The global transfer of management knowledge as dance: why international management must learn the steps : The global transfer of management knowledge as dance: why international management must learn the steps Professor Nigel Holden
Nottingham Business School
Guest lecture: London South Bank University, October 2005
Overview of lecture : Overview of lecture Introducing the global transfer of management knowledge: concepts and challenges
Diverse cases
Latest understandings
Why a dance? How to learn the steps?
Knowledge and competitiveness : Knowledge and competitiveness ‘Knowledge itself remains the paramount resource and thus the key to economic progress’ (Burton-Jones, 2000)
‘Knowledge is the most sought-after remedy to uncertainty’ (Davenport and Prusak, 1998)
‘The realisation that knowledge is the new competitive resource has hit the West like lightning’ (Nonaka and Takeuchi, 1995)
Guiding thoughts : Guiding thoughts
The business world needs all the help it can get to understand the impact on cultural factors on KM activity
Knowledge is the manager’s new universe – by 2010 the world’s codified knowledge base will double every 11 hours
Properties of knowledge : Properties of knowledge is , in a strict sense, only created by individuals; is perpetually expandable; can be stored in heads, technical repositories (ie books, databases, etc)
can be stored systematically
is often in summary form ie precodified
can, in principle, be shared
can be forgotten, ignored, not used
Management knowledge: three elements : Management knowledge: three elements
Know-how (operational)
Values
Experience
Management knowledge flows throughout firms’ internal and external networks 24/365; its ‘shape’ (content, value, utility) is always changing
A guiding definition of knowledge management : A guiding definition of knowledge management KM ‘often encompasses identifying and mapping intellectual assets within the organization, generating new knowledge for competitive advantage … making vast amounts of corporate information accessible, sharing of best practices, and technology that enables all of the above - including groupware and intranets’
(Barclay and Murray, Knowledge Praxis; see www.media-access.com/whatis.html)
Some knowledge concepts : Some knowledge concepts
Explicit knowledge
Tacit knowledge
Stickiness
Absorptive capacity
Explicit knowledge : Explicit knowledge Knowledge ‘which can be articulated in formal language including grammatical statements, mathematical expressions, specifications, manuals and so forth’ [and] ‘thus can be transmitted across individuals formally and easily’ (Nonaka and Takeuchi, 1995).
Key properties of explicit knowledge: codification and transferability
Tacit knowledge : Tacit knowledge
‘Personal, context-specific, and therefore hard to formalize and communicate’ (Nonaka and Takeuchi, 1995)
Key properties of tacit knowledge: embeddedness in social systems, values, cultural behaviour and practices; needs a domain expert
Stickiness : Stickiness Anything that prevents knowledge from being understood, absorbed and applied, such as:
Lack of special expertise, relevant experience, reference tools and access to them
Inconducive circumstances (problematical relationships, organizational structure, conflicts of interests and priorities, etc
Absorptive capacity : Absorptive capacity ‘Whereas stickiness slows down the export of knowledge, absorptive capacity affects how easily the recipient can understand it. Prior knowledge of a particular ‘knowledge domain’ or subject … tends to make it easier to understand new information that is related to that knowledge domain’. (Burton-Jones, 2000).
The global knowledge economy: where we are : The global knowledge economy: where we are
An era of experimentation, in which major corporations design and implement systems of greater ingenuity and cost
The multicultural team is the work-horse of the global knowledge economy
Global knowledge transfer is often inefficient
Leveraging contextual factors and tacit knowledge is becoming a key competitive challenge
Success : Success
Major corporations are committed to KM; many have knowledge officers and dedicated staff or plan to apppoint them
Many corporations are acknowledged KM leaders: BP, Shell, Siemens
Major corporations appear to be able to save around $200m a year by applying KM techniques (a crude estimate)
Failure : Failure General Motors and Japan (1998): massive production losses through misapplying Japanese know-how
’German Multi’: transfer of production know-how from a regulated business environment (Germany) to a liberal one (USA) (in Fink and Holden, 2005)
and
50-70% of all international mergers and acquisitions (mergers are massive projects in cross-cultural interchange of knowledge)
What works against successful KM in general : What works against successful KM in general Lack of time to share knowledge
Failure to use knowledge effectively
Difficulty capturing tacit knowledge
Lack of motivation relating to factors such as lack of user uptake, failure to integrate knowledge management systems, lack of training, lack of time to learn and understand benefits
Some big challenges in international KM : Some big challenges in international KM Language and cultural barriers make the distinction between tacit and explicit knowledge problematical – they are relative concepts
International (cross-cultural) knowledge-sharing and collaborative learning involves translation (literal and metaphorical)
How knowledge is communicated becomes part of the knowledge
Language barriers : Language barriers More than a gulf of relative unintelligibility
The perception of how a foreign business partner uses English or another foreign language may be seen not just as an attempt to communicate, but a feature of that person’s overall behaviour
Skilful use of language can help to create a positive atmosphere and promote participative competence. However, the reqirements of this competence varies from one sociolinguistic domain to another (e.g in the USA one is permitted to be assertive, but this would pass for bad manners in other countries)
How people use English as a foreign language often has traces of their native language use
Languages have varying absorptive capacity for Western management concepts and terminology
Cultural barriers : Cultural barriers The key point is that cultural differences express themselves negatively as a reaction to factors such as feeling misinformed or deceived
In other words, ’culture’ is symptomatic of other problems that aggravate, disconcert or confuse
Cultural background influences how people react with people of other cultures especially when there is uncertainty
As cultural differences stand out, it is easy to attach too much signifance to the outward behaviour and neglect tacit motivations
How knowledge is communicated becomes part of the knowledge received : How knowledge is communicated becomes part of the knowledge received This is always the case because knowledge transfer is an act of communication and ’true’ communication involving not just the sharing of experience, intentions, wishes, etc, but also elements of behaviour
But foreign behaviour is conspicuous owing to its relative unusualness and may be disproportionately memorable for reasons good or bad
The key thing to remember is that YOU are part of the knowledge
Latest research findings to be published in Academy of Management Executive (Fink and Holden, 2005) and Journal of Managerial Psychology (Fink and Holden, 2005) : Latest research findings to be published in Academy of Management Executive (Fink and Holden, 2005) and Journal of Managerial Psychology (Fink and Holden, 2005) Cases and commentaries on transfer of management know-how to Russia: Siemens Sharenet KM system; French retailing expertise to Poland: transfer of German production know-how to USA: Ubuntu (African communication system); transferring US management techniques to a Norwegian MNC; unsuitability of Western management textbooks in former USSR; applying KM concepts to market development in Japan, etc
Some key findings (1) : Some key findings (1)
· Major knowledge transfer processes across different nations or cultures may take 7 years to come to fruition.
· Initial optimism may be high, but there is a strong probability of confrontation and resistance if senders and prospective receivers of knowledge do not conscientiously strive to establish rich communication channels among each other.
· Resistance may be the result of cross-cultural miscommunication or clashes of interest. Either way, it may take 18 months or more to overcome stand-offs.
Some key findings (2) : Some key findings (2) Socialization and motivation are significant factors in the creation of an atmosphere conducive to interchange between senders and receivers
· Transfer of purely explicit knowledge across cultures is bound to fail if the prospective receivers are not able or willing to fully understand the context from where this knowledge is derived
Why a dance? : Why a dance? There is a partner – in fact lots of partners, and no two partners are the same: and HQ is not in complete control of the dance floor
You think everyone is going to use the HQ version of the steps, but you are going to have to invent many new steps and sequences with partners – choreography by cooperation
You must adjust to everyone at many levels
You need trust and confidence
You must create the right atmosphere
Movements can be fast or slow, backwards and forward
Balance can be a problem; it is possible to fall
Learning the steps : Learning the steps The steps are harder to learn than you think and outside your normal experience
The dance will NOT go in the intended way, so you must anticipate unexpected steps
Reflect on new steps and sequences, learning how how modify them for different occasions
Share your reflections with your colleagues – otherwise you reinvent the wheel