Service Science Research, Strategy and Innovation:

Dynamic Knowledge Management Methods

N. Delener Arcadia University, USA

Managing Director: Senior Editorial Director: Book Production Manager: Development Manager: Development Editor: Acquisitions Editor: Typesetters: Print Coordinator: Cover Design:

Lindsay Johnston Heather Probst Sean Woznicki Joel Gamon Myla Harty Erika Gallagher Chris Shearer Jamie Snavely Nick Newcomer, Greg Snader

Published in the United States of America by Business Science Reference (an imprint of IGI Global) 701 E. Chocolate Avenue Hershey PA 17033 Tel: 717-533-8845 Fax: 717-533-8661 E-mail: cust@igi-global.com Web site: http://www.igi-global.com Copyright 2012 by IGI Global. All rights reserved. No part of this publication may be reproduced, stored or distributed in any form or by any means, electronic or mechanical, including photocopying, without written permission from the publisher. Product or company names used in this set are for identification purposes only. Inclusion of the names of the products or companies does not indicate a claim of ownership by IGI Global of the trademark or registered trademark. Library of Congress Cataloging-in-Publication Data Service science research, strategy and innovation: dynamic knowledge management methods / N. Delener, editors. p. cm. Includes bibliographical references and index. Summary: This book explores areas such as strategy development, service contracts, human capital management, leadership, management, marketing, e-government, and e-commerce--Provided by publisher. ISBN 978-1-4666-0077-5 (hardcover) -- ISBN 978-1-4666-0078-2 (ebook) -- ISBN 978-1-4666-0079-9 (print & perpetual access) 1. Service industries--Management. 2. Service industries--Information technology. 3. Knowledge management. I. Delener, Nejdet. HD9980.5.S42533 2012 658--dc23 2011044014

British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. All work contributed to this book is new, previously-unpublished material. The views expressed in this book are those of the authors, but not necessarily of the publisher.

Editorial Advisory Board

Guy Callender, Curtin University of Technology, Australia Gerard Leo Danford, Haaga-Helia University of Applied Sciences, Finland Nikolay Filinov, National Research University, Russia Scott Hoenig, University of the Witwatersrand, South Africa Stephen Ko, Hong Kong Polytechnic University, China Yamen Koubaa, The Brittany School of Management, France Dana Lascu, University of Richmond, USA Gerald R. Ledlow, Georgia Southern University, USA A.R. Leen, Leiden University, The Netherlands Bruno Mascitelli, Swinburne University of Technology, Australia Samir R. Moussali, Huntingdon College, USA Juergen M. Muehlbacher, WU Vienna University of Economics and Business, Austria Kathleen Park, Massachusetts Institute of Technology, USA Christina Schweikert, St. Johns University, USA Satyendra Singh, University of Winnipeg, Canada

List of Reviewers
Shaukat Ali, University of Wolverhampton, UK Pawan K. Chugan, Nirma University, India Max Coulthard, Monash University, Australia Robert Davis, UNITEC University of Technology, New Zealand Shepard Dhilwayo, University of Johannesburg, South Africa Lene Ehlers, University of Pretoria, South Africa Vitor Hugo Ferreira, Polytechnic Institute of Leiria, Portugal Leonora Fuxman, St. Johns University, USA Emanuel Gomes, The University of Sheffield, UK Rim Jallouli, University of Mannouba, Tunisia Fahri Karakaya, University of Massachusetts Dartmouth, USA Georg Kodydek, WU Vienna University of Economics and Business, Austria Samad Kolahi, UNITEC Institute of Technology, New Zealand Nafta Mokate Lehobye, Tshwane University of Technology, South Africa

Grace T.R. Lin, National Chiao Tung University, Taiwan T. Diana L. v. A. de Macedo-Soares, Pontifical Catholic University of Rio de Janeiro, Brazil Alberto Marino, University of Bergamo, Italy Miguel Martins, University of Wolverhampton, UK Professor Roger Mason, Durban University of Technology, South Africa Andile Mji, Tshwane University of Technology, South Africa Barbara Muller, Johannes Kepler University Linz, Austria Pat Obi, University of Purdue Calumet, USA David Pooe, Vaal University of Technology, South Africa Luis Rivera, Dowling College, USA Susana Rodrigues, Polytechnic Institute of Leiria, Portugal Elana Smirnova, SUNY Old Westbury, USA Valentina Smirnova, State University of Management, Russia Oliver Su, Fu-Jen Catholic University, Taiwan Madele Tait, Nelson Mandela Metropolitan University, South Africa Robert Vambery, Pace University, USA C.H. van Heerden, Tshwane University of Technology, South Africa Mathilda van Niekerk, Mbombela Local Municipality, South Africa Reiner van Rensburg, Northwest University, South Africa Ann Marie Zwerg-Villegas, EAFIT University, Colombia

Table of Contents

Foreword ............................................................................................................................................ xxii Preface ............................................................................................................................................... xxiv Acknowledgment ............................................................................................................................xxxiii Section 1 Service Science Chapter 1 Services and Service Management ......................................................................................................... 1 Balzs Heidrich, Budapest Business School, Hungary Gbor Rthi, University of Miskolc, Hungary Chapter 2 The Management of Services Contracts ............................................................................................... 37 Guy Callender, Curtin University, Australia Chapter 3 A Model of Profitable Service Recovery .............................................................................................. 49 Kristen DeTienne, Brigham Young University, USA Aaron Brough, Pepperdine University, USA David Blen Nance, Brigham Young University, USA Chapter 4 Increasing Service Exports: A Key Contributor in the Growth of the Global Knowledge Economy ............................................................................................................................ 73 Max Coulthard, Monash University, Australia Chapter 5 A Theoretical and Empirical Investigation into Service Failure and Service Recovery in the Restaurant Industry ..................................................................................................... 86 Pierre Mostert, North-West University, South Africa Danie Petzer, University of Johannesburg, South Africa Christine De Meyer, University of Johannesburg, South Africa

Chapter 6 Structuring the Service Encounter: A Test of Alternatives ................................................................. 100 Maria da Graa Batista, Azores University, Portugal Miguel Pina e Cunha, New University of Lisbon, Portugal Armenio Rego, Aveiro University, Portugal Chapter 7 How Service Firms Manage Innovation: Development Process and Factors of Success ................... 112 Frederic Jallat, European School of Management, France Chapter 8 Managing Intercultural Service Encounters: Establishing the Need for Intercultural Training .......................................................................................................................... 125 Suvenus Sophonsiri, Mahasarakham University, Thailand G. Barry OMahony, Swinburne University of Technology, Australia Chapter 9 The Role of External Indicators in Measuring the Service Performance of Local Governments: An Italian Case Study ........................................................................................ 141 Fabio Cassia, University of Verona, Italy Francesca Magno, University of Bergamo, Italy Chapter 10 Service Science, Value Creation, and Sustainable Development: Understanding Service-Based Business Models for Sustainable Future..................................................................... 157 Albena Antonova, Sophia University, Bulgaria Chapter 11 Productivity and Innovation in Services: The Multidisciplinary Perspective Offered by Service Science ................................................................................................................. 170 Aleksandar Ivanovi, Alexander College of Arts, Business, and Management, Serbia Leonora Fuxman, St. Johns University, USA Section 2 Technology and Innovation Chapter 12 Technology-Induced Customer Services in the Developing Countries .............................................. 185 Wilson Ozuem, London School of Business and Finance, UK Geoff Lancaster, London School of Commerce, UK Chapter 13 Technical Competitive Intelligence System: An Innovation and Technology Management Tool ............................................................................................................................... 202 Leonel Cezar Rodrigues, University Nove de Julho-UNINOVE, Brazil

Chapter 14 Business-to-Consumers eCommerce: How Companies Use the Internet in Marketing Products and Services to Consumers ................................................................................ 227 Fahri Karakaya, University of Massachusetts Dartmouth, USA Chapter 15 B2B eCommerce: Current Practices ................................................................................................... 245 Fahri Karakaya, University of Massachusetts Dartmouth, USA Chapter 16 An Innovative Firm: The Renova Case Study .................................................................................... 260 Susana Rodrigues, Polytechnic Institute of Leiria, Portugal Chapter 17 Service Science Innovations: E-Government ..................................................................................... 289 Tatiana Leonova, State University of Management, Russia Galina Plotnikova, State University of Management, Russia Section 3 Strategy and Knowledge Management Chapter 18 Resources, Capabilities, and Business Success .................................................................................. 304 Alan Simon, University of Western Australia, Australia Chloe Bartle, University of Western Australia, Australia Chapter 19 Understanding Business Strategy ....................................................................................................... 325 Emanuel Gomes, University of Sheffield, UK Paul Jackson, Coventry University, UK Chapter 20 Business Strategies Incorporating Sustainable Development Principles: Toward an Application of a Function Company ................................................................................. 342 Clin Guru, Montpellier Business School, France Cline Pascual-Espuny, Montpellier Business School, France Ashok Ranchhod, Mudra Institute of Communications, India Chapter 21 Entrepreneurship and Competitive Strategy ....................................................................................... 351 Shepherd Dhilwayo, University of Johannesburg, South Africa

Chapter 22 Leadership Perspectives on the Global Market for Corporate Control............................................... 377 Kathleen Marshall Park, Massachusetts Institute of Technology, USA Chapter 23 PLC and SWOT Reengineered: Strategy Development Tools for Service Industries in Global Competition ........................................................................................................ 400 Peter Mayer, Central European University, Hungary Robert G. Vambery, Pace University, USA Chapter 24 Strategic Marketing: Models and Plans .............................................................................................. 417 Noel Doherty, St. Johns University, USA F. Victor Lu, St. Johns University, USA Chapter 25 Business Education across Cultures and Languages .......................................................................... 428 Yamen Koubaa, The Brittany School of Management, France Chapter 26 New Perspectives on Knowledge Management .................................................................................. 464 Helmut Kasper, WU Vienna University of Economics and Business, Austria Jrgen Mhlbacher, WU Vienna University of Economics and Business, Austria Barbara Mller, Johannes Kepler University Linz, Austria Chapter 27 Formulating a Knowledge Management Strategy .............................................................................. 484 Adeline du Toit, University of Johannesburg, South Africa Carina Human, University of Johannesburg, South Africa Chapter 28 International Applications of Knowledge Intensive Services of Management and IT Consulting in Transitional Countries ....................................................................................... 499 Leonora Fuxman, St. Johns University, USA Aleksandar Ivanovi, Alexander College of Arts, Business, and Management, Serbia Chapter 29 Network Strategies of Hospitality Companies in Emerging and Transitory Economies: Evidence from Russia ......................................................................................................................... 519 Olga Balaeva, National Research University Higher School of Economics, Russia Ella Burnatseva, EGGER, Russia Marina Predvoditeleva, National Research University Higher School of Economics, Russia Marina Sheresheva, National Research University Higher School of Economics, Russia Olga Tretyak, National Research University Higher School of Economics, Russia

Chapter 30 Dynamic Knowledge: Diagnosis and Customer Service .................................................................... 547 Jos G. Hernndez, Metropolitan University, Venezuela Mara J. Garca, Minimax Consultants C.A., Venezuela Gilberto J. Hernndez, Minimax Consultants C.A., Venezuela Chapter 31 Knowledge is Power: Knowledge Management, Innovation, and Competitive Advantage: An Example from Egypt ..................................................................................................................... 574 Rania Nafie, Maastricht School of Management, The Netherlands Stephanie Jones, Maastricht School of Management, The Netherlands Chapter 32 Human Capital Management and Optimization: A Resource-Based View......................................... 605 Jrgen Mhlbacher, WU Vienna University of Economics and Business, Austria Compilation of References ............................................................................................................... 617 About the Contributors .................................................................................................................... 680 Index ................................................................................................................................................... 692

574

Knowledge Management, Innovation, and Competitive Advantage: An Example from Egypt

Rania Nafie Maastricht School of Management, The Netherlands Stephanie Jones Maastricht School of Management, The Netherlands

Knowledge is Power:

Chapter 31

AbstrAct
In this chapter, the authors suggest that the success of the Knowledge Knowledge Management Knowledge Transfer Innovation Competitive Differentiation and step-by-step progression may be moderated and even compromised by cultural considerations. These can be the result of organizational and/or national cultural characteristics impacting on organizations and employees. These organizational and national cultural variables can be closely intertwined. The geographical focus of this chapter is based on Egypt, located in the Middle East/North Africa, currently in a state of political upheaval. The focus on Egypt reflects the interest and experience of the authors, and the perception that culture may be playing a part in the problems experienced by companies in Egypt in achieving a high level of sustained innovation. Companies in Egypt are still struggling to gain competitiveness in world markets, and culture is playing a big role in this struggle. Currently, politics and demands for democratic representation are also muddying the waters. These cultural issues, the authors argue, can be seen in terms of moderating the behavior of employees in the knowledge accumulation and knowledge transfer processes. Qualitative evidence is presented from interviews with managers at five Information and Communications Technology companies which suggest that the authors propositions may be well-founded.
DOI: 10.4018/978-1-4666-0077-5.ch031

Copyright 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Knowledge is Power

IntroductIon
Knowledge is power is a well-known phrase, used in business, politics and the military. Leaders who understand the intricacies of the situation could gain more respect, and have more authority, than those without the knowledge. Increasingly, this concept is being applied in a management context the employee with knowledge of the inner workings of the company, of how decisions are made, and with up-to-date and relevant technical know-how can be more effective and successful. But for an organization, recruiting and retaining employees with knowledge is not enough especially to build competitive advantage, which often comes from innovation. Transferring that knowledge between employees and it can be that customers, suppliers and other stakeholders also play their part is critical for organizational improvement. The objective of this chapter is to introduce the basic concepts of Knowledge Transfer and Knowledge Management and their relationship with the achievement of innovation in business, especially within the context of national and organizational culture as moderating factors. A history of the concepts will be presented along with basic definitions. This will include references to the theoretical underpinnings of the subjects, along with a discussion of the main authors in the field and their interpretations. This chapter will attempt to tackle the issue of the impact of knowledge management and transfer on organizations which are seeking a stronger competitive stance in the global market. Readers will be helped to understand how knowledge management and knowledge transfer can contribute to innovation, hence enabling businesses and organizations to differentiate themselves and create value. Conversely, the absence of knowledge management and knowledge transfer processes can restrict innovation and hence limit value-added.

bAcKGround to the cAse study

As a practical case study, the authors have chosen Egypt as an example of a promising emerging market country. Like all would-be centers of technical and business innovation, Egypt is facing pressures for a transformation in the area of knowledge transfer. In the past, there has arguably been a reluctance to transfer knowledge due to deeply ingrained beliefs that knowledge should be retained with top management, or at most a selected handful of trusted employees. The UNDP Arab Human Development Report published in 2003, with the theme of Building a Knowledge Society, clearly identifies the situation of knowledge transfer in Egypt and states that our scientific life in Egypt needs to catch up with our past in order to acquire the necessary strength, life and controls. We in Egypt transfer the knowledge of others, then leave it floating without any relationship to our past or any communication with our land. Now, in 2011, this situation has not changed for the better, despite some economic growth and globalization. The current political and constitutional uncertainty is not helping in this process, with businesses on hold and employees facing an unclear future. Issues of job security are making objectives of improving knowledge transfer processes temporarily redundant. The qualitative case study on which this chapter is based has utilized interviews conducted with 25 junior and senior managers of five information and communications technology (ICT) companies in Egypt, chosen as a representative of the Egyptian market. ICT was selected as a cutting-edge industry requiring a high degree of innovation (and thus knowledge transfer) to be successful. It was thought that if knowledge transfer was improving in Egypt, it would be here, in this sector. So, a questionnaire was designed to discern whether knowledge is being transferred between employees or not and was used to test these respondents and their knowledge-transferring tendencies. This

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Table 1. Sample companies used as source of respondents

Ericsson Egypt Microsoft Egypt Mahindra Satyam Egypt Ministry of Communication and Information Technology (MCIT) Advanced Computer Technologies (ACT) Branch of leading provider of telecommunications hardware, software and services to network operators globally. Branch of worldwide manufacturer of computer hardware and software. EgyptianIndian joint venture providing consulting, IT services and outsourcing for organizations. A leading Egyptian government body responsible for initiating and implementing the ICT strategy within Egypt. One of the early local Egyptian ICT companies in the field, involved in consulting, planning, integrating and managing technology solutions with partners.

questionnaire had been pre-tested on three senior employees in the ICT sector in Egypt, to validate the questions, and the feedback was positive the questions were unambiguous and comprehensible. The interviews were conducted in English (it was not necessary to translate the questionnaire into Arabic as these senior employees are familiar with doing business in English). All chosen managers were of Egyptian nationality, to ensure that the moderating variable of national culture could be taken into consideration. Where applicable, the authors tried to engage in ethnographic observation to test the nature of the corporate cultures of these five ICT companies, and to consider the relationships between the employees within these cultural frameworks. Although attempts were made to conduct these observations informally, these efforts were met with some resistance in some of the companies, to the extent that confidentiality agreements had to be signed. Thus the presentation of the findings in terms of the individuals interviewed is anonymous. The political dislocation in Egypt in recent months, as this article goes to press (late March 2011), has exacerbated already considerable problems with data collection. The focus of the research is primarily on multinational companies operating in the Egyptian market, yet local companies have been included to consider differences in the organizational cultures between the two. This was to help determine if

organizational culture plays a role in knowledge transfer, and to determine the gap in knowledge transfer initiatives between both corporate worlds (multinational and local). Individuals from the following companies have been interviewed (see Table 1). The Egyptian ICT sector has been described by many local economists and journalists as one of the most promising sectors in the country. With the Egyptian Governments efforts to curb rising unemployment rates and inject capital into the economy, the Ministry of Communications and Information Technology (MCIT) announced a 400 million stimulus directed to IT projects in 2009 (Diab, 2009). Dr Tarek Kamel, Egypts former Minister of Communications and Information Technology, sees ICT as a potential catalyst for internal efficiency, job creation, and ultimately a source of foreign income (Gain,2005). Since ICT was seen to help transform the Gulf Emirate of Dubai more than 15 years ago, Egypt is hoping for a similar experience. Geographically and logistically, Egypt is an ideal location [for ICT businesses]. With the countrys highly-skilled technology workforce, the cost benefits... [and] ...opportunities in this market..., we see considerable scope for further investment into Egypts growing ICT sector, stated [a representative] from Oracle (Gain, 2005). Egypt is gradually becoming a regional hub for ICT services and outsourcing. To several multi-

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national companies, operating in Egypt is a step towards penetrating the Middle Eastern countries, especially with the negative effect of the global economic crisis currently taking its toll on Dubais ICT operations. The impact of the current political uncertainty is yet to be seen. The purpose of this chapter (representing ongoing research) is to explore these issues further and consider the proposition that if Egypt wishes to build a competitive advantage in this sector and others, knowledge transfer initiatives must be implemented. These might ensure that the process of knowledge sharing is maximized and innovation and competitive advantage can be improved. The authors posit that the Egyptian national culture can be an impediment to the knowledge transfer process. This is a barrier which must be overcome if knowledge transfer processes are to become more robust.

KnoWLedGe MAnAGeMent defInItIons And dIscussIon

Knowledge management is nothing new. For hundreds of years, owners of family businesses have passed their commercial wisdom on to their children and workers have exchanged ideas and know-how on the job (Hansen, Nohria & Tierney, 1999). The existing literature on the subject is replete with definitions, but often creates confusion, as the concept means different things to different people. Theorists and authors have widely varied on a singular definition. Frappaolo (2006) succinctly defines it as the leveraging of collective wisdom for increase responsiveness and innovation. Interestingly, the internet-based Wikipedia (2008) defines knowledge management as comprising a range of practices used by organizations to identify, create, represent, and distribute knowledge. We can see that Frappaolos definition is more comprehensive than the basic definition provided by Wikipedia since it states the impor-

tance of this concept in leveraging the companys potential and being a driver for innovation. On the other hand, Wikipedias definition is a mere statement of the activities or processes of knowledge management and does not discuss the possibility of added value to the company. Malhorta (1998) proposes the following working definition which, he suggests, has found a general consensus among scholars, practitioners, and policymakers across many nations of the world. Knowledge management refers to the critical issues of organizational adaptation, survival and competence against discontinuous environmental change. Essentially, it embodies organizational processes that seek synergistic combination of data and information processing capacity of information technologies, and the creative and innovative capacity of human beings. ODell and Grayson (1998) describe knowledge management as a conscious strategy of getting the right knowledge to the right people at the right time and helping people share and put information into action in ways that strive to improve organizational performance, while Groff and Jones (2003) clearly state their definition as the tools, techniques, and strategies to retain, analyze, organize, improve and share business expertise. The range of definitions provided by differing authors shows us that knowledge is an ambiguous, unspecific and dynamic phenomenon, intrinsically related to meaning, understanding and process, and therefore difficult to manage (Alvesson & Karreman, 2001). Although some definitions are a mere recitation of the stages or processes of knowledge management and hence may seem outdated, others take into account the dynamic nature of knowledge and, through their definitions, have been able to demonstrate the impact of this concept on key outcomes such as organizational performance, innovation, organizational adaptation and responsiveness. knowledge management is as likely, if not more so, to operate as a practice of managing people

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or information than as a practice attuned towards facilitating knowledge creation (Alvesson & Karreman, 2001).

KnoWLedGe MAnAGeMent And KnoWLedGe trAnsfer

It has been argued that the significance of not just knowledge management, but the related concept of knowledge transfer, has grown in the past decades as a result of three interrelated reasons (Levine & Gilbert, 1998): First, knowledge appears to be an increasing proportion of many organizations total assets. While the economic value of human capital cannot be questioned, an important concern among scholars is what type and how much human capital is required to create a competitive advantage for firms (Starbuck, 1992). Second, organizations seem to have moved away from hierarchical methods of control toward more decentralized organizational structures and increased employee involvement resulting in fewer obvious organizational paths through which the transfer can occur. This might be true in theory and in some countries, yet in a developing country and in the unique setting of Egypt, the case is apparently different. All managers surveyed by the authors unanimously agreed that the organizational structure in their companies followed the top-down approach. Some of them even described it as a pyramid and used the analogy that to build something great there should be one mind and one leader with a unique strategy and the power to bring the employees together to build the pyramid. Managers in two respondent companies, quoted above, both agreed that a more decentralized or relaxed approach is appropriate within

functional teams because they depend more on working relationships between employees, and need this to encourage effective working outcomes. Finally, advances in information technology have created new means of knowledge transfer, and this has led to improvements in knowledge management generally.

Interviews with Egyptian managers showed that the existence of ICT does not always improve knowledge transfer. Although advanced technology was used in Egyptian local and multinational companies, this was only a tool employed in companies, and did not necessarily result in positive changes. Managers in one of the companies interviewed by the researchers revealed that although there was a shared knowledge repository, not all employees had access to this. On the contrary, if an employee needed information, he or she had to first explain to his manager the importance and need for this information, after which the managers would contact one another to request access via a username and password that expired as soon as the work was completed. The researchers were informed that only public reports, conferences and speeches were deemed as public knowledge and available to all employees. Any information regarding projects, processes and pipeline innovations were classified as confidential. Meanwhile, both local and multinational companies interviewed did not believe in virtual teams. They typically used a 9am-5pm work schedule, and deemed it necessary for employees to show up at the workplace on a daily basis, although multinational companies were willing to be more flexible. Nonaka (1994) suggests that one of the most important aspects of knowledge management is the transfer of knowledge from one set of individuals to another. Szulanski (1996) defines knowledge transfer as the process where complex, causally ambiguous set of routines [are] recreated and maintained [in a] new setting.Argote and Ingram

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(2000) define knowledge transfer as a process through which one unit is affected by the experience of another. Szulanski (2000) suggests that knowledge transfers are often laborious, time consuming, and difficult and argues that it is important to understand the impediments to knowledge transfer, in order to make the process more effective and the outcomes more favorable. This notion is supported by ODell and Grayson who state that the actual process of identifying and transferring practices is trickier and more time-consuming than most people imagine [and] must involve a conscious dismantling of these organizational barriers (1998, p.16). Yet the benefits of knowledge transfer are many. Osterloh and Frey (2000) state that knowledge generation and transfer is an essential source of a firms sustainable competitive advantage, while Subramaniam and Venkatraman support this statement with their own research (2001). According to them, based on a survey of ninety new transnational product introductions, the [researchers found that] the transnational product development capabilities of organizations significantly depend upon their ability to transfer and deploy their tacit knowledge. Tacit knowledge complements explicit knowledge, since one form completes the other to form a full-fledged knowledge cycle in which the knowledge embedded in the interactions of people, tools and tasks provides a basis for competitive advantage in firms (Argote & Ingram, 2000). As can be seen from the above discussion, most knowledge management initiatives are related to employees tacit knowledge, their interaction within the organization and the processes available to facilitate the knowledge transfer process. Lyles and Salk reported that cultural differences often affect the flow of information and learning (1996). Also, Simonin argues that cultural discrepancies between the source and the recipient can impede the knowledge transfer process (1999). Similarly, Walsham contends that knowledge sharing is reli-

ant on cultures, due to differences in the concept of knowledge itself (2001). In an attempt to further comprehend the interplay of culture and knowledge transfer, a knowledge transfer questionnaire was prepared by the researchers to investigate the role of corporate culture in the prevalence of knowledge transfer initiatives between employees. The questionnaire was prepared by the researchers in relation to proposed research constructs based on previous research (Ladd & Ward, 2002; Pascoe, Ali, & Warne, 2002). A ready-made existing questionnaire from the literature has not been used given that there is no available questionnaire that combined all the research constructs proposed. The questionnaire was designed to be simple and unambiguous without any confusing terminology, to suit the research sample requirements (where English is not a first language), to avoid the need for the researcher in explaining the questionnaire to the respondents and thus running the risk of skewing the results. The questionnaire was validated in two focus group rounds conducted in January 2010, administered within two rounds, which consisted of 27 and 38 junior and senior managers respectively. The questionnaire was found to measure the desired constructs, in addition to it being understandable and easy to use. Preliminary results showed that the environmental factors operationalized to represent corporate culture affect the prevalence of knowledge transfer initiatives between employees positively. The research constructs are shown in Table 2. The first focus group which consisted of 27 employees, showed the following results. With respect to gender, all respondents agreed that gender is not an issue, although the second focus group was more inclined that opposite sexes work better together. Males in the second focus group stated that they preferred that their colleagues were females, but not necessarily their managers (who should be males) given their feeling that females are moody and cannot be held accountable for managing an entire department but they

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Table 2. Research constructs in knowledge transfer questionnaire

Questions Questions 1 2 Questions 3 4 Questions 5 8 Questions 10 12 Questions 13 14 Questions 15 18 Questions 19 23 Questions 24 40 Gender Age Working environment Depth of the relationship Peer pressure Training Rewards Knowledge sharing Constructs

are O.K. for sharing knowledge. According to the Egyptian national culture, both males and females share knowledge with one another willingly without any communication barriers. The justification they gave was that the Egyptian culture has encouraged the integration of both sexes within the workplace, co-educational facilities and clubs for more than fifty years and thus has no bearing on knowledge transfer (although few managers are females). On the other hand, according to these focus groups, age proved to be a barrier to knowledge transfer, where respondents admitted that older employees are more reluctant to share knowledge with younger employees. One reason might be that older employees worry that their knowledge is outdated, and they fear for their positions. They stated that in multinational companies older employees might be assigned as mentors, which raised a discussion regarding the difference of culture between both local and multinational companies. The respondents agreed that employees at local companies represent about 90-95% of the working population, while employees of multinational companies comprise the remaining 5-10%. The focus groups addressed the culture gap between both organizations, stressing that unfortunately the majority of local companies in Egypt are outdated in terms of state-of-the-art management practices and believe in maintaining

the status quo due to both fear of change or high uncertainty avoidance as well as protection of managements personal interests as opposed to those of employees, leading to the increased losses being reported from this sector as a result of corruption. This is supported by the findings of the World Economic Forum Global Competitiveness Report, which states that Egypt is suffering from corruption and that many senior managers have personal agendas. Since all focus group employees are employed in either large local or also large multinational companies, respondents unanimously agreed that a working environment with sanitary conditions (lighting, ventilation and cleanliness) affects employees mood and willingness to perform, also reflecting on their propensity to share knowledge with each other. Respondents went further to discuss relationships within the work environment, at which point they highlighted trust and a sociable environment as essential factors that influence performance. This relates to Hofstedes evidence that Egypt is a collectivist culture where relationships tend to lubricate and facilitate knowledge transfer and are thus regarded as essential. According to the questionnaire results, both groups agreed that a relationship outside the office with colleagues is important not only to facilitate business within the company, but also when employees leave the company, to maintain a network of contacts that might prove beneficial in the future. On the other hand, groups differed on whether they encouraged and maintained relationships between their family members and work colleagues. Some of them agreed to this trend and stated that it only made sense since they spend most of their time on the job, while others objected to this idea stating that it was not the norm. Training is an integral part of the advancement of individuals since it adds to their skill and knowledge base. According to the focus group, companies that invest in training reap the benefits of a more loyal workforce willing to share knowledge through informal mechanisms of socializa-

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tion and networking supporting the fact that the Egyptian culture is diffuse. Egyptian multinational and local companies engage in training, although respondents claim that multinational companies invest more in that regard by virtue of their foreign culture, which supports continuous development as an integral part of career enhancement. Respondents claimed that training does not encourage knowledge sharing, but merely makes it easier. This means that knowledge transfer is not a direct result of training, but a facilitator of this process. Respondents explained that during workshops, employees tend to get introduced to one another through colleagues in common in the workplace and engage in formal and informal discussions, which facilitates the process of knowledge sharing in the future because now theres a face to go with the name. Both focus groups confirmed that training is only a minor way to enhance employee loyalty and retention, and thus the encouragement of knowledge transfer. To them, the most important way a company could retain its employees is through monetary rewards. They stated that a performance-based bonus would make employees more willing to share knowledge with colleagues if they felt an increased sense of security and stability in the company as a result of gaining the bonus. Nevertheless, a few respondents indicated that although a reward system is an effective device for most individuals, to them, the inclination to share knowledge depends on the factor of extroversion or introversion. Being an extrovert, the employee will constantly be willing to share knowledge with others and will strive to engage in learning and innovation efforts offered by the company. On the other hand, introverts will act in an opposite manner and will only share knowledge if they have a personal relationship with the individual or are compelled to do so by policies or regulations. This raised the question of success, job seniority and confidence, whereby how does one motivate an employee who feels he/she has ev-

erything?An employee in such a situation will be more inclined to protect their position and status. Hence we concluded that companies looking to devise mechanisms to motivate employees need to be aware of the fact that there will continue to be variations depending on employees characteristics and motivators. A more effective policy might be to try to incorporate knowledge transfer in their corporate culture. This will serve two purposes: companies will be able to hire candidates with a cultural fit, and meanwhile they can embed knowledge transfer within their processes, including training activities and performance evaluations. This leads to the question of whether companies encourage knowledge transfer as part of their corporate culture. Most respondents claimed that this does not take place in all companies, and not even in all multinationals. They attributed that to the size of the companies as well as the inclination of their management. Small and medium sized organizations (SMEs) have not yet adopted knowledge transfer to much degree and even when the tools are in place, using them depends on managements priorities and directions. As such, large local and multinational companies in Egypt are in the practice of hiring ex-multinational employees because this is the only way they can guarantee that the applicant will have up-to-date skills and will be a cultural fit, instead of the need for grooming fresh graduates or local company staff, which needs time and extensive training to meet the sophisticated culture. Nevertheless, in most companies there are channels of social intra-group networking for business and social purposes. These include lotus notes and blogs to post and discuss questions and new processes. Respondents added that in some companies where they worked, there were Key Performance Indicators (KPIs) in place to assess those managers that keep constant open communication channels with their teams through regular meetings. In other companies some knowledge sharing does take place but depending highly on personal relationships and coalitions. This can create an unprofessional atmosphere in which to

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operate, and indeed this was a complaint by many Egyptians working in such companies. Few organizations in Egypt specifically free up employees time for the purpose of knowledge sharing. Coffee breaks are in place by virtue of the labour law regulations, and during that time some employees may decide to socialize while others seize this opportunity to share knowledge through constructive discussions. Respondents highlighted that since most sharing depends on the coalitions of which an employee may be part, sharing across functions or departments is forbidden unless an employees direct manager authorizes this practice, which of course depends on personal relationships with the other department and whether or not it is thought that the information is sensitive and crucial to the work. At that point only will knowledge be shared. Unfortunately, this takes place in many Egyptian companies across the board, be it local or multinational, large or small, service or manufacturing industry. The researcher had a personal experience in that regard whereby as a junior Finance Executive in a large multinational company in the fast moving consumer goods industry, the researcher was not allowed to share knowledge with other departments given her managers relationship with them, although she was an expatriate. It seems that the Egyptian national culture was stronger than the companys corporate culture and accordingly the manager felt the need to act accordingly. This leads us to the discussion of tacit knowledge and whether or not it is valued and transferred across the organization. Respondents in the both focus groups agreed that tacit knowledge sharing is based on trust and relationships. In their opinion, most managers would prefer to share knowledge with their subordinates to give them a head start, but they do not want to share knowledge with fellow managers or peers. This group have their own reserve of tacit knowledge gained through experience and information processing during their tenure at the company, and accordingly any sharing at this level might threaten the status quo in the future. This idea has also been extended to the

exchange of knowledge during job handovers from one individual to another, whereby the focus groups showed different opinions. While some stated that the process takes place in many organizations as part of the job, the majority agreed that Egyptian companies do not believe in such handovers. The reason for the lack of this process stems from the fact that managers do not feel secure sharing their trade secrets and the information that they have developed through their relationships with others. Unfortunately, they feel that since they have created the knowledge, it is part of their worth, and will not pass it on. Most respondents endorsed this explanation and added that this justification is common practice in avoiding job handovers in public sector companies. Egyptian organizations have a substantial store of tacit knowledge that has been processed by employees and thus represents the actual key of how the organization functions. Unfortunately, most of this value-added information is not documented in any form, especially with the lack of job handovers, and therefore is left lingering and is not codified and maintained. This partly explains why many Egyptians are unable to complete a project to its end, although they have great ideas at the start. Their lack of knowledge transfer practices, and thus the need to constantly reinvent the wheel, arguably wastes both time and energy. Respondents asserted that this is evident even at strategic levels, and is common practice in the Egyptian government. Almost all ministries have uncompleted projects or technical committees that have been convening for years discussing different projects, but due to that same reason, these have not progressed. The reason could be lack of job handovers and longterm knowledge transfer processes.

KnoWLedGe MAnAGeMent And orGAnIZAtIonAL cuLture

Before we venture into studies supporting the importance of the relationship between knowledge transfer and both national and corporate

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cultures (and the possible impact on innovation and competitiveness), the researchers would like to explain the perspectives on organizational and national culture which they have adopted. Firstly, organizational culture presents itself on different levels. At the highest level is the culture of a national or regional society. The way in which attitudes are expressed within a specific organization is described as a corporate or organizational culture (Trompenaars & Hampden-Turner, 1998). Schein formally defines group culture as a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration (2004). Ladd and Heminger offer a different perspective and state that from an organizational perspective, the collective values and beliefs of the individual members of that organization represent a phenomenon called, organizational culture(2002). Trompenaars and Hampden-Turner offer a practical way of thinking about culture and states culture is the way in which a group of people solves problems and reconciles dilemmas (1998). Extensive literature is available on organizational culture. Several renowned theorists have contributed to the field (Trompenaars & HampdenTurner, 1998; Kotter & Heskett, 1992; Schein, 2004; Handy, 1985; Deal & Kennedy, 1982). The most prominent include Johnson and Scholes, who formulated what they named the cultural web of an organization, which identifies six interrelated elements that help make up the paradigm the pattern or model of the work environment. They perceived that studying the elements of the web would lead to a better understanding and insight into that organization (Manketlow, 2009). 1. 2. 3. Stories: The past events and people talked about inside and outside the company. Rituals and Routines: The daily actions of people that signal acceptable behavior. Symbols: The visual representations of the company including logos and the formal or informal dress codes.

4.

5.

6.

Organizational Structure: This includes structure defined by the organization chart, and the unwritten lines of power and influence. Control Systems: The ways that the organization is controlled. These include financial systems, quality systems, and rewards. Power Structures: The pockets of real power in the company. This may involve one or two key senior executives, a whole group of executives, or even a department.

Several authors have addressed the managers role in developing a healthy culture for his or her organization, discussed in relation to the power/ role/task/person cultures within organizations described by Handy (Urrabazo, 2006). Power culture: Is one that exists frequently in entrepreneurial organizations and is ruled by a central power or hub. Minor bureaucracy is apparent since staff function with few rules and procedures. Popular in small businesses and professional practices in Egypt, with communication flows and knowledge transfer relating to the central source of power (Nafie & Jones, 2009). Role culture: Is a bureaucracy, whereby the strength of organizations resides in its pillars, its functions or specialties (Handy, 1985). Each person/business unit has its role in supporting the organization. Employees operate based on job descriptions whereby their individual roles and responsibilities are laid down and specified. The Egyptian public sector is like this. Information flows by a strict hierarchy, within these silos (Nafie & Jones, 2009). Task culture: The focus is on a particular job or function. This culture aims to assemble the right people with the right resources, so that a job can be accomplished (Urrabazo, 2006). This is similar to the matrix structure, where the core culture is a

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role culture, with a task culture as the underlying subculture. Person culture: Exists only to serve and assist the individuals within it (Handy, 1985), a style which is unusual in most environments, especially in Egypt. All information flows and communication would take place to serve these individuals.

The researchers discovered that of the five companies they studied in Egypt, four had strong corporate cultures. Of companies A, B, C, D and E, companies A and D were obviously task cultures. Managers in company A (the first company described above) stated that the existence of a strong corporate culture has changed employeesattitudes over time, increasing organizational citizenship and loyalty. The Head of Operations and Project Management for North East Africa in that company revealed that there are lots of forms available for employees to post their questions and valuable inputs so they can be taken into consideration upon review of the companys strategy. He gives a specific example on knowledge sharing and adds that the company requested ideas and innovations to solve a specific problem. Employees contributed on a web portal designed for that purpose, and the winners were both recognized and their ideas were implemented. Although Company D has a similar corporate culture, ethnographic observation revealed different practices. Interviews in company A were conducted in a closed room and a confidentiality agreement had to be signed. On the other hand, in company D interviews were held during an open corporate event, granting the researcher access to observe employee relationships closely. The company (D) is a strong believer in knowledge sharing and the fact that corporate events are conducted on a monthly basis with business partners, suppliers and customers to discuss methods and forms of collaboration to raise the standards of the industry in Egypt is strong evidence of this belief.

On the other hand, Company B (the second company discussed in the text above) had a very weak corporate culture. Ethnographic observation revealed that the employees had problems with the companys management, which revealed itself as a strong power culture. The manager who was assigned by the corporate headquarters possessed ideas that were alien to the rest of the employees. Upon interviewing him, he clearly stated that this is not a democracy and that the problem with Egyptians is that each one wants to do the job his/her own way and become the president of his own turf. Although the company operates in a very dynamic field, problems with the companys leadership have created a lack of trust among employees since they are aware of the fact that the company management will inhibit their ideas. As a result, knowledge transfer and collaboration is low, turnover is high and productivity is very poor. Company C and E are role cultures with everything laid down in specific rules and procedures that the employees must follow. Nevertheless, ethnographic observation has revealed that employees of both companies respect their leaders greatly and treat them as a source of power and inspiration. The companies leaders formulate the employees job descriptions as well as the strategy for the coming period. In both companies, the leader has a circle of trust of qualified individuals who are authorized to take action on their behalf. In both companies, employees said they actually loved coming to work on a daily basis, since they had strong relational ties with their colleagues and were happy with the working environment in which they operated. The tools for knowledge sharing were present, including technology enablers and knowledge repositories. Nevertheless, access is restricted to only a few based on a need to know basis. As such, although chances for knowledge sharing are available, the structure does not encourage it. Overall, it would seem that all the different organizational cultures have the same reluctance

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to transfer knowledge, suggesting that national culture can be a stronger force.

KnoWLedGe MAnAGeMent And nAtIonAL cuLture

One of the most prominent national culture authors is Geert Hofstede, whose work focuses on identifying the cultural differences between nations and illustrates that cultures and hence values, rituals and symbols vary throughout the world. Hofstede states that culture has been defined in many ways. One well known anthropological consensus definition runs as follows: culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiments on artifacts; the essential core of culture consists of traditional ideas and especially their attached values (Hofstede, 2001). Since the study of national character was a popular research subject in anthropology in the 1930s to 1950s (Hofstede, 2001), it is important to consider the dimensions of culture introduced by Hofstede as follows some of which are also discussed earlier in this chapter: Power distance index: is the extent to which the less powerful members of organizations accept and expect that power is distributed unequally. Uncertainty avoidance index: refers to the extent a culture programs its members to feel either uncomfortable or comfortable in unstructured and novel situations. Individualism versus collectivism index: is the degree to which individuals are supposed to remain independent versus integrating themselves in a group usually around the family. Masculinity versus femininity index: refers to the distribution of emotional roles

between the genders. Hofstede defines both terms as two extremes of any national culture and states that masculinity stands for a society in which social gender roles are clearly distinct: Femininity stands for a society in which social gender roles overlap, where both men and women are supposed to be modest, tender [caring] and concerned with the quality of life (Hofstede, 2001, p.297). Long term versus short term orientation index: refers to the extent to which a culture programs its members to accept delayed gratification of their material, social and emotional needs.

Trompenaars and Hampden-Turner offer a distinctly different perspective, and reason that cultures differentiate themselves according to the way they choose to solve certain problems and accordingly categorizes them under three headings; those which arise from our relationships with other people; those which come from the passage of time; and those which relate to the environment (1998). Universalism versus particularism: Universalist, or rule-based, behavior tends to be abstract, [while] particularist judgments focus on the exceptional nature of present circumstances (Trompenaars & Hampden-Turner, 1998). Individualism versus communitarianism: Individualism has been described (Parsons & Shils) as a prime orientation to the self, and communitarianism as a prime orientation to common goals and objectives (Trompenaars & Hampden-Turner). Neutral versus affective: Affective cultures show their emotions, in which case they get an emotional response in return, versus a neutral approach, where emo-

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tions are closely guarded. (Trompenaars & Hampden-Turner). Specific versus diffuse: Trompenaars and Hampden-Turner contend that closely related to whether we show emotions in dealing with other people is the degree to which we engage others in specific areas of life and single levels of personality, or diffusely in multiple areas of our lives and at several levels of personality at the same time (Trompenaars & Hampden-Turner). Achievement versus ascription: This is a value dependant issue, about how we accord status. While some societies accord status to people on the basis of their achievements, others ascribe it to them by virtue of age, class, gender, education and so on (Trompenaars & HampdenTurner, 1998).

In 1998, Hill et al. published an article in which they examined the linkage between IT transfer and socio-cultural factors that support or impede a successful transfer. [Unfortunately], the body of literature which considers culture and technology transfer is disparate. Their pilot study sample was drawn from 270 knowledge workers in Jordan, Egypt, Saudi Arabia, Lebanon and the Sudan. Respondents were drawn from both private and public organizations with different educational levels ranging between high school diplomas and PhD holders. The respondents felt that only upper level employees, who have been influenced by learning about Western technology and who have experience internationally, are supportive of Information Technology Transfer (ITT) in the Arab World. Although organizations purchase information systems in terms of hardware and software, many of the top managers do not personally use it. Differences in world view and perception of the role of technology between top managers and lower-level employees was a topic that was raised by multiple respondents. The discussion led the

researcher to posit that primary and extended family obligations are often more important than organizational allegiance. All participants in the focus groups conducted by the researchers agreed that the most outstanding cultural factor that distinguishes Arab society is the importance placed on the family. Group loyalty extends to their place of work. Workers are more inclined to strengthen their standing in their immediate work group rather than labor toward the objectives of the organization (Hill, Loch, Straub, & El-Sheshai, 1998). Participants in the Hill research also pointed out that Arabs share information with one another only if the individual thinks that by doing so, he/ she will gain status or power or that their kinspeople or workgroup will gain by their actions. The consensus of the focus groups was that some Arabs educated in the West, upon their return to the homeland, find it difficult to use the knowledge they learned in foreign universities to create change. Loyalty to religion, family and national traditions often outweigh accepting change from outside. Focus group members pointed out that Arab workers are passive and laid back and [that they] often substitute words for action (Hill et al., 1998). It is interesting to note that the findings of this study, conducted more than a decade ago, are in line with the results of the two focus groups conducted by the researchers in Egypt last year. This was including the fact that respondents were of the same average age of 35 years, all of which are bachelor degree holders working for both public and private organizations as junior and senior managers. In the original study by Hofstede, the Arab countries were grouped together and referred to collectively, although arguably there is a clear distinction between the Egyptian culture as compared to that of neighboring nations in North Africa and the Middle East. As such, the results obtained by Hofstede need verification. The focus groups conducted by the present researchers discerned that Egyptians have a strong

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sense of high power distance, given their respect to authority both in the workplace and at home. Company leaders are figureheads and role models, to whom most employees are submissive. Over time, Egyptians have remained uncertainty avoiding, where unstructured and novel situations are not welcomed and even feared. Programmed decisions, within a framework of known criteria, are the preferred method of operating in many organizations (Jones, 2009). Nevertheless, despite this perceived lack of change, a large segment of the Egyptian society has gradually shifted from a collectivist to an individualistic culture. This social change has taken its toll on Egyptians values, or as Amin terms it the patterns of behavior such as sticking to ones word or promise, pride and personal integrity, as well as collectivism patterns, where social mobility may also require a physical dislocation which threatens old ties (Amin, 2000). The current political upheaval in Egypt may reflect an ongoing transformation in Egyptian society, but it is bound to be some time before results come through. Unfortunately for the future growth of the economy, it can be suggested that Egyptians lack a long-term orientation. This is supported by a line manager in company A who considers that Egyptians in general are not long-term people. We are trying to secure as much as possible what we need today. If people dont get realized for their contribution immediately, they lose interest. This also has implications for the achievement of knowledge transfer, as this arguably requires a realization of the importance of a longterm perspective. In an article considering problems resulting from Arab cultural characteristics, Jones outlines her experience in training 70 first-level UAE national recruits for a local bank. The focus group consisted of male and female public school-leavers of age 17-19. The new torch-bearing recruits, as they were named by the bank, were scheduled to undertake a five- month training program with the aim of preparing them for their placement

in front-line, customer interface posts. During these five months, the cadets were exposed to business skills training which subscribes to the Western valuesof conflict handling (Jones, 2007). At the termination of the training program, the recruits were asked to complete the Thomas Kilmann Mode of Conflict Inventory designed to identify conflict mode preferences between the possibilities of being predominantly competitive, collaborating, compromising, accommodating or avoiding (Jones, 2007). Despite rigorous and lengthy training, they showed little progress beyond their traditional norms of being predominantly compromising and avoiding. More than three decades ago, Kransberg and Davenport argued that an advance in technology not only must be congruent with the surrounding technology but must also be compatible with existing economic and other cultural and social institutions (1972). It is safe to say that this underlying cultural barrier/ dilemma is inherent in transferring any form of knowledge, be it technology or otherwise. This can be deduced from Jones results in the UAE, as explained here, and in the outcomes of the researchers survey in Egypt. Some of the participants in the Jones article worked individually and some worked as groups. However, there was little significant difference between the individual scores and the group scores. The reason was that many of the participants, in order to clarify their understanding of the concepts, discussed most of the elements in the group before deciding their individual score. Many were exhibiting risk-averse and uncertaintyavoiding behaviors during the exercise itself, seeking approval from others for their choices, depending on others for opinions, following the most conventional approach, and avoiding making decisions at all (Jones, 2007). In analyzing the highest and second-highest preferences of the five conflict modes of the 70 participants, it was discovered that by far the highest scores were given to the preference for Compromising or Avoiding. Only six of the 70 participants did

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not record either compromising or avoiding as their top two preferences (Jones, 2007). Culture is thought by many scholars to have a bearing on outcomes. It follows that if cultural beliefs and attitudes toward technology were better understood, then the technology itself might be better adapted to the behavioral patterns of the adopting country, rather than the traditional approach of force-fitting the culture to the technology(Loch, Straub, & Kamel, 2003). Arguably, this is supported by another of Jones articles where she presents her findings based on her consulting experience to a large public sector organization in Kuwait. Attempts were made to sell a software system for managing job task analysis and competency-based training. The would-be vendors were expatriate consultants, who were aiming to sell their system to a public sector Kuwaiti firm with substantial government ownership and influence. These attempts failed completely, especially due to political and cultural barriers, despite tailored system design and an attractive introductory offer by the consultants. During her experience with the would-be consulting-purchasing firm, which employed more than 5,000 employees, 30 percent of whom were Kuwaiti nationals, the following concern was voiced in particular: significant gaps between senior management and the rank-and-file meant that the idea of one system for everyone was an anathema (Jones, 2009). Considering the work of Hofstede, this observation of one system for all supports his classification of the Arab countries as high power-distant, where power is distributed unequally in the workplace, not only between seniors and juniors, but also between expatriate and local employees. In the Arab world, qualified expatriates are looked to for the bringing-about of change. Yet they raise concerns of job security for the local and mostly unqualified senior management team members. They often fear that their closely-guarded incompetence might be revealed. During the course of their experience with this organization, the consultants encountered opposition to incorporat-

ing all training management into one system Management strongly felt that the fast-track leadership high-potentials should be monitored into a different system. Their fear of transparency, need to protect their own political agendas, and lack of trust led to immediate opposition (Jones, 2009). When questioned about Hofstedes indexes, the focus groups interviewed by the researchers in Egypt last year claimed that the primary perception of staff and managers is that they are untrustworthy and have hidden agendas. Unfortunately, both parties dont exert any effort to work on their relationship and hence the advancement of the corporation for which they work. Respondents feel that maybe if they did, that would stimulate research and development and divert the nations strategy from a me too imitation strategy to one based on innovation. Focus group members felt that the major drawback to this advancement was that peoples values in Egypt are very closely guarded to them and hence are difficult to change. The employer-employee relationship in Egypt, being one of them, has been based on exploitation, command and superiority and that will not change quickly. If values are unknown, trust is difficult and a reluctance to achieve knowledge transfer will be an inevitable result. When questioned about power distance, both focus groups agreed that Egypts power distance has been lowered over the last decade due to several reasons. The first being increased foreign direct investment and therefore the integration of a new foreign corporate culture into society based on informality, team work and cooperation. The second being the increased gap in the distribution of income, affecting education and job opportunities. It is this discrepancy that has recently characterized the Egyptian population, creating a median, whereby the higher-middle class rank low on power distance, while the lower-class income groups who work for the government are characterized by high power distance, since public sector management cherishes superiority over employees.

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Respondents overall believed that Egyptians suffer from a dual personality crisis when it comes to group versus individual behavior. Although the Arab community is characterized by tribal behavior both in their private and professional lives, Egypt tends to be different. Within their personal lives, Egyptians exhibit a collectivist culture, whereby they belong to the group and family relations are of utmost importance. Men and women do not leave home until theyre married, regardless of their age; not only would that be considered a huge offence to their parents, but also would be the subject of discontent and shame to the whole family. Respondents concurred that by instinct Egyptians are motivated to conform to the expectations of a larger group or community. The pressure to measure up to societys standards and values are engrained in the upbringing of both males and females at different stages of their life, be it at school or home. On the other hand, the alternate personality of the dual personality crisis is one of selfishness and concern for personal interests following the political regime of ex-president Anwar Al Sadat who many suggest emphasized that people should engage in all sorts of activities to increase their personal wealth without regard for others or the interest of the country. Respondents affirmed that by giving a common example of Egyptians whilst driving a car, stating that they only care about their journey and are not concerned with fellow drivers in the street, or the traffic problems at large. They also stated that this new personality has surfaced due to several economic reasons, which include the increased influx of multinational companies promoting a professional, individualistic attitude and the large gap in wealth distribution between the rich and poor, which has increased the frustration of the needy, compelling them to lose concern for everything except themselves. Respondents concluded that Egyptians are a mixture of both personalities with the situation dictating the emphasis on one or the other.

Both focus groups agreed that Egyptians suffer from high uncertainty avoidance given their need for structure, rules and information. They inferred that it might be the result of a collectivist culture bound by rules as well as an outdated educational system that dictates knowledge rather than encourages creativity and innovation. Egyptians have been accustomed to receiving orders from the time of the Pharaohs, which has inhibited their desire to make decisions. Respondents stated that this is the current situation in politics, but the respondents feel that this has partly changed after the revolution on January 25th 2011, whereby many Egyptians have tried to rise up from their repression and have become more proactive members in the society, unusual for an uncertainty avoiding country. Finally, both focus groups agreed to a masculine culture where the roles of men and women in the society are known and clearly differentiated. Quality of life is not a concern for those facing poverty and illiteracy they focus more on living and providing for their families on a daily basis.

the KnoWLedGe trAnsfer process, InnovAtIon, And coMpetItIveness

Knowledge transfer is becoming increasingly important in organizations. Organizations that are able to transfer knowledge effectively from one unit to another are more productive and are more likely to survive than those that are less adept at knowledge transfer (Argote, Ingram, Levine, & Moreland, 2000). Knowledge sharing and transfer, as a source of competitive advantage, has been underlined by several researchers as an essential ingredient in organizational success (Szulanski, 2003; Reagans & McEvily, 2003; Argote & Ingram, 2000). The ability to transfer knowledge effectively among individuals is critical to a host of organizational processes and outcomes, including the transfer

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of best practices, new product development, learning rates and organizational survival. According to some scholars, the ability to transfer knowledge represents a distinct source of competitive advantage for organizations (Reagans & McEvily, 2003). Much of the focus of this chapter is on the impact of culture on knowledge management processes, and the implications for competitiveness. The impact of organizational culture on knowledge sharing has attracted considerable academic interest. Among many other authors, Davenport and Prusak (1998) recognized the need to develop a knowledge-intensive culture that encourages knowledge sharing. Similarly, Alavi and Leidner (2001) and Nonaka (1991) also identify the relationship between corporate culture and the knowledge-creation capabilities of a company. Organizational culture has been identified as either a major catalyst or a major hindrance to knowledge creation and sharing (Alavi & Leidner, 2001). A knowledge-friendly organizational culture is argued to be one of the most important conditions leading to the success of knowledge management initiatives in organizations (Davenport & Prusak, 1998). Observers suggest that cultural barriers to knowledge management, including cultural norms that advocate and support knowledge hoarding by individuals, need to be substituted by an organizational culture that promotes the free dissemination of knowledge among all. Globalization has placed businesses everywhere in new and different competitive situations where effective employee behavior (including the sharing of knowledge, information and expertise) has been recognized as having the potential to provide a competitive edge. According to the 2008 publication of the United Nations Conference on Trade and Development (UNCTAD), most of the global income from trade remains in the hands of developed nations. Nevertheless, developing economies have managed to improve economically during the past two decades. Real growth

in percentage terms has more than doubled for economies such as in Africa (excluding South Africa) exhibiting a growth from 2.6% to 5.4% during 1981-1990 to 2003-2007 respectively. Similarly, the developing economies of the Americas, defined as the Caribbean Islands, Central and South America (excluding the USA and Mexico), has shown a surge in real growth from 1.7% to 5.0% during the periods 1981-1990 to 2003-2007 respectively (UNCTAD). Egypt has recently attracted large FDI inputs into several industries, including ICT, pharmaceuticals and petroleum. An expected repercussion of the generally accepted globalization phenomenon occurring throughout the world is a rise in the activity of national firms in foreign markets (Gulev, 2005). Accordingly, several firms have ventured abroad as multinational companies (Bhagwati, 2004; Lechner & Boli, 2004) in an attempt to overcome country specific boundaries and reap profits. However, although international firms have set up in Egypt, local ICT companies in Egypt have not been venturing overseas to any great extent, and the issue of the impact of Egyptian national culture remains problematic in all sectors. FDI has clear benefits for host countries because it is often associated with transfers of technology as well as financing (Masson, 2001). According to the UNCTAD, Foreign Direct Investment flows worldwide have increased from $1,779,198 million in 1990 to $10,047,966 million in 2008. Such an increase in FDI suggests greater levels of activity not only the sharing of technology, but also the sharing of expertise. According to the above figures, developed nations involved in investment beyond their boundaries have in the past years pumped capital into developing nations, exploiting the abundance of natural resources present, primarily seen as including cheap labor. Such exploitation has brought about its advantages for the recipients, including the development of an experienced workforce. Multinational companies have realized that employing a culturally diverse

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workforce can increase their competitiveness in several ways. The most prominent rewards of ethnic and other kinds of diversity include enhancing the organizations ability to generate creative ideas and cater to the needs of a diverse customer base. Decision-making can be significantly enhanced when companies have greater access to diverse points of view and a wider range of individual talent. However, multinational companies with a diverse workforce face several competitive challenges. On the one hand, communication between diverse employees needs to be optimized especially through installing knowledge transfer enablers within companies. This has been recognized in Egypt, where an interview with the VP of Strategy and Marketing of one of the respondent companies stated that they consider they have succeeded in harnessing employees tacit knowledge through creating a knowledge base to which employees can contribute. This knowledge base includes online forums, videos, blogs and social networking sites such as Facebook. Other techniques the company has devised include breakfast with the president where 30 employees (up to the level of line managers) are invited to meet the company president to voice their concerns. The company has also created lunch and learn sessions where employees are given an agenda of appealing and attractive topics, to be discussed in an informal environment. The sessions are administered by colleagues who share knowledge about their area of expertise, and kept to within a 45 minute lunch break. These methods to encourage knowledge transfer have enabled this particular company to argue that it has become a true learning organization and a pioneer in the ICT sector. Certainly, these processes have contributed to the companys efforts to create a strong organizational culture based on transparency, knowledge transfer and organizational citizenship, enabling it to grow from 130 to 500 employees within one year, with considerably enhanced profitability.

In order to lay the foundations for a true learning organization, it has been suggested in the literature that knowledge creation and management needs to be the core concern of the organization as a whole from top down. Garvin (1993) defines a learning organization as one skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. He states that learning organizations are skilled at five main activities: systematic problem solving, experimentation with new approaches, learning from past experience, learning from the best practices of others, and transferring knowledge quickly and efficiently throughout the organization. The photocopier giant Xerox has arguably managed to foster such an environment through implementing successful performance management. When the Xerox machines are not as predictable as the customers expect, and when following the service manual fails to produce the relevant advice, the Xerox sales representatives come together and share their best practices. [Xerox] has set up a process similar to an academic peer-review system to gather, vet, and share those best practices across the company. The reps get much-welcome recognition for their creativity, and local best practices are deployed companywide (Brown & Duguid, 2000). Together the sales representatives embody a community of practice, whereby a pool of knowledge is created with each individual contribution. A community of practice is a group of people informally bound together by shared expertise and passion for a joint enterprise (Wenger & Snyder, 2000). As communities of practice generate knowledge, they renew themselves. They give you both the golden eggs and the goose that lays them (Wegner & Snyder, 2000). In a similar manner, Fortune 500 leader General Electric believes that communication is an essential ingredient for success. Not only does it create transparency and a defined strategy for employees to follow, which creates a solid orga-

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nizational culture, but also ensures that ideas are allowed to freely flow within the company. General Electric CEO Jack Welch considers this to be a powerful stimulant of change. He has made the concept of boundarylessness a cornerstone of the companys strategy for the 1990s (Garvin, 1993). The fact that such examples are becoming a widespread phenomenon in a multitude of organizations such as Chaparral Steel, AT&T and Boeing, to name but a few, is indicative of the power of transparency in such organizations. Peter Senge, a pioneer advocate of the concept, states that learning organizations are places where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together (Senge, 1990).

KnoWLedGe trAnsfer And nAtIonAL cuLture

According to the researchers interviews in several multinational companies in Egypt, employees have attributed the lack of Egyptian companies competitiveness as opposed to those of the West to two interrelated factors culture and management. The issue of national culture discussed in further detail below is particularly important for the present study. There is immediately a strong contrast between the Western companies discussed above and the Egyptian experience. Almost all employees stated that the Egyptian culture is high power-distant, in which employees hesitate to communicate directly on all levels with their bosses. More senior colleagues are reluctant to share information with their juniors, who may be seen as potentially untrustworthy. There is a predominantly collective rather than individualistic culture in Egypt, which does not encourage individual achievement, given a greater fear of individual blame when things go wrong. Uncertainty avoiding behaviors can also prevent
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knowledge-sharing, given worries about possible outcomes. These cultural factors (devised by Hofstede, 2001, see below) show Egypt as in contrast with the multinational giants discussed above. Employees interviewed also saw Egypt as mostly particularistic prizing relationships as higher than universal laws and as an affective culture, whereby managers and employees utilize and reveal their emotions when doing business (these concepts relate to cultural characteristics created by Trompenaars & Hampden-Turner, 1997). This includes how they feel towards both employees and external stakeholders. The interviewees explained that this cultural attitude including a perceived lack of discipline, structure, organization skills and time management in the workplace has led to distrust in a multinational context, and accusations of being unprofessional. It has created barriers for employee advancement and innovation efforts, to the extent of some employees even sabotaging innovation attempts being practiced in some companies, seen as too individualistic and failing to support colleagues. Staff members trying to look good are penalized by those less competent. Egyptians can also be seen as too personal and emotional, and operate in quite different ways in the workplace than those expected by Western bosses, so behavior is often misunderstood by multinational employers. As such, much time and effort is wasted, resulting in companies missing out on opportunities to innovate, grow and focus on customer needs as a primary strategy. Furthermore, interviewees identified that being an ascribed or status-conscious society, authority is most often centralized and those reaching high positions are most positively-regarded, regardless of their value-adding achievements (another Trompenaars, 1997 dimension). This view may need to be moderated in view of the recent removal of Egypts unpopular president, but such an initiative is not necessarily a widespread phenomenon, as he was in power and unpopular for many years before being overthrown.

Knowledge is Power

These factors can lead to problems in the management of local staff by multinational companies in Egypt. Interviewees stated that in the 1950s and 1960s, after Egypts first revolution, management had a mission to rebuild the country and therefore was keen to perform and excel. Many observers feel that this is no longer the case, although what the latest revolution in 2011 might bring is open to debate. From the above, it can be deduced that the Egyptian national culture is strong and persistent, given the fact that it is difficult to penetrate by foreigners and highly expressive. Throughout the years, these national cultural characteristics have (arguably) negatively impacted the management of organizations in Egypt, and have contributed to the loss of Egypts competitive position in several sectors including textiles, wheat exports, the steel industry and, possibly, ICT. Their impact on knowledge management processes has been one of the greatest areas of concern and largely explains the lack of competitiveness the researchers suggest.

KnoWLedGe MAnAGeMent, huMAn cApItAL, InnovAtIon, And coMpetItIveness

As the pressures of global competition accentuate, managers have realized that increasing emphasis should be placed on what organizations and employees can learn and develop in the future, rather than on what they actually own now (their knowledge and asset base generally). The term intellectual capital basically, what employees know and can learn is not a recent concept. On the contrary, Malchup (1962) was the first to coin the term and used it to emphasize the importance of general knowledge and an ability to learn as essential to growth and development of employees and organizations. In a five-decade old article by a researcher in the US National Bureau of Economic Research, it was stated that it has become increasingly evident, from studies in income

growth that factors other than physical resources play a larger role than formerly believed, thus focusing attention on less tangible resources, like the knowledge possessed. A concern with investment in human capital, therefore, ties in closely with the new emphasis on intangible resources (Becker, 1962). The world is experiencing a revolution in information technology, innovation, and telecommunications, which is driving the emergence of the knowledge-based economy. This requires successful organizations of the twenty-first century to recognize the importance of intellectual capital as a source of sustainable competitive advantage (Seleim, Ashour, & Bontis, 2007). Sharing of intellectual capital between employees is the next step. By contrast, in traditional societies, essential knowledge was held as proprietary by the ruling hierarchy. It was often guarded and sacred. The priests of ancient Egypt developed a system for knowing when and to what extent the river Nile would flood. It was through their intellectual capital that they could manage the growth of agriculture, which was the basis for the physical wealth of the pharaoh (http://www.rdp07.org). This knowledge was not generally shared, to preserve the unique role of the priests. Research has shown a strong relationship between performance and the development of human capital. In the research results of Hitt, Bierman, Shimizu, & Kochhar (2001), they found that human capital moderates the relationship between strategy and firm performance, stating that outside of natural resource monopolies, intangible resources are more likely to produce a competitive advantage because they are often rare and socially complex, thereby making them difficult to imitate. Carly Florina, CEO of HewlettPackard, emphasized this point, saying that the most magical and tangible and ultimately the most important ingredient in the transformed landscape is people. Therefore, one answer to the critical question in strategic management regarding why

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firms vary in performance is that they differ in human capital (Hitt et al., 2001). In an interesting study by Seleim, Ashour & Bontis (2007), on the relationship of human capital and organizational performance in Egyptian software companies, the authors hypothesized the following: [It was expected that] the higher the number of certified developers in the firm, the higher [would be] the performance of the firm. Although the government invested heavily in certification training and many employers look for it when recruiting, the results of this study do not support a statistically significant relationship. It seems that as an outcome of this research, the Egyptian government will need to wait a little longer to realize an economic benefit from its initial investment (Seleim, Ashour, & Bontis, 2007). [It was also speculated that] the higher the number of developers who are able to work in a team, the higher [would be] the performance of the firm. Significant benefits can be gained from adopting a teamwork approach to software development. It is an effective mechanism for collective learning, which can lead to overall increases in intellectual capital (Seleim et al., 2007). [This has not yet been tested in Egypt]. From the above research it can be speculated that employee certifications are only the means to an end. If they are not put to proper use through effective teamwork, organizational performance will not be affected. To meaningfully impact performance in such a knowledge-intensive sector, employees need to collaborate to innovate and devise ways to think out of the box. Arguably, Knowledge Management in an organizational context is of vital concern to both public and private sector enterprises today, since it impacts employees ability to transfer knowledge between organizational silos. Consultants at both Ernst & Young and McKinsey, for example, are

evaluated partially on the knowledge they contribute to repositories and human networks (Cortada & Woods, 1999). Knowledge Management is now one of the major driving forces of organizational change and wealth creation (Chase, 1997), as such implementing organization wide strategies that focus on Knowledge proliferation is the core concern. Some pioneering success stories in that regard include British Petroleum, Glaxo Wellcome, ICL, Nokia Telecommunications, the UK Post Office and Zeneca Pharmaceuticals (Chase, 1997). On the other hand, the inability of organizations or countries to harness the power of knowledge can have the reverse effect. Knowledge increasingly defines the line between wealth and poverty, between capability and powerlessness and between human fulfillment and frustration. A country able to mobilize and diffuse knowledge can rapidly raise its level of development, help all its citizens to grow and flourish and take its proper place on the 21st century global stage (UNDP Report, 2003). The UNDP Report examines the status of Arab knowledge and concludes that the Arab world is lagging behind given the fact that the missing links [necessary to achieve a true learning culture] are either buried in dust or smothered by ideologies, societal structures and values that inhibit critical thinking, cut Arabs off from their knowledge-rich heritage and block the free flow of ideas and learning (UNDP Report, 2003). As a result, several newly-developing nations, such as the United Arab Emirates, have managed to progress rapidly and take its place in the 21st century, while countries with a strong heritage of economic development, such as Egypt and Syria, have lagged behind. Within our survey of Egyptian ICT companies, in one particular international organization (the second discussed here so far), the Regional Manager disclosed that the company is facing difficulties in penetrating the Egyptian market and in gaining market share, compared with its operations in the rest of the world. This was due

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to several factors, the most prominent perceived by this respondent being the inability of the Egyptian management to implement a learning organization and thus leverage human capital. He suggested that multinational companies planning to invest in Egypt should hire foreign management to enforce a culture of knowledge sharing, engaging in culture transformation to achieve this. He considered the Egyptian culture as one where priorities frequently change, and there is a lack of focus. Employees efforts may be primarily directed towards achieving strategic goals for the benefit of the whole organization, but then they can shift towards protecting their own interests in the company. The first goal might encourage knowledge sharing, but the second has the consequence of retaining knowledge, but not necessarily sharing it. Accordingly, this tendency towards knowledge retention (but not sharing) can be the result of feelings of job insecurity, since there is a distinction between those who are qualified and those who are trust-worthy. The qualified staff might be less trust-worthy and loyal a major concern of the typical Egyptian manager. The fear is that the qualified staff can easily leave and get another job. It is thus apparent that in order to achieve a differentiation strategy with improved knowledge transfer and the building of human capital, companies are compelled to deal with aspects of the impact of national culture on their corporate culture. Helping to explain this situation, the researchers observations and the feedback from organizing two focus groups (including a total of 65 respondents, between the ages of 25 40) in January 2010 can be seen to lead to the proposition that most Arab countries, including Egypt, are characterized by political regimes that have prohibited citizens rights of expression and freedom for years. This may have exacerbated the existing national cultural characteristic of knowledge retention and reluctance to share. As such, this tendency has been transformed into a

dominant cultural element, not only within the political system, but also within the workplace. Respondents have expressed this as a prevailing factor of lack of political freedom leading to a fear of job insecurity, the lack of trust, and therefore a failure of innovation amongst Arab countries. Moreover, a weak economy coupled with an inadequate and outdated educational system have also been mentioned as compelling reasons behind Egypts lack of strong human capital, innovation and world competitiveness. Although there is now a new opportunity for political freedom in Egypt with the toppling of the old, repressive regime, it is bound to take time for a national culture change to take place, and this is unlikely to be wholesale. In a recent paper on science and technology indicators in the Arab region, including both Gulf and Mediterranean Arab countries, Nour (2005) concludes that neither the Gulf nor the Mediterranean countries surveyed possess sufficient human or financial resources to promote improved performance in science and technology. Nour tries to explain the lack of innovation in Egypt through looking at a failure to build human capital. She states that public expenditure on education was highest in the case of the 26.1% spent by Morocco. On the contrary, Egypts % is in single digits. Despite recording the appointment of 493 senior scientists during 1996-2000, the highest in the Arab world, Egypts high technology exports as % of manufactured exports was a mere 1% in 2001 (Nour, 2005). This evidence indicates that: The Egyptian government does not set expenditure in education as a priority Despite the outdated educational system, Egypt has a highly qualified pool of talent, but it is not well-utilized. Many Arab countries, including Egypt, still lack a national policy for enhancing national innovation capabilities.

In a supporting presentation by a World Bank Economist (2006), Zeng states that Egypt has

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several strengths from a knowledge economy perspective, including a significant number of scientists and engineers, working in R&D. This can be augmented by the observation that Nobel Laureates Dr. Ahmed Zuwail and novelist Naguib Mahfouz, renowned cardiologist Magdy Yacoub and Dr. Mohamed El Baradei, previous Director General of the International Atomic Energy Agency, are all Egyptians. However, the problem of a lack of innovation and competitiveness still persists. According to the focus group studies conducted by the researchers in the present study, Egypts lack of innovation capabilities has been attributed not only to an underdeveloped education base but also to a lack of knowledge transfer within the limited human capital base. Respondents saw culture as a strong and resilient force, since it is deeply ingrained. As such, Egyptians that excel abroad tend to regress upon returning home, since they are faced with the strong Egyptian culture that defies knowledge transfer and tends to maintain the status quo. They identified that Egyptians have been accustomed to control by a centralized authority, taking all decisions and discouraging the disclosure of information to other parties. Accordingly, foreigners face difficulty when doing business in Egypt since they have to rely on personal relationships to obtain data rather than on contemporary, professional means of doing business. Most organizations should be particularly interested in the conversion of tacit towards explicit knowledge, as part of the process of building up human capital. Tacit knowledge is one of two types of knowledge, whose taxonomy was most notably espoused by Michael Polanyi, [and refers] to the experiential know-how based on clues, hunches, instinct, and personal insights (Cortada & Woods, 1999, p.499). In his article, Li-Hua (2000) states that it is of great significance for an organization to be able to capture and use the knowledge inside managers heads. Maitland (1999) argues that the crucial factor in determining

a companys competitive advantage is its ability to convert tacit knowledge into explicit knowledge through organizational learning. Polanyi (1967) considered human knowledge as starting from the fact that we know more than we can tell. Knowledge is increasingly being recognized as a vital organizational resource that gives market leverage and competitive advantage (LeonardBarton, 1995). A study which surveys a broad spectrum of US manufacturer and service firms to examine the effect of tacit knowledge transfer on firm innovation capability, [produced] empirical results [that] generally support the predictions from theory (Cavusgil, Calantone, & Zhao, 2003). However, in Egypt the conversion of tacit to explicit knowledge does not seem to be happening, and this underpins the lack of knowledge transfer mostly due to national cultural barriers.

soLutIons And recoMMendAtIons

What can Egypt do about this? In order to strengthen the countrys innovation record and achievements, Zeng (2009) considers that Egyptian companies should restructure their management systems to improve efficiency, try to gain increased funding for strategically and economically significant areas, as well as develop research quality through more training. Zeng (2009) suggests and the current researchers agree that the country must implement a comprehensive reform of the education system, which has arguably lagged behind during the past fifty years. Encouraging business sector involvement in R&D, and promoting venture capital, are alternative approaches to seizing the knowledge opportunity. Finally, accelerating technology transfer through more international cooperation is seen as a must. However, as revealed in the research for this chapter, there is more to improving innovation and competitiveness than systems, funding, training, R&D and international help. The cultural barriers

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to the essential processes of knowledge management especially knowledge transfer need to be overcome before real changes in improved innovation can be achieved. Culture change takes time especially national culture change but it is possible. Yet research shows that currently the barriers are stronger than the drivers, so this might take generations, and needs stronger leadership than that currently in place. As we go to press, Egypt is at an impasse, with the future leadership style and approach still uncertain. Given the long-term nature of change achievement, the researchers feel that long term reform should be focused on updating the educational system at all stages, with increased focus on encouraging students to innovate and devise creative solutions. This will create a new generation of leaders with a vision and enough ingenuity to advance the corporations for which they work. By changing and modernizing the educational system, future leaders will understand the significance of global integration and thus work attitudes will gradually shift to encourage knowledge transfer as a means of achieving global competitiveness. Nevertheless, in the short term, local and multinational organizations should employ a Chief Information Office (CIO) as an expert in exploiting the tools in place within different organizations to disseminate knowledge between employees. CIOs can encourage knowledge transfer through organizing training sessions to stimulate the process and familiarize employees with its importance in increasing innovation and competitiveness. Such managers will act as a vital link between management and employees. Not only will they operate hand in hand with employees to enhance the process, but also can influence management to increase monetary incentives to those actively involved in the process, as a form of reward. Corporations should set measurable key performance indicators that link the active engagement in knowledge transfer to monetary and non-monetary rewards including promotion, bonuses and certificates of merit. This should be

implemented from the top-down starting from senior management and ministries to induce the process on a wide scale. When this has been successfully achieved, companies should form industrial coalitions to share trade know-how and achieve competitiveness through the synergy of all players. Such programs and efforts will send an effective and immediate message throughout the economy that this is the means to regaining Egypts global competiveness. Individuals who refuse to engage in such a process will not be able to survive the transformed corporate culture and will be weeded out unless they adjust their behavior and conform to the peer pressure. Eventually changes will take place in the perception of rewarded behaviors. In this way, knowledge transfer can be engrained as part of the national culture and the corporate culture of Egyptian companies. Currently, the country is far from achieving this goal. Egyptians have to be willing to change their current corporate practices and attitudes. This may be seen in the coming years following the recent political revolution, with the development of a more proactive and innovative mind-set eventually replacing the obsolete political structure that is currently being swept aside.

future reseArch dIrectIons for studyInG KnoWLedGe MAnAGeMent, KnoWLedGe trAnsfer, And cuLture
The findings by the authors have been supported by the results of the World Economic Forum Global Competitiveness Report, which reported that the Global Competitiveness Index (GCI) for Egypt in 2010/2011 is ranked 81 out of 139 participating countries, with 1 being high and 139 being low. Thus Egypt is more than half way down the list and in the lower half of competitiveness in countries worldwide. The report identified one of the most problematic factors for doing business in Egypt

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as being corruption. The economy is underperforming in both the health and primary education sectors, and in terms of labor market efficiency. This is supported by the researchers focus group findings of a year ago, discussed above. Other directions for future research in this regard include researching the lack of innovation in the educational sector, where a lack of knowledge transfer tendencies would seem to exist. Researchers need to study the knowledge transfer process between key players in the educational process including teachers, students and management of educational facilities. Training of staff in the Egyptian educational sector is underdeveloped due to a lack of funds. As such, teachers are outdated in terms of their knowledge and practices and are not encouraged to share knowledge with one another. Students are lectured at from books as factual information with no room for thinking or innovation. This affects the breeding of future leaders working for local and multinational companies and hence the knowledge management process as a whole. According to the report cited above, although Egypt ranks 27th in domestic and foreign market size, classifying it as a lucrative market for FDI given its population size and diversity, its capacity for innovation and company spending in research and development rank 109 and 74 in this report respectively. These figures are alarming when compared with other developing nations in the same income group such as India. India has a greater population size and ranks 51 in the Global Competitiveness Index (compared with Egypts 81). Nevertheless innovation and R&D spending rank 33 (compared with 109) and 37 (compared with 74) respectively, exhibiting a huge difference between the two nations. Culturally, India and Egypt are very different, and it would be an interesting future study to consider if Indias organizational and national culture was playing a role in encouraging innovation, whilst Egypts seem to be discouraging it. Applying Hofstedes national culture questionnaire

between both countries would result in a grounded comparison between both countries on each of Hostedes five indexes, and it might be found that both cultures are quite similar. Collectivism and high uncertainty avoidance are expected to be parallels. Researchers should map their findings, analyzing points of convergence and discrepancy, to try to pinpoint explanations. Finally, the researchers are planning to extend their research into different industries in Egypt. The findings presented in this chapter have been conducted on the ICT sector as one of the booming sectors attracting FDI and therefore worthy of research, yet other sectors with reputation of international presence include banking and FMCG. We expect to find similar results in all sectors, since organizational behavior in Egypt is highly influenced by national culture, and this would seem to be stronger than the organizational culture of the multinationals. Nevertheless, by doing so, generalization will be possible on a national scale and hence formulation of a strategic road map to continue to enhance the knowledge transfer process in Egyptian companies may be possible.

concLusIon
It is apparent from much of the above study, especially the insights from survey of ICT companies in Egypt, that the concept of culture be it organizational culture or national culture is working as a strong moderator of the knowledge transfer process and of the effectiveness of knowledge management generally. This is undoubtedly having a knock-on effect on the achievement of innovation in products and services and the competitiveness of Egypt in ICT as a whole. Although in many Egyptian companies the necessary tools required to facilitate knowledge transfer are in place, this does not necessarily mean that employees are actively engaged in the knowledge transfer process. As we have seen, one of the advantages of knowledge transfer outlined earlier in this chapter is the

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encouragement of new approaches and business improvement. Managers in local companies and in focus groups conducted complained about the lack of innovation in the Egyptian economy. So the poor levels of innovation fuelled by knowledge transfer are not the result of a lack of appropriate tools. The researchers believe that the preliminary findings in this study have an important implication for managers, especially in ICT, and possibly in other sectors. What can be done about this? The following suggestions may be relevant: Managers need to understand the importance of exploiting the ICT tools available in the companies to share knowledge. This incorporates the use of shared knowledge repositories without functional or seniority restrictions. At present, these tools are being used to guard knowledge, not share it. Training is regarded by employees as a facilitator to the knowledge transfer process since it builds new relationships and opens the room for discussion. Also, Egyptian managers need to free up employees time to share knowledge through formal coffee breaks or scheduling periodic sessions to formally socialize with peers and managers across different functions in workshops. Top management needs to show its support to the knowledge transfer process through increased commitment by rewarding employees that engage in the knowledgesharing process, both in monetary and nonmonetary forms. Top management should coordinate with the HR department to develop appropriate methods to engrain knowledge transfer within the corporate culture of companies and integrate this concept within their hiring process to guarantee a cultural fit of new employees.

All companies should incorporate knowledge transfer in their mission statements and set smart objectives to share knowledge for managers that in turn will be cascaded down to subordinates. Finally, since Egyptian companies in the ICT sector engage in several international agreements, managers should be sensitive to these cultural differences. These suggestions could also play a part in improving knowledge transfer across the board and not just in Egypt.

Here, in this chapter, we have suggested that problems of knowledge management including knowledge transfer and how they can support innovation and global competitiveness are primarily due to cultural barriers to the knowledge transfer process at grass roots level. Respondents interviewed particularly mentioned that this may be the result of a short-term orientation mentality and the results of an outdated educational sector. This study is continuing with the first-named authors doctoral thesis, and is continuing to test the proposition and will seek more specific recommendations.

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Key terMs And defInItIons

Competitiveness: The ability of companies to perform better in local and global markets. Competitiveness is not always measured by financial performance, but also by the companys ability to differentiate itself from existing competition. ICT Companies: Companies in the Information and Communication Technology field. They have been named as such in Egypt to emphasize the role these companies have in capturing information and data and transferring them into knowledge through the use of technology. These companies are part of the IT field, involved in the business of providing software, hardware, IT solutions and consultancy. This is a booming sector in Egypt and is hoped to transform the economys performance in the future. Innovation: Is the process followed in individual companies to enhance the creation of new ideas be it products / processes. These innovations are a direct result of knowledge transfer and have the ability to transform organizations and countries, enhancing their competitiveness in global markets. Knowledge Transfer: Within the research, this refers to the ability of individuals within the company to share knowledge together. This is through informal coffee breaks and socialization sessions in addition to technology enablers such as knowledge repositories in an attempt to ameliorate the performance of the company. Multinational Corporation: A company that has its facilities and other assets in at least one country other than its home country (not being Egypt). Such companies usually have a centralized head office where they coordinate global management. National Culture: National culture is the higher level, the characteristics which are shared by a population of a country by virtue of their ethnicity. The authors believe that a countrys national culture impacts the way organizations conduct business. Organizational Culture: Is the way in which companies conduct themselves. It is usually visible in a companys shared values and norms. Organizational cultures can be strong or weak depending on managements ability to successfully diffuse ethics and standards through training.

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