Abstract
Knowledge—particularly tacit knowledge—is key to sustainable competitive advantage. This applies especially to the current competitive environment of increasing globalization. As global organizations engage in increasing levels of intercultural interaction—across continents, nations, organizations, races, religions, norms, and customs—intercultural differences can impede knowledge flows, and hence degrade competitive performance. Managing such knowledge flows—diagnosing and dissolving intercultural knowledge clumps and clots that impede healthy circulation—represents a critical priority in this competitive, global environment, but the sets of knowledge management (KM) theories and analytical lenses available to most leaders and managers remain limited in terms of managing intercultural knowledge flows. Alternatively, Institution Theory and institutional analysis offer excellent promise to elucidate important aspects of globalization, and can be very helpful with understanding cultural change. The problem is, Institution Theory does not address knowledge flows well at present; hence its elucidatory potential in this light remains opaque. In this expository article, we integrate emerging Knowledge‐Flow Theory with established Institution Theory, and use this multidisciplinary perspective to develop new insight into how knowledge flows can be managed across global organizations and intercultural contexts. The use and utility of this new theoretical perspective are illustrated through examination of a current, global, engineering project that involves intercultural interaction. Results provide actionable guidance for the global manager, in addition to compelling topics for future research along these lines. Copyright © 2007 John Wiley & Sons, Ltd.