Expatriation as a Means of Transferring Tacit Knowledge 3. The Role of Expatriation in the Internationalization Process. International Human Resource Management 4. Recruitment and Selection of Expatriates 4. Approaches to International Staffing 4. Selection Criteria 4. The Use of Selection Tests 4. Self-Selecting Expatriates 4. Female International Managers 4.
Cross-Cultural Training of Expatriates 4. Defining Culture 4. Improving Cultural Awareness 4. Preliminary Visits 4. Language Training 4. Practical Orientation Program 4. Key Components of an International Compensation Program 4. Approaches to International Compensation 4. Taxation 4. Individual Coping Strategies during the Adaptation Process 4. Spouse Issues 4. Cultural Shock 4.
Expatriate Failure 4. Performance Appraisal 4. Repatriation 4. Phases of the Repatriation Process 4. Practical Repatriate Program 4. In the world of today, business is no longer limited by national boundaries. 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. 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 knowledge [3] 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. Although considered a business necessity, many firms lack an organized human resource management to ensure success of international assignments. Finding the right people, preparing them for life and work within a new culture and making them stay there for the duration of their assignments, are challenging tasks.
This is because expatriates working in a foreign environment, with very different political, cultural and economic conditions, face both job-related and personal problems. In light of the high rates of expatriate failure and the increasing demand for managers who can successfully transfer their expertise abroad, the need for sound international human resource management practices presents itself with urgency. This paper consists of three main parts.
The aim of this part is to provide the reader with an understanding of the specific nature of MNEs and to point out the importance of knowledge sharing for their existence and performance. The second part is based on the theory of knowledge transfer and of the learning organization. Its aim is to provide understanding of the international knowledge transfer within organizations, by describing the sequence of this process, its constraints and means.
The aim of the third part is to identify suitable practices of an international human resource department in managing expatriates. This part pays much attention to cross-cultural issues, building primarily on the Hofstede Value Survey Model. There exists no standard definition of a multinational enterprise. Various definitions have been proposed using different criteria.
One way to define MNEs is to see them as corporations owning and controlling production or other value-adding facilities in at least one foreign country. For the purposes of this paper, an MNE is defined as a firm that engages in foreign direct investment and owns or controls value-adding activities in more than one country.
There are three characteristic features of an MNE: 1 it draws on a common pool of resources, including assets, patents, trademarks, information, and human resources, 2 the sub-units of an MNE are linked by a common strategic vision, and 3 the affiliates must be responsive to a number of important environmental forces, including competitors, customers, suppliers, financial institutions and government, that are not only located in the country where the firm is headquartered, but also in the countries in which it does business.
It may be a large diversified global corporation managing activities in many countries or a small single product firm that operates only one foreign marketing venture. According to the U. The latter one was adopted by the United Nations Center on Transnational Corporations in at the request of some Latin American countries who wished to distinguish between companies domiciled in one country of Latin America and investing in another, from those, usually developed ones, originating from outside the region.
Over time, these terminological differences have become increasingly obscure. A little attention should be paid also to the tail end of the concept. There exist numerous theories that explain how it is possible that direct-investing firms compete successfully with local firms in the unfamiliar business environment of the host country, what determines where firms invest abroad, as well as why firms prefer to enter host countries as direct investors rather than as exporters or licensers.
This paper takes a closer look at four of them that seem to be most important in discussing the internal transfer of knowledge in multinational corporations. Internalization theory postulates that: 1 markets can fail to allocate resources optimally due to risk, uncertainty, oligopoly, government interventions and externalities the failure of market prices to capture all costs or revenues , 2 markets and firms are alternative ways of organizing exchange of goods and services, 3 exchange is internalized within a firm when its costs are less than the costs of external market transactions, and 4 the internalization of cross-national transactions is conducted by an MNE undertaking foreign direct investment.
In a world of perfect markets, international business would be carried out through free trade. In the real world, there exist numerous market imperfections that reduce the potential gains from exporting and importing according to the principles of comparative advantage.
One can distinguish between two general types of market imperfections : those imposed by government regulations and natural market imperfections Fig. To the first type belong tariffs, taxes, foreign exchange controls, etc. Imperfections of the second kind arise in the circumstances which lead to transaction costs preventing the competitive market from developing, as well as in the pricing of knowledge.
Source: Rugman, A. I just returned from Bosnia where I had discussions with the people responsible for developing new laws in Bosnia. We provided the financial means, and are now waiting to see the results. The sixth requirement is realistic project conception. Another important dimension of development cooperation and knowledge management is human resources development, which is related to knowledge transfer and capacity building.
Poverty is linked to the lack of knowledge. Knowledge gives people greater control over their destinies. Perhaps here lies the biggest role for international cooperation in the future, as financial means are not being substantially increased recently.
Development cooperation should concentrate its efforts on creating a real partnership: information should not be a one way road, but should generate a dialogue between different partners on an equal level. We are not developing our partners. Our partners develop themselves and we support the process, although it is not our development.
Our contribution is an external one; we do not create the development. Trust and confidence play an important role, allowing for the transfer of knowledge that corresponds to local needs.
Knowledge for development is based on the concept of empowerment. International cooperation should strengthen the capacities of partners to create information, to transfer their knowledge, to adapt external knowledge to local needs, in short, to be responsible for themselves.
Training is therefore a key issue in knowledge transfer and management, and that is why we finance or contribute to quite a number of institutions, for example the institution here in Malta. The contribution is external, aiming to assist and support our partners in offering training. We no longer do the training on our own, through our institutions or even Swiss institutions, but prefer to do it regionally and locally.
This is part of our general goal to invest in local resources development. For example, over the last ten years we have reduced the number of Swiss experts in our cooperation programs from to We now are involving more locals or nationals from each country where we have coordination offices.
Knowledge transfer is, of course, not the only answer to poverty alleviation. Access to other resources, in order to implement the acquired knowledge, remains of utmost importance.
Furthermore, knowledge transfer and use needs to be adapted to needs of specific groups. There is no magical recipe. I would like to provide a few considerations about the focus for development agencies such as ours. We want to avoid discrimination in the access and the transfer of knowledge, ensuring that our partners are involved in the discussion regarding knowledge transfer and the use of new information technologies. We would like to avoid gaps widening between various groups: for example, rich and poor, men and women.
We want to ensure that the needs of our partners rather than our wishes are forwarded and taken into account in the international arena. We would like, through training, to ensure that our partners can participate in the creation of international knowledge and information and that they can adapt information to local needs and resources.
We would like to provide our partners with the knowledge to use technologies and to ensure them access to international networks, use of the Internet, tele-medicine, etc. We would also like to create an enabling environment in these countries to allow them to decide what is in their best interests.
And I think we especially have to put emphasis on strengthening institutions, be it in academia, on vocational training levels or in government, in order to implement various issues related to good governance, for example, to fight or combat corruption.
We focus on a number of other areas. We have also to consider that we cannot do our work without taking the interest of our country into consideration. However, safeguard of national interests cannot easily be linked with development cooperation when you really mean development cooperation in the sense I just explained.
You must safeguard national interests on another level, bilaterally. But in development cooperation we are involved in the internal politics of a country and that should not be linked to the safeguard of national interests. This is why we operate without a hidden political agenda—this is a prerequisite of trust and mutual understanding.
We also have to take into consideration that the ethics of development cooperation have changed and it is not just a question of charity but a question of mutual interests. Development policy-making takes place in international forums. The global dimensions of problems call for global solutions. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Do not sell my personal information. Manage consent.
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This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information. Lane, P. Lawrence, P. Leonard-Barton, D. Levitt, B. Li, H. Lin, N. Luo, Y. Madhok, A. Malnight, T. Maloney, M. March, J. Marschan, R. Maznevski, M. Mohr, J. Mudambi, R. Murtha, T. Nelson, R. Nohria, N. Nonaka, I. Penrose, E. Polyani, M. Porter, M.
Prahalad, C. Reger, G. Rosenzweig, P. Schlegelmilch, B. Schulz, M. Schweiger, D. Snow, C. Souder, W. Spender, J. Subramanian, M. Szulanski, G. Takeuchi, H. Teigland, R. Van den Bulte, C. Von Hippel, E. Yamin, M.
Zander, I. Zander, U. Zeybek, A. Zhao, H. Download references. You can also search for this author in PubMed Google Scholar. Reprints and Permissions. The development and sharing of knowledge by Centres of Excellence and transnational teams: A conceptual framework. Download citation. Received : 15 November Revised : 15 October
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