Organizational learning

As discussed throughout Chapter 9, learning became a central focus of much international business research during the 1990s. A growing number of studies revealed that knowledge levels often constitute the most significant explanatory variable underlying the fortunes of some companies and, indeed, countries. Learning can be approached from many different angles, one being the acknowledgement by one MNE of the organizational successes achieved by another, often a rival. More often than not, this kind of recognition breeds imitation. One example is the 'evolutionary trajectory' of the particular 'lean production' organization adopted by the Korean carmaker Hyundai, a model that began as an imitation of the Toyota Production System before being modified to fit Hyundai's own circumstances. Academics like to study mutations of this kind because they provide an insight into processes of organizational learning. A key aspect in this area is the decision that a company makes about which of the external 'lessons' that it learns deserves to be adopted. This often leads to discussions of the so-called 'path-dependency' aspect of a company's learning trajectory, and to analyses of how decisions made at an early stage of the learning-imitation process automatically create different potential outcomes at a later stage. This is a vision of organizational learning that mathematicians can plot using a binomial tree of alternative choices. Lee, B. and Jo, H. (August 2007) 'The mutation of the Toyota Production System: adapting the TPS at Hyundai Motor Company', International Journal of Production Research. An even richer vein of literature analyses organizational learning in light of MNE-internal knowledge flows, either between headquarters and subsidiaries or from one subsidiary to the next. Factors with a positive influence on knowledge exchanges include incentives given to employees to share knowledge; plus the subsidiary's 'socialization' trajectory, meaning the corporate cultural process by means of which subsidiary employees gain a sense of shared aspirations with the wider group. Other enabling variables include liaison (linkage) mechanisms such as shared objectives and cross-departmental communications; plus ad hoc teams ('lateral integrative mechanisms') uniting people from different parts of the group. Conversely, knowledge transfers tend to be limited when management asks the company's permanent teams to take responsibility for cross-departmental missions. This is because employees whose prime point of reference remains their unit of origin are less likely to shift loyalties and subsume the new group's objectives into those of the MNE as a whole. Other studies of MNE-internal knowledge transfers divide them into two categories, one driven by technological coordination mechanisms and the other by personal relationships between individuals. Analysis reveals that whereas physical distance is irrelevant when a learning process is mainly shaped by technological transfer factors, the opposite applies when the learning occurs on a person-to-person basis. This is because human learning in an MNE environment is already subject to many of the geographic, cultural and linguistic obstacles that social sciences literature has already identified in other contexts. After all, there is no particular reason why sociological realities within MNE organizations should be very different from the group dynamics characterising other collective interactions. Ambos, T. and Ambos, B. (March 2009), 'The impact of distance on knowledge transfer effectiveness in multinational corporations', Journal of International Management, Volume 15, Issue 1.

Persson, M. (October 2006), 'The impact of operational structure, lateral integrative mechanisms and control mechanisms on intra-MNE knowledge transfer', International Business Review, Volume 15, Number 5.