Enabling Conditions for Organizational Learning: A Study in International Business Ventures

Abstract

The significance of international business in the world economy has greatly increased since the beginning of the 1980s, mainly as a consequence of the expansion in the flow of foreign direct investment. Declining costs of transportation and advances in information technology have allowed transnational corporations to spread the production of goods and services around the world. Increasing competition has represented a continuous pressure on organizations for faster or better adaptation to a changing environment. Despite these pressures for change, organizations also need some stability in order to make sense of both the direction they want to take, and the actions which can help them to keep the course. Knowledge about an organization's internal affairs and its interaction with the external environment has become a main source of competitive advantage. The process by which organizations create or acquire this knowledge has been called organizational learning. This dissertation seeks to identify and discuss some key factors which facilitate the occurrence of organizational learning in International Business Ventures (IBVs), here understood as the involvement of foreign investing companies in host countries, with some degree of management that is shared between nationals of both local and foreign countries. The dissertation describes four in-depth case studies in two IBVs, one located in the UK and the other in Brazil. The first company is a subsidiary of Toshiba, which produces television and air conditioner sets for the European market. The second company is a joint venture between Toshiba and Semp, a local company, which produces television sets, VCRs and audio equipment for the Brazilian market. Due to the lack of empirical research in the field of this study, data collection and analysis followed the broad lines of the grounded theory approach. Two processes of organizational learning occurring during the last few years in each company were identified and reconstructed through semi-structured interviews with their key participants. Data about the companies and the processes was supplemented with the use of secondary sources. Througout the whole study particular attention was directed to the context where the processes developed. All interviews were tape recorded and transcribed verbatim. The data were then qualitatively coded in order to help the identification of the main themes and categories related to the objective of the study. Literature was reviewed during all stages of the research in order both to stimulate theoretical sensitivity and to enhance the generalizability into theory of the main findings of the study. Some of the main areas of contribution from the research include: the relationship between time and behavioural/cognitive changes in processes of organizational learning; the relationship between time and acquisition of tacit/explicit knowledge; the analysis of outcomes as moments in a process, and their use as leverage for continuous learning; the importance of control for guiding the process and evaluating its outcomes; communication as a major difficulty in the work of cross-cultural teams, and strategies to overcome such difficulties; and the relationship between local and foreign knowledge for the management of IBVs. In addition, the analysis of processes of organizational learning and the attention given to their context represent a methodological contribution of the study.