Cross-border Competence Management

Multinational corporations increasingly face dilemmas related to coordination, control and development of their international activities in large developing countries. The project goes beyond the current state of the art by combining and leveraging the expertise of both academics and practitioners. It is structured as a ‘multi-client’ project, meaning the involvement of 4 corporate partners interested in a high degree of mutual interaction and dialogue within the project. These partners represent Finnish firms active in the relevant markets. Our overarching objective is to help the corporate partners’ improve their understanding of cross-border competence management, in particular in the context of Russia and China. We explore challenges in terms of identification, creation, transfer and integration of both competencies and competence management systems in/to the foreign units in the above countries. We also examine, both from the headquarters’ and the foreign units’ perspectives, the success of processes/practices that aim to overcome the above challenges and enhance organizational learning with the ultimate goal of providing further understanding of possibilities to leverage processes across units. After an initial round of interviews both in the foreign units and at headquarters the following research topics have been specified in collaboration with partner firms: Sub-project 1. Cross-border competence management – key challenges of dynamic capability The aim here is to explore dynamic capabilities crucial for the partner firms’ ability to pursue their strategically important cross-border operations. First, we will focus more in depth on issues and processes related to the integration of operations and the related transfer of organizational values/cultures/business processes, including post-acquisition routines. Second, the focus will also be on the building of new thinking & organizational competence within the organization. In addition to partner specific challenges, all of these issues involve the development of new routines, processes of sharing knowledge and reweaving webs of collaboration among various parts of the firms and their external environments. Of great interest within the scope of this project are also discursive practices through which the organizations construct and reproduce their key competencies. Sub-project 2. Transfer of HRM practices Research has shown that transfers of practices involve four important dimensions: (1) the transfer process itself as well as the degrees of (2) implementation, (3) internalization and (4) integration of the practices in recipient units. This sub-project examines how these dimensions of the internal transfer of one key competence-relevant management practice is related to the (5) human, (6) social and (7) organizational capital existing within the case companies. The performance management system has been chosen as the as the related practices are both central for competence development and of particular interest to many of the case companies. In addition, our objective is to study the issue of actual transfer of these practices versus the creation of new (adapted) practices specific to emerging markets and how this issue is related to (1)–(4) and (5)-(7) respectively. Sub-project 3. Language and competence Possibly because it can be difficult to see the forest for the trees, there is little serious research on language as a barrier to competence transfer/development in international firms. Also, too little is known of the opposite side of the coin – namely language skills as a key enabler of interpersonal networks and subsequently of competence transfer/development. This subproject aims to systematize and expand existing research on these issues. The project will focus on interesting cases of both linguistic barriers and enablers involved in the four partner firms’ cross-border operations in Russia and China. Linguistic challenges associated with the transfer of corporate visions and values form an area of special interest. Sub-project 4. Cultural differences, trust and control The sub-project seeks understanding of the nature and significance of differences in cultural and cognitive backgrounds and its impact on the establishment of organizational trust versus control between host-country and parent country operations/nationals in the partner firms. The sub-project also aims at increasing understanding of social and rhetorical mechanisms through which cultural/cognitive differences are (re)produced in daily interactions of organizational actors. Project group: Hanken Department of Management and Organization Ph.D Mats Ehrnrooth (project coordinator) Prof. Ingmar Björkman (project leader) Katja Peltola (project assistant) Project team members: Prof. Eero Vaara Assist. Prof. Wilhelm Barner-Rasmussen Ph.D Kristiina Mäkelä Doct. Stud. Alexei Koveshnikov Res. Assist. Liu Wei Res. Assist. Ling Zhang