Global Strategy: Creating and Sustaining Advantage across Borders

By Andrew Inkpen; Kannan Ramaswamy | Go to book overview

5
Global Knowledge Management

To emphasize that valuable knowledge often exists at the geographic periphery of MNEs, Gary Hamel wrote that [the capacity for strategic innovation increases proportionately with every mile you move away from headquarters.]1 While this comment was intended to be provocative, the essential argument is valid and important: the MNE is a repository of valuable knowledge that often goes unexploited. In this chapter we explore how that knowledge can be managed and transferred in the global organization.

A key assumption underpinning the discussion is that knowledge, like money, has velocity: the more it gets used, the greater the potential effect. More important, unlike physical assets that depreciate over time, knowledge can increase in value when used, whereas neglect will destroy it. Along these lines, John Browne, CEO of BP, said: [Learning is at the heart of a company's ability to adapt to a changing environment … In order to generate extraordinary value for shareholders, a company has to learn better than its competitors and apply that knowledge throughout its businesses faster and more widely than they do … No matter where the knowledge comes from, the key to reaping a big return is to leverage that knowledge by replicating it throughout the company so that each unit is not learning in isolation … The wonderful thing about knowledge is that it is inexpensive to replicate if you can capture it.]2 As Browne says, knowledge is valuable if you can capture it. The reality is that there are significant transactional difficulties associated with exploiting organizational knowledge.3 Quite simply, organizational knowledge is hard to capture, transfer, and make usable. Because knowledge is embedded in organizational structures, processes, procedures, and routines, it is not easy to separate it from the context in which it has been created. In addition, when knowledge is tacit, it is difficult to transfer without moving the people who have the knowledge.

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Global Strategy: Creating and Sustaining Advantage across Borders
Table of contents

Table of contents

  • Strategic Management Series ii
  • Title Page iii
  • Preface v
  • Contents vii
  • Introduction 3
  • 1: Globalization and Global Strategy 10
  • 2: Strategic Choices in a Global Marketplace 32
  • 3: Global Strategy and Organization 54
  • 4: International Strategic Alliances 80
  • 5: Global Knowledge Management 107
  • 6: Leveraging Knowledge Resources Globally 130
  • 7: Global Strategy in Emerging Markets 152
  • 8: Corporate Governance Issues in International Business 180
  • 9: Ethics and Global Strategy 204
  • Strategy and Globalization: A Final Note 223
  • Notes 227
  • Additional Reading 239
  • Index 243
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