Barriers to absorption when grafting experiential internationalisation knowledge

Abstract The Uppsala internationalisation process model, as the dominant theoretical model explaining internationalisation processes in International Business, suggests that the knowledge gap between a firm’s current knowledge base and the experiential knowledge required to operate successfully in a new market presents the most significant obstacle for firms trying to internationalise (Johanson and Vahlne, 2009; Vahlne and Johanson, 2017; Welch et al., 2016). Previous research into the process of internationalisation has suggested that firms overcome this knowledge gap by incrementally acquiring such experiential knowledge through the direct experiential learning process of their individual managers in foreign markets over time (Johanson and Vahlne, 1977). Contemporary research into firms’ learning processes, on the other hand, asserts that experiential knowledge is transferable, and suggests that firms can indirectly acquire experiential knowledge from the experience of others (Huber, 1991; Forsgren, 2002; Fletcher and Harris, 2011; Bingham and Davis, 2012). Accordingly, firms who are able to indirectly acquire experiential knowledge are able to expedite the closure of their knowledge gap, enabling them to accelerate their internationalisation process. But, internationalisation process research has not yet sufficiently explored whether or not experiential knowledge can be transferred at the individual level, in order to provide a processual account of how and why the indirect learning process of grafting may accelerate the internationalisation process of Multinational Business Enterprises over time. This study explores how and why the indirect learning process of grafting - i.e. hiring an individual manager with the relevant experiential knowledge - impacts the internationalisation process over time. In order to do so, this thesis employs a qualitative processual research approach on a single revelatory case study. Rich, authentic and trustworthy data was acquired using ethnographic methods, allowing the thesis to ‘problematise’ extant theoretical understanding and assumptions. It reveals how and why interpersonal cultural differences within a firm limit its absorptive capacity for indirectly acquiring experiential knowledge from culturally distant host context source (Alvesson and Sandberg, 2011; Alvesson and Kaerreman, 2007; Westney and Van Mannen, 2011; Chapman, et al., 2004; Sharpe, 2004). This revelatory insight challenges the prevailing assumption that experiential knowledge is transferable. This thesis’s abductive approach, in turn, allows refinement of the theoretical understanding and explanation by generating a processual account of how and why grafting might - or might not - serve as an indirect means to expeditiously acquire salient experiential knowledge. Specifically, by capturing insiders’ cultural perspectives, and by drawing on the psychological insights using cognitive dissonance, this study’s findings suggest that interpersonal cultural differences within a firm can impede its ability to assimilate potentially valuable experiential knowledge. The findings reveal that individual managers are intrinsically motivated to maintain their ignorance of potentially valuable experiential knowledge, in order to avoid psychological distress which arises when they are confronted with information, knowledge or ideas that are either explicitly or implicitly linked to values, beliefs, and actions that contradict their own. By drawing on these psychological insights, this thesis contributes to the theoretical development of a process explanation that illustrates how and why interpersonal cultural differences within a firm may limit its absorptive capacity. This thesis thereby enhances theoretical understanding of how and why the indirect learning process of grafting may not reduce a firm’s knowledge gap, and therefore, may not accelerate its internationalisation