In the world of today, business is no longer limited by national boundaries. The majority of the
world’s large corporations perform a significant portion of their activities outside their home
countries. The rapidly emerging global economy creates numerous opportunities for businesses to
expand their revenues, drive down their costs and boost their profits. At the same time, markets
have become fierce battlegrounds where firms have to fight aggressively for market share with
domestic and foreign competitors. It is commonly accepted that one of the primary sources for
competitive advantage of multinational enterprises (MNEs) in this globalized business environment
is their ability to transfer superior knowledge at the international level1 and to create a “learning
organization”2. To succeed, or at least survive, in the global market-place, organizations need to
adapt quickly to the changing environment and must commit themselves to permanent learning.
This paper presents a general overview of the process of international knowledge transfer within
multinational enterprises. It deals with the problems of organizational knowledge creation and
sharing. A particular emphasis is placed on the implications for international human resource
management practices in managing the international transfer of employees, since global
assignments are recognized hierin as the most important mechanism of transferring tacit knowledge3
across borders. As the sharing of easily codifiable knowledge is relatively easy to manage, the
means of transferring it are not focused on in this study. [...]
1 See, for instance, Kogut, B. and Zander, U. (1992): „Knowledge of the Firm, Combinative Capabilities, and the
Replication of Technology“, Organizational Science, Vol. 3, No. 3, pp. 383-397; Kogut, B. and Zander, U. (1993):
„Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation“, Journal of International
Business Studies, Vol. 24, pp. 625-645; Björkman, I. and Forsgren, M. (1997): „The Nature of the International Firm.
Nordic Contributions to International Business Research“, Handelshojskolens Forlag, p. 71.
2 See, for instance, Garvin, D.A. (1993): „Building a Learning Organization“, Harvard Business Review, July/August,
pp. 78-91. For definition of the learning organization see p. 23.
3 For definition of the tacit knowledge see p. 22.
Table of Contents
1. Introduction
2. The Specific Nature of an MNE
2.1. Defining an MNE
2.2. Theories Explaining the Existence of MNEs
2.2.1. Internalization Theory
2.2.2. Monopolistic Advantage Theory
2.2.3. Product Life Cycle Theory
2.2.4. Dunning’s Eclectic Theory
2.3. Highlights on the Internationalization Process
2.4. Perlmutter’s Classification of MNEs
3. Theory of the International Knowledge Transfer within MNEs
3.1. Defining Knowledge
3.2. MNE as a Learning Organization
3.2.1. The Concept of Organizational Learning
3.2.2. Creation of Organizational Knowledge
3.3. A General Model of Intra-Firm Knowledge Transfer
3.4. Transferring Complementary Knowledge Between MNE’s Units
3.5. Knowledge Sharing Mechanisms
3.5.1. The Knowledge Transfer Facilitating N-form Structure
3.5.2. Expatriation as a Means of Transferring Tacit Knowledge
3.5.3. The Role of Expatriation in the Internationalization Process
4. The Role of International Human Resource Management in Transferring Tacit Knowledge Across Borders
4.1. International Human Resource Management
4.2. Linking Organizational Growth Stages of an MNE with Human Resource Planning
4.3. Recruitment and Selection of Expatriates
4.3.1. Approaches to International Staffing
4.3.2. Selection Criteria
4.3.3. The Use of Selection Tests
4.3.4. Self-Selecting Expatriates
4.3.5. Female International Managers
4.4. Cross-Cultural Training of Expatriates
4.4.1. Defining Culture
4.4.2. Hofstede’s Value Survey Model and Its Practical Implications
4.4.3. Improving Cultural Awareness
4.4.4. Preliminary Visits
4.4.5. Language Training
4.4.6. Practical Orientation Program
4.5. Expatriates’ Compensation
4.5.1. Key Components of an International Compensation Program
4.5.2. Approaches to International Compensation
4.5.3. Taxation
4.6. Expatriates’ Adjustment to the New Environment
4.6.1. Individual Coping Strategies during the Adaptation Process
4.6.2. Spouse Issues
4.6.3. Cultural Shock
4.6.4. Expatriate Failure
4.7. Expatriates’ Performance Management
4.7.1. Variables Affecting Expatriates‘ Performance
4.7.2. Performance Appraisal
4.8. Repatriation
4.8.1. Phases of the Repatriation Process
4.8.2. Factors Affecting Expatriates’ Readjustment Process
4.8.3. Practical Repatriate Program
4.9. Comparison of IHRM Practices in Various Countries
5. Conclusions
Research Objectives and Core Themes
The primary objective of this thesis is to provide a comprehensive overview of the mechanisms of international knowledge transfer within multinational enterprises (MNEs). The research explores how organizational knowledge is created, shared, and effectively managed, with a specific focus on the vital role that International Human Resource Management (IHRM) plays in facilitating the cross-border movement of employees as the primary vehicle for transferring tacit knowledge.
- The specific nature and theoretical foundations of multinational enterprises.
- Mechanisms and processes of intra-firm knowledge transfer and organizational learning.
- The strategic significance of expatriates as a means to share tacit knowledge.
- The role of IHRM in recruitment, selection, cross-cultural training, and performance management of international staff.
- Challenges associated with expatriate adjustment, cultural shock, and successful repatriation.
Excerpt from the Book
3.2.2. Creation of Organizational Knowledge
There are four processes that describe the interaction between tacit and explicit knowledge and that are of great importance for understanding the process of organizational knowledge creation (Fig.3):
Socialization: The conversion from tacit knowledge to tacit knowledge. It is a process of sharing experiences and thereby creating tacit knowledge, such as shared mental models and technical skills. In this process knowledge can be directly acquired from others through observation, imitation and practice, and without using language. Projecting oneself into another individual’s thinking process requires, however, some form of shared experience that enables the individual to understand the specific context and associated emotions;
Externalization: The conversion of knowledge from tacit to explicit form through the use of metaphors, analogies, concepts, hypotheses, and models. Knowledge may be codified in a number of ways that range from abstract formulas to text, images, prototypes and technologies. A higher intensity of interactions between individuals can to some extent diminish the discrepancy between the tacit knowledge and its often inconsistent and insufficient conceptualizations;
Combination: The conversion from explicit to explicit knowledge. It involves sorting, adding and combining different bodies of explicit knowledge that can result in the creation of new knowledge;
Internalization: The conversion from explicit to tacit knowledge. Knowledge, that is verbalized or diagrammed, enriches the tacit knowledge of the individuals by helping them to internalize what they have experienced. Documentation also facilitates the transfer of explicit knowledge to other people, enabling them to some extent to experience the experiences of others indirectly.
Summary of Chapters
1. Introduction: This chapter defines the global business environment and identifies knowledge transfer and learning as key drivers for MNE competitive advantage, setting the scope of the paper.
2. The Specific Nature of an MNE: This section provides a foundation by defining MNEs, explaining theories of their existence, and classifying their strategic orientations using the Perlmutter model.
3. Theory of the International Knowledge Transfer within MNEs: This chapter elaborates on the nature of knowledge, the concept of the learning organization, and the various mechanisms and models for transferring knowledge, including N-form structures and expatriation.
4. The Role of International Human Resource Management in Transferring Tacit Knowledge Across Borders: This extensive chapter analyzes how IHRM practices—such as staffing, training, compensation, and repatriation—are essential for managing the transfer of tacit knowledge.
5. Conclusions: The final chapter synthesizes the main findings, emphasizing that IHRM is effectively an indirect management tool for tacit knowledge that requires strategic integration to succeed.
Keywords
Multinational Enterprise, MNE, International Knowledge Transfer, Tacit Knowledge, Explicit Knowledge, International Human Resource Management, IHRM, Expatriation, Learning Organization, Cross-Cultural Training, Repatriation, Organizational Learning, Global Strategy, Knowledge Management.
Frequently Asked Questions
What is the core focus of this thesis?
This work examines the process of international knowledge transfer within multinational enterprises, focusing on the critical role of human resource management in facilitating the transfer of tacit knowledge across international borders.
What are the primary themes addressed?
Key themes include MNE organizational structures, the theory of knowledge transfer, organizational learning, the complexities of international staffing, cross-cultural training, and the challenges of repatriation.
What is the main objective of the research?
The goal is to identify and describe how MNEs can improve their knowledge sharing processes and how IHRM practices specifically contribute to the success of international assignments as a knowledge-transfer mechanism.
Which scientific methodology is employed?
The study is a conceptual overview and synthesis of existing literature on multinational business strategy, international human resource management, and knowledge management theory.
What topics are discussed in the main body?
The main body covers the specific nature of MNEs, theories explaining their existence, models of knowledge creation (socialization, externalization, combination, internalization), and detailed IHRM functions like recruitment, selection, and performance management.
Which keywords characterize this paper?
The work is defined by concepts such as MNE, international knowledge transfer, tacit knowledge, expatriation, IHRM, organizational learning, and repatriation.
How does the author explain the difference between M-form and N-form organizations?
The author distinguishes them by their communication networks and structural focus; whereas the M-form relies on hierarchical vertical communication and division-based logic, the N-form emphasizes lateral communication, temporary work constellations, and a network-like "heterarchy".
Why is spouse adjustment identified as a critical issue?
Research cited in the thesis indicates that the inability of an expatriate's spouse to adjust to the new cultural environment is one of the most frequent reasons for assignment failure, necessitating better family support and preparation.
- Quote paper
- Agnieszka Osiecka (Author), 2001, International Transfer of Knowledge in Multinational Enterprises. The Role of International Human Resource Management in Transferring Tacit Knowledge Across Borders, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/11749
