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Tacit knowledge transfer

24 July, 2015 - 14:53

In the family business literature, the transfer of tacit knowledge from predecessor to successor has been found to be one of the key processes in developing and protecting knowledge and guaranteeing the continuity of the family business 1. It is of crucial importance to understand how and in which way predecessors transfer their tacit knowledge to successors as this enables the successor to get hands-on knowledge about a family firm and an industry. As pointed by [ 2, p. 13], “the process of knowledge sharing is fundamental because it stimulates people creativity through interactions”. This is why we explored different ways and approaches of tacit knowledge transfer from founders to successors.

Several authors 34 have stressed the importance of a successor’s early exposure to a family business (e.g., through summer and lower category jobs) in order to provide the successor with valuable experiences and the founder’s tacit knowledge; this is of particular importance during the transfer from the founding to the second generation. Conversation about a firm at home is also an approach that enables a successor to absorb tacit knowledge about the business as “conveying the psychological legacy of the firm is an important part of child rearing from the beginning” [ 5, p. 71]. Mentoring is also an important way of enhancing the successor’s knowledge 6, 7 as close interactions between founders and their successors are a superior form of experience supporting the development of tacit knowledge by successors. However, no common agreement exists on whether parents are the most suitable mentors 8, and diverse opinions exist regarding the role of formal and informal mentoring 9. Apprenticeship is found to be an effective way of transferring tacit knowledge between generations, especially in traditional industries that do not operate in environments of rapid change 10. The learning-by-doing process can be an excellent opportunity for younger generations to learn directly from the previous generation, “especially, all the ‘tricks of trade’ related to the business” [ 11, p. 441].

Working together (e.g., in a team) is also an important way of transferring knowledge across family generations and is particularly important as it facilitates creative interactions between generations, thereby contributing to the entrepreneurial and innovative orientation of a family firm 12, 13. Different approaches to such joint work are identified in the literature, including the successor’s active participation in decision making 14, involvement of the next-generation family members in the strategic planning process 15, and teamwork 16, 17.