The Institutional Limits to Diffusion of Knowledge : A Comparative Study of Three Japanese MNCs in the UK

, focusing on the importance of knowledge diffusion in strategic alliances. However, relatively few attempts have been made to address the difficulties in implementing alternative knowledge systems, especially in transnational settings. The goals of diffusing knowledge are commonly seen as the requirement for adaptation and improved efficiency in times of change (e.g. Adler, 1992). The paradigm in which the diffusion of knowledge within international collaborations is discussed is commonly economic (e.g. Bresman et al., 1999; Kogut and Zander, 1992). There is an attempt in such studies to link knowledge with a performance outcome (e.g. Buckley and 2 Carter, 1999; Makino and Delios, 1996). In this sense, the firm is treated as a repository of capabilities and competence, and knowledge is seen as an objectified commodity Although knowledge diffusion has been studied by both IT and organisational behaviour specialists, the focus has largely been on examining knowledge diffusion processes in high-tech firms, such as software development (e.g. Lahti and Beyerlein, 2000). This is mainly derived from the association of knowledge with technology, where technology diffusion is seen as synonymous with knowledge diffusion (e.g. Lynskey, 1999). This study addresses the limits to adoption of knowledge-driven work systems in a cross-site comparison of three Japanese MNCs in the UK. Work systems are defined here as organisational practices that are the product of over three decades of continuous improvement in Japan, driven by people's knowledge, ideas and suggestions. Bearing this definition in mind, work systems are referred to here as knowledge-driven. An attempt is made to complement the national level discussions with the firm level by providing an analysis of the social patterns that shape the diffusion process. Both 'structure and flow' aspects of the diffusion process are addressed (Sorge, 1996). The study acknowledges the idea that employees are a vital component of work systems. This idea rests on the premise that " technology [cannot] be separated from the knowledge, skills, and motivation of the workforce " (Cutcher-Gershenfeld et al.