Abstract
This paper addresses the dynamics of knowledge transfer in an interfirm network through findings on "guest engineers", a common practice in the automotive industry. Long-term observation of a case revealed the following: (1) Knowledge indispensable in developing highly integrated organizational capability is transferred from the automaker to its suppliers via the guest engineers. Such knowledge is usually embedded in the organizational structure of a firm and therefore not readily transferrable between firms. (2) The guest engineer system has an elaborate mechanism for efficient training of engineers for knowledge transfer. An engineer's capability is developed through building his career beyond firm boundaries, which is facilitated by a cooperative interfirm network. (3) The guest engineers with the capability thus formed may act not only as a carrier of knowledge but also as a creator of new knowledge. The present work thus elucidates knowledge transfer beyond firm boundaries but within a network.
