Factory Automation and Learning Capability in the Knowledge Transfer Process of Multi-National Corporations: A Case Study of Japanese Healthcare Company

In a volatile global environment;it is critical to respond to unpredictable variables in the global market. Multi-national corporations (MNCs) operating across national boundaries face complex risks and a high level of uncertainties. Therefore;MNCs need to sense changing market dynamics and prepare diverse responsive options with future scenario planning. In terms of global management with subsidiaries;MNCs that target the global market need to implement a balance of global business integration and local adaptation. Recent new technologies are one critical factor that contributes to this balance. The introduction of new automation machines to the production line is also an external force of change;requiring line workers to acquire new knowledge as well. Understandably;many Japanese domestic firms have enthusiastically introduced machines and robots to automate their factories. In response to this automation fever;we investigate under what conditions automation might be a barrier to effective knowledge transfer. We explore this question using an in-depth qualitative case study of a Japanese manufacturing firm with subsidiaries in Vietnam and China. Through analyzing two aspects of vertical and horizontal knowledge transfer;we find the recipient’s degree of prior knowledge affects knowledge transfer. Based on our findings;we provide propositions to explain two aspects of vertical and horizontal knowledge transfer.