Please note: This is only a preliminary version of the file that will be shown in class.

A
complete version, which incorporates the thread of the discussion in class, will be
available from the course website after the completion of the class.

MGTO 630B
Managing People Globally
for Competitive Advantage

Transferring Management Systems: Learning in IJVs

Saturday, March 1, 2003
By the end of today’s class, you should
be
able to:
 Evaluate the factors contributing to
knowledge creation / learning in IJVs
 Evaluate the impact of culture on IJV
learning / performance
 Explain the factors that contribute to
differentiation (localization) /
integration (globalization) of HRM
practices
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A Re-definition of Global HRM
 The strategic, policy, and practical issues
related to how MNEs of any type or size
manage their human resources,
including their approaches to balancing
issues of differentiating and integration
(duality theory) while enhancing the flow
of knowledge transfer within the
organization – Brewester, 2002

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Why are alliances important?
 Resource-Based View of the Firm
 Knowledge basis of sustainable advantage / firm growth
 Firms able to develop, transfer and exploit knowledge most
likely to succeed
 No organization can develop within its boundaries all
critical knowledge needed to prosper and grow
 Original knowledge sources for most critical
inventions at Du Pont (1920 to 1950) came from
outside company: suppliers, buyers, universities,
consultants, government agencies, competitors
 Access to broader knowledge bases through learning
increases firm flexibility – external capabilities
embedded in inter-firm relationships  ALLIANCES

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Figure 5-2. Motivation for
International Alliances

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 How does learning occur in IJVs?

LOCAL WHOLLY OWNED

Organizational FOREIGN PARTNER SUBSIDIARY vs JV
INVESTOR
Level
Overseas
Training
ACQUISITION VS. GREENFIELD
Commitment Learning
Of human Intent &
resources Industrial Effort
Experience
Organizational
Unlearning

Individual EXPATRIATE Knowledge LOCAL

Level MANAGER MANAGER

Tsang, E. W. K. (2001). Managerial learning in foreign-invested

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enterprises in China. Management International Review, 41, 29-51.
 Figure 5-3. Obstacles to Learning in
International Strategic Alliances

Source: Adapted from V. Pucik, “Strategic Alliances, Organizational Learning, andcompetitive Advantage: The HRM
Agenda,” Human Resource Management 27 (1988): 77-93. 7
Types of knowledge acquired through
alliances
 Country specific
 Local government
 Labour force

 Competence with accessing local

markets / distribution channels

 Firm specific technologies

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What influences firms’ capabilities to
learn / transfer knowledge?

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Impact of Culture on IJV Knowledge
Transfer / Performance
 What matters more: National culture
(e.g., Thailand), regional culture
(Bangkok) or organizational culture
(Ferodo)?
 Let’s see what insights we can gain

from the Ferodo case . . .

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Which factors influence the
differentiation / integration of HRM
Practices?

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HR practices that tend to be localized
 Time off
 Benefits

 Gender composition

 Training

 Executive bonus

 Participation

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