Multinational Enterprises in Dissimilar Cultural Contexts: The Role of Global Virtual Teams

This 13-page paper written for the 9th International Conference on Social Implications of Computers in Developing Countries, São Paulo, Brazil, May 2007, discusses knowledge transfer within a multi national enterprise (MNE) network. The document suggests that capacity to absorb knowledge among internationally dispersed parts of MNEs can be hampered by the cultural diversity of its corporate members. However, the document describes practices that may enable dispersed groups to overcome distance and time barriers using information and communications technology (ICT). In short, this study offers a theoretical framework that explains the potential benefits of global virtual teams to multinational enterprise practices in dissimilar cultural contexts by examining the role of technology, culture, and absorptive capacity in the cross-border transfer of knowledge within an MNE network.


The paper bases the importance of ITC-based knowledge transfer on research showing that successful engagement in competitive strategies relies on the ability to absorb new ideas and generate new outputs through transferring knowledge from one unit, or base of operations, to another. However, culturally diverse communication practises, e.g. communicating from a collectivist culture with paternalistic practices to an individualistic culture, are "embedded within individuals’ cognitive processes", according to the paper's sources, and, as a result, communication structures to enhance knowledge absorption are needed.


The strategy recommended here is the construction of global virtual teams which can overcome barriers of distance and time using a variety of technological tools, including electronic message recording, audio and text message exchanges, emails, and electronic discussion tools. These ICT tools are classified here using three dimensions: a) communication, b) process structuring, and c) information processing. 'Communication' refers to capabilities and channels to technologically share knowledge, e.g. the capacity to give input and get feedback. 'Structuring' refers to agenda setting and enforcement, devices to share norms and procedures, e.g. inter-related calendars, or storage and access to records of decisions made within the group. 'Information processing' is the ability to aggregate, share, evaluate, and structure information.


The document enumerates a series of propositions to use ICT to enhance knowledge transfer through virtual global teams. The first is the use of ICT as a storage device, based on the need of working groups to link to past decisions and knowledge for moving forward. “Information and communications technologies, such as group decision support systems (GDSS), have been designed to support the exploration of unstructured problems in a group setting. These systems often include tools (e.g., electronic brainstorming, agenda setting, voting, and topic analysis) to aid groups in several decision-making processes by inducing members to work smaller parts of the task separately." The document suggests that structural tools and database functions of knowledge storage (sorting, categorising, evaluating, and searching) can provide process structuring and information processing mechanisms to promote knowledge assimilation.

The author differentiates here between location-bound knowledge and border-crossing knowledge, suggesting that management's capacity to differentiate and appropriately use both can be enhanced by the ICT tools used across the entire organisation. The study concludes that "[a] managerial intervention based on this approach may ultimately stimulate collaboration among and engender effective knowledge transactions between firms [as well as across cultural boundaries]".