Tranfer of Knowledge Across National Borders

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Transcript of Tranfer of Knowledge Across National Borders

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    TRANSFER OFKNOWLEDGE

    ACROSSNATIONAL

    BORDERS

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    What is appropriate knowledge in one country may not suit theneeds of the firm in other countries.

    Factors such as different language, business culture and

    institutional framework make up a psychic distance as perceived

    by managers.

    As the psychic distance between nations increases, it becomes

    more difficult for firms to acquire knowledge from abroad.

    Thus, a clash between national cultures may jeopardize the

    international transfer of knowledge.

    By contrast, geographical proximity and cultural affinity could help

    knowledge transfer between countries and organizations.

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    Governments can help improve a nations ability tolearn best practices from successful societies by

    providing a suitable environment, through

    educational and training policies.

    However, it is important to be aware of the

    incompatibilities between foreign management

    practices and local social and cultural characteristics.

    This is particularly important fordeveloping

    countries.

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    Developing Countries and Foreign

    Knowledge and Practices The question of transfer of management practices is of

    crucial importance esp. for the less developed nations.

    Many of these countries in an attempt to upgrade their

    organizational systems and to improve their performance,import various management techniques from the more

    advanced industrialized nations, without due regard to

    their own socio-cultural and technological conditions.

    If these imported techniques are not modified and

    adapted to the local conditions, both in cultural terms and

    in terms of the availability of human skills, the trnasfer will

    almost certainly fail.

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    It is imp. for developing nations, in parallel withlearning from abroad, to build on their ownresources and develop compatible indigenousmanagement practices.

    Thus, the transfer of management practices shouldnot replace but in fact complement the localpractices that are a culmination of specific context of

    a particular society. Current development efforts should focus on

    building institutional capacity through theencouragement of local self-reliance.

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    Ex-Communist Countries and

    Foreign Knowledge and Practices Many companies in the ex-communist countries of

    central and eastern Europe are tempted to importsome of the capitalist countries managementpractices.

    In addition, multinationals with wholly-ownedsubsidiaries or joint ventures located there are keen totake their home-grown practices with them.

    However, the process of transfer from capitalistcountries to ex-communist ones is a great deal morecomplicated than when the transfer takes place

    between two capitalist countries.

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    This is because in capitalist countries companies generallyperform similar functions but maybe in different ways.

    But in ex-communist countries, when they were undercommunist rule, companies didnt perform certain functions at

    all. The difference between capitalist and communist countries is

    not only that of style but also of substance.

    For ex: An avg. manufacturing co. in any capitalist country willhave functions such as marketing, R&D, accounting, HRM.

    Whereas, in the ex-communist countries, many if thesefunctions were either out of the co.s control or were notperformed at all.

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    In addition, cos. based in a capitalist country have alreadydeveloped these functions in accordance with its existingsocio-economic structure.

    When importing new management and organizationalpractices from abroad, the cos. may only need to makecertain adjustments to make them workable, and to traintheir employees to work in new ways.

    In ex-communist countries, by contrast, cos. have to startby adapting their existing functions to their new domesticeconomic conditions, then learn to perform new sets offunctions which would be necessary to survive in themarket.

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    From a western multinationals perspective, whendeciding to transfer its home grown practices to centraland eastern European countries, there is yet anothercomplication : the cultural heterogeneity of these

    countries.

    Culture, in terms of values, attitudes and beliefs, is adeeply-rooted construct, which may not necessarily beeradicated by an imposed regime.

    Therefore, the effect of national cultures as well as formerpolitical economic structures of the ex-communistcountries must be taken into account when transferringorganizational knowledge there to elsewhere.

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