Download - Tranfer of Knowledge Across National Borders

7/30/2019 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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