Journal of Technology Management in China

Technology transfer in Asia: challenges from a cross-cultural perspective

Christian Hirt,
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To cite this document:
Christian Hirt, (2012) "Technology transfer in Asia: challenges from a crosscultural perspective", Journal of
Technology Management in China, Vol. 7 Issue: 1, pp.4-21, doi: 10.1108/17468771211207312
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JTMC
7,1 Technology transfer in Asia:
challenges from a cross-cultural
perspective
4
Christian Hirt
Institute of Human Resource Management, University of Graz, Graz, Austria

Abstract
Purpose The purpose of this paper is to highlight challenges to the transfer of technologies which are
caused by the internationalization of companies and the need to outsource production in a globalized
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business environment. Aside from typical methods of transfer by means of documents or equipment,
technology is mainly brought forward by human resources, which in a transboundary context implies
the interaction between cultures. However, a connection between culture and technology has, for a long
time, been underestimated by practitioners and researchers and a fortiori necessitates the development
of competences to facilitate collaboration in a more and more multicultural working environment.
Design/methodology/approach Data were retrieved from a semi-structured questionnaire used
in ten in-depth interviews and exploited by discourse analysis. The survey questionnaire was the main
instrument to support data collection in the interviews with at least one respective executive involved
in cross-border technology transfer in the Japanese sample companies.
Findings Contradicting the assumptions in Western literature, this study reveals that not only
countries correlating on collectivism and masculinity but also more feminine countries can be
considered as successful technology transfer partners. It is also substantiated that cultural closeness
between countries does not imperatively result in frictionless technology transfer when analyzed from a
cultural point of view.
Practical implications Survey results from a small-sized exploratory study on Japanese
companies and their experience in technology transfer processes within Asia provide information that
will help managers to better understand the challenges in cross-cultural transfer situations and to create
a more effective transfer framework.
Originality/value This paper focuses on the combination of technology transfer processes and the
need for cross-cultural competence and hence fulfils an identified need to link technology transfer to
culture.
Keywords Japan, International business, Globalization, Outsourcing, National cultures,
Knowledge management, Knowledge transfer, Technology management, Technology transfer, Culture
Paper type Research paper

Introduction
The effect globalization has on the international business environment highlights the
importance of studying management concepts not only between the West and East but
also among Asian countries. For a long time it seemed that technology originating in
developed countries controlled numerous nations but nowadays Japanese technology
dominates the whole world as well. The transfer of technology to rapidly developing
Journal of Technology Management economies has become an important strategy of corporations in industrialized countries
in China with already developed nations as well as Japan playing a major role as the transferring
Vol. 7 No. 1, 2012
pp. 4-21 partner. At the same time a considerable focus has been on the extent to which the Brazil,
q Emerald Group Publishing Limited Russia, India and China (BRIC) in particular, are taking the lead in this setting by taking
1746-8779
DOI 10.1108/17468771211207312 over global manufacturing with increasing numbers of engineers and technically
 qualified workers (Goldman Sachs, 2005). But just as economies are rapidly changing, so is Technology
the focus on the interest on developing economies. The original BRIC term has experienced transfer in Asia
several extensions and alterations with some exhaustive branching offs like the Vietnam,
Indonesia, South Africa and Turkey (VIST) concept at present being intensely discussed
in the Japanese context. Vietnam in particular competes more and more with the Chinese
market in attracting Japanese companies by offering a competitive advantage with lower
wages in manufacturing industries. Such low production costs are one of the main reasons 5
for technology transfer in Japanese companies (Takata and Hirakawa, 2007).
By comparing and analyzing the findings of Japanese companies the most prevalent
cross-cultural risk factors in cross-country technology transfer processes will be
identified as areas where to put forth the development of cross-cultural competence for
smoother transfer operations in the future. It is argued that even though Asian cultures
have more commonness among each other than Asian and Western cultures,
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cross-cultural mismatches impair the effectiveness of a successful technology transfer

process. Within this paper I will highlight such problem areas from the viewpoint of
cultural aspects and person-embodied technology transfer in Japanese enterprises and try
to downsize a gap in literature: first, most studies elaborating on technology transfer in a
Japanese context focus on the technical aspect. This apparent lack of interest of Japanese
academics in the human side of technology transfer was also emphasized by Elsey and
Fujiwara (2000, p. 333). Second, another lack in literature was highlighted by Swart
and Powell (2008). Supporting their argumentation in terms of intra-organizational
knowledge and learning in networks, the cognitive aspect has to be stressed, describing
the degree of shared codes and language as overlapping cognitive structures.
As knowledge is inseparable from person-embodied technology transfer an elaboration
on overlapping or diverging cognitive structures is fundamental for the success of a
transfer project. For a detailed literature review on the other two categories, namely the
structural dimension referring to the physical structure of a network, and the relational
dimension of knowledge dealing with trust and shared norms in the relationships within a
network refer to Swart and Powell (2008, p. 5f). This paper will try to contribute to this
apparent lack in literature by seizing both suggestions, focusing on the human side and
mismatches in cognitive structures.
In a first step, the technology transfer concept will be briefly discussed in relation to
cross-cultural requirements. Second, this paper will elaborate on the findings of the
empirical survey and the resulting requirements for operating in a multicultural workforce
in Asia. Finally, as the exploration of this topic is intended to be continued in Europe, the
paper will conclude with ideas to continue this research in the European context.

Technology transfer concepts and the relevance of culture

A discussion on cross-cultural challenges in a multicultural work setting requires first of
all a clarification of how this concept and cultural terms are understood in this context: the
terms cross-cultural and multicultural both apply to the involvement of more than
one culture. Adler relates cross-cultural to the understanding and improvement of the
interaction of co-workers, managers, executives, clients, suppliers and alliance partners
from countries and cultures around the world (Adler, 2002, p. 11) whereas multicultural
denotes that people, clients, employees come from more than one culture (Adler, 2002,
p. 15). In the educational context Fries (2002, p. 2) does not see the interaction aspect in
the term cross-cultural but implies interaction with the term intercultural. All definitions
 JTMC have in common that multicultural denotes the mere coexistence of people from different
7,1 cultures and ancestry, whereas the terms cross-cultural and intercultural imply dealing
with and referring to other cultures with the goal to bridge differences. Another useful
diction in this context is transcultural which also describes a decline in homogeneity
and an increase in mixture and interpenetration among cultures. The goal here is the
transformation of differences and the creation of something new. Unlike the mere
6 perception of difference as implied in the terms cross-cultural, intercultural and
multicultural, the term transcultural implies that difference is incorporated and integrated
and can thus lead to the overcoming of cultural limits (Schneider and Hirt, 2007, p. 44). In
this paper this distinction will be adopted. Cross-cultural problems accentuate difficulties
generated by interaction between partners of different cultures in technology transfer
processes. Multiculturalism describes the variety and potential connection of cultures in a
system, as to say members with different cultural background in transboundary work
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settings. The term cross-cultural (intercultural) competence requires the integration of the
former definitions. As the ability to interact successfully with people from other cultures
and to apply this knowledge in respective situations cross-cultural competence becomes
evident in multicultural group settings as well as cross-cultural interactions
with business/technology transfer partners. Even transculturality gains importance in
connection with technology transfer as for instance in the absorption of culturally
embossed operation methods from a technology transferring partner. This study shows
that the intermixture of Japanese working methods and specific cultural practices in other
Asian countries can generate behavioral patterns in a transcultural sense. Cultural limits
herewith and difficulties in the attempt to balance ethnocentrism and cultural relativism
will be pointed out in the subsequently identified cultural risk factors.
Technology can be understood as a combination of hardware, software and know-how,
describing the means by which we apply our understanding of the natural world to the
solution of practical problems (Miles, 1995). This becomes manifest in engineering
documentation and manufacturing techniques, which are the human implementation of
the aforementioned written instructions. Technology is hence a systematically developed
set of organized information, skills, rights and services. Li-Hua (2007) highlights the
challenge of finding a consistent definition in literature by contrasting different
interpretations and positions of this term, but emphasizes the importance of technology as
a strategic instrument in achieving economic goals for both developing and developed
countries. Whereas for developed countries technology facilitates the use of huge market
potential, developing countries benefits lie in the creation of wealth and prosperity.
According to the definition in the International Code of Conduct of the UNCTAD (1985)
technology transfer can be defined as the transfer of systematic knowledge for the
manufacture of a product, for the application of a process or for the rendering of a service
[. . .]. Applied to cross-border activities this definition can be adopted similarly for
international technology transfer. However, it is apparent that the original United Nations
and hitherto quoted definitions are quite neutral and ignore the cultural aspect.
The transfer of technology has been discussed by several authors (Hawkins and
Prasad, 1981; Li-Hua, 2007, 2010). Technology transfer is explained as flows of
technological knowledge to the market (Li-Hua, 2010). This comprises the movement of
science and technology between different groups. Traditionally, the focus lies on
hardware objectives but nowadays an increased transfer of information as in computer
programs or simply new ideas is prevalent. Successful technology transfer necessitates
 the transformation of a multinationals technology strategy into achievable objectives in Technology
order to gain sustainable competitive advantage in the global market (Li-Hua, 2010). transfer in Asia
When technology is transferred across borders, it usually involves a supplier organization
generally located in a developed country and a recipient organization located in a
developing country. Intra-transfer between companies or between knowledge factories
like universities or research centers and industry or intra-industry transfer are also
prevalent. As the effectiveness of technology transfer is highly affected by variations in 7
societal cultures the former mode between countries is of utmost interest in a cultural
context. Only few theoretical and empirical analyses integrate culture and technology. For
a detailed overview on studies covering this topic refer to Khedia and Bhagat (1988,
p. 559f). As for the human aspect Takata and Hirakawa (2007) emphasize the process in
which a certain technology is applied by other subjects by converting technology into
various elements. First, technical information on the donor side is transformed, then
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transferred and finally reproduced as new technology on the receivers side. Problems
frequently occur by specific idiosyncrasies embodied in technologies which are likely to
result in mismatches between the transferring and receiving culture. By stressing the term
subjects across nations culture is at least implicitly considered in this approach.
Further complications with the term technology transfer have been disclosed by Mathews
(1995) who argues that the term implies action on the side of the sender and passivity on
the side of the receiver, as the receivers activity of absorbing, adapting and improving of
technology is not sufficiently expressed in this diction.
As for specific countries, studies depict the connection of the concept of technology
transfer and culture by the example of China (Farhang, 1996; Di Benedetto et al., 2003;
Li-Hua, 2006; Li-Hua and Khalil, 2006; De Meyer, 2008; Sabir and Sabir, 2010) or other
rapidly developing economies (Hussain, 1998). Cultural variations require not only the
transfer of technical knowledge in form of (written) material specifications but also
the transfer of know-how and engineering personnel from a supplier to a recipient
country. The latter method is person-embodied and necessitates the paying attention to
cultural aspects and the need for a suitable cultural environment (Marton, 1986).
An overview depicting different access to integral parts of technology and methods of
its transfer found in literature is summarized in Table I.
According to Khedia and Bhagat (1988) person-embodied technology transfer is one
of the three characteristics that can be allocated to technology. Together with the
process-embodied method of technology transfer where concern is with the transfer of
documents, blueprints or patent rights and its actual processes, person-embodied
technologies pose a comparably bigger challenge to the transfer across nations than the
transfer of a physical product itself (product-embodied). The reason lies in the influence
of cultural and strategic management factors and direct face-to-face interactions, which
are less likely in the application of the product-embodied method by equipment,
machine and tools. A slightly distinct allocation can be found by Pacey (1984) who
argues that there are three aspects of technology that need to be given consideration.

Aspects (Pacey) Classification (Khedia and Bhagat) Category and transfer (Takata)

Technical Product-embodied Equipment Table I.

Organizational Process-embodied Document Technology and
Cultural Person-embodied Human resources methods of transfer
 JTMC This includes not only skills, technique, know-how, tools and machines in the technical
7,1 aspect, as well as economic, professional activity and administrative and management
systems in the organizational sense but also cultural goals, values and ethical codes.
Whereas the organizational and technical aspects of technology are in general
acknowledged this concept draws explicit attention to the cultural aspect. Difficulties
occur when one of the three aspects is not compatible with the situation in which
8 technology is to be relocated, resulting in tensions that can lead to the failure of a whole
technology transfer project. In many cases executives only focus on technical problems
but indeed it is forgotten cultural or organizational factors that ultimately lead to a
technologys failure. Awareness has to be raised of such a fact, in particular the
requirement to understand that problems can only be detected when looking behind
obvious aspects of a technical problem. Takata (2005) introduces three categories of
technology information on the basis of which he explains the method of transfer. If we
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try to link the different categorizations we can identify the key role, human resource
plays in the whole technology transfer concept. Already Kaplinsky (1990) underscored
that the greatest return in transfer of technology can be achieved through human
knowledge and the purchase of know-how. Figure 1 shows that all technical,
organizational and cultural aspects are both process- and person-embodied and merge
into the technology category of human resource, that is subjects like engineers,
technicians, etc. which are in turn strongly influenced by societal culture. Only the
technical aspect which also includes tools, machines and resources can more easily be
detached from cultural influence when focusing on the product-embodied classification
which accordingly links to the transfer by means of equipment. Only in the latter
allocation does the cultural aspect have a minor impact.
Cobb and Barker (1992) substantiate that cultural differences between two nations
may be even more important than strategic management issues in determining the
efficacy of a transfer. Backlund (2006) emphasizes in a comparative study that
technology is socially constructed and successful transfer depends on fundamental
cultural differences. Hence, the human interaction and the cultural aspect need, in
particular, given consideration in this context and culture cannot be separated from a
discussion of technology transfer concepts.
As suggested cultural restraints play a major role in the transfer of technologies. It is
the cultural variations and organizational culture-based differences that are the two
major factors to influence the success of a transfer across nations. Two of the
propositions in a conceptual model found in literature are of particular interest in the

Technical aspects

Culture
Process-embodied
Organizational
Human
aspects
Person-embodied
Figure 1.
Culture
Human resource
as the key factor in Cultural aspects
technology transfer
 extent of this paper. First, it is argued that the transfer of technology is easier between Technology
two organizations that are similar in terms of their societal/national culture-based transfer in Asia
tendencies [. . .] (Khedia and Bhagat, 1988, p. 564). This assumption highlights the
importance of certain proximity for a successful transfer and I will discuss this approach
by allocating it to the concept of cultural proximity among nations. This concept
follows a similar train of thought, which is based on the premise of shared cultural
linguistic or geocultural markets often centered on a geographic region (Straubhaar, 9
2002, p. 196). Derived from communication and media studies cultural proximity
describes the need for a cultural and historical reference and is reflected in nationally or
locally produced material. If the preference for national programming cannot be fulfilled,
then products from the same (geographic) region can be relatively culturally proximate
(Straubhaar, 1991, p. 51). Trepte linked this concept to Hofstedes cultural dimensions
and defined cultural proximity as the similarities of the programming and the viewers
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according to the four dimensions of national culture (Trepte, 2003, p. 13). Extending
this concept, cultural proximity reveals convergence of viewing habits, and preference
for products and similar behavioral patterns from geographically close areas, implying
that collaboration may be easier if attributes of national culture resemble. In order to
retrace this concept for Japan in this study, Asian countries will be compared based on
the prerequisites of being geographically close and fundamental for the transfer of
technology. Following the former argumentation, the comparison of China, Vietnam, the
Republic of Korea, Taiwan, Thailand, Singapore and the Philippines show a relatively
high characteristic of power index correlating with the attribute of collectivism. In spite
of criticism on Hofstedes study (Kirkman et al., 2006) and consideration of cultural as
well as societal change various studies in cross-cultural literature have substantiated
these findings for Asian cultures. Referring to such an outcome similar cultural
characteristics and geographical closeness should allow smooth technology transfer
processes and lessen concern for huge cultural differences. However, this does not hold
true for the results of this survey. It is often subtle and unrecognized differences between
close countries that create problems and are even more problematic than those between
distant countries. The findings substantiate a paradox of cultural proximity, where two
neighboring countries show significant cultural difference in a technology transfer
process despite primarily supposed similarities. Similar results were shown for the case
of a post-merger process between Swedish and Finnish managers (Vaara, 2002). It is
therefore evident that geographic proximity is not adequate to explain the impact of
culture on the process of technology transfer.
The second absorbing assumption in Khedia and Bhagats (1988, p. 565) model
implies that organizations in individualistic cultures are in general more successful in
importing technologies than collectivistic countries. Only collectivistic cultures that are
fairly masculine are also effective in such matters. When we note the findings of
Hofstedes studies for the Asian countries applicable in our context, a different picture
emerges. With the exception of China and the Philippines all countries range on the
feminine scale with Vietnam, the Republic of Korea and Thailand being main targets
and in general well able to absorb Japanese technology. Therewith the outcome
conflicts with the preceding proposition that only masculine collectivistic cultures like
China can absorb technology efficiently. By contrast, our survey results show that China
as a masculine and collectivistic country poses the most challenges in the technology
transfer process of Japanese companies due to cultural restraints. In particular
 JTMC China as a fast emerging nation has to rapidly learn strategies
7,1 for successful implementation of imported technologies and is in accordance with
masculine attributes more driven to compete and action orientated. In fact, several
Japanese managers have confirmed the extraordinary technology absorbing ability of
Chinese organizations, but with anxious concern. Although this ability is regarded
effective from the technical aspect and advantageous for the Chinese side, it is critical
10 from the Japanese point of view. In this context the term incubator was often mentioned,
referring to the Chinese workers excellence of absorbing Japanese technology and
subsequently harness for ones own end. Again, culturally similar attributes between
donor and recipient country as in the case of collectivism and masculinity for Japan
and China do not automatically imply frictionless interactions and also more feminine
cultures like Vietnam, Thailand or the Republic of Korea can enable effective transfer
processes.
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Research design and methodology

It is the purpose of this paper to illustrate critical cross-cultural issues
affecting technology transfer from the viewpoint of the Japanese transferring partner.
The fieldwork was conducted over a period of three months from September to
November 2007 in the greater Hiroshima area in Japan and represents a sample of
different business sectors such as food processing, automobile, sports, semiconductor
and pharmaceutical industries. The data was retrieved from a semi-structured
questionnaire used in ten in-depth interviews with Japanese managers and exploited by
discourse analysis (Mayring, 2002; Keller, 2007). The survey questionnaire was the main
instrument to support data collection in the interviews with one or more respective
executives involved in cross-border technology transfer in the Japanese sample
companies. The questionnaire was first designed in English and then translated into
Japanese and comprised three main clusters of questions with 15 items: initial questions
referring to the relevance and experience with this topic; guiding questions
referring to the companies background, target markets, internationalization strategy
and reasons as well as methods of technology transfer; main questions referring to
challenges, responsibilities and cross-culturally critical anecdotes in technology transfer
situations. The final question aimed at finding out about the handling of cross-cultural
problems and the existence of respective training programs. All three clusters asked for
descriptive type information but also included questions that were more interpretive,
inviting respondents to narrate their assessment about key aspects within their work.
Following the approach of a qualitative content analysis the on hand exploitation of
data is a summary of the narrations derived from the main interview questions.
Once the study purpose was personally explained the questions were discussed in
accordance with the questionnaire. All interviews were recorded on tape, transcribed
and if applicable translated from Japanese into English. As the questionnaire was
allocated before the interview, a few executives handed in written explanatory
notes to the questions which were exploited in addition to the narrated material from
the interviews. The collaboration with the Venture Business Laboratory at
Hiroshima University facilitated access to the companies, as getting permission
to undertake research in Japanese companies is extremely difficult with many stages of
request and approval.
 Research findings Technology
For reason of simplicity only the main findings of the general study are highlighted in transfer in Asia
this paper. As a main outcome culture was recognized by all executives interviewed as
an important topic in the transfer of technology. This awareness mainly originates from
learning by doing and severe backlashes in critical business situations. Still, even if
apparent in the business environment nowadays Japanese companies do not pay enough
attention to fostering cross-cultural competence and lack cross-cultural training 11
programs. Whereas technical training is commonly spread, culture awareness trainings
are an exception to the rule. Cross-cultural experience is only shared in the minority of all
sample companies and if acknowledged only more or less informally passed on by senior
executives. Although the responsible executives wish for more training is prevalent it
should once again be noted that the focus on the technical aspect still dominates transfer
processes and Japanese company structures often hinder implementation.
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An elaboration on the reasons for technology transfer showed the following:

mainly Asian countries were identified in this study as the target area for Japanese
technology transfer, which are apart from China and Vietnam, at present the Republic of
Korea, Taiwan, Thailand, Singapore and the Philippines. The main reason for
internationalization and accordingly technology transfer is not geographical or cultural
proximity but first the need to follow customers as a supplier of technology and second,
cheaper labor and production costs. Needless to say that access to Asian markets with a
view to future development potentials and financial revenue are also crucial for
internationalization decisions. However, it is noticeable that external criteria like the
necessity to keep up in the race with competitors puts companies in the position to
subordinate to customers demand and often drives them into primarily not intended
technology transfer situations. In particular the semiconductor business and suppliers
of technical components are subject to conditions that require a transfer of their
technologies, which is often not the primary goal of the transferring Japanese partner.
Self-initiated reluctance to technology transfer has its roots in bad experience in notably
China and the associated problem for Japanese companies to be utilized as a sole
incubator for Japanese technology. Yet, the pressure of the market is stronger than the
power to resist and forces companies into involuntary technology transfer situations.
Differences were also noted among technology receiving partners. In general, the
acquisition of advanced technology, up-to-date expertise and capability in design,
manufacturing and modern management systems were identified as main goals. Most
striking was the polarity between the absorbing behavior of China and Vietnam. By
contrast to Chinese workers, Vietnamese workers were classified to be more obedient and
not reluctant to being trained for a mutual benefit. Chinese workers show more and more
individualistic traits in absorbing technology in order to use it for their own advantage.
The main transfer process in this study was identified as human-embodied with mainly
technicians and sometimes executives being transferred overseas for short term periods.
This was reported to be necessary due to an apparent lack of education in the absorbing
countries. A shortage of basic skills and the inability to understand written manuals
even if written in the local language requires the assignment of qualified personnel on
site. Three companies practice mutual exchange of technicians, whereas it is striking that
this is mainly done with geographically close countries like the Republic of Korea and
Taiwan, but hardly with China. Japan has the highest number of international students
from these countries with 60.2 percent of the total from China, followed by 14.6 percent
 JTMC from the Republic of Korea and 4.0 percent from Taiwan (JASSO, 2007). A similar
7,1 distribution of international incoming students can be traced for successive years with
86.2 percent from China and 20.2 percent from the Republic of Korea in 2010. Taiwan is
listed with a slight decrease in favor of other Asian countries such as Vietnam and
Malaysia (JASSO, 2010). Despite the high number of Chinese students the Chinese are
perceived to be very distant from the Japanese culture, which makes room for potential
12 conflicts. According to all respondents this is not the case for Koreans and Taiwanese and
exchange is efficient due to more common ground and the role model of Japan for
education or management structures. Apart from some mutual exchange the common
strategy for Japanese companies is yet predominance which implies the shifting of
Japanese staff along with a prevailing ethnocentric recruiting policy and priority of the
Japanese language in transfer situations. Only one progressive company out of the sample
is the exception by putting effort in recruiting overseas management positions locally.
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Finally, for the main focus of interest the following was revealed: among the target
markets for technology transfer Japanese executives consider China to be the
most problematic to work in. By contrast, Vietnam and the Philippines seem to have
most affinity to Japanese culture with fundamental impact on technology transfer.
The interviews revealed that the Japanese concepts of reciprocal obligations such as giri
and gimu, which are embedded in the Japanese mind, are more likely to be accepted by
technology receiving nations such as Vietnam and the Philippines. Giri are obligations
in terms of debt, which have to be paid back with mathematical equivalence to the favor
received within a certain time limit. With gimu there are no time limits and the concept
mainly refers to the duty to the Emperor, the Nation, parents and ancestors. An additional
form is described by on which refers to obligations passively incurred by interactions
between the members of the Japanese society in the course of ones life (e.g. from the
Emperor, the parents, ones teacher, etc.). While on describes the obligations from the
point of view of the passive recipient and are of minor importance for international
technology transfer, gimu and giri are reciprocals of on and are regarded from the
point of view of active repayment. The described web of obligations automatically
ascribes responsibility to each individual of the society by sharing an implicit
understanding of duty and reciprocation. For a detailed elaboration on these terms refer to
Benedict (1993, p. 116). Another characteristic feature of Japanese society is the concept of
amae (Doi, 1982) which also highlights a strong relatedness. It is described as the oil of
life a reciprocal understanding of complete trust and confidence, where the members
of society can presume upon the indulgence of each other (DeMente, 1993, p. 11). Whereas
it cannot be expected that culturally different transferors and transferees have the same
or at least similar understanding of duty, trust and reciprocation, Japanese executives
highlighted the importance of this ideology for business conduct and a slight preference
for countries with willingness to absorb the Japanese way of thinking and behavior could
not be denied. Keeping such particularities of the Japanese culture in mind, the analysis of
the executives narrations allows the paraphrase of the following major cross-cultural risk
factors with strong influence on Japanese technology transfer processes.

Communication
Although the need for foreign language ability is recognized and positioned in the
Japanese education system the outcome and namely fluency in English is not sufficient.
While some of the technology recipient countries like Vietnam, the Republic of Korea
 or Taiwan are fortunate to have staff willing to study Japanese, in other countries like Technology
China or Thailand the language is a serious barrier. Although some countries may not be transfer in Asia
willing to sacrifice their cultural identity or language for the sake of economic progress
through technology acquisitions, the former countries do. Technology transfer quite
often demands involvement on the level of blue-collar workers, where lacking
communication skills complicate collaboration even more. And all too often resistant
countries like China are affected. As many signs in the written Japanese language were 13
simplified from old Chinese characters the assumption that written communication
within two metaphorical languages is at least rudimentarily possible seems obvious.
Apparently this is not the case in a technological context, as a lot of technical terms in
Japanese are English loan words, which are in turn written in the Japanese specific
Katakana script. Therefore, even in the written language communication by means of
Chinese and Japanese characters is almost impossible.
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On the other hand, countries with fluently speaking Japanese staff may facilitate the
transfer of technology but also run the risk of subordinating completely to Japanese
parameters. A dominating Japanese strategy by resting upon the Japanese mother
tongue involves the danger of causing discontent and does not live up to the prerequisites
of cultural competence.
A second risk factor affected by culture within transboundary communication
processes is the lacking implementation of the literally translated Japanese spinach
(horenso) concept. The process of keeping in close communication is summed up in
three words: report (hokoku), inform and give periodic updates (renraku) and consult
(sodan), or ho-ren-so for short. Japanese see this process as being one of the most effective
and important ways to avert risk, as it acts as an overhaul between employees and
between departments, as well as between vendors and the customers they service. This
approach of back-and-forth communication for consultation and updates is widely
applied in Japanese companies but hardly works across cultures. Adopting this style of
communication can be an advantage in a cross-cultural technology transfer project but is
de facto in most cases perceived as a burden by people not used to this method of highly
engaged communication. Indeed, this study pinpoints the absence of reports and
consultations in technology transfer processes to Asian countries. All technology
recipients were identified as employees who wait for concrete instructions and where
work is only executed when clearly ordered. As a consequence Japanese managers tend to
become insecure and develop a practice of micromanaging or in other words of constantly
checking the status of a task or project.
Both challenges the dominance of the mother tongue and the adherence to Japan
specific communication patterns hamper the transfer of technologies. Not because of
inefficient methods but because of cross-cultural incompatibility. In terms of
cross-cultural competence this stipulates action flexibility (Kuhlmann and Stahl, 1998):
behavioral routines proven a success at home might collapse or raise hackles in different
cultural contexts. For technology transfer projects persons in charge are requested to be
prepared for particular situations and to show distinct willingness to learn. Only the
latter is integrated in the Japanese understanding.

Status and decision making

Whereas all technology receiving countries in this study score high on Hofstedes power
index a difference could be noted in the employees attitude towards hierarchy. It is out
 JTMC of the question that less powerful members of organizations accept and expect that
7,1 power is distributed unequally. However, this study shows that this fact is handled
differently among Asian cultures. Inequality in rank is either an almost negligible
actuality or handicap in cross-border cooperation. The Japanese approach will always
require reflection in teams, in particular on the cross-hierarchy level including all
established forms of Japanese decision making. Again, countries like Vietnam, the
14 Republic of Korea, the Philippines and Taiwan are reported to absorb this model. This is
comprehensible due to the dominant role Japanese companies take in most transfer
processes by appointing Japanese executives to implement and supervise technology
transfer abroad. I argue that this allows the education of subordinate technology
receiving countries according to the Japanese way. The situation is slightly different for
the Republic of Korea. As mentioned before, Japan has taken the model role for various
systems in Korean society, including framework for management. Consequently, apart
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from predominantly Korean staff the background and mode of operation resemble the
Japanese approach. Thailand and Singapore are described as being less adaptable, with
little room for bottom-up decisions. In Singapore this is attributed to the heterogeneous
composition of work force and respective cultural influences that are difficult to
integrate. Finally China demands a strict classification of managers according to
hierarchy with almost sacrosanct power on top. This implies that the decision of the
supervisor is not questioned, either being right or wrong. There is no striving for consent
of the collective as pointed out for other nations. Alston (1989) has already referred to the
more individualistic Chinese traits in interpersonal relations compared to other Asian
cultures and an elaboration on the incompatibility of Japanese and Chinese relationship
webs has been discussed in literature (Hirt and Schneider, 2003, p. 162). A lacking will to
adjust to Japanese methods on the Chinese side and the perception of being exploited
with know-how on the Japanese side endanger successful technology transfer. The
study suggests the massive negative impact on trust which was permanently brought
forward in the interviews.
Japanese companies have to learn and accept that certain cultures do not allow the
domination of their cultural traits, not even for the duration of a transfer project. This
calls for more cultural empathy, as goals and reasons for certain behavior are hidden or
hardly comprehensible. A cognitive perception of difference is insufficient and has to
be supplemented by fostering the emotional dimension of cross-cultural competence.
In other words, respect of each others culture is considered of paramount importance
and a nation or organization may have to accept cultural divergence to facilitate the
process of technology transfer.

Job loyalty and work attitude

Within Asian cultures there are some value-related differences that need specific focus in
the context of technology; one is the attitude towards job hopping. Over the last decades
ongoing economic developments like an unfavorable economic situation and the aging of
the Japanese work force have provoked a change in the structure of the traditional Japanese
employment system, offering nowadays more flexible opportunities in the selection of
employment. Along with an incremental change of attitude and values in the Japanese
society the number of those feeling restricted to lifetime employment is declining
(Sasajima, 2003, p. 14). Still, the identification with the company and extensive job loyalty
are characteristics of the Japanese organizational culture. This holds in particular true
 for the executives experiences in technology intensive industries within this study, where Technology
to a certain extent the protection of know-how is crucial but at the same time vulnerable transfer in Asia
due to job hopping. A first risk factor can be identified if coherence is not shared between
donor and recipient partners in a technology transfer process. Workers in Vietnam
and Thailand show, respectively, little fluctuation and are reported to be very loyal if
trained during technology transfer. This corresponds to a traditional Japanese attitude and
facilitates efficient absorption. Recipients of more international technology inflow like the 15
Republic of Korea, Taiwan and Singapore are considered to be quite loyal but are subject to
marginal fluctuation, a situation probably comparable to the circumstance traceable on
todays Japanese labor market. Again, China is considered to be the problem child. Job
hopping is regarded as the means of changing ones job for better (financial) treatment. If a
competitor offers a slightly higher wage trained staff will leave the company with
the technical know-how acquired. As a consequence technology is difficult to settle in the
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targeted organization and the usefulness of training is put into question.

The second prevailing challenge in this context is diverging attitudes towards work.
Whereas the company wellbeing is the utmost goal of many Japanese companies, other
Asian cultures show more selfish traits. This study suggests that all nations involved
are willing to learn and ingest technology, but the motivation and methods to do so are
diverse. Financial incentives are understandably sine qua non. Interesting is the fact that
nations like Vietnam and the Philippines, which have only recently become more
important for the transfer of technology can be motivated by good education and
training. The result is loyal and skillful workers who demand to be trained according to
the Japanese system. Thais are also considered to be willing to learn and to be quite loyal
partners in technology transfer, however, group cohesion is low and support for others
goes at the expense of everyone doing his own thing. As more problematic this study
reveals Singaporean and Chinese workers. The mixture of cultures in Singapore and a
strong Chinese influence may have negative effects on the work attitude. Not the
company you work for but your own family and the person him/herself come first.
Company and work are only a means of earning a living, far from a Japanese perspective.
This can be traced by the share of salary that is sent home to the family. Yet, according to
the narrations changes are under way. Whereas a couple of years ago almost all the
money was sent home, a more self-concentrated Chinese nowadays disposes of
approximately two-thirds of the salary for him/herself.
In respect of cross-cultural competence differing attitudes towards job loyalty and
work demand tolerance in the handling of ambiguity. The most resembling culture in
terms of attitude is probably Vietnam, which explains why many Japanese
organizations put their hope in expanding cooperation of technology transfer. At least
for the time being, reactions in this particular target country are quite predictable. The
situation is different in China where interactions are coined by ambiguity and
incertitude. Executives are requested to cope with this framework and simultaneously
perform efficiently without losing ones way because of unforeseen surprises. Many
Japanese executives still seem to be at a loss with the challenges they experience in China
and I assert that this is often connected to a strong belief in the superiority of their own
Japanese culture, which works in less resistant civilizations. The advice here is
acceptance of difference and a lowering of cultural barriers, as changes in cultural values
will also bring about changes in work values. Japanese companies require versatility for
more efficiency and improvement.
 JTMC Handling of emotions
7,1 Tromenaars and Hampden-Turner have elaborated on the difference where the
expression of feelings across cultures is concerned. The list of countries included is not
exhaustive but gives insight into the relationship between Japan and China, Thailand,
Singapore and the Philippines. Whereas this study confirms that most countries in our
sample correspond with the affective dimension, Trompenaars (1997, p. 70) described
16 China and Japan as neutral cultures. It is striking that the handling of emotions between
the neutral Japanese culture and all other affective cultures has not led to severe
interaction problems within the scope of this study. The reason may be found in the
unique behavior of those cultures in technology transfer situations. Aside from
Singaporeans and their strong Chinese influence Thais and Filipinos keep more distance
and do not really involve and mix with the Japanese. This in fact enables the preservation
of their respective ways of thinking, but also brings about the will to seriously pay
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attention to each other in business cooperation, resulting in smooth relationships.

The circumstances for China are again different. For Japan, contained behavior and
reluctance to reveal what people are thinking or feeling can be affirmed. However, where
Trompenaars is concerned, the findings for China as a neutral culture are contradicting.
In particular in terms of anger, temper was in many cases reported to be shown openly
with vehemence and without inhibition. Japanese culture in general requires patience.
This holds true for explanations, exceptionally fundamental in technology transfer
situations, as it involves the transmission of mainly complicated instructions. Many
problems leading to affective behavior originate from divergent approaches how to cope
with technical challenge. The exploitation of this study revealed that in many transfer
projects Chinese workers find it difficult to understand what to produce because they
cannot comprehend the transferred technology and the meaning of what a product is
designed for. What A means to the Japanese does not mean A to the Chinese.
Building on the communication aspect, interpreters frequently fail in translating due to a
lack of specific technical expertise and even if nonverbal communication by gesture is
tricky in a technological context, it has proven to be more successful. Insufficient
translations in combination with a workers humble absorbing capacity of technical
know-how result in time-consuming transfer processes, dominated by impatience and
outbreaks of affective behavior. Chinese workers were generally described as being
impatient in absorbing technology and keen to stick to their own opinion (even if they are
wrong) and defend it, which leads to exertive discussions and very direct expression of
ones thoughts. Both conflicts with traditional Japanese behavior, illustrated by the
following narrated example: whereas Chinese cross a street on the zebra crossing when
the traffic light is red, Japanese will not do so. The same holds true for technology
transfer situations. It is extremely difficult to explain to a Chinese worker why things
should (not) be done in a certain way. The Japanese account for their implicit
understanding with their theoretical approach (riron) to tackle problems combined
with patience, whereas Chinese behavior is attributed to emotions.
The challenge for the Japanese is to cope with unfamiliar direct communication
including refusal or unwillingness by Chinese workers if they do not want to comply
with a predetermined Japanese way. In this sense, an undertone of poor appreciation
for Chinese transferring partners was laid open in the majority of the interviews. As a
remedy, cross-cultural competence suggests impartiality, such as the tolerance for
different values and norms in behavior. The prerequisite is not only cultural relativism
 but also awareness of the relativity of ones own cultural standards. I claim that the Technology
development of this competence towards Asian countries is presumably the biggest transfer in Asia
challenge for Japanese executives. Historical conflicts and the Asian accusations of
Japans territorial expansionism and whitewashing of history have evoked mutual lack
of understanding and resulted in the phenomenon of Japanese bashing, targeting
innocent businessmen in China. Such affective incidents are contra productive for
reciprocal comprehension and were revealed to influence person-embodied technology 17
transfer projects and unprejudiced collaboration.

Theoretical implications and suggestions for future research

Many theories in cross-cultural studies as well as dispersion of technology were
developed in the Western world and are based on individualistic features. Within
technology transfer processes ethnocentric biases are often forgotten. The application
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of such concepts in different cultural settings frequently leads to erroneous belief.

Contradicting the assumptions in Western literature, this study revealed that not
only countries correlating on collectivism and masculinity but also more feminine
countries can be considered as successful technology transfer partners. It was also
substantiated that cultural closeness between countries does not imperatively result in
frictionless technology transfer when analyzed from a cultural point of view.
In connection to cross-cultural competence profiles discussed in literature (Bennett,
1993, p. 29; Bolten, 2000, p. 68; Kuhlmann and Stahl, 1998; Podsiadlowski, 2004, p. 45)
specific exigencies in a Japanese Asian setting were identified as the strengthening of
ability to communicate and the willingness to learn, differences in status and decision
making and the need for more distinct empathy, varying work attitudes and the demand
for a better conduct with ambiguity as well as an impartial handling of build up
emotions. The initial assumption that cross-cultural mismatches impair the
effectiveness of a successful technology transfer process within Asian cultures was in
general verified for all developed risk factors, yet some of the probed countries display
only minor difficulties. It was shown that for Japanese organizations a focus on
cross-cultural competence is in particular essential for technology transfers to China.
In the current economic environment all findings are considered to have a strong
impact on practice. With regard to communication, adherence to the mother tongue and
culture specific communication patterns of the transferor partner are insufficient and
mutual approaches in communication behavior are recommended. Status and decision
making differs among Asian countries and therefore requires cultural empathy in
business conduct. Findings suggested that economic development affects job loyalty,
work attitude and handling of emotions. Given Chinas increasingly pro-active role in
international business and its ongoing economic development even more incompatibility
with Japanese expectations is expected. After succeeding Japan in 2010 as the second
largest economy after the USA, Chinas fast development causes fear and concern among
Japanese and Western observers. Chinas economic scale is powerful enough to take
a dominant role within technology-led firms and significantly influence technology and
innovation capacity in international cooperation. It is doubtful if in the long run Japan and
the West will be able to keep their position as technology transferors. Attempts to block
channels of technology transfer to China in order to maintain competitive advantage
were hinted in the findings, however, such attempts are considered inexpedient as
international technology transfer can be beneficial to all parties involved. In accordance
 JTMC with Li-Hua IP strategy in terms of using intellectual property to inform and leverage a
7,1 business strategy is the key to surmounting this obstacle. It allows the guidance of
opportunities and challenges to achieve competitive advantage, not only for the
transferor but also for the transferee, and might contribute to countervailing culturally
embedded prejudice of solely being the Japanese technology incubator.
If cross-cultural difficulties are prevalent between culturally close countries, cultural
18 mismatches are supposed to be even trickier between countries with more cultural
distance. In order to continue work on this assumption and simultaneously incorporate
cultural studies and technology transfer concepts, an extension of this study is desirable
for business interactions between Asia and the West. This studys results only give
insight into the discussed set of problems from a Japanese point of view. As mentioned
before, such an approach may be influenced by ethnocentric biases this time from an
Asian perception and consequently can in a first step only raise awareness of Western
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managers for challenges in Asian transfer situations. It is important to note here that out
of the perspective of Japanese executives and business systems, the identified
cross-cultural risk factors might include negative connotations, thereby implying
inferiority and inefficiency. However, contrary to this position I emphasize that the
described risk factors are far beyond such judgment. The findings illustrate cognitive
schemata which are inherently legitimate, as they reflect individual experience embedded
in certain institutional context. Albeit the general requirement of critically reflecting such
experience, findings simply represent rational patterns of thoughts and behaviors. Given
their contingency, deep-rootedness and longevity, culturally embedded risk factors are
rather something that business companies are faced with than something that can be
easily changed by foreign business partners. For policy and practice it is reasonable to
suggest learning from the intra-Asian experience in technology transfer. If there is a big
gap in terms of economic development between Asian countries, how can smooth
technology transfer be expected with culturally even more distant cooperation partners
from the West? Accordingly, this idea presented leaves room for future research. To find
out about comparable difficulties it will be of particular interest to analyze Western
experiences. This can be done by taking the findings of Japanese companies in
cross-cultural technology transfer situations as a starting point and comparing them to
practical complexity in Western dominated transfer processes.
Finally I conclude that cross-border technology transfer can only be successful when
considering the impact of culture. In this sense further research should be stimulated on
the human side of technology transfer processes and not only on the technical aspects
as preferably highlighted by researchers in the Japanese context. Cross-cultural
competence has already become a must in technology transfers nowadays and Japanese
companies will have to develop stronger awareness of this fact. This study revealed a
vigorous ethnocentric attitude among Japanese companies combined with the self
perception of technological leadership towards technology recipients. Bar a few
exceptions this dominant Japanese strategy is traceable when dealing with technology
absorbing partners, however does not do much to cope with cultural mismatches. As the
ineffable economic and technological development of Japan has proved over the
last decades, the Japanese are very well capable of adapting in many situations.
Apparently this may not yet be the case for the progress and fostering of cross-cultural
competence and the need for cross-cultural training programs. All the more the
identified risk factors should be taken seriously by first and foremost Japanese
 enterprises involved in technology transfer but also be comprehended by Western Technology
enterprises as a hint of caution in Asian technology transfer situations. transfer in Asia

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About the author

Christian Hirt currently holds the position of a Senior Lecturer at the Institute of Human
Resource Management, University of Graz, Austria. He graduated from the same university with
a PhD (Doctor of Social Sciences and Economics) and his dissertation dealt with trends of change
in Japanese personnel management. He has work experience as executive assistant and office
manager; shareholder in business start-up and food export with a main focus on Japan;
coordinator for international relations within the Japanese Exchange and Teaching Programme
in Japan; as well as Assistant Professor at the Institute of International Management, University
of Graz. He has co-ordinated and collaborated in several international projects, been a trainer for
cross-cultural co-operation and communication in the private sector and is a member of the
Advisory Board for International Relations at the University of Graz. He gives lectures on
Globalization, Management of Complex Systems, HRM and Cross-cultural Management. His
main research interests and publications focus on international human resource management
and cross-cultural topics. Christian Hirt can be contacted at: christian.hirt@uni-graz.at

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