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Managing Knowledge in the Dark: An Empirical Study of the Reliability of Capability Evaluations


  • Jerker Denrell

    () (Graduate School of Business, Stanford University, 518 Memorial Way, Stanford, California 94305-5015)

  • Niklas Arvidsson

    () (NormannPartners AB, Drottninggatan 33, SE-11151 Stockholm, Sweden)

  • Udo Zander

    () (Institute of International Business, Stockholm School of Economics, Box 6501, 113 83, Stockholm, Sweden)


If knowledge is to be managed and transferred, it is essential that members of organizations know and agree on where capabilities reside. Few studies, however, have examined the difficulties of evaluating capabilities in large firms. This paper reports an in-depth empirical study of capabilities central to knowledge management efforts in large leading multinational companies. The results show that evaluation of these capabilities is a complex task. The median interrater correlation for capabilities designated as strategic by top management is only 0.28. Analysis of the determinants of reliability show that the difference in evaluations is largest for subsidiaries managers know less about, for younger subsidiaries, and for subsidiaries in less important markets. The results of our empirical study have important implications for creating, retaining, and transferring knowledge in organizations.

Suggested Citation

  • Jerker Denrell & Niklas Arvidsson & Udo Zander, 2004. "Managing Knowledge in the Dark: An Empirical Study of the Reliability of Capability Evaluations," Management Science, INFORMS, vol. 50(11), pages 1491-1503, November.
  • Handle: RePEc:inm:ormnsc:v:50:y:2004:i:11:p:1491-1503
    DOI: 10.1287/mnsc.1040.0239

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    References listed on IDEAS

    1. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 625-645, December.
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    Cited by:

    1. Guillou, Sarah & Lazaric, Nathalie & Longhi, Christian & Rochhia, Sylvie, 2009. "The French defence industry in the knowledge management era: A historical overview and evidence from empirical data," Research Policy, Elsevier, vol. 38(1), pages 170-180, February.
    2. Erwin Danneels, 2016. "Survey measures of first- and second-order competences," Strategic Management Journal, Wiley Blackwell, vol. 37(10), pages 2174-2188, October.
    3. Dellestrand, Henrik & Kappen, Philip, 2011. "Headquarters Allocation of Resources to Innovation Transfer Projects within the Multinational Enterprise," Journal of International Management, Elsevier, vol. 17(4), pages 263-277.
    4. Patrick Regnér & Udo Zander, 2011. "Knowledge and Strategy Creation in Multinational Companies," Management International Review, Springer, vol. 51(6), pages 821-850, December.
    5. Shinjinee Chattopadhyay & Janet Bercovitz, 2020. "When one door closes, another door opens … for some: Evidence from the post‐TRIPS Indian pharmaceutical industry," Strategic Management Journal, Wiley Blackwell, vol. 41(6), pages 988-1022, June.
    6. Michailova, Snejina & Mustaffa, Zaidah, 2012. "Subsidiary knowledge flows in multinational corporations: Research accomplishments, gaps, and opportunities," Journal of World Business, Elsevier, vol. 47(3), pages 383-396.
    7. Janaina Macke & Kelly Menezes Crespi, 2016. "“One Swallow Does Not Make a Summerâ€," SAGE Open, , vol. 6(2), pages 21582440166, April.
    8. Persson, Magnus, 2006. "The impact of operational structure, lateral integrative mechanisms and control mechanisms on intra-MNE knowledge transfer," International Business Review, Elsevier, vol. 15(5), pages 547-569, October.
    9. L. Felipe Monteiro & Niklas Arvidsson & Julian Birkinshaw, 2008. "Knowledge Flows Within Multinational Corporations: Explaining Subsidiary Isolation and Its Performance Implications," Organization Science, INFORMS, vol. 19(1), pages 90-107, February.
    10. Dasí, Àngels & Pedersen, Torben & Gooderham, Paul N. & Elter, Frank & Hildrum, Jarle, 2017. "The effect of organizational separation on individuals’ knowledge sharing in MNCs," Journal of World Business, Elsevier, vol. 52(3), pages 431-446.
    11. Claudio Vitari & Aurelio Ravarini & Bernard Fallery, 2006. "The Kms Recommending Experts In The Communities: Proposition Of A Theory On Their Success," Post-Print halshs-01924301, HAL.
    12. Jan-Erik Vahlne & Jan Johanson, 2017. "From internationalization to evolution: The Uppsala model at 40 years," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(9), pages 1087-1102, December.
    13. Jasjit Singh & Morten T. Hansen & Joel M. Podolny, 2010. "The World Is Not Small for Everyone: Inequity in Searching for Knowledge in Organizations," Management Science, INFORMS, vol. 56(9), pages 1415-1438, September.
    14. Vahlne, Jan-Erik & Ivarsson, Inge & Johanson, Jan, 2011. "The tortuous road to globalization for Volvo's heavy truck business: Extending the scope of the Uppsala model," International Business Review, Elsevier, vol. 20(1), pages 1-14, February.
    15. Haq, Hammad ul & Drogendijk, Rian & Blankenburg Holm, Desirée, 2017. "Attention in words, not in deeds: Effects of attention dissonance on headquarters-subsidiary communication in multinational corporations," Journal of World Business, Elsevier, vol. 52(1), pages 111-123.
    16. Mats Forsgren, 2018. "The development of international business: A narrative of theory and practice," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(6), pages 774-777, August.


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