International Management

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International Management

• Technology Knowledge Management

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BASIC DEFINITIONS

• Technology is manifested in new products,
  processes, and systems, but it includes the
  knowledge and capabilities needed to deliver
  functionality that is reproducible, that is, it
  includes not only tangible artifacts, but also
  the knowledge that enables it to be developed and
  used in ways that are useful.

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Technology

• Transformed from an operational issue and has
  become a source of strategic advantage in the
  past twenty years
• Technology has changed the way in which global
  companies do business
• Technology has also created an environment that
  lends business models to be global in nature

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Technology As a Competitive Advantage

• Same Basic Issues
• Why is the term technology-sale not used in the
  literature? Can you explain
• Product Technology
• Process Technology/Person-Embodied Technology
• Management of Technology (Managerial skills
  needed to operate a business
• Technology Transfer is the diffusion from the
  place of its introduction (country of origin) to
  other markets around the world

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Other Issues

• Technology Innovations in Technology are
  considered as public good
• Appropriability is the ability of the innovating
  firm to protect its technology from competitors
  and to obtain economic benefits from that
  technology
• Nuclear plant technology versus Certain food
  flavors -
• Which one is more appropriable
• Proprietary Technology To what extent technology
  created in a given firm belongs solely to that
  firm
• Technology Intensity Although US is capital
  intensive, manufactured exports were less capital
  intensive and more labor intensive during the
  1980s. Japan, in comparison is a far more
  technologically intensive country
• Note Technology intensity is a key variable in
  sustaining superior export performance.

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• How to transfer technology and knowledge across
  national and cultural boundaries.
• Transferring technology and knowledge from
  countries such as the US to Mexico or India or
  Brazil is more complex than transferring such
  commodities to Germany or Japan.
• Effective management of knowledge transfer across
  national contexts is a key focus of international
  management research today

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Table 1AN EXAMINATION OF THE RELATIVE
IMPORTANCES OF CULTURAL VARIATION AND STRATEGIC
MANAGEMENT PROCESSES AS DETERMINANTS OF THE
SUCCESSFUL TRANSFER OF TECHNOLOGY ACROSS NATIONS
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Proposition 1 Process-and person-embodied
technologies are more difficult than
product-embodied technologies to transfer and
diffuse across nations because cultural
differences at the organizational, as well as the
societal, level play greater roles in such
transfers.
Proposition 2 Transfer of technology is easier
between two organizations that are similar in
terms of their societal/national culture-based
tendencies to either avoid or embrace uncertainty
generated in their organizational contexts due to
such transfers.
Proposition 3 Technologies that might introduce
significant changes in the distributions of
power, status (real and symbolic), and rewards in
the recipient organization of the developing
country that emphasizes power distance are least
likely to be effectively transferred.
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BASIC DEFINITIONS

• Knowledge is broader, deeper, and richer than
  data or information.
• Data reflects discrete objective facts about
  events in the business and economic world.
• Information links data in a contextualized form.
• Knowledge is a fluid mix of framed experience,
  important values, contextual information, and
  expert insights that provide a framework for
  evaluating and incorporating new experiences and
  information.

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Overview

• An MNCs ability to transfer knowledge and
  innovate are contributors to its competitiveness
  (Bartlett Ghoshal, 1989 Kogut Zander, 1993)
• Often, the parent subsidiary are located in
  different cultural contexts
• These differences can cause significant problems
  in the effectiveness of the transfer of knowledge
  from the parent to the sub and vice versa
• We examine the process of knowledge flow between
  the parent and subsidiaries as well as knowledge
  flow between two MNC's which are located in
  dissimilar cultural contexts

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HIGH
GLOBAL
SCOPE OF BUSINESS ACTIVITY
INTERNATIONAL
MULTINATIONAL
LOW
HIGH
LOW
INTENSITY OF KNOWLEDGE MANAGEMENT
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• GLOBAL CORPORATIONS HAVE TO BE CONCERNED WITH
• Knowledge identification
• Knowledge acquisition
• Knowledge generation
• Knowledge validation
• Knowledge capture
• Knowledge diffusion
• Knowledge embodiment
• Knowledge realization
• Knowledge utilization/application
• Managing knowledge effectively comprises of doing
  all of the above on an ongoing basis. This is
  particularly crucial for global corporations

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Main Arguments

• Knowledge flow between various subsidiaries of a
  multinational firm is a critical determinant of
  MNC effectiveness
• Cultural factors and strategic management
  processes play significant roles in influencing
  the effectiveness of knowledge transfers

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Patterns of Knowledge Flow
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Knowledge Creation

• Knowledge is a multidimensional concept with
  multilayered meanings (Nonaka, 1994)
• Tacit Knowledge personal, difficult to
  communicate, highly specialized not easily valued
  or traded in the external marketplace (Polanyi,
  1958 Ghemawat, 1991)
• Explicit Knowledge is codified and
  transmittable (Nonaka Takeuchi, 1995)
• Knowledge flow across subsidiary units or between
  two MNCs in dissimilar cultures invariably
  involves flow of both tactical and explicit
  knowledge

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Knowledge Transmission
Nonaka (1994) proposed four models of
transmission Combination Transmission of
explicit knowledge to explicit knowledge,
(e-mail, EDI) Internalization Transmission of
explicit to tacit, (learning by
doing) Socialization Transmission of tacit to
tacit, (on the job training) Externalization
Transmission of tacit to explicit, (use of
groupware technology tools)
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Cultural Context

• Individualism a social pattern that consists of
  loosely linked individuals who view themselves
  independent of collectives
• Attention to personal over collective goals,
  emphasize rational analyses verses historical
  information in making sense of events
• Socialized to emphasize significance of written
  codified information, more likely to obey such
  information (Triandis, 1985)
• Collectivism a social pattern that consists of
  closely linked individuals who see themselves as
  belonging to one or more collectives (family,
  co-workers, organizations)
• Give priority to collective over personal goals,
  emphasize historical contextual information in
  making sense of events
• Less likely to emphasize significance of
  information in written codified form and are
  more likely to disregard such information

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Proposition 1 Strategic considerations play
important roles in determining as to which form
of knowledge (tacit or explicit) is likely to be
converted in the process of transferring to
another subsidiary or another MNC. Proposition
2 Knowledge flow between MNCs or their units
will be more effective if they are combination
mode (E E) and if the cultural contexts in which
both the transmitting and the recipient org are
located are individualist in nature. Individualist
context Individualist context.likely to be
most easy Collectivistic context Individualist
context Individualist context Collectivistic
context Collectivistic context Collectivistic
context.likely
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Proposition 3 Knowledge flow between MNCs or
their units will be more effective if they are
internalization mode (E T) and if the
cultural contexts in which the transmitting org
and the recipient org are located in a
collectivist context Individualist context
Collectivist context.likely to be most
easy Individualist context Individualist
context Collectivist context Collectivist
context Collectivist context Individualist
context.likely to be most difficult
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Proposition 4 Knowledge flow between MNCs or
their units will be more effective if they are
socialization mode (T T) and if the
cultural contexts in which both the transmitting
and the recipient org are collectivist in
nature Collectivist context Collectivist
context.likely to be most easy Individualist
context Collectivist context Collectivist
context Individualist context Individualist
context Individualist context.likely to be most
difficult
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Proposition 5 Knowledge flow between MNCs or
their units will be more effective if they are
externalization mode (T E) and if the
cultural contexts in which both the transmitting
org is located is collectivist and the recipient
org is located in an individualist
context Collectivist context Individualist
context.likely to be most easy Collectivist
context Collectivist context Individualist
context Collectivist context Individualist
context Individualist context.likely to be most
difficult
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Theoretical Research Implications

• Role of cultural variation between the
  transmitter and the recipient should be
  recognized and developed in relation to knowledge
  flow
• Future research should acknowledge the difference
  between tacit and explicit knowledge as they
  different consequences in multinational strategy