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POST-CONFERENCE PUBLICATION

Managing inter-organisational transfer of competencies : a case study



Frédéric PREVOT
Assistant Professor - Marseille-Provence Business School





Contact :

Frédéric PREVOT
69 boulevard de la Libération
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.



Keywords: Competence, Transfer, Inter-organisational Relationships.


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Managing inter-organisational transfer of competencies : a case study
Frédéric 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 Molière: “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 another’s 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 Renault’s 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 [Métais, 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
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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
Boal’s propositions allow for the transition from co-specialised resources to competencies
network. Nanda’s 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. Quélin (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 partner’s 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
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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
company’s 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
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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 manufacturer’s 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 manufacturer’s 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 one’s competencies, should be seen as a key element in the management of
inter-organisational relationships and as a mean of maximising the transferring company’s
performance. Controlling competence transfer methods and tools then proves to be strategic
for companies.

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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 partner’s level of
experience in collaborations. At the same time, the partner’s 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 partner’s 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
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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 company’s 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
Renault’s 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 Scénic car left the plant’s
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
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due to a quality improvement strategy. There is indeed a direct relationship between Renault’s
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 Renault’s 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 Renault’s 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 Renault’s 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 company’s 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.
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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 Renault’s “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
method’s 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 supplier’s
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
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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 Renault’s 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 Renault’s 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 supplier’s
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 [Quélin, 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
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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 transfer’s 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 Renault’s 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 [Métais, 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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13

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

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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

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Figure 1. Transfer tools




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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