WK 8 questions
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Global3e_ch11_ppt_slides.pptxChapter 11
Managing Knowledge and Innovation across Borders
© Evans, Pucik, Björkman 2010
The Global Challenge
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World Bank’s IFC
Consulting work done by teams located in target countries.
Expected to access internal and external knowledge
No protocol for accessing the knowledge
Knowledge pool is so big, not enough time to sort through it
Teams often end up “reinventing the wheel”
Relying on local networks
Struggle to apply outside knowledge to their specific situation.
Knowledge management is key
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The Global Challenge
Sharing Knowledge in the Multinational
Multinationals overcome institutional voids, culture barriers, etc.
Shared processes, language, and trust
New knowledge expected to be shared globally from subsidiary
Knowledge sharing increases chances for new information
Turning to others outside of geographic area yields ¼ of firms’ innovations
Often a top priority for CEOs.
One of GE’s five “timeless principles”
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The Global Challenge
Types of Knowledge
Explicit knowledge
Knowledge that individuals and organizations know they have
Objective, systematic, texts and manuals, IT-based – easy to share
Helps companies improve standardized work capabilities
Tacit
Personal, context - specific, hard to formalize and communicate
Acquired through experience – face-to-face sharing required
Improves creation and innovative capabilities
Explicit knowledge is more likely to be used
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The Global Challenge
Figure 11–1: Types of Knowledge and Work Implications
Standardized Work
Customized Work
Improve routine capabilities
Improve Technical capabilities
Improve creative capabilities
Improve innovation capabilities
Knowledge
Tacit
Explicit
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The Global Challenge
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Knowledge Sharing in Multinationals
Why is knowledge sharing important?
Allows the firm to leverage knowledge from multiple locations
The knowledge that is obtained by the seeking unit can be:
Used to operate more effectively
Recombined with existing knowledge to produce new knowledge
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Provider
Unit
Seeker
Unit
Knowledge sharing mechanisms
What influences the effectiveness of knowledge sharing?
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The Global Challenge
Knowledge Sharing Challenges: Provider Unit
Ability – “Foreigner” Challenge
Explicit knowledge: Proficiency in codifying knowledge
Tacit knowledge: communication skills, global mindset
Motivation – Hoarding of Expertise Challenge
Compensation and rewards encourage knowledge sharing
Gain status for being knowledgeable
Norms of reciprocity
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The Global Challenge
Knowledge Sharing Challenges: Seeker Unit
Ability – Absorptive Capacity Challenge
Ability to absorb information predicts extent of information sharing
More you know, more you can learn, more you can put into practice
Similarity promotes understanding but more knowledge overlap
Capacity to absorb takes time to build
Motivation – Not-Invented-Here Challenge
Capacity to challenge existing processes
Motivation to change
Willingness is low if the unit is successful and has good history
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The Global Challenge
| Seeker of knowledge | Provider of knowledge | |
| Motivation | Not-invented-here challenge | Hoarding-of-expertise challenge |
| Ability | Absorptive Capacity challenge | “Foreigner” challenge |
Figure 11–2: Knowledge Sharing Challenges
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The Global Challenge
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How to Stimulate Knowledge Sharing
Improving information about superior performance
Designing structural mechanisms to share knowledge
(See example of Mittal Steel and Schlumberger)
A comprehensive approach to mobility and talent management
Reinforcing sharing with performance mgmt. and incentives
Framing knowledge around the story, not the data
(See example of IFC)
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The Global Challenge
Improving information about superior performance and knowledge
Make information of unit performance more available – capable units will be sought out
Evaluation is subjective – measure dimensions of performance
Increases ease of finding sources of information
Designing structural mechanisms to share knowledge
Structural coordination – committees w/ members from different geographic and functional units
Temporary international task forces or liasons between units
Split egg roles create open idea market
A comprehensive approach to mobility and talent management
Adequate knowledge base and language skills are important
Transfer of people is transfer of knowledge
Ex. Apple University – clear communication
Reinforcing sharing with performance mgmt. and incentives
Make knowledge sharing attractive – financial and career incentives
Managers should contribute to performance one level above their responsibility
Framing knowledge around the story, not the data
Stimulate units to adopt knowledge
IFC’s SmartLessons – personal story, fun to read
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Mittal Steel and Schlumberger
Communities of practice
Formed around common interests – guided, not controlled, by firm
Schlumberger – online knowledge management, “Eureka”
Communities to exchange information
Two “homes” – hierarchal home, Eureka online home
Similar: Mittal Steel
Members of different units meet together in specialized groups
Conference calls, smaller meetings, discuss common issues
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The Global Challenge
IFC’s SmartLessons
“Pull” from seeking unit needs to be strong when seeking info
IFC encourages knowledge sharing through stories
SmartLessons:
Encourage honesty
Highlight contributors
Let users determine the value (rating)
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The Global Challenge
Knowledge Acquisition: External Knowledge
Scanning for global solutions
Explicit – listening post
Tacit – comprehensive units in business centers
PRO-lots of talent CON-fierce competition
Partnering or merging
Partners provide fresh knowledge
Outsourcing for simple and complex tasks
Social capital required for knowledge acquisition
M&A is the ultimate form of partnering
Playing the virtual market
Crowdsourcing, open calls for research
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Enhancing Knowledge Retention
Stimulate knowledge sharing among individuals
Reduce employee turnover
Keep in mind skills that could be lost in involuntary turnover
Invest in making tacit knowledge explicit
Metaphors can help codify tacit knowledge, making it more accessible
Reap the knowledge repatriates bring back home
Repatriates leave when they feel they can’t share knowledge
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The Global Challenge
How to Encourage Promising Ideas
Promote unit diversity AND standardization
Some subsidiary autonomy helps variation
Strong networks and communities help cross-pollinate good ideas
Encourage chance encounters AND provide focus
Chance encounters can spawn ideas
Specifying what is wanted and listening to customer complaints
Focus on hot spots AND look in surprising places
Be aware of lower-importance areas and consumers – AAT Thailand
Have a culture of experimentation AND stretch goals
70-20-10 ratio of how time should be spent – encourage innovative time
Don’t get complacent or afraid to be the first to do something
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The Global Challenge
Knowledge Sharing
Innovations
Figure 11–3: From Ideas to Innovations
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The Global Challenge
Encourage Promising Ideas
Building Innovation Capabilities
Organizing R&D Centers
Transferring R&D Capabilities
Building Transnational Innovation Capability
Stretch goals are the starting point for innovation
Go local
Observe local market context – deeply understand company needs
Build trust as it relates to sharing of intellectual property
Reach out
Headquarters and peer units can help formulate solutions
Don’t draw inward under stress! Turn out for advice
Develop trusting relationships outside the local domain
Uncover principles – focus on the “why”
Replace templates with principles to allow adaptation
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The Global Challenge
Organizing R&D Centers
Despite the globalization, distance remains a challenge.
Corporate R&D centers are crucial for firm innovativeness
Sharing and recombining tacit knowledge face-to-face
Innovators most closely linked to those with whom they work
Close relationships (social capital) facilitate knowledge sharing
Put the right people where the uncertainties are
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The Global Challenge
Transferring R&D Capabilities
R&D centers nurtured in parent countries before going foreign
Capabilities are interwoven skills and hard to master
Transfer to emerging markets is difficult – lack of knowledge
Transfer of complexity requires great knowledge of details
Transfer involves adapting knowledge to new context
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The Global Challenge
Four Stages of Capability Transfer
Stage 1
Building foundations – skills training, managerial development, etc.
Stage 2
Development of local suppliers’ capabilities & performance management
Greater discipline in streamlining areas
Stage 3
Local development – education, projects, transfers
Local autonomy should be matched with shared values
Stage 4
Transfer capabilities from subsidiary to headquarters
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The Global Challenge
Exploration and Exploitation
Organizing for innovation means managing tensions of dualities
Innovation requires:
Cycles of divergent and convergent behavior
The need to operate “on the edge” between order and chaos
Link time frames, combine structures and improvisation freedom
Social ties can protect from self-interest but cause rigidity
HRM Implications on global scale:
Recruiting to acquire valuable external knowledge
Training should enhance innovative capability of firm and ability to deliver today
PM systems need to encourage exploration and exploitation
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The Global Challenge
Additional slides for teaching
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The Global Challenge
Google Platform
3rd Party Marketers
Content Generators
End Users
Developers
The Ecosystem Behind Google’s Success
The Process of Knowledge Acquisition at Google
Media outlets, individual producers
Generate content
Build recognizable brands
Maintain channels for advertising
Companies and individuals
Providing relevant content on search ads
Cash cow for Google
Commercialization of new Google products
About 12 billion monthly Google searches*
Seeking information and displaying preferences
See advertising
Product testers
Iterators during product development
Use new products
Creators, vendors, engineers, open source community
A large and rapid development group
Generate continual appeal for Google
Each group shares profits
Build upon preexisting products and offerings
Adapted from HBR Article “Reverse Engineering Google’s Innovation Machine” by by Bala Iyer and Thomas H. Davenport
*From “http://expandedramblings.com/index.php/by-the-numbers-a-gigantic-list-of-google-stats-and-facts/”
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The Global Challenge
Exploitation-Enhancing HRM
| Structural | Relational | Cognitive |
| Interdependent work structures Team-based productions Functional structures Specified jobs and roles Job rotations within a team | Commitment-oriented compensation Firm or group performance- based incentives A high ratio of fixed pay Developmental and behavior- based appraisal Internal equity of compensation Procedure justice | Interactive development Extensive orientation Socialization Mentoring and social gathering Group MBO Team-building training Internal staffing Cooperative labor relations Staffing criteria focusing on person-organization fit |
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The Global Challenge
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Exploration-Enhancing HRM
| Structural | Relational | Cognitive |
| Flexible work structures Cross-functional teams Client-focused or divisional structures Broad job classifications Job rotation across teams | Market-based compensation Individual incentive systems A high ratio of variable pay Result-based appraisal Skill- or knowledge-based pay Distributive justice | Multi-knowledge development Formal training Use of information technology Cross-functional teams Broad career path Staffing criteria focusing on employee potentials |
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The Global Challenge
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