Inter-Firm Knowledge Transfer to the Capability of Local Parts Firms in the Malaysian Automobile Industry

The current issue of technology transfer has risen dramatically in the past few years, primary associated with the knowledge transfer. Multinational Corporations (MNCs) in the developed countries are the main actors driving of technology and knowledge to developing countries. Thus the organizations in the developing countries are striving hard to create their internal environment that needed to build strong cooperation with MNCs through strategic alliance. A local parts firm in the Malaysian automobile is considered as one of the most important and strategic industries in the manufacturing sector. However this vital sector is facing remarkable challenges, and in the heart of these challenges is the global competition, rapid changes in consumer behavior, shorter product life cycle, and increasingly saturated market. Thus this industry is eager to gain new technology and knowledge to advance its capability, sustain competitiveness while consolidating their position in the global market place. A survey questionnaire was developed to investigate the impact of knowledge transfer on the capability of local parts firms in this industry. A result from 59 responds asserted that there is a significant relationship between knowledge transfer based on explicit and tacit knowledge on the capability of this industry. Keywords; Inter-firm Knowledge Transfer, Malaysian automobile Industr