The Relationship between Knowledge Transfer and Competitiveness in “SMES” with Emphasis on Absorptive Capacity and Combinative Capabilities

Abstract

In order to improve SMES’ competitiveness, introduction of Knowledge into all aspects of production process and management levels is essential. The question is how the knowledge can be transfer into firms? The purpose of this study is to examine the role of knowledge transfer in Firm’s competitiveness. Firms’ need to manage resources flow effectively to be able to survive and to grow in competitive business environment. How can they do this? Over the last decade, the knowledge- based view has rapidly seized a prominent role in strategy research. The knowledge – based view explains that tacit knowledge is the critical component of the value that a firm adds to input , and that a firm’s ability to transfer this tacit knowledge is the essential source of sustained competitive advantage. Firms which have a good absorptive capacity and combinative capabilities are able to compete effectively. Absorptive capacity and combinative capability are main aspect of knowledge - transfer which has captured the attention of numerous studies in recent years. Large firms have possibilities to invest a large amount of money into R&D and to monopolize the knowledge which they have explored and then to exploit it, but the questions are: What about SMES? Are they able to explore and to exploit new knowledge? What are the advantages of K-T in SMES’ competitiveness? With consideration of SMES’ expansion in developed and developing countries, growth and survival of them depend on K-T in these firms and its relationship with firms’ competitiveness. When firms interact with external constituents, be they suppliers or customers, they seek to acquire and/or maintain access to knowledge that otherwise would not efficiently available. Based on the literature review a theoretical model of Small and medium enterprises (SME’S) competitiveness relating to that knowledge transfer is a function of absorptive capacity and combinative capability that characterize the competitiveness. Small and medium enterprises (SMEs) are assumed to play a key role in social and economic development. The theoretical model that was developed in this study predicted that knowledge transfer is a function of absorptive capacity and combinative capability that characterize the SMEs’ competitiveness. Absorptive capacity refers to the capability to understand and use new knowledge. Results from this study indicate that two dimensions of absorptive capacity, available complementary knowledge and prior related experience, are both important antecedents of knowledge transfer. Combinative capability refers to a firm’s capacity to combine and recombine existing knowledge. The theoretical model predicted that this capacity is a function of the opportunity, motivation, and ability to share knowledge. Key words: Competitiveness; Firm; Tacit; Strategy; Absorptive; Combinative; Knowledge; SMES; Capability; Capacity; Motivation