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Cross-Border Transfer of Knowledge

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The Global Transfer of Management Knowledge
Naveen Kumar, Team 5
Outline
Importance of Knowledge sharing across the globe and the challenges involvedReview of 5 papers and 3 cases by AMEPaper 1: “Five Steps to Creating a Global Knowledge-sharing System: Siemens ShareNet”Paper 2: “Transferring Management Knowledge to Russia: A Culturally-based Approach”Paper 3: Transfer of Managerial Practices by French Food Retailers to Operations in PolandPaper 4: “Transferring a Lean Production Concept from Germany to the United States: the Impact of Labor Laws and Training Systems”Paper 5: “Cross-border Transfer of Knowledge: Cultural Lessons from Project GLOBE”Case 1 Cultural Counterpoints - challenges of transferring U.S. management know-how to a Norwegian MNC in the energy sectorCase 2: “The Shortcomings of a Standardized Global Knowledge Management System: The Case Study of Accenture,” - Asia to the USACase 3: “Applying Knowledge Management Concepts to the Supply Chain: How a Danish Firm Achieved a Remarkable Breakthrough in Japan,”
Key Learnings
Paper 1: “Five Steps to Creating a Global Knowledge-sharing System: Siemens ShareNet”What are the challenges ? Any ideas ??Global knowledge management systems needs to include local and regional knowledge components (e.g., regional knowledge platforms).Cultural Differences needs to be taken into accountCase 2 “The Shortcomings of a Standardized Global Knowledge Management System: The Case Study of Accenture,” - Asia to the USAAlternativeknowledge management systems may emerge locally
Key Learnings
Paper 2: “Transferring Management Knowledge to Russia: A Culturally-based Approach”What are the challenge of doing business in Russia?Transition from communist mindset to a free market economy is a challengeAny takers??? Transfer of Knowledge to a non-western country needs new set of tools and people with specific personalities who fit culturally with the tool.Awareness of cultural and institutional back ground - needs time and experienceNeed to create an atmosphere conducive to cross-cultural knowledge sharing
Key Learnings
Paper 3: Transfer of Managerial/Production Practices by French Food Retailers to Operations in PolandStrong resistance initially but later adjusted to comply with local cultureAfter few years Successfully implemented the intended management practicesTransfer of management know-how evolves through time.
Key Learnings
Paper 4: “Transferring a Lean Production Concept from Germany to the United States: the Impact of Labor Laws and Training Systems”Difficult to transfer production processes rigid to flexible societies, and vice versa.Optimum way of adjusting production processes to suit the behavioral norms of other cultures?
Summary
The transfer of management know-how from any cultural base is not straightforward and follows thestep by step processfor the implementation of knowledge transfer systemsThe transfer of management knowledgetakes time. A more detailed process suiting all the stakeholders has lesser implementation problemsrequires areduction of complexityi.e. attitudes, structures andprocesses at corporate headquarters and needs to take into accountthe cultural differencesin managing the international operationsheavily dependent on how thevalues, attitudes, competences, and personality traits of the people involvedin order to handle the cultural issuesUniform transfer processmaynotbeeffective. If is the case, regional management are likely to establish its own subsystems and process
Thank you
Next case –> GLOBE Project
Cross-Border Transfer of Knowledge:
Cultural Lessons from Project GLOBE
Cross-Border Transfer of Knowledge
When information is inadequate
Foreign Direct Investments have increased from $55 Billon in the early 1980’s to almost $1.3 Trillion in 2000.International electronic payments have increased from $7.5 billion to $60 billion.In 2000 41% of all M&A activities were cross-border.
Billions can be Lost
GM was losing $2 billion a week in production cost after acquiring a Japanese production process.GM Failed to take into account the culture of the Japanese workers.
Problems that can occur
Example (NORDED and TAI BANK)Hierarchical culture and authoritarian styleResistance to ChangeLack of collaboration
“Cross-border transfer of knowledge is often affected by foreseeable cultural differences that are typically underestimated, regardless of the good intentions of all members of the parties.”
Cultural Practices and Cultural Values
Tells us the current perceptions of the culture.Tells us the aspirations and the direction that culture wants to go and develop into.
“As Is” Cultural Practices “Should Be” Cultural Values
“Should Be” can be used to determine a cultures desire to change.Two Cultures can have different “As Is” but if the values are close “Should Be”, the transfer of knowledge will be easier.
Walmartin China
Walmarthas 189 units in 101 cities, and created over 50,000 job opportunities across China.local sourcing. We have established partnerships with nearly 20,000 suppliers in China. Over 95% of the merchandise in our stores in China is sourced locally.All stores in China are managed by Chinese local talent.The company established the “WalmartChina Women’s Leadership Development Commission” for driving women’s career development.
Walmartin Germany
WalmartFailed to Understand the CultureGermans did not understand the idea of buying in bulkFailed to give the German managers the courtesy of speaking to them in German while in Germany.Not prepared to deal with the German government and the price restraints that they placed on certain goods.
Emphasizing Similarities
Minimizes negative consequences of the “As Is”
Understanding cultural differences
McDonalds
Drive-in
Wal-Mart
Live Aquatics Grocery Selection
Ford
GM
Fiesta
Buick
Nine GLOBE Cultural Dimensions
Help with foreseeing cultural difficulties
South Asian Culture and North European Culture
Power DistanceDegree to which a culture’s people are separated by powerSouth Asia had the highest rankingNorth Europe had the lowest ranking
Uncertainty AvoidanceDegree to which a culture should seek orderliness and structureSouth Asia ranked lowNorth Europe ranked 1st
Dimensions can be used to help with the transfer of knowledge
Nine GLOBE Cultural Dimensions, Cont.
In-Group Collectivism:South Asia ranked (1) while Nordic Europe ranked (10)Institutional Collectivism:South Asia ranked (1) while Nordic Europe ranked (10)Future Orientation:South Asia ranked (2) while Nordic Europe ranked (10)Why does this matter?Knowledge transfer across cultures is difficult, not to mention how to disseminate the information once received
In-Group CollectivismDegree to which a culture’s people (should) takepride in and (should) feelloyalty towardtheir families, organizations,and employersInstitutional CollectivismDegree to which individuals are (should be) encouraged by institutions tobe integratedinto broader entitieswith harmonyand cooperation asparamount principlesat the expense ofautonomy andindividualfreedomFuture OrientationDegree to which a culture’s peopleare (shouldbe) willing to deferimmediate gratificationfor futurebenefitsGender EgalitarianismDegree to which a culture’s people (should) supportgenderequalityAssertivenessDegreeto which a culture’s peopleare (shouldbe) assertive,confrontational, and aggressiveHumane OrientationDegree to which a culture’s peopleare (shouldbe) fair, altruistic,generous, caring, and kind towardothersPerformance OrientationDegree to which a culture’s people (should) encourageand reward peoplefor performance
NORDED set up a motivational leadership program for TAI BANK’s managers
NORDED had wanted to convey a low power distance and high institutional collectivism; i.e. they promoted an open feedback system with TAI BANK.
TAI BANK, with their high power distance and high in-group collectivism, did not take full advantage of the consultation. They believed their employees should follow NORDED’s advice without discussion.
High Power Distance vs. Low Power DistanceIn countries where the sense of organizational hierarchy is strong, like France and Mexico, change is brought about from the top and employees at all levels expect new direction from their managers. The employees expect guidelines to be set up for them and to follow them without question. What power distance do they perceive?
HIGH POWER DISTANCE
National Culture Differences and Knowledge Transfer
Tacit information (such as leadership skills and management know-how) is not easily codified and depends on human intuition. In addition, it’s often considered the most valuable knowledge which poses a problem.It’s one thing to see the advantages of adopting knowledge and it’s quite another thing to overcome cultural boundaries and use the knowledgeeffectively
Perceived value of knowledge
Differencesin cognitivestructures, values, and practices, as well aslanguage andcommunication barriers, all raise thecosts involvedin knowledgetransferWhat if there isn’t any perceived value of knowledge?
National Culture and Cultural Differences Shapethe Motivational Disposition of the Source Unit
The source country’s management mustspend time andresources toprovide relevant knowledge to the targetunit. Their willingness to do this is affected bytheir own nationalculture.Ex. “Mexicans tend to require more structure and definition of their role and responsibilities than do Canadians. When a Canadian corporation acquires a Mexican company, its Mexican employees are often looking for information and structure that is not forthcoming, because their new Canadian managers deem it unnecessary. The Mexican organization often grinds to a halt, since Mexican employees are unlikely to go and ask for the information they need, since this may be viewed in Mexico as questioning management's authority.”
NORDED
TAI BANK
High uncertainty avoidance:NORDED spent a high amount of time and effort to ensure the success of their program
Low uncertainty avoidance:TAI BANK sent emails to NORDED about changes taking place within the program as the program was about to startHigh in-group collectivism:TAI BANK almost certainly was not used to working with outside partners even though the intentions weregood
How to Manage Cross Cultural Issues
Advice on Cross-Border Knowledge Transfer:
Define commongoalsMap the cultural profilesAssign relationship managersLearn from knowledge transfer
Define Common Goals
Hewlett-Packard/Compaq
Paramount
Same name, different company after merger.New vision is needed internally.New identity must be formed externally.
Organizational Culture Inventory Ideal.Culture can be achievement oriented.Culture can also be based on strong interpersonal relationships.
Map the Cultural Profiles
What should the focus of a cultural profile be on?Why is doing this essential for success?Examples
Assign Relationship Managers
Position specific:
Job duties?Ideal characteristics?Constraints?
Learn From Knowledge Transfer
Why is it important?
What are methods of execution?
Conclusion
In one sentence only…
“Be proactive and systematic.”Questions?

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Cross-Border Transfer of Knowledge