This document summarizes a case study on Renault's transfer of logistics competencies to local suppliers in Brazil. The study analyzes how competency transfers are organized through inter-organizational relationships. Competencies exist both within and outside company boundaries, relying on external "boundary resources." Collaboration allows companies to access partners' competencies, combine complementary strengths, and create new competencies. For Renault, developing suppliers' logistics competencies through collaboration improved performance for all involved.
This document summarizes a case study on Renault's transfer of logistics competencies to local suppliers in Brazil. The study analyzes how competency transfers are organized through inter-organizational relationships. Competencies exist both within and outside company boundaries, relying on external "boundary resources." Collaboration allows companies to access partners' competencies, combine complementary strengths, and create new competencies. For Renault, developing suppliers' logistics competencies through collaboration improved performance for all involved.
This document summarizes a case study on Renault's transfer of logistics competencies to local suppliers in Brazil. The study analyzes how competency transfers are organized through inter-organizational relationships. Competencies exist both within and outside company boundaries, relying on external "boundary resources." Collaboration allows companies to access partners' competencies, combine complementary strengths, and create new competencies. For Renault, developing suppliers' logistics competencies through collaboration improved performance for all involved.
Managing inter-organisational transfer of competencies : a case study
Frdric PREVOT Assistant Professor - Marseille-Provence Business School
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Frdric PREVOT 69 boulevard de la Libration 13001 MARSEILLE FRANCE
Telephone : 00 33 6 77 74 68 19
email : fprevot02@yahoo.fr
Abstract
Using the resource based theory, we highlight the strategic interests of inter-organisational relationships with a view to mobilizing boundary resources and competencies. We then study the way competencies transfer is organized by lead firms that structure a network of partnerships. This analysis covers three issues : the type of competence that is transferred, the relationships between the different corporate partners and the range of tools used to achieve the competencies transfer. The model is then applied to a case study concerning logistics competencies that Renault transferred to its local suppliers in Brazil.
Managing inter-organisational transfer of competencies : a case study Frdric PREVOT
Introduction
During an interview carried out for our research, the manager of international logistical operations of a multinational declared, using the famous words of Molire: as with prose, we often contribute to competence transfer without realising it. Yet, inter-organisational competence transfer can be seen as a way of not just upgrading competencies in the transferring company, but also improving its performance. Indeed, competence transfer must not be seen as a risk of one company gaining information at anothers expense. On the contrary, in certain conditions, collaboration can be extremely beneficial to the transferring company. Thus it appears useful to master the transfer methods so they are not carried out unwittingly or simply endured, in order to control and take full advantage of them. In this article, we propose to build up an analysis theory of competence transfer, which will then be applied to a case study. Based on the concept of boundary resources [Nanda, 1997], we will study the impact of inter-organisational relationships in competence management. We will then study the benefits of competence transfer based on a series of vertical type collaborative actions between non-competing firms around a pivotal company. From that, we will design a competence transfer analysis model, which we will apply to the case study of Renault in Brazil, where Renaults logistics department has set up a method for competence transfer to local suppliers.
1. Inter-organisational relationships and competence management
1.1. Competencies and boundary resources
An organisational competence is defined as the deployment of resources with a specific aim and in conditions specific to the company, based on interaction between a technology, collective learning and an organisational process. It represents both the knowledge acquired by the company as an organisation and the knowledge acquisition process [Mtais, 1997]. A first method of establishing typologies of resources and competencies is based on intra- organisational analysis: e.g. physical resources, human resources and organisational resources [Barney, 1991]. A second method of establishing typologies considers the resources and competences as systems (interactions between resources), and a third method introduces an inter-organisational orientation. Teece (1987) takes into account the system dimension and introduces the notion of co-specialised assets i.e. the idea of bilateral dependence when they are implemented. Dierickx and Cool (1989) develop further the concept of complementarity by defining the connections between assets, which implies that the value of the asset depends on the value of the asset with which it is linked. Amit and Schoemaker (1993) show that, due to complementarity, the value of resources and competencies is greater than the sum of their assets. These authors include complementarity between assets in the eight characteristics used to define resources and competencies. Black and Boal (1994) build on this analysis and study resources interactions both within the company and externally. These authors make a distinction between simple resources (a simple network of assets) and system resources (a 2 complex network with direct and indirect links between assets and resources). Based on this concept Black and Boal distinguish between competence levels according to the complexity of the network they are made up, and according to the links between competencies. Black and Boals propositions allow for the transition from co-specialised resources to competencies network. Nandas research (1996) places the definition of resources and competencies in an inter-organisational context. He introduces the notion of boundary resources. These are intangible assets specific to the relationships between the company and its environment. These assets are inputs in the production activity of the company, but belong to outside parties. The notion of boundary resources extends the company limits.
1.2. Addressing boundary resources through inter-organisational relationships
The company must harness certain resources even though they are external resources. It then appears that developing the competencies of the company is not only reliant on acquiring and exploiting internal resources, but also harnessing external resources. In this context the capacity to take into account the behaviour of various parties is as important as the way in which the company innovates. [Conner & Prahalad, 1996]. Durand and Guerra Vieira (1997) distinguish between two competence levels within the company: on the one hand, static competencies based on strengthening current competencies, and creating a synergy effect through new combinations of existing competencies; and on the other hand, dynamic competencies which are based on adaptability (permanent learning capabilities) and access to networks (setting up partnerships to access competencies). Then, as shown by McEvily et al. (2000), companies must consider collaboration as a key element in the process of competence development. According to these authors, this development is based on a triple commitment: towards employees, towards suppliers and clients, and towards competitors. Qulin (1997) emphasises that, by giving access to external competencies, co-operation leads companies to go beyond their rigid administrative inheritance (path dependency) which consists in accumulating skills that are in line with previous acquisition, leading to institutionalisation of routine. Developing new competencies requires discontinuity as opposed to this accumulation process. Therefore, a company must develop its ability to adapt to its environment by setting up partnerships and managing its relations with suppliers and clients. Collaborating with outside parties may have three objectives: accessing the partners competencies, combining complementary competencies (co-specialisation), creating new competencies through co- operation. Given the importance of addressing competencies outside the company, inter- organisational collaboration plays a major role in competence management. Below we will define three advantages of co-operation in the management of competencies.
1.3.Advantages of collaboration in competence management
Collaboration generates joint competencies and resources, leading to increased relationship value. According to Hall (1999), one of the main reasons why companies create partnerships is to gain new competencies and develop a socialisation process aiming at sharing knowledge and creating competencies. Then, these competencies are intrinsically linked to the relationship itself. Dyer and Singh (1998) show that key competencies for the company may go beyond the company limits and may be integrated in cross-organisation routines. This creates joint idiosyncratic contributions, which generate relational rents. These relational rents can be seen as the benefits of co-operation. The resource-based model, which states that competitive advantage is based on obtaining and protecting resource related rents. [Peteraf, 1993], can be applied to inter-organisational competencies. Dyer and Singh (1998) lay down 4 sources of inter-organisational competitive advantages: assets specific to the 3 relationship (indivisibility of the resources developed jointly); inter-organisational knowledge sharing routines (relationship behaviour); complementarity of partners competencies (interconnection of inter-organisational assets); logic of joint governance (an environment encouraging trust relationships). More specifically, a second type of advantage is identified as inter-organisational learning. There are four types of learning: based on knowledge, based on competencies in project management of the same current type of collaboration, based on partner knowledge and based on collaboration dynamics [Ingham, 1994]. This learning is conditioned by behaviour of the partners (type of relationship, motivation to learn and level of involvement) and by structure of collaboration (nature of the knowledge, experience in the domain and task distribution [Mothe & Ingham, 2000]. Beyond relational rents and relationship learning, competence sharing may certainly lead to learning acquisition by the recipient, but may also benefit the teaching company, i.e. the transferring company. These advantages are dependent on the feedback effect. This feedback effect (effet en retour du transfert) was defined by Paturel and Degravel (1998) as a consequence of transfer which consists in modifying the teaching company structure on an operational and strategic level. (p. 8). The transferor benefits from improvements generated by the transfer to the recipient. This third advantage due to inter-organisational relationships in competence management emphasises the importance of transfer. Indeed, in numerous studies on alliances, in particular, those of Hamel et al. (1989), the emphasis is on the idea that alliances are a way to acquire competencies. However, learning through an alliance leads to a paradoxical situation, i.e. each company wishes to learn from the partner whilst protecting their own resources. And yet, to enable learning as an objective of the alliance, it is necessary to have tempering effects of causal ambiguity, in order to increase competence transferability: notably the ability to collaborate, the ability to learn and the duration of the alliance. [Simonin, 1999]. Hence, transfer of certain competencies is now seen as useful to ensure that collaboration functions correctly. Going even further, we will see that competence transfer can even be a central element in a collaboration strategy. The company can thus use the competence transfer to not only optimise management of inter-organisational relationships, but also to maximise its own performance. In the second part of the analysis, in the context of inter-organisational relationships, notably vertical partnerships between non-competing firms [Garette & Dussage, 1995], we will show that competence transfer, beyond simply seeking a balance between acquiring and protecting competencies, can represent a key element in co-operation management.
2. Organisation of inter-organisational competence transfer
2. 1. Co-ordination of competencies in inter-organisational relationships
Controlling the communication and assimilation of competencies supposes the companys ability to manage a network of collaborations. As Dyer shows (1996), company activities are interconnected with other activities in a complex inter-organisational context. The author studies this system based on a manufacturer-supplier network. Similarly, Hall (2000) suggests using the network rather than the company as the basis for the analysis of competence development. According to Hall, the company seeks to improve its management of external resources to bridge the gap between existing competencies and those it wishes to acquire. In this respect, the company must learn to co-ordinate current resources and competencies existing in a large number of other organisations with which they have a 4 partnership [Kogut & Zander, 1992]. Managing a partnership network improves the access to additional competencies for the pivotal company, thus allowing interactions of its own competencies with specialised competencies that it would not necessarily be able to manage in house. This has a positive effect for the overall network. [Lorrenzoni & Lipparini, 1999]. Co-ordinating partner competencies is based on the mechanisms that Stein (1997) classes according to their increasing complexity: mutual adjustment, task standardisation, defining the process, sharing objectives, creating joint strategies, sharing standards and values. The pivotal company will then consider encouraging competence sharing as an important task of its management of collaborations. This sharing is enabled by both the complementarity of the partners competencies and by the will to share. [Chi, 1994]. With the aim of optimising the collaborative network, the pivotal company may seek to transfer part of its competencies, not just to adjust its competence level to that of its partners in order to improve network co- ordination, but also to encourage competence sharing behaviour among the network participants. A study of organisation methods of Japanese car manufacturers clearly demonstrates the central role of competence transfer in the management of a co-operation network.
2.2. The Japanese model of competence transfer
A car manufacturers competitiveness is heavily dependent on his suppliers competencies. For this reason, the way in which the manufacturer manages the work distribution between them is important. [Cusumano & Takeishi, 1991]. Takeishi (2001) uses the competencies and resources model to study the links between manufacturers internal organisation and task division between companies in the co-operation. The manufacturers in- house competencies will play an essential role in the collaboration process. Japanese manufacturers have developed a series of competence transfer mechanisms, which encourage sharing of competencies and avoid free-riding behaviour. The notion of intellectual property is forfeited. Dyer and Nobeoka (2000) show that Toyota, by transferring its manufacturing know-how has set a norm for sharing. Intellectual property is transferred to the network. Transferring competencies is based on tools and mechanisms described in the works of Lecler (1992) and Dyer & Nobeoka (2000). The authors emphasise the main innovations in organisation: firstly, supplier clubs, which are created for information exchange between the manufacturer and the suppliers as well as between the suppliers, and also to build up network socialisation; secondly, consultant teams, whose objective is to solve problems between supplier and manufacturer and to provide free assistance for all members of the network thus facilitating the transfer of competencies from manufacturer to supplier; thirdly, creation of voluntary learning teams who meet for suppliers to discuss a specific theme to further competencies sharing between suppliers; fourthly, personnel transfer between companies, which addresses specific problems and provides long period in- the-field training. Japanese manufacturers seek to create multiple competence sharing processes and to encourage the set up of sub-networks within the larger network to maximise the efficiency of the transfer. Dyer and Nobeoka (2000) show that many different processes exist which facilitate the transfer of different types of competencies. Competence transfer, rather than being seen as a necessary evil inherent in inter- organisational relationships and as something to be controlled and limited to avoid partners from acquiring ones competencies, should be seen as a key element in the management of inter-organisational relationships and as a mean of maximising the transferring companys performance. Controlling competence transfer methods and tools then proves to be strategic for companies.
5 2.3. Determining factors of competence transfer
The nature of competencies to be transferred influences the choice of transfer tools. Based on several research programs, knowledge has been classified into different types, which can fit the competence analysis structure. In particular, the taxonomy of resources based on knowledge as suggested by Winter (1987) allows to determine the level of transferability. (Table 1)
insert table 1
The level of knowledge codification influences the level of transferability to a great extent. However, tacit knowledge can, without being codified, be communicated by direct observation [Wright et al., 1995]. There are four methods of classifying communication of knowledge: [Nonaka & Takeuchi, 1995]: socialisation (from tacit knowledge to tacit knowledge); externalisation (from tacit to explicit); combination (from explicit to explicit); internalisation (from explicit to tacit). Partner behaviour and the type of relationship will have a determining effect on the transfer. As for partner behaviour, Simonin and Helleloid (1993) show that the ability to manage the collaboration development process is determined by the partners level of experience in collaborations. At the same time, the partners desire and ability to share and learn will determine their involvement and the possibilities for transfer and learning. [Dyer & Nobeoka, 2000]. The type of relationship between the partners can be defined by their complementarity (in terms of objectives, resources and corporate culture) on one hand and, on the other hand, by the structure of this relationship (control mechanisms, information sharing, mutual trust, informal relationships, quality of interface relationship and management) [Chi, 1994; Takeichi, 2001]. Besides the competence to be transferred, partner behaviour and type of relationship, the tools used can also enhance or hamper the transfer. Firstly, a dedicated transfer team plays an essential role provided it has the means to act and has good relations with the management executives and the staff involved in the transfer, both from the partners side and from the company itself. The level of formalisation of the transfer process, combined with the creation of a dedicated team, plays and important role. Concerning transfer tools, a model created by Makhija and Ganesh (1997) has been adapted and is shown below (Table 2) and draws a parallel between the level of transfer sought and the type of transfer mechanisms.
insert table 2
3. Analysis model of methods and tools for inter-organizational competence transfer
The summary of concepts dealt with in this analysis, as shown in Table 3, provides elements for a study of the transfer conditions and tools.
insert table 3
With respect to the transfer tool types based on research carried out by Makhija and Ganesh (1997), Stein (1997) and Dyer and Nobeoka (2000), the elements listed in Table 4 can be determined. As Dyer and Nobeoka (2000) have described, in order to facilitate the transfer of different types of competence, the transferring company tends to use a large variety of tools. A hierarchy of transfer mechanisms has been established by Makhija and Ganesh (1997): sharing values and beliefs, meaning a desire for a high level of socialisation between 6 partners that enables learning at a higher level than with a simple contract; this type of mechanism allows for the transfer of more complex competencies.
insert table 4
By using the model below, it may help to identify the companys competence transfer strategy. Such model allows to analyse the level of complexity of the tools used for the transfer by comparing them with the type of competencies to be transferred and the nature of relationship established between the partners. In the following section, the Renault plant in Brazil will be used as a model, illustrating the implementation of a competence transfer method from the company to local suppliers.
4. Case study: competence transfers at the Renault plant in Brazil
4.1. Study methodology
The case study was carried out in Renault in Curitiba, Brazil. Contacts resulting in preliminary observations were made with 4 other companies from different sectors: pharmaceutical, distribution, agribusiness and high tech industries. Following these preliminary observations, Renault was chosen for an in depth study because the Brazilian branch of Renault covers the whole production process and it was foreseen to heavily rely on local suppliers. Moreover, Renault is a special case. As a significant difference between Renaults requirements and their local suppliers performance was noticed during the set up stage, a competence transfer methodology was then adopted by the logistics department and developed over time. The study was carried out over 5 months alternating between periods of observation and theory. The objective of the research was to analyse the competence transfer method used by Renault in its logistical relationships with local suppliers in Brazil. Multi-angulation [Hlady- Rispal, 2000] has been researched through the diversity of data resources and of people interviewed, or through the use of data collection methods. Data collection occurred at 4 levels: information concerning the running of the Brazil plant and relations with local suppliers; the logistics department level; the local supplier level; and the fourth level: direct observations of the specialists involved in the implementation of the transfer method of logistical competencies. On this level, several methods were used: gathering documentation, observation during training sessions, interviews with training participants, on site observations and interviews with suppliers having completed a training course, observations of daily supervision of the logistical relationship between Renault and the supplier.
4.2. Presentation of the study context
The Ayrton Senna Plant of Renault in Brazil (in Curitiba, in the State of Panama, to the South of the country) began activity in May 1998 with the set up of industrial processes. The work teams were transferred to the site in July 1998 and the first Scnic car left the plants production line in August 1998. Manufacture of the Clio began in September 1999. The creation of the Ayrton Senna Plant was a first for Renault, because it was the first time a complete production process (a replica of the European factories and not just a assembly line of exported parts) had been set up overseas. The local supply strategy (a greater use of local suppliers) was immediately introduced into the set up process strategy. However, Renault expects very high standards from its suppliers due to the very nature of the activity, but also 7 due to a quality improvement strategy. There is indeed a direct relationship between Renaults quality level and the quality of its suppliers regardless of the point they become involved in the manufacturing process. Given the existence of synchronous suppliers and continuous processes, a failing supplier may cause a break in the chain of activity putting the manufacturing system in jeopardy. This affects not only Renaults internal production, but also the logistical organisation between Renault and all the suppliers. Very early on in the start up phase, the logistics managers noticed a large gap between their requirements and the suppliers performance level. One of the reasons for this is that the logistical philosophy and the importance of high standards were not understood by the suppliers. So, the logistics managers decided during the early months to develop a process to improve supplier quality and ensure a control. A system entitles EAQL (Evaluation of the Aptitude in Quality of Logistics) was set up in Brazil with the aim of explaining Renaults working methods to the suppliers. Implementation of EAQL training program in the Brazil plant was taken on by a specialist from the headquarters in France. However, in the first stage, no direct relation was made between implementing the system by the local suppliers and their results in terms of quality of service. It was not until 2000 that the EAQL became linked to SLP (Suppliers Logistical Progress), which is ensuring a daily follow up of the relationships between Renault and the suppliers in logistical terms, and which is controlling the suppliers results.
4.3. The transfer Method
The method is based on very detailed reference guidelines specifying 70 logistical tools and organisation methods, which would have to be mastered by the suppliers. They are divided into three levels: minimum requirements, level B and level A. The implementation process is divided into 5 main stages.
1) Logistics Meeting: this is the first contact between the logistics department and the suppliers during which Renaults organisation and methods are explained during a day session to the suppliers by the manager of each business unit. It is also the occasion to introduce the EAQL reference manual and all integration processes. The supplier is requested to designate an EAQL pilot who will follow the Renault training courses and will be responsible for maintaining relations between his company and the manufacturer. The pilot must have basic logistical background, be available for managing relations with Renault and have the support of his line managers. 2) Training: Renault does not wish to impose reference guidelines and audits without explaining the benefits of it and the philosophy behind it. Training is an essential step in the EAQL process. For one week, 15 pilots from different companies come together for training on the main principles of logistical management (theory) and situation scenarios. The objective is to help them assimilate the philosophy behind the reference guidelines, and to foster exchange between training participants. The training has three aims: to teach logistical tools, raise awareness of the importance of high logistical standards, and to foster relations between Renault and its suppliers as well as between suppliers. 3) Self-evaluation by the EAQL pilot of his companys logistical level and drawing up of an action plan. The pilot is also responsible for spreading the EAQL principles within his company. 4) Audit of the supplier by Renault consultants and approval of the action plan. During this visit, Renault managers will meet the EAQL pilot and the manager or member of the management team to encourage the whole company to become involved in the process to the very top level. 5) Series of audits as the process develops. 8
The competence transfer method is also based on a series of other organisational methods, which reinforce the transfer process and constitute important transfer tools along with training. - Codified competencies: the competence to be transferred is codified. Renault has a large experience in this type of relationship (based on its experience in Europe) and a real desire to transfer its competencies, given its strong strategic importance. - Explanation of the competence implementation: besides the codified competence, it is important that Renaults philosophy of action be understood and that the supplier develops appropriate principles of action. This philosophy of action is based on Japanese logistical organisation methods, which have long been employed by world car manufacturers (essentially the principles of just in time, minimum stock and zero default). These principles often conflict with the local suppliers operating modes. Integrating them is complex and goes beyond simply using tools. The principles of an organisational culture have to be taken on board. - Position of the transfer team within Renault: given the high standards required, EAQL methods success relies on several elements coinciding, not just the formalisation of the reference guidelines. Within the Ayrton Senna Plant there is good co-ordination between the logistics and purchasing departments; the latter having a strong negotiating influence on suppliers. The logistics department is then capable of ensuring a high level control, backed up by significant sanctions. But the logistical relationship between the supplier and Renault is not entirely coercive. On the contrary, the logistics department has created a group called SLP (Supplier Logistics Progress) which is responsible for controlling the EAQL process development, for EAQL audits, logistical results and also for advising the supplier during audits or in case of problems. - Dedicated training team: implementing the EAQL method is ensured by a specialist consultant team, two for training and 4 other from the logistics department for the follow-up. In fact, EAQL comes in the form of a reference manual, but its implementation is not prescriptive. The objective of the training and follow-up team is not to impose a logistical organisation, but to raise awareness of important factors for improving performance. - Post-training follow-up: the follow up of daily relations within Renault is ensured by a PMT (Production Management Technician), who is in direct contact with the suppliers EAQL pilot and is responsible for a limited number of suppliers. Besides a close management of interfaces, this organisation helps to develop inter-personal relationships and informal contacts. At the same time, contact between the logistics department and the supplier is ensured by holding regular meetings and ad hoc meetings to address special issues.
A summary of some of EAQL process elements shows that Renault is seeking to use a large range of transfer tools (see Table 5). This may be explained by the fact that the objective is not simply to transfer techniques and know- how, but also management concepts. The idea is to promote internal competence development not by transferring the competence itself but by providing the means for its development within the company, based more on methods of action being internalised, rather than know-how. Exchanging personnel is not utilised. So, although there is a clear vision that cllaborative competence management is important, legal barriers around organisations remain strictly impermeable. Moreover, collaboration is organised on a unilateral mode (top-down). On the one hand, the transfer process is considered to go from Renault to the supplier. On the other hand, there is no real tool for communication between suppliers. The importance of these aspects has however been noted. Therefore, within its logistical relationships management, along side very formal processes, Renault seeks to develop a voluntary commitment of the supplier and create inter-personal 9 relations that foster informal exchanges. As to communication between suppliers, training is a place for exchange and inter-personal relations, which is positively encouraged by the trainers. By contrast, beyond clearly stated intentions, no real tool has been set up (supplier associations, meetings to exchange ideas and experience...). The EAQL management mode in Brazil constitutes a breakthrough in competence transfer methods (in terms of awareness of their importance and formalisation of their organisation). But it does not lead to transfers at network level, as is the case with Japanese manufacturers.
insert table 5
This case study shows how Renault manage the transfer of logistical competencies to its local suppliers in Brazil. We first explained the strategic goals of the transfer. On the one hand, it aims at clarifying the philosophy of Renaults logistical organization and requirements. On the other hand, it aims at providing the suppliers with the means to improve the quality of the products and services supplied to Renault. We then underlined that the types of competencies transferred are more complex than simple know-how. In fact, we can distinguish three level of competencies that the method aims at transferring : understanding of Renaults logistical organization (simple knowledge); training on theory and practice in Logistics (formalized skills); and organizational conditions for skills improvement (complex competence). The method of transfer consists in the combination between a formal process (in 5 steps : logistic meeting, training, self-evaluation, audit, series of audit) and other mechanisms aiming at facilitating the process of transfer (existence of reference guidelines, dedicated training team, specialist consultant team, creation of links between the transfer process and the suppliers performance appraisal, post-training follow-up). Finally, as shown in figure 1, we have seen that one can distinguish different levels of transfer mechanisms. Different transfer mechanisms enable different level of competence transfer, depending on the level of interaction between the collaborating firms.
insert figure 1
5. Discussion: management of inter-organisational competence transfer.
Based on the case study above, backed up by analysis, we make three propositions for the formalisation of this survey on competence transfers for future developments. Competence can be found on several complex levels [Qulin, 1997]. It can be identified at staff level, group level, functional level or even cross- functional level. Thus, increasing levels of complexity of the transfer can be found, depending on the competence transferred [Makhija & Ganesh, 1997] and it will then require the use of different types of tools [Stein, 1997; Dyer & Nobeoka, 2000]. Renault does not stop at requiring that its suppliers apply criteria defined in the reference manual. It has implemented numerous tools to foster greater relationship management. The objective is to persuade the suppliers to go beyond operational logistical competencies and implement the principles of action, standards of behaviour. Consequently, a large gamete of competence transfer tools is utilised. - Proposition 1: the transfer of a high level competence requires a large range of tools and sophisticated transfer methods.
It also appears important to link the strategic benefit of the transfer to the intensity of the transfer. Dyer and Singh (1998) show that key competencies could go beyond the boundaries of the organisation. Competence transfer to another company can be considered as a way of harnessing these competencies. Then, the level of transfer and the breadth of the range of 10 tools used will depend on the perceived interest. This notion is consistent with two concepts described in the theoretical analysis. On the one hand it is possible to differentiate between the levels of complexity in terms of the transfers form of organisation and of the tools used. [Stein, 1997; Makhija & Ganesh, 1997; Dyer & Nobeoka, 2000]. On the other hand, the decision to implement highly complex tools is related to the strategic interest perceived by the transferring company. [Hall, 2000; Dyer & Nobeoka, 2000; Takeishi, 2001]. Renault has committed itself to a particularly significant transfer process in Brazil. Strategic interests of the transfer, perceived by the logistics managers, were related not only to the importance of the relationship with the supplier, but also to the gap between Renaults standards and the suppliers performance level. - Proposition 2: The choice of the level of complexity of the transfer methods and the choice of the range of tools used for transferring depends on how strategic competence transfer is perceived by the transferring company.
A competence is a complex matter based on a network of relationships between assets, even between competencies [Black & Boal, 1994]. It defines both a know- how and the way it is put into practice [Mtais, 1997]. Competence is not just possession of knowledge or know- how. Adequate conditions must exist for it to come about [McGrath et al., 1995]. Competence transfer involves not only transferring the know-how specific to the performance of a task, but also the know- how to create organisational conditions to allow the competence to exist and develop. This aspect was raised in studies on the importance of the socialisation process [Stein, 1997; Makhija & Ganesh, 1997; Dyer & Nobeoka, 2000; Takeishi, 2001]. Renault bases its methodology not only on teaching techniques, but also on a series of relationship events and rules that turn the philosophy into action. In the process of transferring logistical competencies, Renault acts on two levels: 1) explaining the technical know-how; 2) describing the expected result from the competencies implemented (the result is observable) and the assessment modes of these results. Renault does not get involved in the appraisal of the learning at the supplier end but only looks at the results. It would seem that it is not competence that is transferred. In fact, transfer consists in creating within the recipient company the conditions for the competence to emerge. Competence is dependent, in its very creation, on the context in which it is implemented. Therefore, the objective in transfer should not be to simply duplicate the original competence. It is appropriate to look for methods of organising the transfer to favour the emergence in the target organisation of conditions of creation of the competence. - Proposition 3: competence transfer does not simply consists in transferring know-how in the performance of a task, but also in transferring management methods facilitating the creation of conditions for the competence to emerge and be developed.
Conclusion
The aim of the research presented in this article is to analyse the methods and tools in inter-organisational transfer of competencies. From a study of the definitions of organisational competence and from developing the notion of boundary resources [Nanda, 1997], we have shown the strategic importance of collaboration with a view to develop competencies. In particular, we have shown the benefits that can be reaped from transfer within the inter- organisational relationship framework. We then proposed, based on the theoretical analysis, elements for analysing the transfer conditions, methods and tools. These elements were applied to the case study of a company, which introduced formal procedures for the transfer of competencies to its suppliers. The structure of the study (divided into three level of 11 analysis: type of competence, type of relationship and type of transfer tools) defines real transfer actions in the context of co-operative relationships. In this way, the model is used to analyse a complex phenomenon, which is, as yet, little known. The complexity of transferring competencies has led to the transferring company introducing transfer mechanisms to foster socialisation with the recipient company. Moreover, the strategic interest of the transfer perceived leads the transferring company to resort to a larger range of tools. The case study of the transfer methods developed by Renault in Brazil also reveals that the transfer objectives are not limited to the duplication of competence by the recipient company. Transferring seems to be reliant on creating the necessary conditions for the emergence of competence. From that, transfer tools are aimed at setting up the means to increase relationship socialisation, which then makes it possible to transfer principles of action and organisation methods. This goes beyond simple know-how. To extend this research, it seems appropriate to assess the links between the strategic interest of transfer as perceived by the transferring company and the transfer level of formalisation (as well as the range of tools in use). This, coupled with the comparison of different cases, would establish typologies of situation of transfer and typologies of competence transfer methods. Therefore, it seems that inter-organisational transfer of competence provides a particularly rich field of study for research in competence-based strategic management.
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Tables & Figures
Table 1. Taxonomy of resources based on knowledge Tacit Not teachable Not articulated Not observable in use Complex An element of a system Articulable Teachable Articulated Observable in use Simple Independent Difficult to transfer Easy to transfer Source: adapted from Winter (1987)
Table 2. Transfer mechanisms Codification level Transfer mechanisms Type of learning High +
- Low -contract -formal control -standardised procedures -planning -supervision -assessment of the performance -team work -meetings and formal personal contact -manager transfer -sharing of objectives and standards -sharing of values and beliefs Basic learning -
+ High level learning source: adapted from Mr. Makhija and U. Ganesh (1997)
Table 3. Elements of transfer analysis Type of competence codified/tacit ; simple/system ; observable/not observable Partner behaviour and type of relationship Experience of co-operation relations Will and capabilities to share/learn Mechanisms for controlling and sharing information Formalisation of relations Methods for managing interfaces Mutual trust Transfer tools -Dedicated team: Means of action; intra- and inter-organisational relationships -Formal transfer processes -Type of tools
14
Table 4. Transfer tools Transfer tools Existence of a contract Definition of required results Drawing up rules and directives to govern the relationship Regular appraisal of performance Team work Audits and visits Formal personal contact Training courses Personnel swapping Socialisation of the dyadic relationship Socialisation on a network level
Table 5. Application of the EAQL analysis Types of competence -logistical techniques codified and recorded in a manual -philosophy and principles of action Partner behaviour and type of relationship -strong experience of co-operation relationships -strong will and capacity to learn and share -formal and regular control (TGP and PLF) -direct links between the transfer methodology and the method of appraisal of performance -sharing information formally on a daily basis -mutual trust based on inter-personal relationships - formal relationship, but informal exchange encouraged -very structured management of interfaces Transfer tools -Existence of a dedicated team: large means of action, strong inter-organisational hierarchical relationships (plus buying pressure) and inter-organisational relationships both on a formal and inter-personal level -Formal transfer process: structured methodology and very formal process but based on communicating a philosophy of action rather than know how; vertical, unilateral transfer (Renault to suppliers) Types of tools: -formalisation of the development process stages -link between transfer methodology and performance appraisal -rules and directives codified in a reference manual -regular appraisal of performance leading to Renault/supplier interaction -no real team work, but a pilot is designated (with possible interpersonal links) and regular suggestions during audits -audits, visits, formal personal contacts -great importance given to training -aim to socialise the relationship (tools encouraging interpersonal relationships) -first attempts at socialisation on a network level
15
Figure 1. Transfer tools
L e v e l
o f
i n t e r a c t i o n
b e t w e e n
t h e
c o l l a b o r a t i n g
f i r m s
+ - L e v e l
o f
c o m p e t e n c e
t r a n s f e r
+ - Formalized process & reference guidelines
Links between transfer method and performance appraisal
Regular formal interactions
Designation of a EAQL pilot
Regular suggestions during audits
Great importance given to training
Organization of the relationships aiming at facilitating socialization
First attempts at socialization on a network level