Naveen Kumar, Team 5
Outline
 Importance of Knowledge sharing across the globe and
the challenges involved
 Review of 5 papers and 3 cases by AME
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Paper 1: “Five Steps to Creating a Global Knowledge-sharing System:
Siemens ShareNet”
Paper 2: “Transferring Management Knowledge to Russia: A Culturallybased Approach”
Paper 3: Transfer of Managerial Practices by French Food Retailers to
Operations in Poland
Paper 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 sector
Case 2: “The Shortcomings of a Standardized Global Knowledge
Management System: The Case Study of Accenture,” - Asia to the USA
Case 3: “Applying Knowledge Management Concepts to the Supply Chain:
How a Danish Firm Achieved a Remarkable Breakthrough in Japan,”
Key Learnings
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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 account
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Case 2 “The Shortcomings of a Standardized Global Knowledge Management
System: The Case Study of Accenture,” - Asia to the USA
 Alternative knowledge management systems may emerge locally
Key Learnings
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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 challenge
 Any 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 experience
 Need 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 Poland
 Strong resistance initially but later adjusted to comply with local culture
 After few years Successfully implemented the intended management practices
 Transfer 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 the step by step process for the
implementation of knowledge transfer systems
 The transfer of management knowledge takes time. A more detailed
process suiting all the stakeholders has lesser implementation problems
 requires a reduction of complexity i.e. attitudes, structures and
processes at corporate headquarters and needs to take into account the
cultural differences in managing the international operations
 heavily dependent on how the values, attitudes, competences, and
personality traits of the people involved in order to handle the cultural
issues
 Uniform transfer process may not be effective. If is the case, regional
management are likely to establish its own subsystems and process
Thank you
Next case –> GLOBE Project
Cultural Lessons from Project GLOBE
•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.
When information is inadequate
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 style
 Resistance to Change
 Lack 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
Values
“Should Be” Cultural
“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.
Walmart in China
•Walmart has 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 “Walmart China Women’s
Leadership Development Commission” for driving women’s
career development.
Walmart in Germany
•Walmart Failed to Understand the Culture
•Germans did not understand the idea of buying in bulk
•Failed 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
Wal-Mart
•Drive-in
•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 Distance
Uncertainty Avoidance
•Degree to which a culture’s people are
separated by power
•South Asia had the highest ranking
•North Europe had the lowest ranking
•Degree to which a culture should
seek orderliness and structure
•South Asia ranked low
•North 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)
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In-Group Collectivism
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Institutional Collectivism
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Degree to which a culture’s people are (should be) assertive, confrontational,
and aggressive
Humane Orientation
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Degree to which a culture’s people (should) support gender equality
Assertiveness
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Why does this matter?
• Knowledge transfer across
cultures is difficult, not to
mention how to disseminate
the information once received
Degree to which a culture’s people are (should be) willing to defer immediate
gratification for future benefits
Gender Egalitarianism
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Degree to which individuals are (should be) encouraged by institutions to be
integrated into broader entities with harmony and cooperation as paramount
principles at the expense of autonomy and individual freedom
Future Orientation
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Degree to which a culture’s people (should) take pride in and (should) feel
loyalty toward their families, organizations, and employers
Degree to which a culture’s people are (should be) fair, altruistic, generous,
caring, and kind toward others
Performance Orientation
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Degree to which a culture’s people (should) encourage and reward people for
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 Distance
 In 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 knowledge effectively
Perceived value of knowledge
 Differences in cognitive structures, values, and
practices, as well as language and communication
barriers, all raise the costs involved in knowledge
transfer
 What if there isn’t any perceived value of knowledge?
National Culture and Cultural Differences Shape
the Motivational Disposition of the Source Unit
 The source country’s management must spend time and
resources to provide relevant knowledge to the target unit.
Their willingness to do this is affected by their own
national culture.
 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 start
 High in-group collectivism:
 TAI BANK almost certainly
was not used to working with
outside partners even though
the intentions were good
Both NORDED and TAI bank had low
assertiveness; this led to both companies
backing off when the communication
soured
How to Manage Cross Cultural Issues
Advice on Cross-Border Knowledge Transfer:
 Define common goals
 Map the cultural profiles
 Assign relationship managers
 Learn from knowledge transfer
Define Common Goals
Hewlett-Packard/Compaq
Paramount
 Same name, different
 Organizational Culture
company after merger.
 New vision is needed
internally.
 New identity must be formed
externally.
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?