IB Reading Summary: "Five Steps to Creating a Global Knowledge-Sharing System: Siemens' Share Net"

Introduction:

The cumulative knowledge that a company is able to access from inside and outside the organization is often regarded as a sustainable resource for competitive advantage. One of the success stories is with Siemens' (one of the world's largest organizations) ShareNet, a global knowledge-sharing system. This system passed through 5 major steps to ensure sustainable performance and value added contribution. Although technical aspects (reliability and usability) are a prerequisite for performance, this article focuses on the global character and rollout phase, the cross-cultural implications, with a detailed focus on the experience in China.

Global Knowledge Transfer and Cross-Cultural Challenges:

Conceptually there are 5 elements, pointing at organizational, psychological and technical factors that have to be fulfilled in order to enable the use of transferred knowledge within an organization: 1. perceived value of the source unit's knowledge, 2. willingness to share knowledge, 3. the existence and richness of transmission channels, 4. the willingness to acquire knowledge from the source, and 5. the absorptive capacity of the receiving unit. Apart from just these Knowledge Management Systems (KMS), though, the information must also pass through a knowledge integration phase (internalized by the receiving unit – how 'sticky' is the knowledge for the receiving unit).

Research Approach:

2 phases: 1) 116 interviews concentrated in hi-tech and consulting industries w/iNorth America, looking for good KMS examples. 2) identified Siemens' as a 'best practice' source in KMS, conducted investigation into the implementation process and global establishment of ShareNet, interviewed 35 executives internationally and incorporated hard data to support results (manuals, internal presentations, etc.).

5 Steps to Creating a Global Knowledge-Sharing System:

Based in Munich, Germany, Siemens is giant global electronics firm – involved in info and communication systems, products and services, semiconductors, passive and electromechanical components, transportation, energy, health care, household appliances, lighting and other businesses.

1998: Siemens restructures their corporate groups to better offer total/comprehensive solutions to clients (moving away from 'simple' product seller). Info and Communication Networks (ICN) is the departmental bridge between the carrier and enterprise branches of Siemens Telecom, realizes they have a rich body of experience that needs to be grouped for best use. Joachim Döring, President of Group Strategy at ICN, heads up this initiative.

Step 1: Define the Concept:

Not just a data repository, Döring's idea was to create a system that was able to handle not only explicit knowledge, but also help externalize the individuals' tacit knowledge by 'codifying' it (a technique best suited for organizations that reuse the same knowledge repeatedly, and therefore require a scalable knowledge-sharing approach that enables efficient knowledge transfer). He gathered an early team to map out broad classifications of knowledge and establish an organizational structure for the knowledge. The components would include: knowledge library, forum for urgent requests, platforms to enable 'rich' information transmissions. The library would be composed of knowledge bids, constructed to categorize the experience gained from ongoing and completed projects, and was compiled using an important questionnaire that captured all of the tacit knowledge (not just the hard details). The urgent request forum would be a place for users to post and check for answers to questi
ons like, "how dangerous is it to lay cables in the Amazon rainforest?" A PM in Senegal answered w/I a few hours and his knowledge saved the South American project $1million Euros. It was also decided that the rollout should not be Munich-driven, that it should be tested in satellite environments to gain cross-cultural insights from people removed from HQ.

Step 2: Global Rollout

First version rolled out in 1999, launched in 39 countries with a "GLOCAL" emphasis – creating mutual trust to facilitate cross-cultural knowledge-sharing, to address the bias of both global integration and local responsiveness. The system would be centrally maintained in Munich in English, but local ShareNet managers were selected, trained in 2-3 day workshops and given incentives to promote the initiative and the concept of knowledge-sharing at local level. Consultants were also hired at the local level to provide support, organize and manage conferences and interface with the local ShareNet managers to bid feedback and control input quality. Global editors oversaw the clarity and usefulness of contributions, reviewed ways in which entered solutions could be understood and reused efficiently.
PROS: benefits became almost immediately evident. The urgent requests platform gave even smaller satellites a powerful forum to access other field people struggling with similar problems. This evident usefulness helped overcome language and culture barriers. Chinese (large part of Siemens' corporation structure) especially took to the system because it satisfied the Confucian principle of 'personal steadiness', 'respect for tradition', 'contributing to the long-term harmony' (Chinese averaged 16.7 KM contributions per worker vs. only 3.3 in the US). Moreover, system was offered gratis, which promoted its use - rather than encountering budget constraints that would limit employees' use of the system.
CONS: Small percentage of German workers were resentful of its English-language orientation, but the system's evident usefulness overcame this concern. Some language concessions had to be made for the lower-level Chinese workers, who may have been reluctant to contribute out of wanting to 'save face' due to sub-par English language skills.

Step 3: Bringing momentum into the system:

They encountered a couple of challenges – people that said they didn't have time to spend on it and others that resented sharing knowledge 'for free.' Still others didn't believe that the clarity in issues regarding their own projects would translate well for others. (These challenges were also observed in other companies with KMS.)
So they implemented an incentive system to encourage contributions. Initially these were bonuses, but in China and India to prevent overuse of the bonuses (to where employees would neglect their regular work in favor of earning 'contribution' bonuses), they changed the incentives to accessories and gift items rather than cash.

Step 4: Expanding Group-Wide

By 2001, ShareNet expanded into the R&D sectors, too. The system was adapted to relevant criteria and parameters for R&D knowledge (more specific and complex than in other units, which had heretofore contributed to its problematic transfer ability). But, by 2002 a different context obstacle had been encountered: knowledge protectiveness and 'shielding mechanisms' that hindered knowledge flow b/w different R&D units. To overcome this, Munich R&D HQ had to set the tone for open communication, and train others to view the strong personal benefit of knowledge sharing. (Once they started, however, satellite engineers took to it faster and better than the Munich counterparts.)

Step 5: consolidating and sustaining performance

The economic downturn caused Siemens to have to reorg staff and divisions in all corporate areas and the ShareNet team was transferred over to a newly-established Competence and Knowledge Management department. The reorgs had the following effect on the knowledge contributions: although the urgent request platform remained highly in use, the knowledge libraries saw fewer and fewer contributions. Discussions on the performance and value of ShareNet led them to begin to document the impact that it had had on ICN's businesses since implementation. The final calculation showed that ShareNet had generated 5 million Euros since its inception in 1988, but this is just a rough estimate because the cost side of the equation had to approximately quantify time-spent, opportunity cost of employee-time-spent, opportunity cost of employee time-spent answering urgent requests, etc. The fundamental premise, however, is that a knowledge-sharing system that is actively used by its employees can
improve performance and may produce a long-term sustainable competitive advantage for the organization.

Learning Outcomes and Implications for Global Practice:

The first three steps in implementation focused on the systematic methods of implementing a knowledge-sharing system, but the crucial task for Siemens' has been to manage the employee obstacles and the crisis resulting from the economic downturn. The system has shown that, even with minimum costs, the system is able to create value for the company and gain its users' acceptance. The timing of the rollout was also crucial, too; it seems obvious that he launch of an entirely new project would have been difficult to accomplish during economically bad times such as in 2001/2002. The insight is that profiting from such an enabling context and anchoring the system within the organization are necessary actions to survive when contrary winds are encountered.

Limitations and Future Challenges:

The Siemens case supports the view that just-in-time delivery of context-specific knowledge can significantly improve performance because it reveals that a thoughtful implementation of a knowledge-sharing system enhances the transfer of knowledge within a global organization and can therefore create value. However, there are certain limitations: 1) on the financial side, it will always remain a significant cost since supervision can only be automated to a certain degree (required dedicated personnel resources); 2) sharing tacit knowledge through a virtual medium has communication and context limitations (some situations may require personal interaction for the knowledge receiver to understand the source's context); 3) the current knowledge platform is limited in media richness and can therefore only create 'weak ties' within the organization.

However, Siemens is committed to the advancement of their KMS. The CEO Heinrich von Pierer desires "to truly release this treasure trove of experience…one of our key competitive advantages."

(Recommend readers briefly scan the Table 2 on page 20 of the article to see the bulleted learning outcomes designated by implementation phase.)

Carol Sautter
404-610-6660
cj_sautter@yahoo.com

Chapter 4 Communicating Across Cultures

Summary
This chapter is abou the various ways communicating
affects the sender and receiver in management
situations. When language is a communcation barrier,
there are many other ways to communicate meaning.

I. The Communication Process
• Communication-describes the process of sharing
meaning by transmitting messages through media such as
words, behavior, or material artifacts
• Communication is a complex process of linking up or
sharing perceptual fields of sender and receiver
• The sender builds a bridge to the life space of the
receiver
• Cultural noise: the cultural variables that
undermine the communications of intended meaning
• Attribution-looking for an explanation for another
person's behavior
II. The Culture-Communication Link
• Trust in Communication: create a clear and
calculated basis for mutual benefit, improve
predictability, develop mutual bonding thorough
regular socializing and friendly contact
• Cultural variables: attitudes, social organization,
thought patterns, roles, language, nonverbal
communication-kinesic/proxemics, time-monochronic
cultures (U.S., Switzerland-individualists) and
polychromic cultures (Latin, Arab-collectivists),
context-high context, feelings not explicitly
expressed, low-context, explicit about thoughts or
feelings
III. Information Technology: Going Global and Acting
Local
• Communication channels-information systems-the
systematic flow of information within an
organization-correlates with the context level of the
cultural; Japanese example
IV. Managing Cross-Cultural Communication
• Developing cultural sensitivity, careful encoding,
selective transmission, careful decoding of feedback,
V. Conclusion
• Effective intercultural communication is a vital
skill for international managers and domestic mangers
with international workforces. Cultural variables and
the manner in which culture is communicated underlie
the processes of negotiation and decision making.

My Time or Yours?

My Time or Yours? Managing Time visions in Global Virtual Teams

More global virtual teams (GVT) are forming in business to tackle international business issues. While these teams are coming from different cultures their perception of time is often different. This article is about the different "time visions" affecting business, and advice on how to make increase functionality within a multi-time vision GVT.

Clock/Linearity – US, UK, Germany, Scandinavia

• a linier view of time
• time can be lost, spent, used, saved

Event - Japan

• cyclical, continuous (holistic), and epochal
• unfolding of time, passing from one phase of an activity
• emphasis on the passing from one phase of an activity to another, rather than time involved
• ritual tradition

Timeless – Hindu and Buddhist

• long-term, abstract, recurrent, epochal
• simultaneous destruction and creation
• passage of time is insignificant
• soul searches for timeless state

Harmonic – Buddhism, Confucianism, and Taoism (China)

• long-term, cyclical, continuous, and recurrent
• a dynamic of life
• time is valuable, punctuality important

Ways to improve time value communication

• scheduling time: deadlines
• synchronizing time: team rhythms
• allocating time: performance measures
• Managing time visions
• Creating awareness of the differences
• Facilitating the development of team norms
• Creating an intersubjective time vision
• Avoid language traps
• Apply the appropriate measures of performance

Cross-border transfer of knowledge: Cultural Lessons from Project GLOBE

Summary: Cross-border transfer of knowledge: Cultural Lessons from Project GLOBE

• A huge increase in cross-border knowledge has increased (and will continue to increase) the need for effective cross-border knowledge transfer.

A real-life case: NORDED (a Nordic European business school)

• Wanted to establish a base in South Asia. Signed agreement with TAI BANK to train managers about leadership and management of change. It was the largest investment the bank had ever made in training and development. Goal was to help TAI BANK transition from local bank to major regional player. Cultural differences soured the relationship between the two parties and could’ve been avoided if they had been identified ahead of time. TAI BANK’s senior management had a top-down communication and decision making style that frustrated middle management. TAI BANK made curriculum changes without discussing it with NORDED.
• The cultural differences between NORDED and TAI BANK were substantial (measured by the avg. distance between rankings on all 9 dimensions listed below), especially power distance differences and differences in uncertainty avoidance.
• Strong personal ties were not developed between the 2 organizations, so the continuity of the program was in doubt. Regular high level contact could have reduced obstacles.
• Taking time to articulate common goals and criteria for success would have helped.
• GLOBE = Global Leadership and Organizational Behavior Effectiveness. Studied 62 societies worldwide. Goal of project: to develop empirically based theories to describe, understand and predict the impact of specific cultural variables on leadership effectiveness and organizational cultures in societies.

Nine cultural dimensions:

1. Power Distance
2. In-Group Collectivism
3. Institutional Collectivism
4. Uncertainty Avoidance
5. Future Orientation
6. Gender egalitarianism
7. Assertiveness
8. Humane Orientation
9. Performance Orientation

Effective knowledge transfer is a function of:

1. Value of the source unit’s store of knowledge
2. Motivational disposition of the unit that sources the knowledge – shaped by national culture and motivational disposition
3. Existence and richness of transmission channels – affected by cultural differences
4. Motivational disposition of the unit to which the knowledge is directed
5. Absorptive capacity or assimilation ability of the target unit.

GLOBE Advice on cross-border knowledge transfer:

1. Define common goals in advance of knowledge transfer. First need to agree on the value of the knowledge to be transferred.
2. Map the cultural profiles. Identify cultural differences that can have a negative impact and explore ways to address them.
3. Assign relationship managers in cross-cultural transfers of knowledge. All parties should have cross-culturally aware individuals accountable for the success of the transfer.
4. Learn from knowledge transfer – view it as a learning experience.

Melissa Efferth

Chapter 5

I. Negotiation- process of discussion by which two or more parties aim to reach a mutually acceptable agreement

5 Stages:

1. Preparation:

· negotiators should familiarize themselves with the entire context and background of their counterparts

· must understand own and other parties' negotiation styles

· should know the value system, attitudes, and expected behaviors of the opposing team

· prior to the meeting find out what kinds of demands might be made, what the composition of the opposing team is and the level of authority that their members posses

2. Relationship building:

· Goal is to get to know one's contacts in the host country and to build mutual trust before beginning any business discussion

· Involves nontask sounding (nemawashi)- general, polite conversation, and informal communication before meetings

· Sometimes intermediaries are needed, these are people who already has the trust and respect of the foreign managers and can act as a "relationship bridge"

· Should also practice "posturing" which is the general discussion that sets the tone for the meeting and it should result in a feeling of cooperation

3. Exchanging task-related information:

· Consists of exchanging task-related info

· Each side typically makes a presentation and states its position, then Q&A

· Negotiators should focus both on presenting their own situation and in showing an understanding of their opponents' viewpoint

· Prepare for this stage by practicing role reversal

4. Persuasion

· Hard bargaining-parties try to persuade the other to accept more of their position and to give up some of their own

· Can face difficulties because of differences in the uses and interpretation of verbal and nonverbal behaviors

· Exhibit 5-4 shows list of recognizable bargaining tactics

· "dirty tricks" sometimes used- giving misleading or distorted factual info, using the excuse of ambiguous authority

· "Rough tactics" also used- designed to put opposing negotiators in a stressful situation physically or psychologically so that their giving in is more likely (uncomfortable room temp, too-bright lighting, take-it-or-leave-it attitude, etc.)

5. Concessions and Agreement

· Stage of concessions and agreement

· Decide ahead of time what your concession strategy will be

· Usually better end results are attained by starting with extreme positions

Managing negotiations

· must understand the position of the other parties in regard to their goals

· problem-solving approach is essential to successful cross-cultural negotiation

- requires that a negotiator treat everyone with respect

- avoid making anyone feel uncomfortable

- should not criticized or blame the other parties in a personal way that may make someone feel shame (lose face)

Successful negotiators

· consider a wider range of options

· pay greater attention to areas of common ground

· tend to make twice as many comments regarding long-term issues

· more likely to set upper and lower limits regarding specific points

· make fewer irritating comments ("We are making you a generous offer")

· use counterproposals less frequently

· use fewer reasons to back up arguments

· practice active listening

Using the Internet for Negotiations

· internet-based programs provide support for the negotiating process but can't take the place of face-to-face negotiations

· Negotiating Support Systems (NSS) program that provides support by finding zones of agreement, decreasing direct and indirect costs of negotiations, and maximizing the chances of optimal outcomes

· INSPIRE- web-based program that provides applications for preparing and conducting negotiations

Influence of culture in decision making:

· Culture affects decision making at the broader context of the nation's institutional culture- produces collective patterns of decision making

· Culture also affects decisions through culturally based value systems that affect an individual's perception of a situation

· 5 stages of rational decision-making process

1. Defining the problem

2. Gathering and analyzing relevant data

3. Considering alternatives

4. Deciding on best solution

5. Implementing decision
--
Maggie Mariscal

Chapter 4 summary--International Business

Chapter 4:

Communicating Across Cultures

**The ability of a manager to effectively communicate across cultural boundries will largely determine the success of international business transactions or the output of a culturally diverse workforce**

I The Communication Process

v Communication: the process of sharing meaning by transmitting messages though media such as words, behavior, or material artifacts.

® It is vitally important for a receiver to interpret the meaning of a particular communications in the way the sender intended

II Cultural Noise in the Communication process

v Cultural noise: the cultural variables that undermine the communications of intended meaning—will enable us to take steps to minimize that noise and so to improve communication.

v Attribution: the process in which people look for an explanation of another person's behavior

III The Culture-Communication Link

v KEY=Trust

® The meaning and level of trust for new people varies drastically

® When asked do you believe "Most people can be trusted?"

· Nordic countries and China had the highest levels of trust

· Brazil, Turkey, Romania, Slovenia, and Latvia had the lowest.

v Attitudes underlie the way we behave and communicate

® Ethnocentrism is one of the greatest types of cultural noise

® Another major problem is stereotyping…attributing general principles to individuals

v Other key cultural variables

® Social Organizations

® Thought Patterns

· Have to be open that your culture isn't universal àie double lines in Thailand do not indicate that you cannot pass, they just mean that that is the center of the road.

® Roles

· Vary from culture to culture…power distance…etc..

® Language

· Basic/major translation errors "come alive with pepsi" =Come out of the grave with Pepsi.

· You either need to be fluent or get a good translator for major deals

v Nonverbal Communication

® Kinesic behavior

· Body movements—sticking your tongue out in China is a sign of surprise

· Eye-Contact, not as important in other cultures…

® Proxemics

· Influence of proximity and space on communications

¨ American culture àcorner office, French àCentral office, Asian àintermingled offices

¨ South Americans, Souther and Eastern Europeans à high contact cultures

Ø Less personal space

Ø More touching

® Paralanguage

· How something is said, not what…. Use of silence, Chinese are more comfortable with silence than Americans are

® Object language

· How we communication through material artifacts

v Time

® Monochronic cultures:

· Switzerland, Germany, USA

· Time is linear, used, wasted, stored, made-up

® Polychronic cultures:

· Latin Americans, Arabs

· Many things can occur simultaneously…meetings are less structured…friends/family take priority over work…can mix the two

v Context

® Context in which the communication takes place affects the meaning and interpretation of the interaction

IV Managing Cross-Cultural Communications

v Developing Cultural Sensitivity

® A manager must make it a point to know the receiver and to encode the message in a form that will most likely be understood as intended

v Carefully Encode a message

® Use words, pictures, etc, that the receiver will understand

v Selective Transmission

® The closer the contacts, the better, face to face, web-chats, etc…all help

v Carefully Decode Feedback