowledge diffusion, including coordination complications, cultural and linguistic hurdles and variable absorptive capacities among different organizations, underscore the urgency of devising effective strategies for translating tacit knowledge. Utilizing boundary spanners to maintain trust, commitment and the strategic deployment of upper management levels in orchestrating these processes form integral elements of these strategies. In addition, reversing the traditional flow of knowledge transfer warrants further consideration to thoroughly harness the rich insights stemming from this practice. The pivotal role of repatriates in facilitating bi-directional knowledge flow underpins this notion, given their capability to relay unique skill sets, global viewpoints, relational knowledge and management acumen back to their home countries.