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Citation: Li-Hua, Richard (2001) Technology transfer in international joint venture projects in China.
Doctoral thesis, University of Northumbria at Newcastle.
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TECHNOLOGY TRANSFER IN INTERNATIONAL
JOINT VENTURE PROJECTS IN CHINA
RICHARD LI-HUA
A thesis
submitted in partial fulfilment of the requirements
for the degreeof Doctor of Philosophy
University of Northumbria at Newcastle
November 2001
Abstract
Following the establishment of a theoretical framework for analysing. ft. ýý6phnology
transfer process between construction industries in different countries, this thesis
presents findings from an investigation of international joint venture projects in the
People's Republic of China. The main study was based on a structured survey which
had
been
in
Xinjiang,
Henan
Jiangsu
study
carried
out
after
a
pilot
and
was
provinces
completed on the huge Sino-foreign joint venture demonstration project at Xiaolangdi
in Henan province. Both studies adopted a cross-cultural approach to investigation.
An assessmentinventory was designed for data collection on the pilot study. This
proved to be useful technique and was modified for the main study. The findings
suggested important implications for the relationship between technology transfer and
is
big
if
is
development.
Technology
too
there
transfer
a gap
obtainable
not
economic
in terms of economic development between transfer and transferee. The contribution
of the study has been to confirm that technology transfer cannot properly take place
without knowledge transfer. Moreover, knowledge transfer itself has a number of
components, of which it is argued that explicit knowledge and tacit knowledge
transfer are the most significant. There are a number of mechanisms already in place
for explicit knowledge transfer and this research used the term method statement as a
It
investigating
their
was concluded that such systems are
of
effectiveness.
means
generally being used to good effect.
Nevertheless, tacit knowledge transfer is
knowledge
falter
in
haphazard
it
is
transfer
that
this
can
area
considerably more
and
by
impeded.
be
This
technology
transfer
suggests
study
means
which tacit
and
can
knowledge transfer could be improved.
The outcomes will enable policy-makers
within government, sponsors of projects and executives of companies involved to
address the existing deficiencies and develop more appropriate arrangements for the
transfer of tacit and explicit knowledge. In addition, it also leads the way for the
introduction of systematic processes that could be specifically incorporated into
World Bank projects that involve international technology transfer as a major feature.
Acknowledgments
It is clear that the process of conducting and completing a PhD research project is
rewarding but difficult to achieve. The freshness and enthusiasm at the beginning of
the process soon disappears as time passes by and considerable work and sustained
effort is devoted. During this long process, sometimes the researcher is encouraged,
however, most of the times the researcher faces a cross-road ahead and loses, his
direction. It is the supervisors who guide the researcher and make the research project
go. Therefore, the author would like to acknowledge the considerable work and great
contribution made by his supervision team. Through the many years that it has taken
to produce this thesis the author's Director of Studies, Dr Bob Giddings and
Supervisor, Dr David Greenwood have given continuous support and guidance.
Indeed, it is a testimony to the value of their supervision and their belief and
philosophy in the quality of the developing work that a thesis has been completed.
In the mean time, the author would like to record his thanksto The InternationalCoAffairs
Department,
The
Foreign
Construction,
PRC,
Section,
Ministry
of
operation
Yellow River Water & Hydropower DevelopmentCorporation (client of Xiaolangdi
Project), The ConstructionManagementBureauof JiangsuProvince,HenanProvince
in
Region,
PRC.
Without
Xinjiang
Autonomous
their
support
and
assistance
and
impossible
have
been
it
interviews
to
would
and conducting survey,
arranging
informal
Finally,
the
the
thesis.
the
support given
author must acknowledge
produce
by members of staff in the School of Built Environment, International Office and
Newcastle Business School of the University of Northumbria. Their contributions
helped to make the years of time spent in completing this researchproject both
memorableand enjoyable.
LIST OF CONTENTS
Abstract
Acknowledgments
List of Tables
List of Figures
Chapter One
Introduction
1.1.
Backgroundto the Research
1
1.2.
ResearchProblems
1
1.3.
Aims and Objectivesof the Research
2
1.4.
An Overview of China's Economy
1.4.1. Twenty Yearsof EconomicReform
3
1.4.2. The World Bank's ForecastaboutChina
4
1.5.
From TechnologyTransferto KnowledgeTransfer
5
1.6.
Methodology
6
1.7.
Outline of the ResearchProject
6
1.8.
Limitations andKey Assumptions
8
1.9.
Summary
8
Chapter Two
The Development and the Current State of Understanding of
Technology Transfer
2
2.1.
Introduction
10
2.2.
What is Technology
10
2.3.
Technology Transfer
12
2.3.1. Definition of Technology Transfer
13
2.3.2. Significance of Technology Transfer
13
2.4.
The Recent History of Technology Transfer
14
2.4.1. UN Conference on Science and Technology
14
2.4.2. The Organisation of American States
14
2.4.3. UN Conference on Trade and Development
14
2.4.4. Technology Transfer in the 1970s
15
2.4.5. Technology Transfer in 1980s and 1990s-Fearof Competition
15
2.5.
17
Technology Transfer: Issues and Practice
2.5.1. Technology Transfer Process
17
2.5.2. Technology Transfer Channels
17
2.5.3. Evaluation of International Technology Transfer
19
2.6.
Theories of Technology Transfer
20
2.6.1. A Basic Model of Technology Transfer
20
2.6.2. Product Life Cycle Theory of Technology Transfer
21
2.6.3. The Mechanisms of Technology Transfer
23
2.6.4. Measurement of Technology Transfer
24
2.7.
26
Summary
Chapter Three
Technology Transfer in the Construction Industry in China
3.1. Introduction
28
3.2. The ConstructionIndustry
28
3.2.1.Definition of Construction
28
3.2.2.Role of Construction
29
3.2.3. Stagesof Developmentin the ConstructionIndustry
29
3.3. The ConstructionIndustry in China
30
3.3.1. PrivateFinns in China's ConstructionSector
31
3.3.2. Internationalisationof ConstructionIndustry in China
31
3.4. TechnologyTransferin the ConstructionIndustry
33
3.4.1. ConstructionTechnologyTransferVehicles
33
3.4.2. Identification of AppropriateConstructionTechnology
34
3.4.3. Patternsof InternationalTradein Construction
35
3.5. ConstructionTechnologyTransfer:Issuesand Options
37
3.5.1.Attitude of the Government
37
3.5.2.Attitude of the World Bank
38
3.5.3.Barriers to TechnologyTransfer
38
3.6. The CurrentSituationof TechnologyTransferin China
39
3.6.1. Legal Statusof TechnologyTransfer
39
3.6.2. Encouragementof TechnologyTransfer
40
3.7. Aspectsof TechnologyTransferin the ConstructionIndustry in China
40
3.8. Summary
42
3.8.1. TechnologyTransfer:Problemsand Solutions
42
3.8.2.A Frameworkof TechnologyTransferin Construction
3.8.3. CurrentIssuesof TechnologyTransferin China
42
44
Chapter Four
Theory and Practice of Knowledge Transfer
4.1.
Introduction
45
CommunicationandKnowledgeTransfer
4.2.1. CommunicationIssuesin Construction
45
4.2.2. KnowledgeManagementin Construction
47
4.2.3. Explicit KnowledgeandTacit Knowledge
48
4.2.4. Featuresof Explicit andTacit Knowledge
4.2.5. Model of Codification of Knowledge
48
49
4.2.6. KnowledgeTransfer
49
4.2.
4.3.
ProblemsandPracticalitiesin KnowledgeTransfer
4.3.1. Successof KnowledgeTransfer
4.3.2. Exchangeof Information andKnowledge
46
50
50
52
4.3.3. Barrier in Joint VentureOrganisation
53
4.3.4. Motivation for KnowledgeTransfer
53
4.3.5. Mechanismsof TransferringTacit Knowledge
4.3.6. Joint-venture-A Vehicle of KnowledgeTransfer
54
54
4.4.
KnowledgeManagementProgrammesin Construction
55
4.5.
Summary
56
Chapter Five
Methodological Issues
5.1.
Introduction
58
5.2.
Design Concepts and Philosophical Notions of the Study
59
5.2.1. Cross - cultural Research
59
5.2.2. Creative Problem - solving in the Field
61
5.2.3. Process Observation and ProcessMeasurement
64
5.2.4. Structure of the Current Research Project
65
Mixed Methodology in the Studies
67
5.3.
5.3.1. Pilot Study
67
5.3.2. Main Study
71
5.4.
Data Collection Process
73
5.5.
Summary
74
Chapter Six
Problem Area and Pilot Study
6.1. Introduction
6.2. ProblemArea: from TechnologyTransferto KnowledgeTransfer
76
6.3. The Xiaolangdi Project
76
6.3.1.Major Joint Venture Companies
79
6.3.2. Statisticsof ForeignersWorking on Xiaolangdi
79
6.4. Pilot Study
83
6.4.1.Aims and Objectives
83
6.4.2.AssessmentInventory Surveywith Interview
84
6.4.3. Semi-structuredInterviews
85
6.4.4. Problemsin ConceptualisingandMeasuringKnowledgeTransfer
85
6.4.5. SystematicArrangementof the Studies
86
6.5. Presentationof Pilot StudyData
87
6.5.1.Data Collection Processand QuantitativeData
87
6.5.2.Typical ManagementStructureof Sino-foreignJoint Venture
88
6.5.3.Tacit KnowledgeTransfer
90
6.5.4. Influencing Factors
90
6.5.5. Motivation for KnowledgeTransfer
91
6.5.6.Mechanismsof TransferringKnowledge
92
6.5.7. What Is Being Transferred
92
6.5.8. A Basic Model of KnowledgeTransfer
93
6.5.9.Limitations of the CurrentResearchMethod
93
6.6. Summary
94
Chapter Seven
A Study of Jiangsu, Henan and Xinjiang
7.1. Introduction
96
7.2. JiangsuProvince,HenanProvinceandXinjiang AutonomousRegion
96
7.3. EconomicIndicatorsin ConstructionIndustry
102
7.4. Comparisonamongthe ThreeRegions
7.4.1.Main EconomicIndicatorsin Construction
105
105
7.4.2.Main EconomicIndicatorsin ConstructionEnterprises
Units
Economic
Foreign
Funded
of
7.5. Summary
110
113
Chapter Eight
Main Study
8.1.
Introduction
115
8.2.
Main Study in Jiangsu, Henan and Xinjiang
115
8.2.1. Aims and Objectives
116
8.2.2. DesignRational andthe Main Themesof the AssessmentInventory
116
8.3. Main StudyData
118
8.3.1.Respondents
118
8.3.2.ResponseRate
119
8.4. Interpretationof the Main Study
119
8.4.1.Exploring the CorrelationbetweenKnowledgeTransfer
and EconomicDevelopment
8.4.2.Explaining the Implicationsfor KnowledgeTransfer
120
124
8.4.3.Explaining the RelationshipsbetweenKnowledgeTransfer
and EconomicDevelopment
8.5. Summary
136
148
Chapter Nine
Research Findings and Implications
9.1. Introduction
149
9.2. Aims and ObjectivesAre Examined
149
9.3. ResearchFindings
151
9.3.1. RelationshipbetweenKnowledgeTransferand
EconomicDevelopment
151
9.3.2. RelationshipbetweenTransferof Explicit Knowledge
and Tacit Knowledge
152
9.4. SystematicApproachto Tacit KnowledgeTransfer
153
9.5. Effect of the Xiaolangdi Project on Responsesfrom Henan
155
9.6. Implication for Policy andPractice
156
9.7. Contribution to Knowledge
157
9.7.1. TheoreticalContribution
158
9.7.2. PracticalContribution
159
9.8. Recommendationfor FurtherResearch
159
List of Tables
Table 2.1. Distribution of the cost of innovation
Table 4.1. Features of tacit knowledge and explicit knowledge
Table 5.1. Structure of the current researchproject
Table 6.1. Relevant information of the three joint ventures
Table 6.2. Statistics of foreigners working on Xiaolangdi project
Table 6.3. Systematic arrangement of the Pilot Study
Table 6.4. Interview agenda in the Pilot Study
Table 7.1. League table of the provinces and regions in PRC
Table 7.2. Main economic indicators of construction in Jiangsu, Henan and Xinjiang
Table 8.1. Location and whole population of the respondents in the main study
Table 8.2. The key answers to Question 1 in the assessmentinventory
Table 9.1. Indicators of economic development
Table 9.2. Economic development scores for the three geographical data sources
Table 9.3. Notional development index for the three geographical data sources
Table 9.4. The correlation between knowledge transfer and economic development
in Jiangsu, Henan and Xinjiang, PRC
Table of Figures
Figure 1.1. Sequenceof the researchproject
Figure 2.1. Technology transfer process
Figure 2.2. A basic model of technology transfer
Figure 3.1. Construction technology transfer vehicles
Figure 3.2. Present pattern of trade in construction services
Figure 3.3. Technology transfer within good congruence
Figure 4.1. Codification of knowledge
Figure 4.2. A framework for managing knowledge in construction
Figure 5.1. A diagrammatic presentation of the data collection process for the
research programme
Figure 6.1. A framework for effectiveknowledgetransfer
Figure 6.2. Typical managementstructureof Sino-foreignjoint venturein
Xiaolangdi Project,PRC
Figure 6.3. Work patternsof dyadic interaction
Figure 6.4. A model of knowledgetransfer
Figure 7.1. A map of China showingthe locationsof Jiangsu,Henanand Xinjiang
Figure 9.1. Correlationbetweeneconomicdevelopmentandknowledgetransfer
Figure 9.2. Relationship(notional hypotheses)betweenknowledgetransferand
economicdevelopment
Figure 9.3. A model of tacit knowledgetransfer
List of Appendices
Appendix 1: A sampleof assessment
inventory for the pilot study
Appendix 2: Transcription of interview in the pilot study
Appendix 3: Background information of Xiaolangdi Project
Appendix 4: A summary of assessmentinventory of pilot study
Appendix 5: A sample of assessmentinventory for the main study
(both English and Chineseversion)
Appendix 6: A summary of the main study data from Jiangsu, Henan, Xinjiang
and Xiaolangdi Project (with Xiaolangdi outside Henan)
Appendix 7: A summary of the main study data from Jiangsu, Henan and Xinjiang
(with Xiaolandi inside Henan)
Appendix 8: Recordof differencebetweentotal assessment
inventoriesreceived
and the total responses
Appendix 9: Recordof differencebetweentotal assessment
inventoriesreceived
andthe total responses(bar charts)
Chapter One
Introduction
1.1. Background to the Research
Technology transfer is rccogniscd as the acquisition, adaptation and use of
technologicalknowledgeby an individual, group, or society other than the one that
developedthe technology.The conceptof technologytransferinvolves more than the
capacity to acquire new knowledge, or produce improved production processes
(Miles, 1995).It also encompasses
the capacitiesto link engineeringand managerial
skills to plan, develop and implement technological capacities to shape and
accomplishthe strategicandoperationalobjectivesof the host organisation.
Technologytransferhas beena subjectof considerableinterestto many groups,such
as governmentpolicyrnakers,internationalfunding agencies,and businessexecutives,
becauseof the close relationshipbetweentechnologytransfer and economicgrowth.
Technologytransferhas arousedthe interestof academicresearchers.Despite all this
attention,however,the conceptof technologytransferand mechanismsof technology
transferremainsvague,controversial,andinadequatelyoperationalised(Samli,1985).
Technology transfer is shroudednot only in controversy and emotion, but also in
considerableconfusion, owing to the complexity of "technology" itself and the
multiplicity of channelsof its "transfer". A difficulty lies in determining what to
evaluate, since technology transfer has two main dimensions: that from the
seller/transferorto the buyer/transferee,and that relating to the effective diffusion and
applicationof the technology(Erdilek andRapoport,1985).
1.2. Research Problems
The literature review provides a wide and extensiveunderstandingof international
technology transfer, e.g. definition, history, processesand channel of technology
transfer, and problems of measuring technology transfer. In particular, a long
involvement of technology transfer in construction is revealed by the literature
review. With a few exceptions that touch international technology transfer (Abbott,
1985; Carrillo, 1993; Bon, 1997; and Ofori, 2000), little has been done in the research
I
area of knowledge transfer, in particular, tacit knowledge transfer. However, it has
been clear that the subsequentliteraturereview (Tsang,1995, et al.; Maitland, 1999;
Holland, 1999; and Egbu, 2000, et al.) of knowledge transfer in terms of explicit
knowledgeand tacit knowledgehasmadethe researchaims more focused.Hence,the
researchproblemsaddressedin this study,are:
"
Is technologytransfer appropriatelyand effectivelychannelled?
"
"at
is the relationship betweentechnologytransfer and economicgrowth?
1.3. Aims and Objectives of the Research
The research project aimed to investigate the current mechanisms of technology
transfer and the aspects of technology transfer between foreign and local managers
within international joint ventures in China. Its aim was to generate a model for the
effectiveness and appropriateness of technology transfer. The results may ultimately
assist in assessing the efficacy of technology transfer and may inform decisionmakers in the recipient and donor organisations as well as investors such as the World
Bank, who impose contractual provisions that require technology transfer.
In particular the objectivesof the currentresearchproject are:
*
From the literature,to establisha theoreticalframework for the tracking of the
technology transfer process;
o To establishthe basicpatternsof knowledgetransferthrough a pilot study;
by
To evaluatethe appropriateness
the
using a main
of
study
and effectiveness
study;
*
To identify the implications of the relationship between technology transfer
and economicdevelopmentlevels.
1.4. An Overview of China's Economy
It is necessaryto have an overview of China's economic reform as the current
researchhasbeenundertakenin the contextof the constructionindustry in China.
2
The Chineseeconomypresentsa mixture of featuresof a market economyintertwined
with those of a command economy. A number of key policies made these
achievementspossible.The householdresponsibility systemand partial liberalisation
of agricultural prices raised agricultural production and rural incomes,especiallyin
the early yearsof reforms. Liberal policies toward non-stateenterprisesand a gradual
introduction of market forces into the state-ownedenterprise sector provided a
powerful catalyst for rapid growth in industrial output, exports and employment
(Stem, 2001).
Despite China's achievements since 1978, the Government faces significant
challenges over the medium term, which can be broadly divided into two sets:
achieving sustainable growth within a stable macroeconomic environment, and
reducing poverty and maintaining a relatively egalitarian distribution of income and
wealth.
1.4.1. Twenty Years of Economic Reform
During the last twenty years,China has seenthe most remarkableperiod of economic
growth in modem times. As Stem (2001) pointed out at Tsinghua University,
Beijing':
"China's developmentin this period has beencharacterisedby
been
has
it
a sequence of radical changes, although
before.
building
in
the sense of
on what went
evolutionary
Nere the territory was uncharted,the governmentrecognised
that it was unknownand approachedreforms with a pragmatic
learn-as-you-gospirit. It did not matter whether the cats were
black or white as long as they could catch the mice - and some
experiencewas neededto see which cats could actually catch
the mice".
Stem describedthe features of Chinesemarket economy as decentralisation,rural
reforms, and experimentation
and innovation
with new enterprises. Each element is
1Nicholas Stem is a SeniorVice-Presidentand Chief Economistof the World Bank. Twenty Yearsof
Reform: Achievements,Challenges,and the New Agendais a speechdeliveredby him in June,2001 at
TsinghuaUniversity, Beijing.
3
crucial to an understandingof how Chinawas ableto useits social and organisational
capital to transform the economy and generate growth. The analysis of
decentralisation,the rural economy, and new enterprisesprovides a context and
rational for China's successfulevolutionaryapproachto the transition, which may be
summarisedin a stylisedway in termsof four principlesor observations.
Step-by-step progress: The Chinese experience is that an adaptive process of
transition, proceeding step by step, can retain the social and organisational capital
developed in previous stages of developmentand transform it in ways that
enhanceefficiency andproductivity.
*
Build the road as one travels: It has to be pointed out that there were strong
argumentsin favour of following suchan evolutionaryapproach.
Climb the mountain by a zigzag path: There is no doubt that the reform path
might be more zigzag than linear.
be
Robust
they
The
to
arise,
need
not
perfect.
9
solutions:
solutions problems,as
The key is to look for robust solutions, that is, resilient solutions that work
reasonably well across, or can be adapted to, a range of circumstances.
However,when Chinajoins the World Trade Organisation(WTO), therewill be great
opportunitiesand challengesaswell, which havebeencategorisedby Stem, (2001) as
follows:
9 Enterprises,competitionandthe investmentclimate;
0 Infrastructureandregulation;
WTO accessionandtrade;
Socialprotectionandpensionrefonn.
With each of these categories, there are institutional possibilities. However, China as
in the pastwill chooseits own approachand innovatealong the way.
4
1.4.2. The World Bank's Forecast about China
The World Bank (1997) reports that China can meet the new challenges and sustain
rapid growth, mainly because of its strengths: relative stability, a remarkably high
savings rate, a strong record of pragmatic reforms, a disciplined and literate labour
force, and growing administrative capacity. These strengths have driven the country's
growth for the past two decadesand can continue to do so over the next two.
China's continued transformation into a larger, more open economy is likely to have
far reaching consequences for other countries. Similarly,
as China makes the
transition into the world economy, it becomes increasingly exposed to external
influences.
The World Bank has made the long term projection that based on current trends
China's GDP measures on a purchasing parity basis, would become one of the
world's largest early in the next century. This forecast assumesthat a number of
assumptionsare fulfilled (FlanaganandLi, 1997):
The continuationof the reform process;
A growing ability of the authoritiesto control macroeconomicsdevelopments;
The ability of relatively underdevelopedinfrastructuresystemsupportgrowth;
A relatively stablepolitical environrnent.
1.5. From Technology Transfer to Knowledge Transfer
Research
into technologytransferhasmaturedfrom the earlyperiodof emphasison
the technologyitself, throughgeneralmanagement
objectivesto the currentstateof
development
andeffectiveness
of the
whereinteresthasarisenin the appropriateness
technologytransfer.It hasbeenidentifiedthatwithoutknowledgetransfer,technology
transferdoesnot takeplaceasknowledgeis thekey to controltechnologyasa whole.
Knowledgetransferis crucial in the processof technologytransfer.Therefore,the
focusof theresearch
hasbeenshiftedfromtechnologytransferto knowledgetransfer.
The sequenceof the research thought is presented in Figure I. I. as follows:
5
Technology
Transfer
>
Investigate
knowledgetransfer
in practice
_
How doesthis
occur in practice?
Theory
and
Model
Problem
areasand
Pilot Study
>
Discoverthat sustainabletechnology
transfercannothappenwithout
knowledgetransfer
Discoverthat explicit knowledge
is easyto track but only part of
knowledgetransfer
>
>
>
Developmodel for
improving tacit
knowledgetransfer
.
Improved tacit knowledgetransferfacilitates
knowledgetransferwhich enablessustainable
technologytransferto takeplace
>
>
>
Estabish importance
of tacit knowledge
transfer
Refine and
validate model
in Main Study
>
>>
ornpleteloop
to technology
transfer
Figure 1.1. Sequence of the Research Thought
1.6.
Methodology
The research project aimed to investigate aspects of technology transfer and to track
the process of knowledge transfer between foreign and local managers within joint
venture projects in China when they deal with method statement in construction. The
design concept of the research project has been a combination of both qualitative
both
literature
Following
the
the
a pilot
review,
approach and
quantitative approach.
study and a main study were designed to be an integral part of the research project.
Interviews were undertaken during the pilot study in a major joint venture project in
China in order to obtain qualitative data while a structured survey was arranged
during the main study in three sampling regions in a much wider context in China.
A psychological instrument - the assessmentinventory was used both in the pilot
data
be
that
It
the
qualitative
significant
out
study and
main study.
should pointed
in
foreign
local
(25)
interview
twenty-five
through
the
and
managers
was collected
of
the pilot study while quantitativedata were obtainedby analysingfour hundred fifty
(450) copiesof assessment
inventories,which were returnedto the researcher.
1.7.
Outline of the Research Project
As it hasbeenpointedout in the sectionof aimsandobjectives,the studyfocusedon
the investigationof the currentmechanisms
of technologytransferandthe aspectsof
technologytransferbetweenforeign and local partnerswithin internationaljoint
venturesin China.Basedupon that, the study aimedto generatea model for its
6
appropriateness
and effectiveness.Following the theme,the theoreticalframework for
the current researchhas been built through the literature review of knowledge
transfer.It shouldbe pointed out that it might be easyto define the processof explicit
knowledge while it is hard to track tacit knowledge transfer. Qualitative data were
collectedduring the pilot studythroughinterviews. The researchmodel that was built
during the pilot studywas further refined andvalidatedduring the main study.
As the researchtitle implies, the subjectmatter encompasses
the following fields:
Technology transfer
Knowledge transfer
Construction industry in China
International joint venture projects
Therefore,to resolvethe expanseof material content,logic and sequence,the outline
and designconceptof the study hasto be closely relatedwith the abovefocuses.Each
chapterbeginswith a brief introduction,then examinesproblemsand issues,and ends
with a discussion.
ChapterOne looks at the researchproblem and issuesof technologytransfer,aims and
objectives of the current researchproject, an overview of China's economy, with
particular examinationof how the researchfocuswas shifted from technologytransfer
to knowledgetransfer.ChapterTwo examinesthe dcflnition, history, channels,theory
and practice of technologytransfer,the policies of EC and the World Bank towards
technologytransfer,and the measurementand appropriateness
of technologytransfer.
Chapter Three reviews the definition and the important role of construction,
constructionindustry in China, aspectsof internationalisationof constructionindustry
in China, issues and options of technology transfer in construction. Chapter Four
examinestheoriesof communicationand aspectsof knowledgetransfer,distinction of
explicit knowledge and tacit knowledge, problems and practicalities in knowledge
transfer, knowledge managementprogrammein construction.ChapterFive looks at
methodologicalissuesthat relate to the current research.It examinesthe conceptof
researchdesign and philosophical notions of the study. It explains the methodsused
7
both in the pilot study andthe main study.ChapterSix examinesthe various issuesof
the pilot study, the internationaljoint venture projects in China. The analysis and
findings of pilot study data is presented.The different positions of the three
economies have been identified. Chapter Seven examines a comprehensive
comparativestudy of economicindicators of JiangsuProvince, Henan Province and
Xinjiang AutonomousRegion, PRC. ChapterEight examinesthe aspectsof the main
study that was undertaken in Jiangsu Province, Henan Province and Xinjiang
Autonomous Region, PRC. The analysis and discussionof the main study data are
presented.Chapter Nine looks at the researchfindings, validation of the research
model, policy implication, and contribution to knowledge. The further researchis
recommended.
1.8. Scope and Key Assumptions
Thecurrentresearch
projectsetsits boundaries
within the contextof the construction
industry in China. Therefore,the pilot study and the main study of the present
researchwere designedand arrangedin China.In particular,the main study was
undertakenin threedifferentregionsin termsof economicdevelopmentin China
while the former was carriedout in a major internationaljoint ventureproject in
China.The unit of analysisof the studywas various'dyads' or management
pairs
with one foreignelementandonelocal element,andwhoserolesdemandthat they
point of view,the studyshould
work together(referto figure6.3.). Fromanacademic
generateprofound data and useful information. Of the many researchworks
concerned
with technologytransfer,relativelyfew havetried to approachthetracking
of knowledgetransferprocess,which is the core issueof technologytransfer.At
presentthere has not been much researchin the area of knowledgetransfer,in
particular,the transferof tacit knowledge.However,it is believedthat the current
researchwork hasprovideda systematicandtheoreticalmodelthat hasnot existed
hithertoin anareathathasattractedlittle previousresearch.
The distinctivenessof the researchprogrammelies in developing and validating a
model with which the recipients and donor organisations as well as international
funding agencies can identify the essential ingredients of a particular aspect of
technology transfer, namely the transfer of tacit knowledge. This may enable the
8
practitionersto addressthe existing deficienciesin the processof technologytransfer
and assist in the developmentof more appropriatearrangementfor the transfer of
managementknow-how in theory andin practice.
1.9. Summary
This chapterhas describedthe structureof the thesis and laid the foundationsfor the
report. It has introducedan overview of China's economy.It presentedthe research
problem and thejustification of the research.It explainedthe key issuesof the current
researchproject, from technology transfer to knowledge transfer. Furthermore,the
method was briefly described and justified. The thesis was outlined and the
limitations were given. On thesefoundations,the thesis can proceedwith a detailed
descriptionof the researchproject.
9
Chapter Two
The Development and the Current State of Understanding of
Technology Transfer
2.1.
Introduction
Technology transferhas been a focus of considerableresearchinterest becauseof its
close relationship with economic growth. It has been assuming an increasing
is
In
for
both
developed
developing
this
attempt
chapteran
significance
countries.
and
made to establish a clear picture of the definition, theory, channels,measurement
issues,and appropriateness
of internationaltechnologytransfer.Basedupon the above
elements,the study will concentrateon the identification of mechanismsof technology
transfer and the processesof technologytransfer.Furthermore,the chapterreviews the
approachesand issuesin measuringtechnologytransfer.
2.2. What Is Technology
Technology representsthe combination of human understandingof natural laws and
fulfil
that
things
to
times
our needsand
make
phenomenaaccumulatedsince ancient
desiresor that perform certain functions (Karatsu, 1990). In other words, technology
has to createthings. Miles (1995) definestechnologyas the meansby which we apply
is
It
a
to
the
problems.
practical
solution of
our understandingof the natural world
(skills,
"software"
(buildings,
"hardware"
and
plant and equipment)
combination of
knowledge, experience together with suitable organisational and institutional
implies
demand
be
which
a
Technology
applied and maintained,
arrangement).
must
for a further input of a suitable range of human resourcesand skills. It is this latter
input that is at the root of the difficulty in transferringtechnologiesbetweendifferent
enviromnents.
The UN Conference on Trade and Development (UNCTAD) has provided the
following definition:
"Technology is bought and sold as capital goods including
human
labour
usually skilled
systems,
machinery and productive
10
manpower, management and specialised scientists. Information of
both technical and commercial character, including that which is
readily available, and that subject to proprietary rights and
restrictions."
Technology cannotmerely be consideredas a production factor, and it is not socially
neutral (Mnaas, 1990). It seemsfruitful to consider the concept of technology as
consisting of four closely inter-linked elements: namely, technique, knowledge
(normally consideredas 'technology'), the organisation of the production and the
product.
1. Technique
Technique covers the instrumentsof labour (machineryand tools), materials and the
way they are brought into function by labour in the working process.Both social
dynamic (working process) and social contradictions (e.g. between machinery and
labour) are inherentin this elementof the technologyasin eachof the sub-concepts.
2. Knowledge
Knowledge consists of three principal categories: applied science, skills, and intuition.
The weighting between these categories of knowledge is changing historically, but in
every case an adequate combination of types of knowledge must be present.
Knowledge is the 'key to control'over
technology as a whole, which can be seen both
at micro-level (Taylorism) and at higher levels of social aggregation (technological
dependency) (Mnaas, 1990).
3. OrRanisation
Technique and knowledge must be organised before they can bring results.
Organisationis therefore an integral part of technology. Organisationof a working
processmay have technical causes,but mostly the actual choice of organisationwill
rest widely on social-economiccausesand reflect the general social structure of
society.
11
4. Product
The ultimate purpose of bringing technique, knowledge and organisation together is of'
Without
course to obtain a product.
Including
this goal, it is in fact difficult
to
understand the other three elements properly. It seems natural to include the product III
a comprehensive
concept, not least because in practice, the choice of
technology
product Often precedes the choice of the technique, knowledge
and organisation
by
which it is going to be produced.
Rosenberg and Frisclitak (1985) pointed out that the speciI icity of technology has close
In Most
links with the nature of the IIIPLItSto Its production and of tile I-CS111ting
OLItPLItS.
advanced COUntries,at least 60 percent of research & development expcnd1'tUrcsare on
development, namely expenditure to develop specific prodLICtS or production
processes. Table 2.1 represents the distribUtIOn of the costs of innovation - eXCILIdIng
normal Investment in plant and equipment in indUstrial firms. Depending oil tile
asSLIII1ptiOIIS
made, this distribution of expendItUres predicts that between 10 and 30
percent of the inputs to Industrial technology come fi'011101.1tsideindUstry (mainly
universities and government laboratories), and tile remainder from within indUstry
itself.
015%
015%
35%
0 engineering 0 market launchý
Table 2.1. DistribUtIO11of the cost of innovation (Rosenberg and Frisclitak, 1985)
2.3. Technology Transfer
'Fcchnology
transfcr
is a crucial
(level opm ent, Technology
and dyli'llilic
has bccn
transtlerral
Ilictor
ill
intentionally
social
or
and ccolloillic
unintcifflonally.
12
Sometimes, a generator of technology has acquired a competitive advantageby
undertaking the dissemination of products, processesand maintenance systems
(Bradbury, 1978).Sometimes,a recipient(or transferee)has donemuch better than the
original innovator. For example,it was the Chinesewho invented gunpowder,but the
Europeanswho usedit and developedit for world conquest.Sometimesthe technology
has taken a new form at each transfer, absorbinglocal traditions of design or local
marketpreferences.
2.3.1. Derinition of Technology Transfer
The two words "technology transfer" seemto convey different meaningsto different
people and different organisations.Technology transfer is defined in the Work
Regulations of the United Nations, as the transfer of systematicknowledge for the
manufactureof a product or provision of service (Yu, 1991). It has been defined in
many other ways. According to Abbott, (1985), it is the movement of scienceand
technology from one group to another, such movement involving their use.
Traditionally, technology transfer was conceptualisedas the transfer of hardware
objects,but today also often involves information (e.g., a computersoftwareprogram
or a new idea) that may be completelydevoid of any hardwareaspects.
The concept of technology transfer is comprehensive, including
commercial
transactions and non-commercial technical aid. If this transfer involves any factors that
are beyond domestic control, the transfer takes on an international aspect, the content
of which covers license agreement, technical services, technical consulting, etc..
International technology transfer includes co-operation production, joint-venture
operation, operation of project in co-operation, project-contracting as well (Yu, 1991).
2.3.2. Significance of Technology Transfer
Technology transfer is important not only for world understanding, but also for taking
advantage of progress in different parts of the world in applying modem science to
economicactivity. At the sametime, technologytransferis a shortcutnot only for the
Third World countries, but also for all countries in the world. However, successin
technology transfer is related to its appropriateness (Samli, 1985). If the transferred
technology is not appropriate for the needs and conditions prevailing in the receiving
country, no matter how superior or efficient that technology may be, it will be rejected.
13
2.4. The Recent History of Technology Transfer
In its broadest sense, technology transfer has occurred since the very earliest stages of
the human development, and social and economic development. Having identified the
definition and the significance of technology transfer, this section examines the recent
history of technology transfer from the 1960s to the 1990s. Knowledge management
1
began to prevail as
in
late
focus
1995
that emerged as a
of business attention
technology transfer began to fade since 1990s. Knowledge management and
knowledge transfer has become popular until recently.
2.4.1. UN Conference on Science and Technology
The interest in technologytransferon a global scalecan be traced to the early 1960s.
The concept of "technology transfer" was debated during the UN Conferenceon
Scienceand Technology(UNCSAT) which was held in Genevain 1963.The advanced
developing
the
nations
technological
their
and
wares
countriesprepared
scientific and
help
their
that
solve
to
those
might
aspects
expected
were
pick and choose
development problems. One distinguished British Nobel Laureate referred to the
UNCSAT as 'a supermarket'(Oldham, 1987).The difficulties of accessto technology
fact
In
the real problemsof
the
technology
considered.
costsof
and
were not seriously
technologytransferwere hardly discussedat all.
2.4.2.The Organisation of American States
According to Oldham (1987), the Organisationof American Stateswas the earliestto
initiated
their
importance
transfer
developmental
technology
and
the
of
recognise
had
Vaitsos
Constantine
that
by
in
built
already
America.
They
Latin
on work
studies
begunin Colombiaand setup a network of studiesin most Latin American countries.
2.4.3. UN Conference on Trade and Development
UN Conferenceon Trade andDevelopment(UNCTAD) is one of the first international
transfer
the
of
to
that
there
with
associated
problems
were
organisations recognise
technology to developing countries.In its secondconferencein New Delhi in 1968,
UNCTAD commissioneda paper that used Organisationfor Economic Co-operation
1Examplesinclude: The Journalof KnowledgeManagement,KnowledgeManagement,Knowledge
ManagementMagazine,KnowledgeManagementReview, etc.
14
and Developmentstatisticsto comparethe technologicalbalanceof paymentsbetween
different countries.Some industrialisedcountriessold more than they purchasedand
their balanceof paymentswas positive, whereasdevelopingcountrieshad the reverse.
Therefore,UNCTAD arguedthat this 'invisible' trade in technologywarrantedfurther
study and begana major programto identify the main policy issuesabout technology
transfer,which they feel, shouldbe of concernto Third World governments.
2.4.4. Technology Transfer in the 1970s
The result of the study of technology transfer in Latin America grabbed the attention of
the developing world. With technology transfer, the multinational companies appeared
to be making excessive profits out of their sales to Latin America. Technology transfer
aroused increasing interest of academics. At the same time the issue of technology
transfer had become so politically charged that it featured on the agenda of a meeting
of Latin American foreign ministers.
Throughout the 1970s,technologytransferremaineda major political issue (Oldham,
1987). For 10 years UNCTAD tried to negotiatea Code of Conduct on Technology
Transfer which would be binding on both suppliersand recipientsof technology.The
debate between government representativesin Geneva's UNCTAD headquarters
becameextremely acrimonious,and much time and money was spenton negotiations
that were eventuallyfruitless. Therewas argumentover excessiveprofits and the price
developing
developed
for
the
between
countries.
technology
the
transfer
and
charged
At the same time many developing countries set up government mechanismsto
followed
These
foreign
flow
technology.
what
countries
the
monitor and control
of
improving
They
be
'defensive'
aimed
at
to
transfer
technology
policies.
came
called
the contracttermsof thosethat were permittedentry into the country.
2.4.5. Technology Transfer in 1980sand 1990s- Fear of Competition
The prominent featuresof the interrelateddevelopmentsof international technology
transferin the1980'sare surnmarisedby Singer(1991) as follows:
Internationalisationof production
9 Globalisationof competition
15
The proliferation of new information technologies and several types of
organisational innovations relating to design, production and marketing of
industrial goods and services.
In the 1980s,the concernsaboutcontractconditionsand terms beganto fade as a new
set of issuesbegan to take place. This was mainly causedby the successof such
countries as Brazil and South Korea in competingwith their manufacturedgoods in
international markets. This led companiesin the developedworld to be even more
reluctantto part with their 'core' or essentialtechnologiesat whateverprice.
2.4.5.1. Technology Transfer and EC Policies
During the 1980s and the early 1990s, European Commission policies and programmes
on technology transfer opened new ways of thinking about innovation support systems
and shaped a number of infrastructures and services for such purpose. The most
important have been contributions from the Strategic Programme for Innovation and
Technology Transfer (SPRINT), the Regional Innovation and Technology Transfer
Strategies and Infrastructures (RITTS), the pilot-action of Regional Technology Plans
(TRP), and recently, the Fifth Community Frame-work Programme for Research and
Technological
Development.
These programmes have accumulated important
experiences in technological co-operation and created generic tools for technology
transfer and innovation diffusion (Komninos, 1997).
2.4.5.2. The World Bank and Technology Transfer
The World Bank is one of the organisations that are most interested in technology
transfer. It supports the view that the development of local consulting firms can best be
advanced through ventures with foreign firms. In 1993, however, the World Bank
adopted an explicit policy of requiring a commitment to technology transfer from its
contractors to the construction industries of the host country (Abbott, 1986).
The World Bank has an explicit policy of promoting technology transfer by using
international consulting firms to support and strengthenlocal capacities.The World
Bank is now keen to promote technologytransfer and frequently advisesthat foreign
companieswill not get contractsof the Bank projects unless they form meaningful
partnerships with local companies (Carrillo, 1993). However, there is a lack of
16
mechanismsto ensurereal technology transfer. In her study of international joint
ventures,Carrillo's findings show that internationaljoint-venture betweencontractors
A,
in the developed and developing countries are recognised as a potential means of
enhancingthe constructionexpertiseof nationals of developing countries, and offer
to its partners.
many advantagesand disadvantages
8
2.5. Technology Transfer: Issues and Practice
It is clear that technology can no longer be regarded as information that is generally
applicable and easy to reproduce and re-use but as a highly differentiated range of
techniques (Tsang, 1997). Neither can technical knowledge only be interpreted in
terms of production technology, as Kogut and Zander (1992) point out. People and
organisations possess socially oriented as well as technologically oriented know-how
(Menzler-Hokkanen, 1995) and a firm's technologies are embodied in its human and
organisational. as well
hard
Successful
its
transfer
of
as
physical resources.
technologies often has to be accompanied by the transfer of soft technologies like
management know-how (Hendryx, 1986). These are particularly critical since they are
sensitive to local cultural and environmental conditions (Bakuli, 1994).
This section reviews a range of issues and practices of technology transfer, which
coverstechnologytransferprocess,channelsand evaluationof technologytransfer.
2.5.1. Technology Transfer Process
Technology may be transferred between persons, between organisations, from a
in
industries
between
institution
to
and
enterprises
research centre or educational
regions and countries. In its most common usage, technology transfer normally refers
to formal and direct arrangements based on an agreement between a buyer and a seller
beneficiary.
donor
However, a
between
and
a
or a non-commercial arrangement
a
funding agency can play an important role in the arrangement. Ofori (1994) illustrates
the process of technology transfer between countries as shown in Figure 2.1.
2.5.2. Technology Transfer Channels
As identified by Sharif (1983) the complexity of technology and transfer process,
motivations and the practices of the transferors, attitudes and the abilities of the
17
transfereesand the governmentpolicies are the major issuesof technology transfer.
Reddy (1996) identifies six barriersto technologytransfer: political, regional, social,
religious, ethical, and economic.After a surveyof the literatureof technologytransfer,
Rapoport(1985) summarisedthe channelsof technologytransferas follows:
Identification of need
Scanning a variety of
technologies to choose
suitable one
Not suitable
Evaluation of
technology for its
appropriateness
I
Negotiationwith
supplier
I
v
Acquisition
Organisation preparation to use
the technology: planning, setting
targets and successful factors,
P,
forming monitoring system
Transfer through
appropriate channels
Adaptationand
integrationinto
corporatesystem
Continuousmonitoring
of achievementof
targets
Correctiveaction
I
Improvement
I
Development of new
technologies
Figure 2. I. Technology transfer process (Ofori, 1994)
18
"
Direct foreign investment
"
Sale of turnkey plants
"
Joint venture
"
Co-operative research arrangement
"
Export of high technology products and capital goods
"
Reverse engineering
"
Exchange of scientific and technical personnel
"
Science and technology conference
"
Trade shows and exhibits
"
Education and training of foreigners
"
Commercial visits
"
Open literature Uournals, magazines, technical books and articles)
"
Industrial espionage
"
End-user or third country diversions
"
And government assistanceprograms
The technology lag in the constructionindustries of the developing countries makes
technology transfer more necessaryand potentially viable (Abbott, UNCTC, 1989).
Developing countries should promote strategic alliances, such as joint ventures
betweenlocal and foreign contractorsin order to developtheir constructionindustries
(World Bank, 1984).
2.5.3. Evaluation of International
Technology Transfer
Technology is mainly specific knowledge about highly differentiated products and
productionprocessesthat accumulatesstep-by-stepin firms (Rosenbergand Frischtak,
1985).The successfulassimilationof technologyfrom outside sourcesdependson an
in-house capacity not just in research and development, but also in production
engineering.Assimilation invariably involves adaptation,so that the diffusion of an
innovation cannotbe neatly separatedfrom innovationitself.
The sources, nature, and mechanisms of international technology transfer vary
considerably from sector to sector. In sectors where firms are in general supplierdominated, technology comes mainly already embodied in production machines. In
19
production-intensivefirms, the key technology relates to constructing and operating
large-scale plant and is transferred international mainly through know-how
agreements.In sectors supplying production equipment, however, technology is
transferred internationally mainly through reverse engineering and through local
linkages with the production engineeringdepartmentsin production-intensiveuser
firms (Rosenbergand Frischtak, 1985). In science-basedfirms, the key technology
emergesmainly from industrial researchand developmentand in some casesfrom
academicresearch.
2.6. Theories of Technology Transfer
This section examinesthe theoreticalissuesof technologytransfer, which covers the
models of technologytransfer,mechanismof technologytransfer and approachesand
problemsin measuringtechnologytransfer.
2.6.1. A Basic Model of Technology Transfer
Cultural barriers are perhapsone of greatestchallengesto a successfultransfer of
technology. Penetratingcultural barriers implies the sender's perceptions as to the
important
is
far
As
transfer
the
technology
an
principle
concerned,
receivers'needs.
as
is congruencebetweenthe sender,the technologyandthe receiver.
Transferor
Needs
Needs
causedbarriers
Transferor's
knowledgeof the
Transferor
ý-ý
Technology
Transferee
i
lo Consequence
Transferee's
background
markets
raw materials
labour
know-how
Transferee
Readiness
causedbarriers
- willingness
- ability
Assessmentof
TechnologyTransfer
Figure 2.2. A basicmodel of technologytransfer(Samli, 1985)
20
In fact, technology transfer benefits both developing and developed countries.
Regarding where the technology is developedhow it is utilised who uses it and for
what purpose, Samli (1985) considered six dimensions of technology related to the
following specific aspects: such as geography, culture, economy, people, business, and
government.He modelstechnologytransferas shownin Figure 2.2.
2.6.2. Product Life Cycle Theory of Technology Transfer
Walsh (1987) suggests that the typical approach of the foreign organisation is to
attempt to use familiar technologies rather than develop production process skills of
the existing labour force. This approach provides short-term solutions to shortfalls in
indigenous capacity and a residue of the imported technology can be expected to
remain in the country, contributing to a longer-term improvement in capacity. The
extent to which this happensnaturally, however,is debatable.Lam (1997) arguesthat
the difficulties in the transfer of knowledge arise not simply from the tacit nature of
knowledgeitself, but from differencesin the degreeof tacitnessof knowledgeand the
way in which it formed,structuredandutilised in different countries.
Technology transfer has played an important role in the international economy and
technologicalco-operation,the disseminationof scienceandtechnologyandpromotion
of international trade. According to Chen, (1994), the importance of technology
transfer has been one of the main Chineseaims in attracting foreign investment.The
unsophisticatedtechnology transferredto China by foreign firms resonateswith the
predication suggestedby product life cycle theory. The theory states that as the
technologyof a product becomesmore standardisedand static, the product migratesto
lower-income countries where labour cost becomes a more important basis for
comparativethan researchand development.They were in the final stageof their cycle,
namely the standardisedstage,where managementskills and labour costs rather than
technicalskills, were critical (Chen, 1994).
2.6.3. The Mechanisms of Technology Transfer
Much of the technology developedin industrial countries is freely available to the
underdevelopedcountries and constitutes part of the common fund of human
knowledge(Abi-Saab, 1967).This is true not only of purely scientific knowledge,but
also of a lot of specific information concerning production processes.Apart from
21
be
information
obtained through academic and
can
scientific publications, such
government exchanges,foreign experts,scientific and practical training of nationals
abroad,etc. It can also be acquiredby attendinginternational scientific and technical
conferences,meetings or seminarsheld by the international scientific and technical
organisationsor institutions.
In the light of the political and economic conditions of the countries concerned,the
patterns of transfer of technology from enterprise to enterprise vary enormously.
According to Abi-Saab (1967), transfer of technology can be:
1. Operated in the first place from a foreign enterprise to one of its branches or to a
wholly owned subsidiaryin the lessdevelopedcountry. In this case,the transferof
technology is part of direct private foreign investment in that country.
2. Arranged by the patenteeto sell the use of the processto a producer in the less
developedcountry through a license.
3. Operated with 'turn-key' formula. According to which the foreign enterprise
undertakes to build all the installations and the machinery necessaryfor the
working of the process.The considerationfor the use of the processwill be part of
the global price.
One basic considerationbecomesapparent:as far as technologytransferis concerned,
what counts most is not the legal formula employedto effect the transfer,but that it
directs foreign investment,licensingor joint venture.
The foreign enterprise may be attracted to the less developed countries by raw
materials, cheap labour and accessto new markets, but the result will be a dual
economy,as exists in many countries.Moreover, it is not enoughto work the process
in the country.Real implantationmay requireits adaptationto local conditions,suchas
climate, availability of factors of production, tastes,etc. In this respect,the foreign
staff may learn from their local counterpartsaswell asteachthem. The developmentof
the product on the spot is thus a very important aspectof the successfultransfer of
technologyand its implantation(Ramaer,S., 1967).
22
2.6.4. Measurement of Technology Transfer
In categorising the conceptual and measurement problems, the key factors are
determinants, channels, and effects of international technology transfer. (Samli, 1985).
What makes the conceptualisation exceptionally difficult
is the specificity
of
technology in terms of its highly differentiated inputs and outputs. The sources, nature
and mechanisms for international transfer of technology vary considerably from sector
to sector.
2.6.4.1. Approaches to Measuring International Technology Transfer
There are three approachesin measuring international technology transfer surnmarised
by Samli (1985) as follows:
1. The macroeconomicapproachthat restricts its coverageto transfersthat generate
monetary paymentsand receipts and which relies on balanceof payments,often
highly aggregateddatafor their measurement.
2. The microeconomicapproachthat restricts its coverageto selectedspecific firms
and/or sectorsin terms of case studies and which relies on firm-specific, often
primary data that go beyond monetary payments and receipts.
3. The microeconomicapproachwhich restrictsits coverageto patentabletechnology
infonnation as a proxy for technology and relies on patent citation data for
measuringthe internationaltransferof suchinformation.
It should be pointed that Samli has surnmarisedonly the economicmeasuresat both
macroeconomicandmicroeconomiclevels.
2.6.4.2.Problems in Measuring Technology Transfer
It is clear that the aboveliterature has built a ground in understandingthe mechanism
and processof technologytransfer; however,the measurementof technologytransfer
is still a hard task. Samli (1985)pointed out six difficulties as follows:
1. The international flow of public technological infortnation (scientific and
technologicaljournals, patentdescriptions)and of firm-specific infonnation (drawings
23
international
blueprints,
the
of
process
of
are
only
part
and
operating manuals),
technology transfer. They do not capture reverse engineering, the transfer of person or
institution-embodied know-how, flows through academic institutions, or technology
embodied in machines.
2. Monetary flows resulting from inter or intra-firm licensing agreements can, in
principle, capture flows of know-how. Patent license can be distinguished from knowhow licenses. Within the latter it is useful to distinguish between sums involved in
transferring otherwise secret information and those involved in transferring personembodiedknow-how.
3. For certain important channels of international transfer, there is not sufficient
information available.Therefore, it is difficult to separateout the value of embodied
technology.
4. As has been seen, the assimilation of outside technology always involves
considerablecoststo those doing the assimilatingand requiresactivities that resemble
in many ways thosenecessaryfor the creationof technology.A goodproxy measureof
the capacity for imitation is therefore the level of industrial activity in R&D, and
production. Although there are good data on R&D activities in the OECD countries,
there is nothing systematicon PE activities.
5. Technology license payments in the past were understood to be proxies for
technology imports and industrial R&D expendituresto be proxies for the production
for
is
indigenous
There
This
technology.
many
other
channels
are
of
view mistaken.
the import of foreign technologythan licensing,and industrial R&D activities not only
create indigenous technology but also assimilate and adopt technology of foreign
origin.
6. Even if better data are collectedon eachof the channelsof internationaltechnology
transfer, there remains the problem of putting them together in a common measure of
volume andvalue.
24
2.7. Summary
What hasbecomeapparentis that the critical issuesof technologytransferbetween
developedanddevelopingcountriesshouldbe sufficientlyaddressed.
Much hasbeen
publishedaboutthe significanceof internationaltechnologytransfer,but relatively
little toucheson ensuringof effectivenessor appropriateness
of the technology
transferred.Furthermore,it has been pointed out by researchers
that technology
transferrequirement
shouldbe specifiedin a contractwith a highly structuredsystem.
To date no systematicand theoreticmodel is availableto establishthe essential
ingredientsfor this typeof transfer.
25
Chapter Three
Technology Transfer in Construction Industry in China
3.1.
Introduction
Following the examination of aspectsthe construction industry, the chapter will
review the presentsituation of constructionindustry in China. Then the chapterwill
address the issues of technology transfer in the construction industry and the
internationalisationof constructionindustry in China. Furthermore,the chapterwill
addresstechnology transfer involvement in constructionindustry, in particular, the
issues and options in construction technology transfer. Finally, the chapter will
addressthe technologytransferissuesin the constructionindustry in China.
3.2.
The Construction Industry
The constructionindustryplays a major role in economicdevelopmentin both
developedand developingcountrieswith its specialcharacteristics
comparedwith
other industries.It undertakesthe productionof variousconstructionproducts.In
industryis composed
of constructionandreconstruction
otherwords,the construction
of housing,infrastructure,the installationof variousequipmentand facilities, the
surveyingand designingof various constructionproducts for various material
productionentities,andnon-material
productionentitiesof nationaleconomy.
3.2.1. Definition of Construction
Construction is a traditional industry, whose background dictates that it has not
developed at the same pace as that of other industries (Scott, Ponniah and Saud,
1997). Whether it is justified or not, this industry is often perceived as old fashioned
and reluctant to come to terms fully with the modem business world of today. Homer
and ZaJa (1991) argue that it would be a loss in competitive advantage if new
management techniques, such as management know-how, are not properly considered
and adopted, no matter how sensible it is that new ideas are not adopted until they
have been tried and tested. Raftery et al. (1998) review recent developments in the
construction industry and identify the major trends that have helped polarise the
financial and technical superiority of the developed countries and the corresponding
26
inferiority of the developingcountries.Raftery et al. (1998) arguesthat technology
transfer, in the long run, could be one of the important ways to fill this gap. Joint
venture between multi-national companies and local companies is an effective
approachandpreferredvehicle.
3.2.2. Role of Construction
The construction industry plays a major role in economic development in the less
industrialised nations since it constitutes a significant portion of both gross national
product and of employment (Abbott, 1985). Indeed, the creation of physical facilities
constitutes more than one half of the gross domestic investment of both developed
and developing nations. The construction industry also plays a key role in satisfying a
wide range of physical, economic and social needs and contributes significantly to the
fulfilment of various major national goals. The industry's size, the nature of its
operation, and its presence in every developmental activity make it an attractive area
for the transfer, adaptation, and development of technologies consistent with the
development goals of emerging nations.
3.2.3. Stages of Development of the Construction Industry
The development of a local construction industry follows economic development
fairly closely. Abbott, (1985) identified five basic stages in the development of an
indigenous contracting industry as follows:
1. Foreign firms play important role in construction activity. Foreign firms have the
expertise and local firms do not, or it may be that local firms do not even exist,
exceptperhapsasinformal jobbing contractors.
2. Local sub-contractorsbegin to develop perhapsto take over small parts of the
foreign contractor's work. These sub-contractorsmay be formed by local
entrepreneurs,
which are ableto supply labour.
3. Local contractorsexecutesmall projects.This is a significant step,for.thesefirms
are taking commercial risks and are probably completing projects,that foreign
contractorsarenot interestedin.
27
4. Local contractorstake over most local work. Perhapsby keeping costs down,
thesefirms competesuccessfullywith foreign firms, but they also undertakejoint
ventures with the foreign firms for larger contracts.
5. Local contractors seek new work abroad. Initially this may mean that the
contractorsbid for work in neighbouringcountriesbut there is also the possibility
of bidding for contractsfurther afield.
It is clear that the relative importance and the demand of technology transfer in this
process is demonstrated not just at the joint venture stage, but also earlier, since the
transfer stimulates the growth of local contractors and consultants, and there are
consequent passeson effects.
3.3. The Construction Industry in China
China's economy is now one of the largest economies in the world, the rapid
economic expansion has also created one of the largest construction market in the
world (Bon, 1997). The increase in economic activity has generated and will continue
to do so, a heavy demand for construction for at least the next 10 years. Therefore, the
heavy demand for construction, caused by the rapid economic growth, cannot be
satisfied by Chinaýsprevailing resources, either physical, technological or managerial.
The construction industry in China has suffered for many years as a result of long
construction cycles, inadequate planning and programming of projects and poor
quality of workmanship. Therefore, an increasing number of construction projects are
promoted for international competitive bidding. In this way, not only can advanced
technology be introduced, but also advanced management practices and methods can
be imported from the advanced countries.
The constructionindustry in China was not recognisedofficially as a separateindustry
until 1983.In the past, it was viewed as a subordinatepart of the Basic Construction
(government investment). Therefore, the construction industry was regarded as
producing no financial value through design and constructionactivities. The creative
contribution of constructionindustry to the national economywas completelydenied.
In fact, the constructionindustry plays a very important role in the national economy.
28
China has 88,329 constructionenterprises,(including 4,643 state-owned,9,837
collcctivc-owncd and 73,849 rural constructioncompanies),with a total workforce
25 million, about 10% of the total employment of the country (Chen, 1997).
Another featureof the constructiondimensionin China in that thereis a largeincrease
international
finance,
financed
In
to
of externally
projects. addition providing project
funding agenciesare keen to addressthe issues of shortening the gaps between
developed and developing countries, namely increasing the future capacity of the
indigenous industry to meet the demandsplaced upon it. The principal vehicle for
achievingthis is technologytransfer.
3.3.1. Private Firms in China's Construction Sector
Economicreform is succeedingin China's constructionindustry. As a result, China's
in
important
the country's
role
privately owned constructioncompaniesnow plays an
for
85 percent
its
60
account
constructionsector,which produce percentof output and
of the sector'sprofits. So far, more than 13,000,or more than 28 percent,of China's
in
firms
have
structural
reforms
assets-and quality-certified construction
undergone
accordancewith contemporarymanagementstandardsandpractices(EconomicDaily,
1999). These companies include 1,844 joint-stock corporations, 7,833 limited
companies, 1,983 solely state-ownedenterprises,1,167 shareholding co-operative
fin-ns,270 enterprisegroupsand23 listed stockcompanies.
China's private construction companies now generate RMB 500 billion (US$60.39
billion) in annualoutput value, which is 60 percentof the sector'stotal. Theseprivate
firms also produce RMB 10.6 billion (US$1.28billion) in annual profits-a huge 85
percentof the total for the entireconstructionsector.
3.3.2. Intern ation alis ation of the Construction Industry in China
With the accession to the World Trade Organisation (WTO), as the economic reform
is going to depth, China will be facing both opportunities and challenges. The
internationalised.
However,
in
China
is
becoming
construction market
more and more
the following factors are implications of internationalisation of construction industry
in China.
29
1. Increaseof the ProjectsFinancedby the World Bank
The number of constructionprojects financed by the World Bank and also by the
Asian DevelopmentBank has been increasingsince the World Bank recommenced
the provision of loansto China at the beginningof 1980's.So far, the total amountof
loansprovided by the World Bank to China has exceededUS$ 20 billion (Sun, 1997).
There are about 200 projects financedwith a loan from the World Bank, which are
widespread in various industries, such as construction, agriculture, transportation,
communication,energy,social and educationaldevelopment,and so on. Somenotable
examplesare: the projects of Lubuge Hydro-electric Power Station, Ertian Hydroelectric Power Station, Jing-Jin-TangExpressWay, and Xiaolangdi Hydro-electric
Network.
2. Project-Contracting Overseas
China has made great achievements in the field of international economic and
technological co-operation, project contracting in the international construction
in
domestic
578
By
1995,
the
there
companies
construction
market.
end of
were
China which were approved and authorised by the Ministry of Foreign Economy and
Trade Co-operation to undertake international construction project-contracting and
labour service, with a total contract value US$ 50 billion, a turnover US$ 32.1 billion,
a workforce dispatched to the foreign countries 1.104 million and a business coverage
of more than 170 countries in the world (Li, 1997 ).
3. Foreign Joint-Venture Investments
Since the reform and opening to the outside world, China has absorbed a large amount
of foreign capital through various channels. By the end of 1996,283,793 foreign
investment projects were approved in China, with a total contract value US$ 469.325
billion and a total value paid up US$ 177.217 billion. More than 140,000 joint
ventures are in good operation, with a total employment 17 million (Ma, 1997). There
is an increasing number of the multi-national firms in the world which are coming to
China for investment. Among the top 500 large and multi-national firins in the world,
more than 200 have made investments in China. There are 132 large multi-national
finris, which have established offices in Beijing alone. Technology-concentrated
projects have increased because of the coming of the large and multi-national firms.
With the establishment of many Sino-foreign joint-ventures, investment has been
30
brought in and greatly increasedthe number of the infrastructureprojects, such as
expressways,water plant, cementplant, power plants; commercialfacilities, such as,
department stores, shopping centres, as well as high standard multi-function
buildings.
4. InvestmentOverseas
11
At the sametime, China hasmadea largeinvestmentin variouscountriesin the world
through its multi-national companies.A lot of companiesset up their factories and
built facilities in many countriesin the world. For example,China StateConstruction
EngineeringCorporation(CSCEC),the largest constructioncompanyin China, with
22,000 employees,8 branch companies,6 design institutes, 1 technical school and I
training centre, 35 regional branchesand 8 specialist branches,has established63
overseasbranchesand offices and made investmentsin many countries all over the
%
world (Flanaganand Li, 1997).
3.4. Technology Transfer in the Construction Industry
Theinternationalconstruction
industryhaslongbeeninvolvedwith differentformsof
technologytransfer(Abbott,1985).Formanycompanies,
whethertheyareconsulting
designorganisations
technologytransferis just
engineers,
engineering
or contractors,
thattheyhave
a newtermusedto describethetrainingelementin foreignconstruction
oftenhadto undertake.
1$
The rising demandfrom public and private clients in developingcountries,however,
supportedby the international aid organisationsfor a technology transfer elementin
%
contractslet to foreign companies,has led to a new pre-occupationwith its definition
and implementation.
3.4.1. Construction Technology Transfer Vehicles
During technologytransferthe transferordoesnot alwaysprovide the transfereewith
solutions to specific problems.As a matter of fact, an effective transfer occurswhen
technology is requested, transmitted, received, understood, applied, diffused widely
and improved. Ofori, (1994) models the construction technology transfer vehicles in
Figure 3.1.
31
I Source
I
I
Vehicle
Recipient
I Post-reception
Subsidiary
Joint venture
Supplyof plant
and equipment
Subcontracting
Foreign
contractor,
manufacturer
government,
nongovernment
body
Strat egic
alliances
Construction
company in
developing
country
Counterpart
training
4
Licensing
ýF-Contract-R&
Ac quisition
D---1
jovernment-level
technicalaid
-
H
Adaptation
I
Improvement
Diffusion
to other
countries
Attendanceof
conferencesand
seminars
Referenceto
Figure 3.1. Constructiontechnologytransfervehicles(Ofori, 1994)
3.4.2. Identification
of Appropriate
Construction Technology
The suggestions of the World Bank (1979) for the identification of more appropriate
construction technologies and techniques are:
Appropriateness of goal. Does the technology support the goals of development
policy?
32
"
Appropriateness of product. Is the final product or service delivered, useful,
acceptable and affordable to the intended users?
"
Appropriateness ofprocess. Does the production process make economic use of
inputs?
"
Cultural and environmental appropriateness. Are the production processes, the
products delivered and the institutional arrangements compatible with the local
environmental and cultural settings (The World Bank, 1976).
A United Nation Development Programme (UNDP) study for determining the most
appropriate construction technologies and techniques has listed the following criteria
(UNDP/World Bank, 1979):
Amount of local labour incorporated- objectiveto maximise
"
Amount of indigenousmaterialused- objectiveto maximise
"
Functionalperformance
"
Replicability
"
Capital cost
"
Life cycle cost
"
Time to implement
"
Amount of foreign exchangecomponent- objectiveto minimise
"
Environmentalimpact
"
Social impact
"
Economicimpact
3.4.3. Patterns of International
Trade in Construction
Bon (1997) describes that national economics can be considered in three categories of
countries:
L
"
Advancedindustrialisedcountries( AIC
"
Newly industrialisedcountries( NIC
"
Lessdevelopedcountries( LDC )
33
Basedupon the abovepremisesand internationalsurveyof construction, Bon (1997)
models the present pattern of international trade and technology transfer in
construction services as shown in Figure 3.2. The arrows in the figure show the
direction of currentpatternsof tradein constructionservices.
Figure. 3.2. Presentpatternof tradein constructionservices(Bon, 1997)
Evidencefrom India, Turkey and SouthKorea supportedthe pattern.China is another
example.Since the economicreform in 1978,the Chineseconstructionindustry has
played an importantrole in the internationalconstructionmarket.
A large proportion of constructionactivity remains local, regional or national at all
stages of development. The segment of the construction sector that engagesin
multinational, continental,or global constructionactivity may be growing. The global
market in construction services is far from restricted to advanced industrialised
countries.Both less developedcountriesand newly developedcountriesalreadyplay
important parts in the global market (Drewer, 1990). At present, advanced
industrialised countries may continue providing highly specialised construction
servicesto newly industrialisedcountriesand lessdevelopedcountries.Theseservices
may focus on high-technology or capital-intensiveproject, as well as on highly
specialised maintenanceand repair construction, which is growing in advanced
industrialised countries (Bon, 1996). Technology transfer from the advanced
industrialised countries is likely to be based around professional expertise being
transferredto the newly industrialisedcountriesand less developedcountries.Indeed
in 1993, the World Bank adopted an explicit policy of assistanceto promote the
growth of borrower countriesin constructionindustries(Langford, 1995).
34
3.5. Construction Technology Transfer: Issues and Options
This section will address the attitude of the governments, the attitude of the World
Bank in terms of technology transfer in construction and the barriers to technology
transfer in construction.
3.5.1. Attitude of the Governments
Governments everywhere (and especially in the developing countries), have sought to
control, guide and encourage technology transfer through various means which were
summarised by Ofori (1992) as follows:
*
Training componentsare mademandatoryin joint-venture agreementsbetweena
foreign and local partners,in the terms of engagementof foreign companiesfor
construction projects or in agreementsfor direct investment by manufacturing
enterpnses.
Guidelines for licensing agreementsare formulated and administered which
prohibit the transferof certain technologies,outline prices or pricing mechanisms
or suggest terms of contract.
Support is provided for technical information and extension services to facilitate
the diffusion of technologies.
3.5.2. Attitude of the World Bank
The World Bank encourages technology transfer in the construction industry and
favours the formation of joint ventures, which appear to be the most widely preferred
vehicle of technology transfer in construction. In addition, public, private sector
clients, and leading agencies have supported technology transfer in construction
industry. For example, As far as Xiaolangdi
Multi-purpose
Dam Project' is
1Xiaolangdi Multi-purposeDam Project, acrossthe Yellow River in HenanProvince,PRC, was
jointly fundedby the World Bank and the CentralGovernment.It is quotedby the Chinese
Governmentasa demonstrationproject for internationalproject managementof Sino-foreignjoint
ventures.The project, chosenaspilot study,will be further explainedin the later chapters.
35
World
Chinese
loan
the
the
to
government,
of
concerned,as a condition providing
Bank strongly suggests(WB, 1994):
*
To establisha project managementorganisationwhich is ableto raise funding and
managethe project independently.
9 To establisha managementsystemwhich could be able to clarify the relationships
of the rights andthe responsibilitiesof the Client, Engineerandthe Contractors.
joint
Sino-foreign
be
To
to
the
that
the
make clear
awarded
contracts could
9
venture contractors so as to create the best international practice and obtain
technologytransferand exchangeof technology.
3.5.3. Barriers to Technology Transfer
There appears to be more resistance to technology transfer in construction than in
by
identified
industries.
in
barriers
technology
The
transfer
as
other
of construction
Abbott (1985) include:
e
Unwillingness of foreign firms to nurture potential competitors in a declining
world market.
*
Tendencyof technologytransferto add a time and cost element(and managerial
complexity) to the alreadydifficult andrisky businessof contracting.
beneficiaries
local
foreign
(arnong
The
lack
enterprises,
9
usual
of understanding
and clients) of what is to be transferred.
*
Suspicion of the recipient and the client about usefulness of what is being
transferred.
9
Ineffectiveness of previous transfer, as the trained personnel seldom utilise what
they leam.
36
3.6. The Current Situation of Technology Transfer in China
Before economicreform,constructionindustryand otherindustriesin Chinawere
arrangedin a 'block' format(FlanaganandLi, 1997),wherethey eachhadthe same
demands.
The
factoriesmakingthe sameproductsfor the customers
the
same
with
reformfrom thecentralplannedeconomyto themarketeconomysawthebreakdown
of theseblocks and the Chinesefirms were suddenlyfaced with international
competition.They had to absorbtechnologythat helpsthem survive.As a result,
technologytransferhasbecomeveryimportantandpopularin China.
China's leader, Deng Xiaoping', has set targetsto achieve a per capita income of
US$4000 (presumably at 1987 prices) by 2049 - the Hundredth Anniversary of
Communistrule - which would rank China amongthe medium-developedcountriesin
the world. To achievethis will involve both the importation and absorptionof foreign
technologyon an unprecedented
scale.
3.6.1. Legal Status of Technology Transfer
Since economic reform started in 1978, international technology transfer in China has
been developing quickly. At present, the priority of this work is to introduce new and
advanced technology from
developed countries and to export the advanced
technology as well. In order to promote international technology transfer, several
Contract
Technology
laws
have
been
the
such
as,
worked out,
relevant
and regulations
Law of China adopted in 1987, the Science and Technology Improvement Law of
China adopted in 1993, Science and Technology Result Transfer Law of China
have
be
in
(Yu,
these
It
1996
that
1991).
a profound
policies
adopted
noticed
should
influence on technology transfer in China. In addition, technology transfer has been
one of the main Chinese objectives in attracting foreign investment.
2 Deng Xiaoping (1904-1997), Chinese Communist leader
who served as the de facto ruler of China
from 1976 to 1997. Under Deng, who survived two purges before he succeeded Mao Zedong, China
developed into one of the fastest-growing economies in the world.
37
3.6.2. Encouragement of Technology Transfer
The Science and Technology Improvement Law of China encourages enterprises to
increase
innovation
the
to
technological
the
so
as
of
equipment
and
renewal
carry out
develop
facilitates
law
This
to
enterprises
scientific and management competence.
in
light
in
the
technology
to
the
with
market,
new
and
strengthen
competitive power
the demand of international and domestic market. Enterprises can import advanced
technology and equipment from developed countries through technology consultation.
Enterprises are encouraged to develop new products and high-technology products by
applying new technology to participate in the competition in the international market
and to promote the internationalisation of high-technology industry.
The improvement of scienceand technology in industry, communication,post and
telecommunication,geological prospecting,construction and installation should be
encouragedso asto increasethe economicand socialresults.
3.7. Aspects of Technology Transfer in the Construction Industry in
China
In the process of the internationalisation of the construction market in China,
technology transfer is likely to be involved in the following respects in the
constructionindustry in China:
1. Proiect Supervision (Proiect Management)
Since 1988, a supervision system has been introduced for the execution of large and
middle-sized
consttuction
construction
in
the construction
projects
supervision companies were established.
trained so as to promote the construction
exist
many
problems
supervision
industry. A large number of
Construction
system. However,
in the process of the execution
Supervisors need to be familiar
international
the
with
supervisors were
of project
there still
supervision.
be
trained to
to
practices and
have a good command of the basic theory of project supervision. The means and
methods need to be improved with wide application of computer technology and
information technology. Therefore, there is a large potential for the western
consultantsto provide project supervisionmanagementservicesin the construction
market in China.
38
2. Traininiz Services
The project-client's-responsibility system was adopted from 1992. Since then, middle
and large-sizedprojectsmust havea client who is responsiblefor the executionof the
project from the beginningto the end so asto ensurea good investmentand economic
k
return will be achieved. To do the work well still needs a large quantity of
experiencedpersonnel.There are training co-operationprogrammesbetweenthe EU
and China. The China-Europe International Business School has already been
establishedin Shanghai,to developco-operationcomplementaryto the efforts made
by Member Statesin higher educationandvocationaltraining.
3. Joint-ventureOperation
In the construction market in China, construction activities can be organised in
collaboration with a foreign construction contractor, with whom the Chinese
construction contractor enters into an agreement.Generally, this option is allowed
when advancedtechnology and managementskills are required for major complex
foreign investmentprojects.
4. Consulting Services
Foreign consulting companies are invited to provide consulting services on the
projects with foreign aid. In the preliminary stage of Xiaolangdi Hydro-electric
Network, for example, a contract was awarded to a leading Canadian consulting
company for the consulting services of feasibility study.
5. High and New Technology Based Projects
Foreign general contractors have been independently employed in China frequently
on "high tech" turnkey projects. The joint venture investment project of China World
Trade Centre in Beijing was signed in 1986. The project is a US$ 231 million hotel,
office and apartment complex. The contract for the first two phases of the project was
awarded to a leading French general contractor, Societe Auxiliare d'Entreprises
(SAE). One of the main obligationsof the contractorwas to employ Chineseworkers
and provide technical training to the Chinese specialist trade contractors.
6. ProiectsFinancedby the World Bank
39
In most cases,the projects financedwith a loan from the World Bank are promoted
for international competitive bidding. The Xiaolangdi Hydro-electric Network, the
largest constructionproject financedin China with loans from the World Bank, is a
model project of the World Bank and the Chinesegovernment.The contractvalue of
the first phaseof the project is aboutRMB 32 billion (aboutUS$ 4 billion).
3.8.
Summary
3.8.1. Technology Transfer: Problems and Solutions
It hasbeenclear that confusionsabouttechnologytransferin the constructionindustry
can be attributed not only to a misunderstandingof the concept, but also to the
complexities of comprehendingtransferee'sneed and formulating programmesthat
effectively satisfy these needs. Therefore, satisfactory measures of ensuring
technologytransferis still a hard task dueto lack of appropriatedata and the diversity
aswell asthe complexity of the channelsthroughwhich technologyis transferred.
3.8.2. A Framework of Technology Transfer in Construction
Based on the review of the current literature of technology transfer in construction
and the premises of technology transfer models, a framework of technology transfer
in construction has been constructed. It should be pointed out that it is impossible that
this framework will be applicable and functional to all related situations. However,
the model presented here will provide insights into the key components of technology
transfer in construction. The failure or success of technology transfer rests on the
congruence of all the parties concerned. Furthermore, the responsibility
for
technology transfer should fall jointly on the funding agency, the transferor, and the
transferee as well as the congruence among all the parties regarding the technology to
be transferred as shown in Figure 3.3.
In this framework, a principle has been addressedthat is predominantlyimportant in
the processof technology transfer in the constructionindustry, namely congruence
amongthe transferor,transfereeand the funding agencyregardingthe technologyto
be transferred.Among all the relevantparties,if a high degreeof congruencedoesnot
exist, the technologywill not be transferredeffectively.It should be pointed out that
there exists deferencetowardstechnologytransferbetweenthe public fundedprojects
40
in
is
funded
Technology
transfer
the projects
the
projects.
promoted
and
private
funded by governmentalagenciesand developmentalagenciessuch as the World
Bank, Asian Development Bank. However, technology transfer seems not as
importantaspublic fundedproject asfar asthe private fundedprojects.
3.8.3. Current Issues of Technology Transfer in China
The construction industry in China still displays characteristics of its origin in a
planned economy. However, its structure is not uniform and in fact presents quite a
complex picture. There are state-owned units, nominally collective-owned units
which are in fact also owned by the state and true collective-owned units run by rural
construction teams. Overlaid upon these rather anachronist organisations, are new
generations of construction companies, which can be wholly owned by Chinese,
irony
An
between
by
foreign
joint-venture
two.
the
of the
owned
a
organisation or
situation is that the most traditional rural construction teams composed of peasants
from agricultural production often out-perform more technically-superior companies.
This is because significant inefficiencies have developed, where the industry has
attempted to keep pace with the rapid economic expansion by transplanting new
technology without the capacity to fully embrace it. It is this sector of the industry that
is struggling to come to terms with technology, which will be the focus of this study.
I
funding
or
Geography/ý agency
\,
and /
culture
People
and
government
Technology
Transferor
Transferee
andbusiness
Figure 3.3. Technology transfer within good congruence
41
IN
Chapter Four
Theory and Practice of Knowledge Transfer
4.1.
Introduction
The review of the current literature of technology transfer suggeststhat technology
transfermay be ineffective or subordinatedby other issuesof which knowledgetransfer
is the most significant as knowledgeis the key to control over technologyas a whole
(Mnaas, 1990). A further examinationof the current literature of technology transfer
showsthat interestin knowledgetransferis at presentmore popular than in technology
transfer. Sometimes,technologytransfer and knowledge transfer goes hand in hand.
Sometimes,knowledge transfer occurs without technology transfer. In most of the
cases,it is knowledge that flows betweenthe transferor and the transferee.Without
knowledgetransfer,technologytransferdoesnot work.
First of all, this chapteraddressesissuesof communicationand knowledge transfer in
constructionindustry, with particular referenceto internationaljoint venture projects.
Based upon the survey of the literature of knowledge transfer, this chapter reports
problems and practicalities of knowledge transfer with particular examination of
various aspectsof knowledgetransferin the processof problem-solvingand decisionmaking within joint venturesprojects.The strengthof any project decision is basedon
the knowledge, expertise and project information that informs those making the
decision. The potential for decision-makingand problem-solving is held within the
knowledgeand expertiseof the project team.
4.2.
Communication and Knowledge Transfer
Communicationis a relatively recent academicdiscipline, and organisational
hasbeenan importantsubjectof that disciplinesince 1950.Because
communication
by academics
communicationis acknowledged
and managersas a major push since
1970to developinstrumentshelpfulin analysingcommunication
so thatwe canmake
is
interventions
Communication
(Downs,
1994).
to achieveorganisational.
effectiveness
a processinvolvingthe exchangeof message
andthe creationof meaning,it requires
in
that at leasttwo peoplecontributeto the ongoinganddynamicsequence
events
of
which eachaffectsand affectedby the otherin a systemof reciprocaldetermination
42 ý
(Gudykunst, 1998; Hargie, 1994). Therefore, without effective communication, it
would be impossibleto achievea successfulknowledgetransfer.
4.2.1. Communication Issues in Construction
Without delving into the intricacies of semantics and linguistics, it is clear that
communications,even on the most fundamentallevel, posescertain issues.A sendsa
simple messageto B. Did B understandA? If not, doesA realise B misinterpretsthe
message?How often doesan individual, especiallyin non-verbalcommunication,read
a messageincorrectly9
No doubt the most efficient way to communicateinformation from one person to
anotheris orally, face to face. As Austen and Neale (1995) point out that this form of
communicationis more efficient becauseit doesnot just rely on words: gestures,eye
contact and other forms of non-verbal communication are used. Furthermore, the
communicationprocessrelies on interactionbetweenpeople. Other forms of informal
communicationinclude telephoneconversationsand hand-writtennotes,both of which
are effective.
This is especially the case in construction. In construction, specifications are written in
a logical, orderly manner to describe the quality of the workmanship, the quality of the
material, and the descriptive features of the project. As a matter of fact, the
specifications communicate those aspects of the job best described with words while
the drawings communicate those aspects of physical details, locations and dimensions.
Due to the technical sophistication of the message, communication in construction is
seen as a sort of modem hieroglyphics like translating a foreign language (Melvin,
1979). However, construction management requires germane skills of communication
that touches every one in diverse forms. Essentially, that is what construction
management is all about: several groups communicating with each other in the joint
venture teamwork of building a structure.
43
4.2.2. Knowledge Management in Construction
It is widely recognised that knowledge management is an important issue in
construction
industry.
Literature
suggests various
definitions
for
knowledge
management. However, Egbu (2000) defines knowledge management as:
"Knowledge management is about theprocess by which knowledge
is
created,
acquired,
communicated, shared,
applied
and
effectively utilised and managed in order to meet existing and
emerging needs, to identify and exploit existing and acquired
knowledge assets
From an organisational perspective, effective knowledge management is about turning
personal knowledge into corporate knowledge that can be widely shared and properly
applied throughout the organisation in such a way as to create competitive advantage to
the organisation.
It is regarded as a subject that suggeststhat what we have in our minds, such as
-%
k
intellectual capital, intellectual property, experience, knowledge and infonnation, is our
primary commercial resource (Steward, 1998). Frappaolo & Toms (1997) define
knowledge managementas a tool-set for the automation of deductive or inherent
relationshipsbetweeninfonnation objects,usersand processeswhile Takeuchi (1998)
believes that knowledge management is about capturing knowledge gained by
individuals and spreadingit to othersin the organisation.However,the developmentof
knowledgemanagementas a discipline gives us the opportunity to model the dynamic
interpersonalprocess of knowledge transfer. Furthennore, such discussioncan help
increasethe profile of "people-centred"strategicthinking.
1%
Egbu (2000) arguesthat lower costsand higher productivity are no longer seenas key
influences on long term corporatecompetitiveness.There is no doubt that to a great
extent they ensuresurvival but not growth. The ever-changingmarkets and the nature
of competition also demandacceleratedinnovation and knowledge creation supported
by the dynamic core capabilities of organisations.There is an increasingacceptance
1
1.
44
n
that the economic and producing power of a modem organisationrelies more on its
intellectual and service capability than in its hard assets,such as land, plant and
equipment.Effective knowledgemanagementis seenas offering market leverageand
competitiveadvantageto organisations.
Knowledge managementis a complex social process.Egbu (2000) further arguesthat
knowledge managementis ten percent (10%) technology and ninety percent (90%)
people issues. Knowledge management is sophisticated not only because of its potential
A
for organisational value but also because of the solutions and technologies that can be
applied to it. It is the role of knowledge management, therefore, to connect two nodes,
knowledgeowners and knowledgeseekers.The knowledgeof one is transferredto the
mind of another,so that a new decisioncanbe madeor situationhandled.
4
4.2.3. Explicit Knowledge and Tacit Knowledge
Knowledgeis increasinglybeing recognisedas a vital organisationalresourcethat gives
4
lk
market leverage and competitive advantage(Nonaka and Taekuchi, 1995, LeonardBarton, 1995). Knowledge consists of truth, beliefs, perspectives, concepts,
judgements,expectations,methodologiesand know-how, and exists in different forms
such as tacit, explicit, symbolic, embodied,embrainedand enculturedknowledge. In
particular,knowledgehasbecomea substanceto be "managed"at its most literal sense.
Polanyi (1967) consideredhuman knowledge by starting from the fact that we know
more than we can tell. In general, knowledge consists of two components,namely
explicit and tacit. Technical knowledge consists of these two components - 'explicit'
A
and 'tacit', however,the greaterthe extent to which a technologyexists in the form of
the softer, less physical resources,the greater the proportion of tacit knowledge it
contains. Tacit knowledge, due to its non-codifiable nature has to be transferred
through 'intimate humaninteractions'(Tsang,1997).
4
4.2.4. Features of Explicit and Tacit Knowledge
Nonaka and Takeuchi (1995) describe some distinctions between tacit and explicit
knowledge,which are shown in Table 4.1. Featuresgenerallyassociatedwith the more
tacit aspectsof knowledge are shown on the left, while the correspondingqualities
relatedto explicit knowledgeare shownon the right. Knowledge of experiencetendsto
45
be tacit, physical, and subjective,while knowledge of rationality tends to be explicit,
metaphysical,and objective. Tacit knowledgeis created"here and now" in a specific,
practical context, while explicit knowledgeis about past eventsor objects "there and
then". Table 4.1 showsthe featuresof explicit knowledgeandtacit knowledge.
Tacit Knowledge
(Subjective)
I
Knowledge of experience
(body)
Simultaneous knowledge
(here and now)
Analogy knowledge
(practice)
Explicit Knowledge
(Objective)
Knowledge of rationality
(mind)
Sequential knowledge
(thereand then)
Digital knowledge
(theory)
Table 4.1. Featuresof Tacit KnowledgeandExplicit Knowledge(Nonakaand
Takeuchi,1995)
4.2.5. Model of Codification of Knowledge
Skyrme (1999) models the packaging and commercialising knowledge, which shows
forms.
in
knowledge
form
from
knowledge
to
tacit
explicit
more
some
of codification
What starts as un-codified knowledge, often a set of ideas, is gradually shaped through
interaction and expression into something more tangible, such as a process description,
for
finally
design
as
products
market. Figure
a product
emerges
or specification, which
4.1 represents the model of codification of knowledge.
Create
lp.Convert
10
-Do.
It,
-10.10
Uncodified-----O'Codified
Commercialise
V'
10
>
10
Custornised
Products/
Services
iffused
Figure 4.1. Codification of Knowledge(Skyrme, 1999)
4.2.6. Knowledge Transfer
Knowledge transfer is about connection not collection, and that connection ultimately
dependson choice madeby individuals (Dougherty, 1999). It is worth noting that this
46
form of transfer in particular may well be a 'two-way process' betweenthe transferor
and the transferee.
Knowledge transfer is also an increasingly popular term in the literature as writers
attempt to highlight the human aspectof knowledge management.There is often a
distinction made betweenknowledge transfer that occurs naturally or informally, and
that which takesplacein more formalisedroutines.
This natural transfer, or unstructured exchanges and informal exchanges, are vital to a
firm's success.However, one of the essential elements of knowledge management and
knowledge transfer is to develop special strategies to encourage such spontaneous
exchanges of knowledge (Davenport and Prusak, 1998). It is of great significance for
an organisation to be able to capture and use the knowledge inside managers' heads.
Maitland (1999) argues that the crucial factor in determining a company's competitive
advantage is its ability to convert tacit knowledge into explicit knowledge through
organisational learning. That is why some companies encourage friendly networking
and the release of tacit knowledge by setting up individual intranet sites where staff can
post information about themselves.
4.3. Problems and Practicalities in Knowledge Transfer
This sectionaddressesa rangeof issuesof knowledgetransfer,suchas,the success,
barriers,motivations andmechanismsof knowledgetransfer.
4.3.1. Successof Knowledge Transfer
People'snatural tendencyis to try to transplantthe work in their home culture into a
new culture. To the surprise of most people, these "tried and tested" skills will not
work, resulting in destabilisation,culture shockand intolerancetowardsothers(Berger,
1998).It is necessaryto understandthe basic tenet of good cross-culturalrelationships,
otherwise, misunderstandingmay escalate and barriers to communication may be
erected.
The significanceof global thinking has beenwidely promotedover the past five to ten
years,yet it has not impactedon the learning of managerialskills. Cultural awareness
47
and country briefings hasbeenhighly evaluatedin the staff developmentplan of many
enterprises.However, what is neededis a more integratedapproachblending skills to
recognisethe cultural contextwhen planning a strategyto build effective relationships
and systems.There is no magic for peopleto developin terms of cross-culturalskills.
However,Berger (1998)has listed the following skills:
1. Communication
Communication is a processby which people verbalise their feelings, expresstheir
opinions, convey their ideas, influence others and transmit knowledge. Without
communication civilisation would spin into a spiral of confusion and chaos.
Communicationskills include:
"
Gaugingone'slevel of jargon and speedof delivery to the languagefluency of
the listener;
"
Recognising the differing cultural meanings of verbal and non-verbal
behaviour;
"
Listening and questioningto understandthe views and opinions of others;
"
Awarenessof what is expectedat the initial stageof building a relationship in
order to build sufficient trust to work togetherproductively.
2. BehaviouralExpectation
Behavioural.Expectationincludes:
including
behave
Alertness
how
to
to
at meetings,
preparation
o
people expect
and agendamanagement;
Awarenessof a style of leading, negotiating and breaking deadlockswhich is
appropriate to a given culture;
Recognition of how decisions are taken by another culture and the implication
for time management and how decisions are taken.
3. Cultural Value
Basedupon his survey,Hofstede(1993) concludes:
48
for
impact
business,
likely
to
Knowing
on
which cultural values are most
e
example, leadership and decision-making style, importance of structure,
individualistic comparedto collectivist style of relationshipsand the importance
of time;
*
Preparedness
to adoptto cultureswhosevaluesare different from one'sown.
4. Cross-Culture Team Buildin
Leaming is defined as the process by which one acquires new information, habits, and
abilities. Some psychologists define learning as the essentially permanent modification
of behaviour that originates from human interaction with surroundings. Learning
networks are used to bring people together from different background to exchange
practical ideas which may eventually result in innovative practices in companies
(Kululanga, 1997). Transfer of knowledge and skills is an act of power, a claim on time
and resources that was considered to be a natural part of organisational order (Darrah,
1995). Joint ventures between multi-national
and local contractors are widely
recognised as a means of enhancing local expertise (Glass and Saggi, 1999). As a
matter of fact, joint ventures in construction involve even more intimate human
interaction between partners, which makes more critical the issues of cross - cultural
team building in the process of interaction of both foreign and local partners.
4.3.2. Exchange of Information
and Knowledge
A problem with business communication is that people cannot be forced to provide or
accept knowledge. The project environment is often complex, with complexity
increasing with the number of specialists involved. For examples, project participants
will determine how much effort they are going to expend assisting the processing of
information. The individual may be selective with the amount of information disclosed,
the person to whom they disclose it and the degree to which they attempt to get the
other person to understand. A project environment that facilitates the release and
information
individuals
information
to
and groups and assist
exchange of
needs support
flow (Egbu, et al 2000). Organisations and joint venture partners need to reduce
barriers and support positive communication. Some of the barriers are obvious, but it is
probably the less obvious ones that are most threatening to the management of
knowledge.
49
4.3.3. Barriers in Joint Venture Organisations
With the information and knowledge that flow across international joint venture
organisational boundaries, barriers to communication are often present in the multiorganisational projects (Egbu, et al, 2000). The interactions of the partners in the
projects allow information to be shared. The project teams confer developing common
goals, building and sharing information. The motivation is that both parties share a
vision of a future where their co-operation will continue, and they are both interested in
improving the quality of their relationship. Therefore, short-term one-off projects are
often problematic.
The constructionindustry normally pulls togetherproject teamsfor one-off and shortterm projects. Internationaljoint venturesare, in particular, establishedfor specific
'a
project. Little effort is made to develop common objectives,little time is allowed to
break down barriers and form strong relationshipsacrosswhich information can flow.
Time is a precious resource and the parties see no advantagein building close
relationships with companieswith which they will probably have no dealings after
completion of the current project. Therefore, under the commercial pressuresof
completing a project to time, quality and cost, it is not always feasible to undertakea
formalisedcommitmentto transferknowledge.
4.3.4. Motivation for Knowledge Transfer
In any interaction people will have their personal objectives or needs, and these needs
are likely to vary from situation to situation. The most common reason for people
coming together and engaging in interpersonal behaviour is simply that they have to
complete some specified task (Hayes, 1994). People working on the same service line
will need to converse with each other to get their work done. Therefore, managers in
the joint ventures have to involve significant amounts of social interaction and
knowledge transfer not because they particularly want it to, but they have to: once
social interaction does occur then other motivating factors will
come into play
(Garavan, 1997).
50
4.3.5. Mechanisms of Transferring Tacit Knowledge
When knowledge is tacit, its transfer is more difficulty to achieve and monitor. Transfer
of tacit knowledge involves intimate human interaction between the transferor and the
transferee. Mustapha (1998) argues that this is especially the case in the construction
industry because the special nature of the industry makes its management more
complicated. This type of knowledge is not amenable to systematic codification and
could only be accessedand transferred through intimate social interactions (Kogut and
Zander, 1992). Knowledge is utilised and transferred through intensive and extensive
interaction between group members. Co-ordination is achieved through mutual
adaptation among members with common knowledge and shared implicit
coding
schemes accumulated through group interactions. Knowledge is generated and stored
almost organically in team relationships and the mode of co-ordination is humannetwork based (Lam, 1997).
Badaracco(1991) identified that there is an expectationthat technologicalpartnership
and knowledge transfer would enable the partners to take advantage of the
complementaritiesof eachother'sknowledgeand expertiseto achievebenefitsandraise
their competitivenessin the global market. Societalculture is important in affecting the
efficacy of technology transfer (Koizumi, 1982; Samli, 1985 and Kedia and Bhagat,
1988). According to Hofstede (1980), and Hofstede and Bond (1988), the absorptive
capacity of the recipient for technology transfer is influenced by five dimensionsof
culture (uncertainty of avoidance, individualism vs. collectivism, power distance,
masculinity vs. femininity and Confucian dynamism).This is in particular the casein
an environmentof Confuciusdynamicsand culture.
4.3.6. Joint Venture
Transfer
Knowledge
Vehicle
of
-A
Miller (1997) argues that joint ventures are an example of collaborative arrangements
that can be turned into value-creating mechanisms to graft together competencies and
value-creating disciplines of their partners. Joint ventures in construction involve fairly
intimate human interaction between partners. Problem-solving is predicated on a
particular way of making sense of the world (Athey, 1974; Robertshaw, Mecca, and
Rerick, 1978; Vangundy, 1988). It frames situations as amenable to a rational process
of resolution, one in which careful planning precedes action (Suchman, 1987). As Poon
51
and Price (1999) expectedin their study,most of the decisionsgenerallymadewere of
technical and engineering(64.7 per cent) and financial (28.6 per cent)nature.Personnel
decisionswere relatively infrequentparticularly at low levels. The professionalswould
needmore time to deal more with financial problemswhile front line supervisorswere
mainly concentratedon technical and engineeringmatters.Important decision-making
has to involve managersfrom both sidesofjoint venturepartners.
4.4. Knowledge Management Programmes in Construction
Construction organisations need to recognise the importance of an active process
management of knowledge creation, gathering, storing and exploitation. The culture
and climate and the mechanisms in place should allow for the possibility for knowledge
to be readily shared and transferred from project to project and across project teams
(Egbu et al 1998b, 1998c). Regular meetings, in-house seminars and workshops
interviewing, writing, video communication, de-briefing after end of projects, coaching
and job rotation are the mechanisms which construction organisation can use for
transferring knowledge across project team. Holland, (1999) suggests ten ways to
embed knowledge management into organisational culture:
Reward knowledge-sharing behaviour
Define and communicate knowledge management behaviour
Consider formal agreementson knowledge management for key positions
Make knowledge management company policy
Have managers systematically enforce and reinforce knowledge management
Identify knowledge management positions
Incentivise key knowledge management actions
Explicitly manage knowledge management for each and every employee
Publicly recognise good knowledge management
Take action on poor knowledge management
For the developmentof knowledgemanagementprogrammesin the construction
organisation,basedon the casestudyresearchprojectsfundedby the Economicand
Social ResearchCouncil (ESRC)andEuropeanSocial Fund (ESF),Egbu (2000)has
developeda framework for addressingknowledgemanagementissuesin construction,
52
where he considersfive integrateddimensionsin order to developcoherentknowledge
management programmes. They are knowledge content, people, processes,
technological infrastructure culture (leadership, strategy, motivation and
communication).
9 People. Ensuring that key personnel have access to know-how and best
practices can enhanceknowledge sharing. In addition, efficient and accurate
mapping of knowledge can be accomplishedwith the help of people who
informally act as the organisation's memory.
9
Content. Defining
the knowledge that is strategically
relevant to the
organisation(knowledgethat meetsthe businessneedsof the organisation,now
and in the future) should be seenas the first step in knowledge management
implementation.
Culture. The knowledgetransfermediachosenby the organisationmust be such
that is appropriateto its culture.
Process.An organisation should identify the knowledge, which it has after
defining the knowledgeit needs.If requisite knowledgeis not availablewithin
the organisation, then this must be generated,perhaps by acquisition. The
introduction of knowledgemanagementneedsto follow a logical sequenceof
tasksto minimise effort and cost.
Infrastructureand technology.The infrastructurethat is put in place to support
knowledgemanagementmust be adaptedto the organisation'sneedsandnot the
other way round. It must also specify updating responsibilities,data structure,
accessrights and security since knowledgegets old and can 'decline in value'
over time.
4.5.
Summary
Effective transferof knowledgecreatesvalue for the constructionorganisationand their
clients, and involves due considerationof the people, content, culture, process and
53
infrastructure dimensions.However, it is an arduoustask to achieve becauseof the
sophisticationof knowledgecreationand knowledgetransfer.A further examinationof
the literature has revealed that there is very little empirical study directed towards
knowledge transfer and knowledge managementin construction. Therefore, there is
amplescopefor researchin this importantarea.
54
Chapter Five
Methodological Issues
5.1.
Introduction
The primary interest of the study is to identify how management know-how is
transferred between foreign and local managers within international joint ventures.
It is believed that the identification of this transfer process involves cross-cultural
local
foreign
have
the
In
to
and
of
research.
an extensive understanding
order
elements, therefore, the aspects of cross-cultural research have been examined with
a review of creative problem-solving in the real life world. However, it is important
to have process observation of knowledge transfer between foreign and local
managers. It should be noted that these premises have directly contributed to the
design of the study.
Furthermore, two concepts, internal and external validity, are fundamental and
design
Ideally
(Vaus,
2001).
designs
developing
to
should
research
crucial
research
be both internally and externally valid. Therefore,the researchproject is composed
of two major studies- the pilot study and the main study, both the pilot study and
the main study are designedto be an integral part of the research. It has been
recognisedthat the pilot study will certainly generatevaluableresults,which might
be the causalconclusions.However, it is believedthat the main study will generate
result in a much wider context,which will sustainthe externalvalidity.
The measurementof the processof knowledge transfer betweenforeign and local
managersinvolves the observationof human interaction, measurementof attitude
and interests as well as motivation. Therefore, psychological instruments and
methodologyhavebeenapproached,aspsychologyis defined as the scientific study
based
human
behaviour
human
Furthermore,
the
thinking.
the
on
of
and
processof
Cohen,
inventories
1982;
Gatchel
Mears,
(Melvin,
1979;
Lee,
1990;
a seriesof
and
Swerdlik and Phillips, 1996) that measure intelligence, personality, interest,
inventory
preferenceand decision-making,the thought of designing an assessment
for the current study has formed into shape.Therefore,a psychologicalinstrumentinventory hasbeendesignedandintroducedinto the study.
assessment
55
First of all, the chapterexaminesthe designconceptsand philosophical notions of
the study, which are essentialbecausethey would provide guidancefor the design
have
Then
that
the
the
and conducting
research.
chapterexaminesmethodologies
beenusedboth in the Pilot Study and in the Main Study. Furthermore,the chapter
explainsthe datacollection processin eachstepof the study.
5.2.
Design Concepts and Philosophical Notions of the Study
Accordingto Tashakkori(1998),thereare two schoolsin the field of socialand
behavioural science, which are representedby positivist/empiricist and
constructivist/phenomenological
orientation.The positivist paradigmunderlines
while theconstructivist
research
whatis calledquantitativemethodsfor explanatory
paradigmemphasises
qualitativemethodsfor exploratoryresearch.
It has been recognizedthat academicdebatesraged in the social and behavioral
sciencesregarding the superiority of one or the other of the two major social
in
However,
between
positivist and constructivist.
sciencesparadigmsor models
most cases,the researchersincline to the view point of pacifists, who appearto
has
been
different
based
the
thesis
which
paradigm,
on a
present
compatibility
data
between
discrepancies
the
In
to
minimize
order
referred as pragmatism.
collected during the study and the phenomenonof the real world, the current
both
that
has
qualitative
combines
researchproject
adopteda mixed methodology
implies,
the current research
As
topic
the
research
and quantitative approaches.
involves
is
be
deemed
unearthing the
to
which
research
cross-cultural
project
in
processof creative problem solving the real world with particular referenceto
tracking the transfer process of tacit knowledge between foreign and local
basic
the
Therefore,
of
managers.
an extensive understandingand clarification
elementsand the implications of the following issuesare essentialand crucial.
5.2.1. Cross - Cultural Research
Cross-cultural research has both theoretical and practical advantages. Goodwin
(1996) crystallises the complexities and the significance of cross-cultural research.
He points out:
j more recent concerns (about methodology and ethics,
...
generalisability and relevance of much psychological work) have
"[
56
stimulated a resurgence of interest in the universality of
psychological theories and consequently in cross-cultural
variation in both the content and the processes of human
interaction ".
Cross-culturalresearchis important becauseit can serve a number of purposes.
After examiningthe currentliteratures,Goodwin (1996) surnmarisesfour points:
e It can help addressimportant issuesconcerningthe way in which individual
personalityfactorsinteractwith wider societalforces;
"
It can be used to test apparently 'universal' and competing theories under
particularly stringent conditions-thosewhere there is considerable cultural
variation;
"
It allows people to learn directly from other cultures, particularly where
undesirablesocial activities (suchasrelationshipviolence);
"
The acculturation processesin new or changing societies have important
implications for a rangeof socialbehaviours.
Despite the advantagesand increasinginterest of cross-culturalgenerality, crosscultural psychology research is still predominantly un-theoretical and unsystematic.
However, Goodwin proposes (1996) a five-stage guideline for conducting cross-
cultural research:
1. Generationof CentralResearchQuestions
The norm of this step is to use geographicalunits as the basis. It is an interesting
challengeto define exactly which topics are suitablefor study acrossthe culturesof
interest. The most valuable psychological work is likely to involve hypotheses,
which specify some form of relationshipbetweenbroad social structural variables
(e.g. socio-economic status), and individual behaviour, cognition or effect.
Therefore, the researchermight turn to one or more of the systemsof cultural
variationswhich act as mediatingpredictorsfor the interactionof societalinfluence
and individual behaviour.
57
2. Ensuring Suitable Questions
An important approach to this point is to allow the participants in the country under
investigation to become an active participant in the research, in order to verify the
appropriateness of the questions being posed. It should be noted that one important
issue is the translation of the questions in conducting cross-cultural research. There
is a variety of degrees of translation, ranging from broad pragmatic translations to
more specific interpretations.
3. Piloting the Research Ouestion
This can be a relatively short procedure, but it is nevertheless essential. It is a good
idea at this stage to attempt to assesssome of the situational/ideological factors that
might affect the distribution of the inventories or running the experiment. It is
necessary to ask the pilot participants to write down, anonymously and as honestly
as possible, what was going through their minds.
4. The Actual Collection of Data
A general rule for cross-cultural research is the notion that research should be multimethod wherever possible. It is necessary to look at the actual background of
participants, and try to clearly specify the boundaries of their defined participant
group. As culture is such a complex phenomenon (and cultural differences are so
easily misinterpreted) that this guidance may be particularly pertinent to crosscultural research.
5. Writing U12and Discussion of Findings
The main messagefrom Goodwin (1996) is that honestyis essentialin writing up
cross-culturalwork.
5.2.2. Creative Problem-Solving in the Field
From the street comers of the North End of Boston' to the Basque Region of
2
Spain William Foote Whyte has been a pioneer in developing method and theory
,
1Street Corner Society,publishedby William FooteWhyte, in its four editionsfrom 1943to 1993,
hassold 265,000copies.It is the best-sellingbook in sociologypublishedbefore 1950-excluding
textbooksand classicssuchasMax Weber,Emile Durkheirn,and Karl Marx.
58
that have changedand expandedthe way that people look at social structuresand
the individuals within them.
1. Four-Stel2-Methodology of Conducting Action Research
With a summary of his research experience in the field, Whyte (1997) produces a
list of necessarystepsof conductingactionresearchin the field as follows:
Gaining Accessto the Field
SysternatisingParticipantObservation
*
Interviewing in the Field
9 Facts,Interpretation,andEthics in QualitativeInquiry
According to Whyte, his own theoretical ideas have arisen largely out of his
fieldwork and his field experienceshave led him to developtheoreticalideas,while
his field experiencehas suggestednew approachesto researchmethods.The above
in
dealing
important
he
that
with
steps
and
practical
steps
summarisedare very
participantobservation.
2. Gaining Access to the Field
Before the researcher can decide what and how to observe, the researcher has to
find way into the organisationor community. The researchermust preparea good
is
If
he
the
to
the
to
going
study.
people whom
reason or purpose of study
researchercannot be acceptedas a proper person, then nothing could make the
is
it
that
the
is
important
It
to
not trying to
researcher
study acceptable.
make clear
is
to
The
trying
judgement
the
the
researcher
meets.
researcher
pass
on
people
be
to
in
In
the
terms.
them
needs
their
researcher
other
words,
understand
own
accepted as a friend. As they are willing to accept the researcher,then the
researchercan assesswhat they expect from friends and to what extent the
researchercan meettheir expectations.
2Making Mondragon: The Growth and Dynamicsof the Worker Co-operativeComplexGointly
authorisedby KathleenKing Whyte) is widely regardedby studentsof co-operativemovementas
the bestbook yet written on the Basqueco-operativesof Mondragon.
59
3. Participant Observation
Whyte (1997) argues that participant observation should not be a set of random
activities. The researcher must try to go beyond personal impressions to systernatise
observations with an aim to establish patterns of interactions and activities so that
others can check and build on. That takes a great deal of patience and a small
for
looking
keep
if
field
However,
the
amount of resourcefulness.
workers
opportunities, they will eventually manifest themselves.
4. Interviewing in the Field
Interviewing should be seen as part of the whole fieldwork process, rather than an
isolated exercise. The participant observer should undertake interview informally,
simply listening to what people are saying and sometimes asking them to explain
how they feel about the situation they are describing. The interview generally
should fellow certain guidelines: not argue with the informant, not to express
disapproval of him or her, and not to interrupt the statement made.
5. Facts.Intelpretation,andEthics in QualitativeInqui
Whyte (1997) arguesthat there are such things as social and physical facts. He
insists that the researchermust begin by getting those facts straight. How the
in
interprets
behaviour
those
the
studied
and
relation to
researcher
observed
of
thosefacts is certainly subjectto argument.
6. Transactional Relationships
Whyte (1997) further argues that as there is a limit to the number of interpersonal
reciprocities (which he calls them positive exchange and negative exchange) that
any individual can maintain. There must be other forces shaping human relations
beyond interpersonal reciprocity. In the early 1950s Whyte's field experience led
him to the framework of his theory of Transactional Relationships, which focuses
on the way relationships yield benefits or penalties to the interacting parties. Based
on the transactional relationships, he was trying to discover relationships between
interactions, and activities, and inter-action sentiments or attitudes. In his typology,
he referred them as seven transactional relationships as follows:
A. Positive exchange. This means the exchange of favours.
60
B. Trading. This means the buy and sell relationship.
C. Competition. This means that the individuals or groups are competing with each
other to gain some financial awards. In this situation, co-operation can pay off
D. Negative. In this situation, individuals or groups become involved in a tit-for-tat
contest.
E. Open conj7ict. In this situation both individuals, or groups, openly acknowledge
that they are trying to damage each other.
F. Authority. The person in authority agreesto pay other people specified amounts
to do work.
G. Joint-payoff. In this type, two or more individuals or groups agree to pool some
of the resources in order to gain resources from the environment. Joint-payoff is
the basis of organisation in partnerships in business and the professions and is
one of the guiding principles of work co-operatives. It also frequently occurs in
informal collaborative relations between individuals or groups. It is frequently
accompanied by positive exchange.
It should be pointed out that the six steps of conducting action research are
important for the current researchproject becausethey give clear guidance for
undertakingthe field work.
5.2.3. Process Observation and Process Measurement
Holt (1997) explains that:
"Any hypothesisedalternative or improvementto existingpractice
or knowledge,cannot be properly considered,until the existing
conditions and problems surrounding it, are fully understood.
Much of this understanding will emanatefrom the literature
search, but this in isolation will rarely suffice. A first and most
simple complement to the literature search is observation.
Observation alone may be considered as a qualitative
methodology,yielding someunderstandingof the way a processor
condition is conducted,or exist at present. In this context,process
observation is most often recorded as a narrative (vis-a-vis
numericdata) ".
61
Holt (1997) further points out:
,,[ ] process measurement in this context could involve time
...
study; this being the recording of times taken to perform a task, so
that an output standard may be established". [ ...1, many aspects of
built environment research utilise questionnaire surveys. The most
straightforward
of these is the open question survey, which
employs a questionnaire inviting any written reply to the question
set ".
The primary interestof the currentresearchis to investigatethe currentmechanisms
of technology transfer and the aspectsof technologytransfer betweenforeign and
local partners within international joint ventures in China. Furthermore, the
research aims to investigate in particular the process of knowledge transfer.
Therefore, much enlightenment of the philosophical thought in the design of
researchmethodology of the current researchhas been drawn upon the above
literature. With considerationof the paradigmsand politics of the current research
project, Process Observation and Process Measurementhas been regarded as
critical issuesduring the whole processof the research.
5.2.4. Structure of the Current Research Project
Given the design concept of the research, the structure of the current research has
come into shape. Firstly, a literature review of the current state of technology
transfer has developed the theoretical framework for the study. Moreover, a review
has
knowledge
literature
transfer
in
knowledge
the
provided a
of
management and
further and an extensive understanding of the research problems and contemporary
phenomenon of knowledge transfer, in particular, the mechanisms and process of
both explicit and tacit knowledge transfer. Secondly, the pilot study has bridged the
theoretical review of literature in the academic world and the practical approach of
the knowledge transfer phenomenon in the real construction site, which has built a
platform for the in-depth understanding of research problems and undertaking the
main study. And thirdly, by using an assessmentinventory, data have been collected
and a theoretical model has been constructed in the studies. Table 5.1 represents the
structure of the current research project.
62
Phase
Phaseone
Phasetwo
Phasethree
Programmes Academic Activities
Literature
Review
Pilot Study
Main Study
0
0
Currentstateof knowledge
TechnologyTransfer
Interriationalisation
Constructionindustry in
China
Knowledgemanagement
Knowledgetransfer
1.Explicit knowledge
2. Tacit knowledge
CaseStudyin Xiaolangdi
6 study trips to Xiaolangdi
Project
I knowledgetransferseminar
25 interviewees
52 copiesof assessment
inventories
Demonstrationand
presentation
Analysis and discussion
Feedbackand modification
Validation
Contributionto knowledge
Main Study in Jiangsu,Henan
andXinjiang, PRC
0 Visit of construction
authoritiesof Henanand
Jiangsu,PRC
0 450 copiesof assessment
inventoriesfrom Henan,
JiangsuandXinjiang, PRC
*
Methodology
Employ d
Researchnotes
Keeping diaries
Keeping on reading
Keeping on writing
0
0
Survey
Interview
I.
Semi-structured
interview
2. Structured
interview
3. Assessment
inventory
0
0
Structured
survey
Assessment
inventory
Demonstrationand
presentation
Analysis and discussion
Feedbackand modification
Validation
Contribution to knowledge
Table 5.1. Structureof the CurrentResearchProject
63
5.3. Mixed Method in the Studies
In generalthereareseveralstylesof research,
suchasactionresearch,
ethnographic,
surveys, case study and experimental.The nature of the present research
hasresultedin the adoptionof mixedmodelstudies.Froma pragmatist
programme
designedin
point of view, a pilot studyanda mainstudyhavebeensystematically
accordance
with the specialfeaturesof thestudy.As definedby Tashakkori(1998),
a mixed methodology(or mixed methodsor methodologicalmixes) contains
into the research
elementsof both the qualitativeand quantitativeapproaches
methodologyof a singlestudyor multi-phasedstudy.Tashakkori(1998)further
definesthemixedmodelstudies:
"As studies that are products ofpragmatist paradigm and that
combine the qualitative and quantitative approaches within
different phases of the researchprocess. There may be single
applications within phases of the study, such as a quantitative
(experimental)design,followed by qualitative data collection,
followed by quantitativeanalysisafter the data are converted".
The qualitative data were intended to be collected through interviews during the
pilot study.However,quantitativedatawere collectedby having a structuredsurvey
in the main study followed by the quantitative analysis of copies assessment
inventories.
5.3.1. Pilot Study
A pilot study is a trial run of the studythat shouldbe conductedon a smaller sample
than that which will be used in the final version of the study (Carter, 1997). The
purposeof the pilot study is to check whether the basic aspectsof the design and
the procedurework are suitableand appropriate.
However, the current researchof the pilot study adoptedthe application of a mixed
methodology that integrates both case study and interviews. The latter requires the
researcher to have a good understanding of construction processes in order to
identify and evaluate problems and potential solutions, while a case study involves
64
in-depth study of particular instanceswithin the researchsubject (Fellows, 1997).
According to Holt, (1997) interviews are best recorded for later typing-up of
transcripts where necessary and to facilitate analysis. Therefore, both semistructured and structured interviews were designed to be an integral part of
methodology of the researchduring the pilot study phase. In addition, process
observation and review of archival materials (such as method statement,work
dairies,minutesof meetings)were arranged.Basedon the assessment
inventory, by
using semi-structuredinterviews and structured interviews of foreign and local
managersin the pilot study, data were collected for the design and formulation of
the researchmodel.
5.3.1.1. Assessment Inventory
Melvin (1979) defines psychology as the study of behaviour. He points out that:
"It investigates behaviour, stripping away the veneer of myth
and irrational
beliefs, so that one may more realistically
],
[
Granted
in
that
ways.
certain
comprehend why people act
...
psychology lacks the precision of physics, but it certainly
exceeds the accuracy and perception of a rigid personality
cemented together with prejudgement andprejudice "
Psychologists,aidedby conceptsof appliedstatistics,in addressinghumanrelations
in construction management,are much more restrictive and precise in their
(Melvin, 1979).In psychologicalfields, researchers
terminology and measurements
used personality inventories to assess/measure
normal traits of people, such as
sociability, emotional stability, the need to achieve, and a number of others. The
notable personality inventoriesto measureinterests,values and attitudesof human
being are:
*
The Strong-CompbellInterestInventory;
*
The Kuder Preference Record-Vocational;
*
The Harrington/O'Shea System for Career Decision-Making.
65
In addition to the terminology andmeasurementaddressedby psychologists,Whyte
(1997) points out that for studies of attitudes and interest of people in an
organisation or community, the questionnairesurvey along with interview is the
appropriateinstrument.For the field interview, the researchersare only interestedin
how the person's experienceled him or her to form the attitudes in question. In
considerationof the validity and reliability of the methodologyused, it has to be
pointed out that the questionnairesurveyhasbeenmodified into a structuredsurvey
inventory for
inventory. Much of the designconceptof assessment
with assessment
the current researchproject has been derived from the personality inventoriesthat
were designedby psychologists.The employment of the assessmentinventories
approach based on psychological paradigm is a trial run in the construction
managementresearchin a way in which it might be regarded as an extensive
justification to the traditional researchapproach-questionnaire
approach,which has
beenwidely andrepeatedlyusedby researchers.
5.3.1.2. Case Study
Yin (1994) argues that case studies are used extensively in social science researchincluding the traditional disciplines (psychology, sociology, political
science,
anthropology, history and economics) as well as practice-oriented fields such as
urban planning, public administration, public policy, management science, social
work, and education. The method also is a frequent mode of thesis and dissertation
research in all of these disciplines and fields. Moreover, case studies (Melvin,
1979), which
offers
a wealth
of
important
information,
are increasingly
commonplace even in evaluation research. Hypotheses can be developed by
comparing information and data collected through case studies.
In general,casestudiesare the preferredstrategywhen "what", or "how", or "why"
questionsare being posed,when the investigatorhas little control over eventsand
when the focus is on contemporaryphenomenonwithin somereal-life context. Case
study relies on many of the sametechniquesas a history, but it addstwo sourcesof
evidencenot usually included in the historian's repertoire: direct observationand
systematic interviewing. The unique strength of case study is its ability to deal with
a full variety of evidence-documents, artifacts, interviews, and observations.
66
A casestudy is an empirical inquiry that investigatesa contemporaryphenomenon
within its real-life context, especiallywhen the boundariesbetween phenomenon
and context are not clearly evident. The case study inquiry:
be
in
distinctive
there
many
the
technically
will
situation which
copeswith
more variablesof interestthan datapoints, and asoneresult;
in
data
to
a
converge
needing
relies on multiple sourcesof evidence,with
relevantfashion,and as anotherresult;
*
and benefitsfrom the prior developmentof theoreticalpropositionsto guide
datacollection and analysis.
Schramm(1971) further expounds:
"The essenceof a case study, the central tendencyamong all
typesof casestudy, is that it tries to illuminate a decisionor set
how
implemented,
decisions:
they
taken,
they
are
were
of
why
and with what result".
According to Yin (1994), casestudieswere appropriatefor the exploratoryphaseof
descriptive
for
the
investigation,
histories
were
appropriate
an
and surveys and
doing
the
the
explanatory or causal
of
way
only
phase, and
experimentswere
inquiries.
5.3.1.3. Interviews
The interview is one of the most important sourcesof casestudy information. The
interview may take severalforms. Most commonly, casestudy interviews are of an
facts
for
key
the
investigator
in
of
can ask
respondents
open-endednature, which an
a matter aswell as for the respondents'opinions about events.
Interviews are an essentialsourceof casestudy evidencebecausemost casestudies
are about human affairs. These human affairs should be reported and interpreted
through the eyes of specific interviewees (Holt, 1997), and well-informed
insights
important
into a situation. They also can provide
respondentscan provide
investigator
identify
helping
history
the
to
the
to
the
shortcuts
situation,
of
prior
67
other relevant sourcesof evidence. However, the interviews should always be
consideredverbal reports only. As such,they are subject to the commonproblems
of bias, poor recall, andpoor or inaccuratearticulation.
5.3.2. Main Study
It should be pointed that the main study is a continuation of the research project on
the base of the pilot study. The case study with interviews proves appropriate and
effective during the pilot study. The data collected are valuable for the building of
the research model. Therefore, a structured survey with assessmentinventory with
modifications had been undertaken in the chosen sample places, which makes the
context of the study much wider. Furthermore, what becomes more important is
that the certain amount of assessmentinventories will allow the researcher to have a
quantitative analysis of the data.
In the considerationof the effectivenessand appropriatenessof the methodology,
the assessmentinventory was repeatedlyused in the main study. The difference
between the pilot study and the main study are that the former focused on the
collection of qualitative data through interview for internal validity while the latter
concentratedon the collection of quantitative data for external validity through a
structuredsurvey.
5.3.2.1. Structured Survey
When a psychologist wishes to assesscauses of behaviour without waiting for a
result to occur naturally, or when the behaviour essentially precludes observation,
he may elect for the structured survey method (Melvin, 1979). In doing so, the
underlying reasons the behaviour might be directly inquired by asking questions.
Therefore, considerable data can be accumulated in a relatively short time.
Furthermore, surveys, which are under controlled and systematic circumstances,
will
provide surprisingly
informative
results (i. e., public
opinions, election
predications, consumer surveys). In fact, politicians and union officials often
determine policies based on survey findings. Two major deficiencies may possibly
occur in the survey method: (1) the subjects may willingly or unconsciously distort
the true causes of their behaviour; and (2) a biased sample may result in an
erroneous picture of the population segment that the investigator desires to study.
68
Therefore, for keeping the data as accurateas possible, a structured survey was
carried out among the construction authorities and construction managers by
delivering assessment inventories personally by the researcher during the main
study.
5.3.2.2. Correlation of Responses with Levels of Economic Development
In the current study, the data from three different provinces in China were
examinedto seewhetherthere is any associationbetweenthe data gatheredand the
level of economic development of each province. The correlation technique
employedis Pearson'sProduct-MomentCorrelationCoefficient (Pearson'sr). Karl
Pearsonwas a pioneerof regressiontechniquesandhis product-momentcorrelation
coefficient is today the most commonlyusedcorrelationtechnique.
Pearson'sr is properly applied to data that are numerically discreteor continuous.
By contrast, categorical data require other correlation techniques such as the
contingency coefficient, and ranking scale data may be analysedusing the rankorder correlation methods.Correlationconcernsthe relationshipbetweenvariables;
a correlation coefficient is a statistic used to expressquantitatively the extent to
which two variablesare related(Lee, 1999).Examplesof the use of Pearson'sr are
commonly found in the Construction Managementliterature. Examples include
exploration of correlation between the comprise resolution styles and the
satisfactionlevels of contractors(Yu and Leung, 2001), and correlationbetweenthe
value of Australia building completed and K value and B value (Mak, Ng, Chen
and Varnam,2000).
5.3.2.3. Method Statement in the Studies
In the construction industry, it has long been a common belief that the planning of
construction methods is a subject that cannot be taught-only learned by experience.
Such a situation was undoubtedly true when the importance of detailed planning of
construction methods was recognised in the 50s. However, method statement is one
of the most important documents in the planning process. Based on method
statement the job was priced, cost breakdown of the tender sum was done, specialist
staff for the supervision of subcontractors were arranged. The availability of work
69
study facilities to evaluate performance and provide recommendations for
improvements in efficiency, and the use of program systemsappropriateto the
contract in question (Illingworth, 1998). Such systemswill need to allow rapid
assimilation of progresssituations and provide weekly or short-term methods of
giving easily understoodcommunicationto first line supervision.
There is little literaturethat touchesthe measurementof knowledgetransfer.In fact
it is hard to track the processof knowledgetransfer,particularly the transferof tacit
knowledge in construction, becauseof the nature of tacit knowledge and the
sophistication and the large dimension of the construction industry. It has been
consideredthat the feasible way would be an attempt in focusing on a particular
construction task so that the researchproblem may be approached.It is believed
that it is a breakthroughto focus on tracking of the processof knowledgetransfer
when both foreign and local partnersare dealing with method statementduring the
implementation of a project. What is important is that process of knowledge
transfer in dealing with method statementwill mirror the process of problemsolving and decision-makingas well as the processof knowledge transfer in the
whole industry.
5.4. Data Collection Process
According to Yin (1994), data collection for casestudiescan rely on six sourcesof
evidence,such as documentation,archival records, interviews, direct observation,
participant-observation,andphysical artefacts.
The benefits of the six sourcesof evidencecan be maximised if the investigator
follows the three principles:
9
Use multiple sources of evidence
o Createa casestudy database
e Maintain a chain of evidence
The data collection processfor case studies is more complex than the processes
used in other research strategies. The case study investigator must have a
70
methodological versatility not necessarilyrequired for using other strategiesand
data
follow
during
formal
the
to
certain
must
procedures ensurequality control
collection process.The principles are intendedto make the processas explicit as
possible, so that the final results - the data that have been collected - reflect a
concern for constructivevalidity and for reliability, thereby becoming worthy of
further analysis.
The first stageof datacollection throughinterview in the pilot studywas to produce
a representationof the formal managementstructure of a typical joint venture
project, which identifies the individuals, their roles in the managementprocessand
their companyof origin (local and foreign). The secondstagewas to identify how
the managementstructurerequiresthesemanagersto interact. The third stagewas
to formulatea basicresearchmodel of knowledgetransfer.
Holt (1997) suggeststhat structuredsurvey is a very effective meansof performing
quantitative research.Therefore,further investigationof the main study adopteda
fully structured survey requiring the respondents(managersin constructionjoint
ventures) to complete a multi-sectional assessmentinventory. The assessment
inventories were developedon the base of the pilot study and joint venture data.
Figure 5.1 showsa diagrammaticpresentationof the data collection processfor the
researchprogramme.
An in-depth investigation of dyadic interaction was undertaken in terms of:
"
Analysesof dyadic communication/interaction
"
Form and contentof dyadic communication/interaction
"
Purposeof dyadic communication/interaction
"
Successof dyadic relationshipin functional managementterms
Basedon the analysisof both the quantitative and qualitative data, a more refined
knowledge
been
had
tacit
the
transfer
constructed.
of
analyticalmodel of
process
71
Literature search
Identify current state of knowledge
I
I
Pilot study - Data collection
Presentation of management structure of
Joint venture projects
I
Formulate research thought
I
Main Study - data collection
Refine the study by using assessmentinventories
Demonstration offindings of Main Study
Modifications
Evaluation
Presentation of the findings
Figure 5.1. A diagrammatic presentation of the data collection process for the
research programme
72
5.5. Summary
This chapterexplicatesthe designconceptsand the philosophicalnotion of the
to be employedboth in the
practiceof the currentstudy,andof themethodologies
pilot studyandthemainstudy.It hasto bepointedout thatwhatevermethodologies
the potentialto solve the research
employedin the researchhas to demonstrate
problems.
It has been recognisedthat cross-cultureresearchand creativeproblem-solving in
the field were not seenasmethodologicalissuesin most of the academicworks that
deal with researchmethodologies.However,thesetwo issueshave beencoveredin
the methodological chapter, becausethey have directly contributed much to the
designthought of currentresearch.
0
The special nature of the current researchrequires the identification of the
knowledge transfer process between foreign and local elements, which is
cross-culturalresearch;
Both explicit knowledge and tacit knowledge have their own way of being
transferred. In most of the cases, the transfer of tacit knowledge involves the
processof creativeproblem-solvingin the real life world. This researchproject
involves a large amountof field-work on the constructionsite.
73
Chapter Six
Problem Area and Pilot Study
Introduction
First of all, basedupon the current literature, the chapterpresentsa framework for
knowledge transfer, where the problem area of knowledge transfer in the current
practicehasbeenidentified. Thereforethe pilot study is howeverto further define the
Project
introduction
Xiaolangdi
brief
Following
of
problem areaand seeksolution.
a
in Henan Province, PRC, with a particular examinationof why Xiaolangdi Project
was chosenas the pilot study for the currentresearch, the chapterreviews the whole
arrangementof the pilot study with six study trips to China over two years.
Furthermore,the chapter analysesand discussesthe data collected during the pilot
study.Finally the chapterpresentsthe findings of the pilot study.
6.2.
Problem Area: from Technology Transfer to
Knowledge Transfer
Mnaas (1990) statesthat technology consistsof four closely inter-linked elements:
knowledge
However,
knowledge,
technique,
product.
namely,
organisation and
is
key
to control over technology
the
to
technology,
the
contributes major part
which
important
knowledge
Technical
two
components-"explicit"
of
as a whole.
consists
(codified in blueprints, designs,drawings and specifications)and "tacit" (kept in the
humanbrain). The greaterthe extent to which a technologyexists in the form of the
it
knowledge
tacit
less
the
the
of
proportion
softer,
greater
physical resources,
contains.
It is important that the understandingof explicit and tacit elementsof knowledgewill
help identify the processof knowledgetransfer.With regardingto the appropriateness
and effectiveness of technology transfer, Samli (1985) models the pattern of
technology transfer with consideration of six dimensions: geography, culture,
economy, business, people and government (refer figure 2.2.). In addressing
knowledge transfer issues in construction, Egbu (2000) develops a framework for
managingknowledge,where he emphasisesfive dimensions,such as,people,content,
74
culture, process,infrastructureand technology(refer figure 4.2.). It should be noted
that the above researchwork has provided wider understandingand significant
insights towardsthe building an effectiveandapplicablemodel of knowledgetransfer.
However, a framework for the establishmentof effectiveknowledgetransfershownas
figure 6.1 has been developedbased upon the major contribution of the above
research works. It should be pointed out that this framework combines both
technologytransferand knowledgetransfer,wherethe importanceof tacit knowledge
transfer has been establishedand the blockageof tacit knowledge transfer has been
raised.
6.3. The Xiaolangdi Project
TheXiaolangdiHydro-electricNetworkacrossthe Yellow River in HenanProvince,
PRC was chosenas the pilot study, not only becauseit is one of the largestjoint
ventureprojects in China,jointly fundedby the World Bank and the Central
Governmentof PRC,but alsobecauseit is quotedby the Chinesegovernmentas a
demonstrationproject for internationalproject management
of Sino-foreignjoint
ventures.
The Xiaolangdi Hydro-electric Network is located in the last gorge in the middle
reach of the Yellow River, about 40 krn north of Luoyang City, 130 krn downstream
of Sanmenxia Dam, and 128 krn upstream of Huayuankou in Zhengzhou City. It is the
only reservoir with a large storage capacity on the main stem of the Yellow River
downstream of Sanmenxia.
The project consistsof a dam, flood dischargingstructuresand power facilities. The
main objectivesof the project are flood control, sedimentcontrol and water supply,
irrigation, andpower generation.
75
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6.3.1.Major Joint Venture Companies
The Xiaolangdi Project was startedin June 1994 and completedin September2000.
After internationalcompetitivebidding, three Sino-foreignjoint venture construction
companieswon the project. The project was divided into three Lots, which were
undertakenby three major joint ventures.The ma or local partnersare the companies
from Hydraulic-power EngineeringBureaux of the Hydraulic-power Ministry, PRC,
while the foreign partnersare multinationalsmainly from France,Germanyand Italy.
There are a number of foreign sub-contractorsand Chinese sub-contractors.The
foreign sub-contractorsare mainly from Europe, while the Chinesesub-contractors
are from all over China. With their arrival at Xiaolangdi, they brought their engineers
and techniciansto Xiaolangdi from all over the world. However, most of the skilled
and unskilled labour is local from Henan Province. Table 6.1 shows the relevant
information of the threemajorjoint ventures.
6.3.2. Statistics of Foreigners Working on Xiaolangdi
As
confirmed
by
the International
Office,
Yellow
River
Hydraulic-power
Development Corporation, PRC, there were more than 14,000 people working on the
construction site at the peak work, about 750 of them were foreigners from 51
countries, including Germany, France, Italy, UK, USA, Australia, Columbia, South
Africa and Pakistan, etc. According to Zhang (1997), there are various patterns in
terms of management style, such as: (1) Chinese - Foreign - Chinese; (2) Chinese Foreign - Foreign; and (3) Chinese - Foreign - Foreign - Chinese. Besides the
Chinese language, English is the major language of communication at the Xiaolangdi
construction site. It has to be noted that language is a crucial barrier between Chinese
and foreigners. Interpreters and translators were employed from the beginning to the
completion of the project. It is believed that there was a grand scenario of culture
diversity and philosophical sophistication among the people who worked on the
project as they were from different countries with different cultural background,
different living habits, and working experiences. Table 6.2 shows the statistics of
foreigners of Lot 1, Lot 2 and Lot 3 working on Xiaolangdi Construction Site between
May 1994 and September 2000.
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6.4.
Pilot Study
Againstthe problemareas,the intentionof the pilot studywasto usethe projectto
The
knowledge.
for
tacit
transfer
the
pilot
of
process
establisha systematicmodel
structureof Sinostudythat lastedfor two years,identified the typicalmanagement
foreign joint venture in Xiaolangdi by examiningthe existing resourcesand
insight
interviewingthemanagement
Lot
1,
the
with whichsignificant
staffof
project
Furthermore,
into the investigationof the dyadicinteraction'hadbeenapproached.
thestudyhadestablished
a platformfor a morein-depthanalysisof transferprocessof
know-howbetweenforeignandlocal partners,in termsof explicit and
management
tacit knowledgetransfer,dyadicinteraction,channelof transferandthe influencing
factors.
6.4.1.Aims and Objectives
The aims and objectivesof the Pilot Studywere:
To developatypical managementstructureof Sino-foreignjoint venturein
Xiaolangdi for the identification of the physical structureof the dyadic interaction;
*
To develop a model of the transfer of managementknow-how through human
interactionwithin a Sino-foreignjoint ventureproject;
9
To refine the model by using assessmentinventory survey.
The study concentratedon the more tacit forms of managementknowledge,and how
thesecould be transferredthrough the vehicle of joint venturesbetweenmultinational
foreign contractorsand new generationof Chinese construction companies.Based
interaction,
human
is
knowledge
through
transferred
a
the
that
tacit
upon
premise
basic benchmark model for the transfer process of tacit knowledge has been
developed.This Pilot Study was to observethe interaction of a number of dyads,
factors
doing,
In
local
foreign
and the
of
so
a
set
manager.
comprising one
and one
key elementsinfluencing knowledgetransferhad beenexplored.The resultshad been
incorporatedinto a model, which will be further developedand validated in the main
study.
1This is not to be innovative. "Dyadic interaction" is used to interpret the "communication" and
altematively the "knowledge transfer process" between foreign and local managers.
81
6.4.2. Assessment Inventory Survey with Interview
As it has been established previously, the nature of the current research has finally
resulted in the adoption of a combined methodology, where the Assessment
Inventories (see Appendix
1) were used as a basic element of the survey, and
simultaneously the semi-structured interviews were undertaken. The purpose of
deploying this combined methodology was to try to make data collected more
accurate and practical to the present research.
The Pilot Study of the current researchhas beenprimarily basedon the Assessment
Inventory and semi-structuredinterview (seeAppendix 2) with qualitative analysis.
The study also relied on direct observation(of working environmentand foreign and
local managerswithin Xiaolangdi Project). The AssessmentInventories,which were
designedwith an identical set of statements,were deliveredto the managersof (both
foreign,and local) in Xiaolangdi Project. The managerswere expectedto show their
perspectiveand attitude towards each statementby ticking the possible answers.In
inventory there are in total twenty questions(seeAppendix 1) which
eachassessment
cover:
"
Generalinformation of methodstatement
"
Authority over methodstatement
"
Reasonsof using methodstatement
"
What is transferred
"
How is knowledgetransferred
"
The patternsof knowledgetransfer
"
The key and critical issuesin dealingwith methodstatement
"
The aftermathof knowledgetransfer
It was assumedthat in this approachthe information and data collected would be
factual, quantitativeand with featuresin common.The assessmentinventorieswould
be particularly appropriateat this stage since the aim was to quantify the relative
importanceof different responsesto statementsabout a set of well-defined topics. It
could also provide an overview for researchersto carry out the later interviews.
82
6.4.3. Semi-structured Interviews
Interviews with the foreign and local partners of the joint venture projects were a
valuable source of primary research material and information. The semi-structured
interview was adopted in the pilot study of Xiaolangdi Project in order to explore new
topics, sensitive and emotive issuesbased upon the assessmentinventory.
The semi-structuredinterviews were constructedand focusedaroundthe central aims
and objectivesof currentresearchthemes.The major questionswere askedas follows:
9 What hasbeentransferredbetweenforeign and local partnersduring the execution
of the project?
What arethe barriersin achievingsuccessfulknowledgetransfer?
How is knowledgebeing transferred?
Why is knowledgetransferred?
What is the result of knowledgetransfer?
inventorieswere also takeninto
The commonconcernsgeneratedfrom the assessment
considerationduring the discussionswith interviewees.There are both open-ended
and focused questionscovered in the semi-structuredinterviews. The initial openendedquestionswere designedto encouragerespondentsto expresstheir feeling and
experienceswhen they had intimate interactionin the joint ventureorganisation.This
phaseof the interview yielded most of the new and significant insights in the study.
Then, the questionsfollowed would focus on why knowledge transfer takes place,
channelof knowledgetransfer,influence factorsanddyadic interaction.
6.4.4. Problems in Conceptualising and Measuring Knowledge Transfer
In order to track the tacit knowledge transfer process, an assessmentinventory for the
present research project was designed and used during the first two study trips to
Xiaolangdi when the interviews were undertaken. It was found that the key questions
highlighted in the assessmentinventory were more theoretical rather than operational
on the construction site in Xiaolangdi. There was a gap between understanding
academic research problems and approaching the phenomenon of knowledge transfer
in the real life world. Therefore, a more approachable and fundamental study was
83
arrangedin July 2000 to the John Laing Life Centre ConstructionSite in Newcastle
upon Tyne, the UK. After this study, a multi-sectional assessment inventory was
further developed based upon the original assessmentinventory, with a view to
approachthe measurementof the processof tacit knowledgetransfer particularly in
dealingwith Method Statementin the constructionpractice.This inventory had been
testedand commentedin Xiaolangdi by mangers(of foreign and local) during the
later trips. Further data were collected primarily by having a Knowledge Transfer
Seminar, which was organised in Xiaolangdi, and attendedby the managersof
foreign and local from the three mai or joint venture constructionorganisationsand
professionalconsultantsof both client and the World Bank. This had enabledthe
researcherto further develop the assessmentinventory.
6.4.5. Systematic Arrangement of the Studies
During the yearsof 1998and 1999,total six study trips to Xiaolangdi were arranged.
In particular, every study was undertakenwith a specific purposeof achieving aims
andobjectivesof the research.Prior to the study,in termsof what to identify andwhat
to finalise, appropriatepreparation was made. The interviews were conducted in
Chineseand English and were recorded.Table 6.3 showsthe systematicarrangement
of the Pilot Study.
I
2
3
4
5
6
Date
29u, 30"',
Au&2st 1998
19"', 20"', April
1999
Oblectives
Autonomy of
joint venture
Building of
transfer model
Achievements
Typical organisation of Sino-German
Joint Venture
Knowledge transfer model,
Knowledge transfer assessment
inventory
29"', 30"', July
Motivation of knowledge transfer,
Identification
1999
influence factors, tacit knowledge
transfer
280',29th,
Channel of tacit knowledge transfer,
Identification
September, 1999
successof tacit knowledge transfer
24u,25u, April
Identification and Critical issues, critical operation of
2000
finalisation
knowledge transfer
2"", P, August 1 Method statement 1 Knowledge transfer in dealing with
2000
Method Statement
Table 6.3. Systematicarrangementscheduleof the Pilot Study
84
With the assistanceand supportof managementof Xiaolangdi Project, the six study
trips of the Pilot Study to Xiaolangdi were carried out. It was encouragingthat
interviewswere undertakenand aims and objectivesof the study had been achieved.
The interviewees whom the researcherinterviewed were in fact from different
countries.Most of them were from joint venturecompanies,who were contractorsand
sub-contractorsin Xiaolangdi Project while some of them were from the client
organisation.An agendafor the interviewsis shownin Table 6.4.
Interviewee
Organisation
Nationality
CGIC Joint Venture
Xiaolangdi MultipurposeDam Project
German,Italian, English
3
Yellow River Contractors
Xiaolangdi MultipurposeDam Project
Italian
2
EnterpriseDevelopment
Yellow River Water & Hydropower
DevelopmentCorporation
Chinese
10
ConstructionEconomics
Ministry of Construction
Chinese
I
InternationalCo-operationDivision
Constructionmanagementdepartment
Ministry of Construction
Chinese
3
CandianInternationalProject Managers
Canadian
(Consultantto the World Bank and the Cli ent)
6
Total
25
Table 6.4. Interview agenda of the Pilot Study
6.5. Presentation of Pilot Study Data
This sectionwill first of all discussthe datacollectionprocess.Thenthe sectionwill
presentan anatomyof joint ventureprojects,with implicationsof the physical
foreign
local
dyads
element.
a
and
structureof management
composedof a
Furthermore,
the sectionwill presentfindingsof the Pilot Studyandthe benchmark
modelof tacitknowledgetransfer.
6.5.1. Data Collection Process and Quantitative Data
Data were collected primarily by individual interviews with the managers (foreign
and local) of the relevant construction organisations. This had enabled the researcher
85
to track the developmentof collaborativerelationshipsover time. Qualitative data (
refer the Transcriptionof Interviewsin the Pilot Studyin Appendix 2) were collected
directly from interviews and observationsin the field study. Quantitative data were
inventories.
obtainedfrom the resultsof the assessment
The quantitativedatapresentedhere is in the form a summaryof the fifty-two copies
the assessmentinventories returned to the researcher.Based on the previous study
inventory with an identical set of questions
trips, fifty-two copies of the assessment
were deliveredto the managers(of both local and foreign) in Xiaolangdi Project and
all the copies were returned. The assessmentinventories were designed in both
English and Chineseversion. The English versionsare for foreign partnerswhile the
Chineseversionsare for the local partners.A summaryof all the responsesin the Pilot
Studyis presented(seeAppendix 4).
6.5.2. Typical Management Structure of Sino-foreign Joint Venture
The primary interest of this research was in how tacit knowledge was transferred
through human interaction. The unit of analysis would therefore be a dyad with one
foreign member and the other local, and whose roles demand that they work together.
Based on the interviews of foreign and local managers, a typical management
it
better
because
important
has
is
been
This
can
provide
structure
not only
established.
it
is
first
because
but
joint
the
step to
also
understanding of a
venture organisation,
present an anatomy of joint venture projects,
which will establish a platform to
enable the researcher to have further study of the knowledge transfer process through
the analysis and observation of dyadic interaction.
The following points in the typical management structure of joint venture bear
significant implications for the further studyof the knowledgetransferprocess.
*
Foreignmanagerwith Chineseassistantin eachdepartment;
in
department;
Minority
foreign
Chinese
each
e
engineers
engineerswith majority
e
There is no foreigner in the Safety Department.
86
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0
-
EZ2
U
V
V
0
46
C?
to in
9b
02
u
rJ4
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ýZ4
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4)
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E-A
gij
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-
-w
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kn
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tu
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0
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0
-
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-
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cd
ch
lu
441
CIS
U
Figure 6.2 shows the typical management structure of a Sino-foreign Joint Venture in
the Xiaolangdi Project, from which we can identify the physical structure of the
dyadic interaction within the joint venture. An interesting point that we noticed that
there is no foreign staff in the Safety Department, as it is believed that there exists the
measures and requirements in terms of health and safety in construction provided by
the Chinese government.
6.5.3. Tacit Knowledge Transfer
The empirical evidence identified through the pilot study of the Xiaolangdi project (Li
and Greenwood, 2000) has shown that tacit knowledge transfer occurs from time to
time during the execution of the project between members of management dyads,
composed a foreign (F) and a local (L) element (refer Appendix 3). The pilot study
permitted the identification of the various 'dyads' or management pairs of individuals
dyads
fact
inter-react
In
these
their
are
who
managerial role.
with each other as part of
(L(F-L),
local-local
foreign-local
foreign-foreign
(F-F),
numerous, and made up of
L) but for the immediate purposes of the current research, only the foreign-local (F-L)
dyads are of interest. Figure 6.3 representsthe work patterns of dyadic interaction.
Pattern I
Pattern 2
Pattern 3
Foreign-Foreign
Local-Local
Foreign-Local
___H
x
___
jL
___H
Figure 6.3. Work patternsof dyadic interaction
6.5.4. Influencing Factors
Many factors are cited as potential barriers to the success of technology transfer.
Samli (1985) considered six dimensions - geography, culture, economy, people,
business, and government. In addition to the above dimension, contrary to the
motivation of tacit knowledge transfer, one of the important barriers is the resistance
88
of changeor the unwillingnessto acceptknowledgetransfer.It seemsthat there is a
tendencyfor the elderly to be reluctantto haveknowledgetransfer.
Within the context of Hofstede (1980) and Hofstede and Bond's (1988) five
dimensions of culture and based on the model of technology transfer developed by
Tung (1994), the Pilot Study of Xiaolangdi Project has made a further investigation of
the following influencing factors:
Cultural difference
Language barriers
Social values
Different objectives
Technical development level
Thesefactorswill be incorporatedinto the researchmodel and further explainedin the
main study.
6.5.5. Motivation for Knowledge Transfer
The data collected through semi-structured interviews
suggests that on the
knowledge
have
keen
in
local
to
Xiaolangdi,
the
construction site
partners are
transferredby the foreign partners, particularly tacit knowledge such as practical
is
It
decision-making
true
know-how,
techniques.
management
and
problem-solving
that the transfereedoes not only want to absorb"know-how" but also "know-why".
As a matter of fact, the transfer of know-how and skills from one group to another
group is an act of power. However, the foreign partners believe that transferring
managementknowledge to partners is an effective approach to completing the
constructionproject. It seemstherefore that there is congruencebetweentransferor
and the transfereein the desireto seetacit knowledgebeing transferred.
It should be noted that under the commercial pressuresof completing a project to
time, quality and cost, it is not always feasibleto undertakea formalisedcommitment
to-transfer. Many commentatorsbelieve that this needsto be organisedand funded
separately.
89
6.5.6. Mechanisms of Transferring Knowledge
The result of the Pilot Study of Xiaolangdi Project suggests that method statement
appears to be in (a) formal form,
(b)
form,
and
such as well-structured written
informal form, such as a simple note, a rough sketch, and sometimes a method
statement can be in a verbal form, such as a message. Explicit knowledge is often
transferred through well-structured written form while tacit knowledge is transferred
when the messagehas been passedby. The foreign party normally has the final say in
terms of hard construction technology in dealing with the method statement.
However, it should be noted that 80% of the respondents of foreign and local
managers in Xiaolangdi confirmed that knowledge transfer, in particular in terms of
management know-how is a "two-way process" between multinational and local
partners while 8% of the respondentsbelieve that knowledge transfer is one way from
foreign to local.
6.5.7. What Is Being Transferred
It should be pointed out 84% of the respondents stated in the inventories that there is
more demand of tacit knowledge transfer such as soft knowledge, management knowhow than for explicit knowledge transfer such as hard knowledge, construction
technology, which has been in line with the result of the previous interview. There is
less demand of knowledge transfer in dealing with technical problems, such as
construction technology; however, there is significant demand for knowledge transfer
in dealing with administrative problems, in particular, claims and anti-claims. Local
partners are eager to absorb management know-how in dealing with claims and anticlaims. Under the centralised planning economy, construction itself was regarded as
in
However,
for
the market economy,
construction, not a means
making profits.
construction has been taken as an approach of making large profit. Therefore, claims
and anti-claims have become critical issues in the whole life of a project.
6.5.8. A Model of Knowledge Transfer
As describedin the previous section,knowledgecan be divided into two components,
namely explicit and tacit. Explicit knowledge and tacit knowledge have di fferent
channels of transfer, which has been developed in the Pilot Study in Xiaolangdi.
90
uiven ine nature oi i)otn expiicit Kno%N
icage ano tacit Knox%
ieo(Ye,
conslacration
NN
itil
Cý
of the joint %enture \ ehicle. a basic model of kno\%ledge transfer \Nas constructed.
Ch'i
JOINI
Mcaulay, I Ir,
INSIDI
VEN-11'RI. %I-IfICLE
T
1 1999)
,,
(Pilot stu':
( onfvrcncc%
0
On the job training
01
Communication%
clephollic
social occa%ions
0
riining
hance
%e%%ion%
.-\,!.:,,
Iangdi Project)
inectings
at %sork
v
T-
Tacit
Explicit
A
I ransferee
Figure 6.4. A model of knowledge transfer
Figure 6.4 represents the benchmark transfer model of both explicit knowledge and
tacit kno%%
]edge, generated from the literature (Polarivi, 1967; Woherem, 199 1; Tsang,
1995,1997.1998,
Mcaulay, 19977,Maitland, 1999) and refined using data from the
Pilot Study However, it
should be noted that in this presentation the flow of explicit
knowledge is in
a solid line %%hilethe flow of tacit kno-wledge is in a broken line. It
91
should be emphasisedthat the transfer of explicit knowledge is easy to track,
however,while transferof tacit knowledgeis hard to track. In the meantime,the
certainchannelsthat havebeenidentified throughthe pilot study are believedto be
arbitrary. Therefore,it is necessaryto establisha systematicapproachto keep the
channelsof tacit knowledgetransferunblocked.
6.5.9. Limitations of the Current Research Method
In terms of researchmethodological issues,so far the current researchis based on the
single assessmentinventory survey of Xiaolangdi Project. There was limitation for the
interview arrangement and the spreading of the inventories due to time. The results
and conceptual issues generated from the pilot study therefore need to be further
tested in the main study. In addition, the validation of questions designed in the
assessment inventory is not appropriately tested before sending out to the
intervim, ccs, which might have causedmisleading of the researchfocus and direction
during interviews.
6.6. Summary
The aims and objectives of the pilot study had been achieved through the assessment
inventory survey with interviews in Xiaolangdi Project, Henan Province, PRC,
regardlessof the complexity and the difficulty of making such arrangements.It should
be pointed out that Xiaolangdi Project has provided the researchculture ground for
this particular research topic. It is believed that the diversity of culture and the
sophistication of the Xiaolangdi Project itself (both in terms of technical complexity
of the project and the construction of it by multi-national contractors) has createdsuch
a surrounding, where the researcherwas able to track the transfer process of tacit
knowledge. Tbc study has
generatedsignificant insights and fundamental findings at
this stage. Furthermore, the study that has establisheda platform for undertaking the
Main Study, %villbridge the theoretic literature
review in the academicworld and the
exploration of the phenomenonof the knowledge transfer in the real construction site.
Tle significance of the findings from
such a study is that it not only makes possible
further researchinto
mechanismsof knowledge transfer, and but also becauseit helps
92
to developthe understandingof the mechanismsof knowledgetransferbetweenthe
developedanddevelopingcountries.
Furthermore, this study discovers that explicit knowledge is easy to track but
represents only part of knowledge transfer. Therefore, the importance of tacit
knowledge transfer should be and must be established. In the mean time, it is
in
be
knowledge
a
to
transfer
necessary
accomplished
suggest that tacit
can
systematic way rather than ad hoc manner.
93
Chapter Seven
A Study of Jiangsu, Henan and Xinjiang
Introduction
First of all, this chapter briefly presents information on three regions: Jiangsu
Province, Henan Province and Xinjiang Autonomous Region. These are the regions in
which the Main Study was carried out. Then the chapter provides a number of
economic indicators with particular reference to construction activity, which is
believed to provide a broader context for the further understanding of the present
economic status of the provinces and the region. Furthermore, the chapter focuses on
a horizontal comparison of the economic indicators in these provinces and region. The
chapter concludes with a summary.
7.2. Jiangsu Province, Henan Province and Xinjiang Autonomous
The three locations of JiangsuProvince,Henan Province and Xinjiang Autonomous
Region have beenselectedas samplesof study of constructionindustry in China, not
because they are typical examples of the Chinese experience,but as instances
(Figure
in
China
A
different
the
the
attached
country. map of
representing
economy
7.1.) showsthe geological locations of the three regions in the People'sRepublic of
China.
A literature review shows that there is no academicwork that examinesthe current
situation of the economicdevelopmentof the provinces and autonomousregions in
PRC. However, Table 7.1 was establishedbased on the Construction Statistical
Yearbook of China, 1998, which showsthe current positions of Henan,Jiangsuand
Xinjiang ranked by gross output value (GOV) of construction in the country. It is
hoped that the constructionactivities in theseregions will reflect the different levels
of economicdevelopmentin the constructionindustriesin China.
94
(-i
du
ct
::
0
.'c
xc
9-1
P.n
:3ýC
nm
C
C
I
'C
Z-10
'I)
C
.Z
CD
i)
Iti
1C
-2
.0
I.-
M
Table 7.1. League Table of Provinces and Regions in PRC
Table 7.1. League Table of Provinces, Municipalities (directly under the Central
Authorities) and Autonomous Regions in China by Gross Output Value of Construction
Name
Capital City
GOV in RMB 1998
1 Jiangsu
2 Zhejiang
3 Guangdong
4 Shandong
5 Shanghai
6 Sichuan
7 Beijing
8 Liaoning
9 Hebei
10 Hubei
Nanjing
Hangzhou
Guangzhou
Jinnan
Shanghai
Chengdu
Beijing
Shenyang
Shijiazhuang
Wuhan
11 Hunan
12 Henan
13 Chongqing
14 Heilonhjiang
15 Anhui
16 Fujian
17 Yunnan
18 Shanxi
19 Tianjin
20 Shaanxi
Changsha
Zhengzhou
Chongqing
Harbin
Hefei
Fuzhou
Kunming
Taiyuan
Tianjin
Xi'an
2,965,005
2,946,903
2,440,552
2,435,310
2,359,972
2,268,855
2,189,844
1,920,095
1,909,999
1,642,493
21 Jilin
22 Guangxi
23 Xinjiang
24 Gansu
25 Neimonggou
26 Jiangxi
27 Guizhou
28 Ningxia
29 Qinghai
30 Hainan
31 Xlzhang
Changchun
Nanning
Urumqi
Lanzhou
Huhhot
Nanchang
Guiyang
Yinchuan
Xining
Haikou
Lhasa
1,369,882
1,275,627
1,141,318
1,056,249
963,852
856,436
767,046
334,919
309,340
279,923
79,519
10,716,094
8,773,546
6,747,406
6,479,717
5,524,161
5,206,436
5,192,363
4,291,256
3,760,962
3,059,698
1. JiangsuProvince
The economyin JiangsuProvincehas grown steadily and quickly sincethe economic
reform starting from 1978. Jiangsu,with a population of 71 million and an area of
102,600 square kilometres, is making the most of its productive location in the
Yangtze River Delta. A chief economic indicator in one of China's most developed
provinces, Jiangsu's GDP reached RMB335.8 billion (US$48.5 billion), 10% increase
96
over the sameperiod of the previousyear.Jiangsuis the birthplaceof many of China's
most important national industries.For years the value of its industrial output has
ranked first in the country.
The addedvalue of state-ownedenterprisesand non-public industrial enterpriseswith
salesrevenuesof 5 million yuan (US$602,400)came to 102 billion yuan (US$12.3
billion), 11.7%more than that of the previousyear. This growth was 2.3% abovethe
national average.Jiangsu'sexport value topped US$7.7 billion in the first half of
1999.This numberis an increaseof 12.6%over the sameperiod of the previousyear.
The volume of foreign trade and foreign investmentfor the province has surpassed
one-fourth of its GDP as well as its fixed assets.By the end of 1998, there were
20,500 foreign-funded enterprises in Jiangsu, and 15,000 of them are fully
operational.Foreign investmentshavegrown to US$36billion.
Since the reforms and open market policies took effect in the late 70s, Jiangsu's
economy developedrapidly. In the past two decades,the annual growth rate was
12.8%. The province has also made breakthroughsin infrastructure. A modem
transportation network has gradually grown across the province. The ShanghaiNanjing Expressway, as well as the Nanjing-Lianyungang and Nanjing-Nantong
gradeA highways,now open to traffic, have madeeconomicand social development
easier.Two other projects,the Nanjing Lukou InternationalAirport and SouthJiangsu
section of the Beijing-Hangzhou Grand Canal, have been completed. A third
transportationmagnet,the Jiangyin-YangtzeRiver Road Bridge, is now also open to
traffic. Construction on two other key projects, the Nanjing Yangtze River No 2
Bridge andthe North JiangsuExpressway,hasmeanwhilebeenaccelerated'.
2. HenanProvince
Located in the central and easternpart of China, at the middle and lower reachesof
the Yellow River, Henan Province has an area of 167,000squarekilometres and a
population of 88.61 million. It was the birthplace of the Yellow River Culture.
According to a large number of popular legendsand historic records,it was here that
I This is derived from
the Intemet page of China International Economic ConsultantsCo-,Ltd(C7EQ
Issued date: December 28,1999.
97
Fuxi, Nuwa, XuanyuanHuangdi,Diku, Zhuanxu,the ancestorsof the Chinesenation,
createdChinesecivilization.
The Yellow River basin has been called the cradle of the Chinese nation where
mankind lived as early as 500,000 to 600,000 years ago. In Henan Province several
hundred cultural sites of the Neolithic Age (4,000 to 10,000 years ago) have been
found. The famous Peiligang, Yangshao, and Longshan Cultures reflect the prosperity
in this area during the late period of primitive society. From the period of 21st century
B. C., when the Xia Dynasty, the first dynasty in China's history, was established, to
the Northern Song Dynasty, more than 20 dynasties with more than 200 emperors set
or moved their capital cities here.
Henan Province has eight high-new technology industry developmentzones and
seven provincial economy & technology developmentzones, with Zhengzhouand
Luoyang being the country high-new technologyindustry developmentzones.There
are two first-class airports (Zhengzhouand Luoyang), one first-class railway port
(ZhengzhouEast Railway Station), three second-classhighway ports (Zhengzhou,
Luoyang and Shangqiu)in Henan. In 1998,the whole province makes use of about
1.034billion dollars foreign investment.
Henan Province has opened more sectors to foreign investors. In addition to the
technology industry, the province has opened to overseas investors agricultural
industry, stockbreeding industry, transportation industry, service industry, retail
industry, education, pharmaceutical industry, land exploitation and so on. Currently,
investors from more than 60 countries, including Japan, the United States, Germany,
Britain and Singapore, have come to Henan to develop their business. Totally, there
are more than 2000 joint ventures in Henan. The province has 101 cities and towns
2
joint
least
having
foreigners,
town
to
venture.
one
at
open
with almost every city or
Henan has established co-operation and science-technology communication with
more than 30 countries and districts. It also has made long term and relatively stable
in
institutes
Japan, the United
science-technology co-operation with some research
2This meansa city whereinfrastructureand investmentsurroundinghavebeenwell establishedto
accommodateforeign investors.
98
States, Germany, Britain and so on. In 1998, Henan's total turnover reached to
3.
US$69.94million, an increasing7.6 percentcomparedwith the previousyear
3. Xinjiang Autonomous Regio
Xinjiang is the shortenednameof Xinjiang Uygur AutonomousRegion.Xinjiang has
a population of 17.18 million. Situatedin Northwest China and in the centre of the
Eurasiancontinent, it is over 1,600,000squarekilometres in area, making up onesixth of the entire territory of China, the biggest of all the country's provinces and
autonomousregions.
Xinjiang's economy presents a good situation of "high increase and low inflation".
There are bumper harvests in agriculture and rapid increases in industrial production.
Investment, consumption and exports have maintained a certain degree of increase.
The financial and monetary situation is regular. But at the same time, with economic
development, there appear problems that cannot be ignored. The basis for further
is
is
development
the
pace of structural adjustment still slow;
economic
not stable yet;
the production management of state-owned enterprises is difficult; and the overall
situationof the economyis still not ideal.
As a major region in the developmentof west China, Xinjiang is abundant in
feature
for
developing
the
has
economyand
exploitable resourcesand
greatpotential
forming new economicgrowth points. Xinjiang, also rich in mineral resources,plans
to construct China's biggest petroleum and natural gas industrial base and an
important petrochemical industrial base in west China in the coming five years.
Meanwhile, it will finish constructinga textile production base,a non-ferrousmetals
industrial baseand other industrial bases.
Infrastructure construction, focused on transportationand water conservancy,will
five
Xinjiang
in
The
input
industry
be
the
key
local
years.
next
also a
requiring major
billion
23
infrastructure
in
billion
invest
70
to
construction,
yuan
governmentplans
3 This is derived from Intemet
pageof ThePeople'sGovernmentofHenan Province, PRC China,
China Councilfor the Promotion ofInternational Trade,HenanMultimedia Information Bureau,
HenanIn/b.Port, 2000.
99
yuan of which will be directedinto highway constructionand renovation.Besides,it
will speedup the constructionof China-Kirghizia-UzbekistanRailway, improve the
infrastructure of Urumqi and Kashi airports, and quicken the construction of
communication information network. Xinjiang neighbours Gansu province and
Qinghai Provincein the Southeastand Tibet in the South;and borderseight countries
in all the other directions, that is, Mongolia in the Northeast,Russia, Kazakhstan,
Kyrgyzstan and TaJikistanin the Northwest and Afghanistan,Pakistanand India in
the Southwest.The region has a nationalboundaryover 5,000kilometreslong, longer
than that of any other of the country'sprovinces and regions. The situation endows
Xinjiang with a natural geographicaladvantagefor its reform and opening to the
outsideworld.
Xinjiang is surroundedby mountains.It dependsupon snow-melt water from these
mountains to irrigate its oases.Xinjiang's oasesare isolated, separatedfrom each
other by large expansesof desert.Transportationis poor and expensive;as a result
many regions are basically closedeconomies.In 1992,the averageincome of people
in the Hotan region was 903 RMB per year and 1185 in Kashgar, respectively the
lowest and third lowest per capitaincomeof Xinjiang's regions.
From 1949, ethnic Han emigration to Xinjiang rose and fell with events in eastern
China. The great majority of the emigrantsto Xinjiang in 1990 [88 percent] came
from rural China but were in general better educatedthan the averageXinjiang
resident. Xinjiang will
pay more attention to the ecological environmental
construction and attach equal importanceto environmentalprotection and pollution
control.
7.3. Economic Indicators in Construction Industry
As has been establishedpreviously, this study set its boundarywithin the context of
constructionindustry in China. It shouldbe noted that it is hard to obtain the up-dated
data of economic development in a changing environment, in particular with
constructionsectorin the fast andever-changingeconomyin China.
In order to identify the different levels of construction industry among Jiangsu, Henan
and Xinjiang, a certain number of economic indicators have been chosenfrom the
100
Year Book of 1998, which was compiled by the Department of Statistics on
Investmentin Fixed Assetsof StateStatisticalBureau,publishedby China Statistical
PublishingHouse,to be presentedin Table 7.2.
The intention is to havea comparativestudybetweenthe main economicindicatorsin
construction and the economic indicators of foreign funded economic units in the
three regions.Therefore,two setsof economicindicatorshave been chosen.One set
concernsmain economicindicatorsof the whole industry of the three regions,such as
the following:
*
Grossoutput value of construction
*
Number of projects
9 Constructionquality projects
9 Statisticson machineryand equipment
9 Value addedof construction
*
Total floor spacecompleted
*
Total capital and structureof total assets
o Liabilities and creditors' equity
9 Total profit
*
Total number of construction enterprises
The other set concernseconomic indicators of construction enterprisesof foreign
founded economic units, which includes foreign funded economic units, economic
units funded by entrepreneursfrom Hong Kong, Macao and Taiwan, and units of
other typesof ownership.Theseindicatorsare asthe following:
*
Grossoutput value of construction
101
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e Number of projects
*
Constructionquality projects
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*
Value addedof construction
Total floor space completed
0
Total capital and structure of total assets
9 Liabilities and creditors' equity
*
Total profit
9 Total numberof constructionenterprises
Table 7.2 showsthe various economicindicators of constructionindustry in Jiangsu
Province,HenanProvinceandXinjiang AutonomousRegion.
7.4. Comparison among the Three Regions
It is not intended to present any particular mathematicalrelationship or models by
presentingthe following bar charts.All the bar charts are mere visual aids showing
the main featuresof constructionindustry amongtheseregions.This is to allow for a
horizontal comparisonof the various economic indicators of construction industry
in
Region
Autonomous
Xinjiang
Province
Jiangsu
Henan
Province,
and
among
Peoples' Republic of China. Chart I-
20 presentthe comparisonof the economic
indicators among Jiangsu Province, Henan Province and Xinjiang Autonomous
Region.
7.4.1. Main Economic Indicators in Construction
Chart 1-10 show the mere comparison of main economic indicators in construction
industry in Jiangsu Province, Henan Province and Xinjiang Autonomous Region,
Peoples' Republic of China.
103
1. Gross output \ralueof construction (10000 yuan)
12000000
10000000
8000000
6000000
4000000
2000000
Ei 1. Gross output
value of
construction
(10000 yuan)
0
Jiangsu
Henan
Xinjiang
Chart 1. Gross output value of constrLICtIOII
Chart I shows the comparison of the gross OUtpUtvalue (GOV) of construction aniong
the three regions. GOV is the total value of construction prodUCtSSII0WIIin teiTns of
currency that were completed by the construction enterprises up to date. It is an
important indicator to reflect production scale and development speed of construction
industry, which is an important base to calculate the economic results, labOUr
productivity and the proportion of construction industry in the national economy.
2. Number of projects (projects)
80000
60000
I
'E12. Number of
projects (projects)
40000
2UUUO
0
Jiangsu
Chart 2. Number
Henan
Xnjiang
of projects
Chart 2 shows the comparison of number of projects aniong the three regions. Tile
number of projects means the total number of projects completed by the construction
enterprises in the regions so far.
104
3. Construction quality projects (projects)
20000
15000
133. Construction
quality projects
(projects)
10000
5000
0
Jiangsu
F]
Henan
Xinjiang
Chart 3. Construction quality projects
Chart 3 shows the comparison of construction quality projects among the three
regions. The construction quality project means construction projects completed with
high quality. Most items were completed in accordance with the required standard.
This is often assessedand examined by construction experts.
4. Statistics on machinery and equipment (pieces)
600000
500000
400000
300000
200000
100000
0
4. Statistics on 1
machinery and
equipment
(pieces)
Jiangsu
Henan
Anjiang
Chart 4. Statistics on machinery and equipment
Chart 4 shows the comparison of statistics on machinery and equipnicnt aniong the
three regions. These figUres are the qualltlty Of COIlStl'LICtlOllmachinery and eqLllplllCllt
possessedby the construction enterprises in the regions.
5. Value added of construction (10000 yuan)
3000000
2500000
2000000
1500000
1000000
500000
0
Chart 5. Value added of construction
105
Chart 5 shows the comparison
regions.
of value added of construction
Value added of construction
aniong tile three
Means the final result in terms of currency of
production and operation of construction industry up to date.
6. Total floor space completed (10000 sclare
metre)
20000
r-16. Total floor
space completed
(10000 sqare
15000
10000
5000
F-I
0
Jiangsu
Henan
metre)
Xinjiang
Chart 6. Total floor space completed
Chart 6 shows the comparison of total floor space completed so far among tile thrce
regions. These figures show the total construction areas completed in accordance with
the requirement of architectural design and put Into Litilisation.
7. Total capital and structure of total assets
(10000 yuan)
2500000
2000000
1500000
1000000
500000
0
[ýT
F-I -I
Jiangsu
Henan
F-71
Total capital
and structure of
total assets
(10000 yuan)
Xnjiang
Chart 7. Total capital and structure of total assets
Chart 7 shows the comparison of total capital and struCtUre of total assets arriong tile
three regions. This represents tile cconoinic
resources in ternis of currency
enterprises possess and are able to control, which includes operational
that
assets, long
terrn investment, fixed assets, special iterns, invisible assets and other assets.
106
1
8. Liabilities and creditors' equity (10000 yuan)
I
10000000
8000000
08. Liabilities and,
creditors' equity
(10000 yuan)
6000000
4000000
2000000
0
Jiangsu
Henan
Xinjing
Chart 8. Liabilities and creditors' equity
Chart 8 shows the comparison of liabilities and creditors' equity in construction
industry arriong the three regions. This means the liabilities and creditors' equity that
the enterprises would pay in temis of capital or manpower. It should be pointed that
this indicator still bears features of the command economy.
9. Total profit (10000 yuan)
150000
100000
50000
o 9. Total profit
(10000 yuan)
0
-50000
Chart 9.Total profit (10000 yuan)
Chart 9 shows the comparison the total profit of construction IndUstry aniong the three
regions.
107
10. Total number of construction enterprises
(companies)
4000
Ei 10. Total number
of construction
enterprises
(companies)
3000
2000
1000
0
Jiangsu
Henan
Anjiang
Cliart 10. Total nuniber of'construction eilterprises
Chart 10 shows tile comparison of the total number of construction enterprises aniong
the three regions. In fact, there is a strict classification
accordance with the Regulation
Construction,
of construction
No. 666 (1995) promulgatcd
enterprises in
by the Ministry
of
PRC. All the enterprises were classified as the first class, the second
class, the third class and the fourth class in accordance with the personnel quality,
management level, arnount of capital, the ability to contract projects, technological
ability, and the construction perforniance.
7.4.2. Main Economic
Economic Units
Indicators
in Construction
Enterprises
of Foreign
Funded
In order to avoid the repetition of the previous section as they have similar implication
in that the first set of main economic indicators apart froin that these indicators are
related with foreign funded economic Linits, therefore, the second set of ecollornic
indicators of construction enterprises of florcign funded economic units will not be
dwelled upon.
11. Gross output value of construction (10000 yuan)
100000
80000
60000
40000
1 20000
0
1. Gross output
113
value of
construction (10000
yuan)
Jiangsu
Henan
Xinjiang
Chart 11. Gross output value of coristructlori of foreigii furided ecoriomic mlits
108
12. Number of projects (projects)
1000
800
600
0 2. Number of
projects (projects)
400
20
0'
Jiangsu
Henan
Xinjiang
Chart 12. Nunibcr of projects of foreign I'Linded econonlic UllItS
13. Construction quality project (projects)
200
150
0 3. Constructioný
quality project
(projects)
100
50
0
Jiangsu
Chart
Xinjiang
Henan
13. Construction
quality
project
of foreign
funded economic
units
14. Statistics on machinery and equipment (pieces)
4000
3000
[34. Statistics on
machinery and
equipment (pieces)
1 2000
1000
0
Jiangsu
Henan
Xinjiang
Chart 14. Statistics oil machinery and equipment of' floreign funded economic 1.1111tS
109
15. Value added of construction (10000 yuan)
25000
20000
115. Value added of
construction (10000
yuan)
15000
10000
5000
F-1
0
Jiangsu
Henan
Xinjiang
Chart 15. Value added of construction of foreign funded CCOIIOIIIIC
U111tS
16. Total floor space completed (10000 square metre)
40
30
(J 6. Total floor space
completed (10000
square metre)
20
10
0
Jiangsu
Henan
Xinjiang
Chart 16. Total floor space completed by foreign funded economic Linits
17. Total capital and structure of total assets
(yuan/person)
25000
20000
15000
10000
5000
0
0 7. Total capital and
structure of total
assets
(yuan/person)
Jiangsu
Henan
Xinjiang
Chart 17. Total capital and structure of total assetsof foreign funded CCOIIOIIIIC
UllitS
110
18. Liabilities and creditors' equity (10000 yuan)
80000
60000
138. Liabilities and
creditors' equity
(10000 yuan)
40000
20000
0
Jiangsu
Henan
Xinjiang
Chart I S. Liabilities and creditors' equity of foreign Fundedeconomic units
19. Total profits (10000 yuan)
5000
4000
3000
09. Total profits
2000
1000
0
(10000 yuan)
Jiangsu
Henan
Xinjiang
Chart 19. Total profits of foreign funded economic units
f-
-- --
--
--
--
---------I
20. Total Number of foreign funded economic units
(companies)
40
30
20
10
0
ý010. Total Number of!,
foreign funded
economic units
(companies)
Jiangsu
Henan
Xinjiang
Chart 20. Total number of foreign ftinded economIC LfflitS
7.5. Summary
Given
the background of
hangSLI Province, Henan Provmcc and Xinjiang
Autonomous Region, based oil the comprehensive comparison of tile economic
indicators of construction industry In these regions, tile COIICILIS1011
Will be that these
economic indicators in these regions mirror clearly their different devc1opnicnt levels
in construction activity. Jiangsu Province is well-developed, Henan Province is
newly-developedand Xinjing Autonomous Region is less-developed.In addition,
JiangsuProvincehasthe featureof strongindustry, HenanProvincehas a long history
and a rich culture, while Xinjiang AutonomousRegion has a feature of immigrants
with a largepotential to develop. In the next chapter,the discussionwill focus on the
discussionof the implication of theseeconomicindicators and how they give impact
to the processof knowledgetransfer.
112
Chapter Eight
Main Study
Introduction
Following examination of the background and the reasons why Jiangsu Province,
Henan Province and Xinjiang Autonomous Region were selected to be the sampling
locations where the Main Study was undertaken, the chapter explains the aims and
objectives of the Main Study. The view that the method statement is an important
component to approach the tracking of knowledge transfer process is explained. Then,
the chapter presents the results of the Main Study. Furthermore, the chapter explores
the correlation between knowledge transfer and economic development, explains the
implications for knowledge transfer and explains the relationships between knowledge
transfer and economic development by analysing the data.
8.2.
Main Study in Jiangsu, Henan and Xinjiang
in
As it was established
Study
in
Chapter
Five,
Main
the
the
of
purpose
previously
differenteconomies
from the
is to furtherinvestigateandvalidatethe resultsgenerated
Pilot Study.It is believedthat the Main Study,which is undertakenin a muchwider
indicationsof externalvalidity.
context,will providepracticalandfundamental
The primary interest of the Main Study was to use the information collected through
interviews from the Pilot Study andrefine it. The resultswere then usedto developand
establish the researchmodel. In the Main Study, copies of a refined assessment
inventory were delivered by the researcher and distributed by the construction
authoritiesin the threechosenregions, JiangsuProvince,HenanProvinceandXinjiang
Autonomous Region. Thesethree locations have been chosenbecausethey represent
different economic developmentlevels of the construction industry in China (refer
Chapter Seven).JiangsuProvince, one of the coastal and advancedprovinces, has a
relatively well developedconstructionindustry while Xinjiang Autonomous Region,
locatedin the west part of China has an industry, which is much less advanced.Henan
Province,an inland province, locatedin the centralpart of China, is in the intermediate,
position, as was presentedin the Chapter Seven.Appropriate considerationof these
113
factors will contribute to the understandingof the data collected and the information
obtained.
8.2.1. Aims and Objectives
The aims and objectivesof the Main Study are:
"
To further define the processof knowledgetransfer,with the establishmentof the
conceptof tacit knowledgetransferidentified during the Pilot Study;
"
To refine the understandingof the processof tacit knowledgetransferbasedon the
premisesidentified during the Pilot Study;
"
To explore the relationship between knowledge transfer and economic
development;
"
To explore the relationship between explicit knowledge transfer and tacit
knowledgetransfer.
The study focuseson how knowledge (in particular tacit knowledge) was transferred
betweenforeign and local managerswhen they completeda constructiontask - method
dealing
knowledge
is
believed
It
transfer
that
the
with method
when
statement.
of
statementswill mirror the processof problem-solvingand decision-makingas well as
the processof knowledgetransferin the whole industry.
8.2.2.Design Rational and the Main Themesof the AssessmentInventory
The design of the AssessmentInventory for the Main Study was basedon the Pilot
Study of Xiaolangdi Project, in Henan Province, PRC. As has been established
knowledge
identify
focus
Study
Main
to
the
the
the
of
process
previously,
was
of
transferthrough the intimate humaninteractionbetweenforeign and local managersin
the joint venture organisation when they deal with the preparation and the
implementation of method statements.The objective of the researchwas to obtain
practical and useful quantitative and qualitative data through the main study. Against
this background,with a considerationof pattern-matchingand explanation-building
when having quantitativeanalysis,a re-designof the AssessmentInventory of the Main
Study (seeAppendix 5) was carriedout with in particular the following objectivesand
issuesbeing highlighted:
114
1. Why a methodstatementis needed
Question1 tries to explorevariousreasonswhy a methodstatementis needed.
2. Form of method statement
Question2 tries to identify the form of a methodstatement.
3.Background to a method statement
Question3 tries to identify the backgroundknowledgeof a methodstatement.
4.Further reasons for using a method statement
Question4 tries to identify further reasonsfor using a methodstatement.
5. Authority over a method statement
Question5 tries to identify which party has the authority to control a method statement
in
involved
the processof
identify
Question
6
the
to
tries
are
mainly
people
who
while
discussinga methodstatement.
6. What knowledge is being transferred
Question 7 and 9 try to identify what knowledge is needed between foreign and local
knowledge)
knowledge
(hard
in
technology
explicit
terms
or
managers
of construction
Question
knowledge),
knowledge
(or
know-how
tacit
whereas
or
soft
and management
8 and 10 try to identify what knowledge were actually transferred in terms of hard
knowledgeand soft knowledge.
7. How knowledge transfer takes place
Question 11 and 12 try to identify the different channels of explicit and tacit knowledge
transfer while Question 13 tries to identify the pattern of knowledge transfer.
8. Successof knowledge transfer
Question 14 tries to identify the influence factors of knowledge transfer, while
Question 15 and Question 16 try to identify the factors in achieving a successful
knowledge transfer and the motivators of knowledge transfer.
115
9. Critical and key issues
Question 17 tries to identify the critical and key issuesof knowledge transfer in the
processof construction.
10. Aftermath of knowledge transfe
Question18,19 and 20 try to identify the aften-nathof the knowledgetransfer.
8.3. Main Study Data
The results presented in this chapter are a summary of 450 copies of assessment
inventory, which were returned to the researcher by the respondents from Jiangsu
Province, Henan Province and Xinjiang Autonomous Region, PRC. The assessment
inventory was designed both in English and Chinese. English versions were delivered
to foreigners while Chinese versions were delivered to local managers with the
6
Appendix
in
the
three
the
presents a
regions.
assistance of
construction authorities
Henan
Province
from
Province,
Jiangsu
Study
Main
and
the
the
summary of
receipts of
Xinjiang Autonomous region.
8.3.1. Respondents
With the help and support of the Construction Management Bureaux of Jiangsu
Province, Henan Province and Xinjiang Autonomous Region, PRC, the copies of
assessment inventories
were distributed
among joint
venture companies and
fifty
hundred
four
in
China.
There
in
the
three
were
regions
construction enterprises
(450) respondents from the three regions. These respondents were key personnel from
large-middle
sized construction
and
venture companies
within
Some
the
departmental
companies.
managers and engineers of
enterprises, who were
Sino-foreign joint
respondents were the decision-makers of the enterprises, such as presidents, general
joint
deputy
managers,
general managers, chief engineers, and chief economists of
to
be
that
It
consultants
noted
enterprises.
should
venture companies and construction
the World Bank and to the Chinese Government who are working at the Xiaolangdi
Project are also among the respondents. Table 8.1 shows the location and the whole
sample of respondents in the Main Study.
116
Regions in PRC
in
Chinese
Foreign
Total in
Total
respondents
respondents
regions
the Study
450
9
61
61
.1
161
161
128
128
128
100
100
1
Xioalangdi
52
Jiangsu Province
161
Henan Province:
Xinjiang Autonomous Region
Table 8.1. Location andwhole sampleof the respondentsin the Main Study
8.3.2. Response Rate
A numberof correspondingfactorswere carefully consideredin order to have accurate
key
inventories.
Some
designing
from
the
the
assessment
answers
respondentswhen
words, such as, main, mainly, principal, primary were highlighted in the assessment
inventories.However, many respondentschosemore than one answerto eachquestion
in the assessmentinventories, which makes different number of the total copies of
assessmentinventories received and the number of total responses.Pleaserefer to
Appendix 8 and Appendix 9, which showsthe record of different numberbetweenthe
inventoriesreceivedand the total responses.They havebeen
total copiesof assessment
characterisedas"with one answer"and"with more answers".
8.4. Interpretation of the Main Study Findings
inventories,which are all relatedwith
There are 20 questionsin total in the assessment
the processof knowledgetransferbetweenforeign and local partnerswhen dealingwith
the method statement.The interpretationadoptsthe approachthat the analysisfollows
in order and advancesstepby step.Firstly the correlationbetweenknowledgetransfer
and economicdevelopmentby incorporatinga PearsonCorrelation analysismethod is
is
by
from
data
then
the
three
the
explained
presented;
regions
summary of
collected
presentingpie charts; finally the data are discussedand analysedby linking with the
correlation presentedpreviously. Bar charts of different implications in the three
different economiesare presented,which provide visual aids in understandingthe
1It hasbeenconfirmed by the constructionauthority of the threeregionsthat there were efforts madeto
involve both foreign and local managers.However,it appearsthat thereare no foreign respondents.
117
relationshipsbetweenknowledgetransferand economicdevelopmentamongthe three
regions in China.
8.4.1. Exploring the Correlation between Knowledge Transfer and, Economic
Development
In Chapter Seven, the three geographical sources of data for the Main Study were
discussed.These were the provinces of Jiangsu, Henan and Xinjiang Autonomous
Region. Further, in the case of responsesfrom Henan, a differentiation was made
betweenthosereturnedfrom the Xiaolangdi Project and 'others'.This was consideredto
be advisable,owing to the size and potential influence of the Xiaolangdi Project itself,
and its potential for skewing the general response from Henan Province. It was
consideredto be potentially informative to explore the relationshipsbetweenaspectsof
knowledge transfer and the level of economic development of each of the three
geographicalsourcesof data. To enable a more detailed analysis of the relationship
between knowledge transfer and economic development,a correlation analysis was
carried out with the economic indicators and the data derived from the three sample
places,the measureof associationadoptedwas Pearson'sr. In order to do this, the first
stepwas to constructa notional but valid scaleof economicdevelopment.The basisof
this scale was the economic data presentedin Chapter Seven, in particular the ten
indicators of economic developmentobtained from ConstructionStatistical Yearbook
of China andpresentedin Table 7.2 of ChapterSeven.
1. Creation of a notional scale of economic developmen
The ten indicators of economicdevelopmentin constructionin question are shown in
Table 8.1 (below).
1. Gross output value of construction (10000 yuan)
2. Number of projects (projects)
3. Construction quality projects (projects)
4. Statisticson machineryand equipment(pieces)
5. Value addedof construction(10000yuan)
6. Total floor spacecompleted(10000sqaremetre)
7. Total capital and structureof total assets(10000yuan)
8. Liabilities and creditors'equity (10000yuan)
19.Total pro it (10000 yuan)
I10.Total numberof constructionenterprises(companies)
fable 8.1. Indicators of economic development
118
In each case, the results for Jiangsu, Henan and Xinjiang were computed as percentages
of the national total figure. The resulting percentages were treated as relative
developmentscoresfor eachof the ten indicators,and on that basiswere addedto give
an aggregatedevelopmentscorefor each.
1. Gross output value of construction
2. Number of projects
3. Construction quality projects
4. Machinery and equipment
5. Construction added value
6. Floor space completed
7. Total assets (10000 yuan)
8. Investors' equity
9. Total profit
10. Construction enterprises
Aggregate score
Jiangsu
0.1174
0.0941
0.1110
0.1001
0.1032
0.1224
0.0887
0.1041
0.1033
0.0724
1.0168
Xinjiang
Ilenan
0.0323 0.0125
0.0438 0.0 175
,
0.0502 0.0129
0.0436 10.0115
0.0313 10.0136
0.0387 10.0109
0.0261 0.0138
0.0241 0.0129
0.0237 -0.0040
0.0448 0.0147
10.3586 10.1163
Table 8.2. Economicdevelopmentscoresfor the threegeographicaldatasources
For simplicity in graphical scaling, the data were then simply transformed into a
'normalised'index, with Jiangsu(raw score 1.0168)being treatedas 100. This resulted
in the following 'developmentindex' for the threeregionsin question:
Jiangsu
Henan
Xinjiang
100
35.27
11.44
Table 8.3. Notional developmentindex for the three geographicaldatasources
2. Correlationof Main Study Data with Notional Scoresof EconomicDevelopment
Next, thesenewly creatednotional economicdevelopmentindices for the geographical
sourcesof datawere testedfor associationwith 19 of the 202setsof responsesfrom the
function
This
in
For
CORREL
function
Excel
the
the
main survey.
was used.
purpose,
(in common with most similar statistical routines) produces a value for Pearson's
product momentcorrelation coefficient,r. 'This coefficient takes values from +1 to -1
and is given by
2 QuestionI of the inventory surveywas an openquestionand no quantitativedataresulted.
119
(xi - x) (yi - y)
(n-1) s,, s,
where Exi = sumof the variablex of all the n measurements,
and
Iyj = sum of the variabley of all the n measurements
s,, = standarddeviationof x
sy = standard deviation ofy
The sign (+ or -) indicatesthe direction of the relationship (positive or negative),and
the number indicates the strength of the relationship. In the following analysis, values
lessthan 0.3 have beendescribedas 'weak';between0.3 and 0.5 as 'moderate';0.5 and
0.6 as significant, and 0.7 and aboveas 'strong'.The resultsof the correlationare shown
in Table 8.4. (below).
Xinjiang
Pearson'sr
Comment
Formal document 65.64% 42.61%
41.58%
0.975
Strong+ve
Sketchor note
Verbal
19.63% 56.52%
32.67%
-0.578
Significant -ve
14.72% 0.87%
25.74%
Handbook
22.44%
PreviousMS
16.67% 16.10%
1
55.77% 53.00%
45.00%
16.10%
21.00%
Jiangsu Henan
How did you
communi cat e
method
statement?
Form of
method
statement
Contract
document
Handmade
Main reason Task Complex
Resources
Which party
was mainly
involved
9.00%
25.00%
18.52% 3.74%
4.00%
36.42% 33.64%
51.00%
25.93%
11.21%
17.00%
Requiredby client 19.14% 51.40%
28.00%
122.00%
Work guidance
Which party
had the final
say
5.13%
14.81%
Local
16.97% 4.58%
-0.196
0.983
-0.667
0.861
-0.999
0.961"
-0.595
0.788
Weak -ve
Strong+ve
Significant -ve
Strong+ve
Strong-ve
Strong+ve
Significant-ve
-0.505
Strong+ve
Significant -ve
Weak -ve
Weak +ve
30.00%
Together
24.85% 3.05%
158.18% 58.00%
-0.024
0.079
48.00%
0.719
Strong+ve
Local
7.83%
30.75%
13.27%
Foreign
-0.470
16.87% 12.25%
Together
75.30% 57.00%
30.61%
I
56.12%
-0.516
0.975
Moderate-ve
Significant -ve
15.79%
30.69%
84.21%
69.31%
31.31%
1
168.69%
-0.675
0.675
Foreign
Main needed Cnstr. technology 16.56%
knowledge
Mgnt know-how 83.44%
Main actual Cnstr. technology 33.12%
knowledge
IMngt know-how 66.88%
33.70%
'66.30%
Strong+ve
Significant -ve
0.524
Significant +ve
Moderate +ve
-0.524
IModera
120
Main needed Explicit
knowledge
Tacit
33.77% 68.22%
50.98%
66.23% 31.78%
49.02%
-0.706
0.706
Main actual
knowledge
Explicit
48.08% 51.64%
46.32%
0.071
Tacit
51.92% 48.36%
Main channel Conferences
(explicit
Meetings
knowledge)
Seminars
Training
Main channel Job training
(tacit
Telephone
knowledge)
Social
Principal
pattern of
transfer
Main
influencing
factor
29.80% 20.18%
_53.68%
30.61%
Weak +ve
30.46% 53.51%
13.27%
0.178
Weak +ve
27.81%
50.00%
11.92% 12.28%
6.12%
-0.387
0.670
17.86% 40.00%
12.12%
-0.064
Moderate-ve
Significant +ve
Weak -ve
22.14% 19.23%
22.22%
0.235
Weak +ve
39.29% 20.51%
53.54%
-0.183
0.740
Weak -ve
14.04%
Chancemeeting
Foreign- local
28.66% 53.85%
112.12%
28.28%
Local - foreign
14.63% 7.69%
33.33%
2- way process
56.71% 38.46%
38.38%
Culture
9.93%
Language
30.46% 75.83%
32.32%
.25.25%
Common
objective
Socialvalues
Mutual respect
36.42% 5.00%
20.71% 20.26%
-0.245
-0.800
14.14%
-0.166
0.853
Weak -ve
Strong+ve
23.18% 5.83%
28.28%
0.042
Weak +ve
18.13% 35.65%
-0.962
0.921
Strong-ve
Strong+ve
Strong+ve
13.33%
-0.498
0.967
60.63% 46.96%
Co-ordination
21.25% 17.39%
15.63%
0.999
Mutual benefit
44.74% 24.37%
40.00%
0.466
Collaboration
41.45% 24.37%
36.15%
0.538
Completetask
Time
13.82% 51.26%
23.85%
11.69% 2.88%
5.05%
-0.499
0.877
17.31%
23.23%
0.076
Safety
28.57% 36.54%
35.35%
-0.921
Quality
37.66% 43.27%
36.36%
-0.083
Implemented
13.33% 17.05%
21.00%
Revised
83.64% 61.24%
69.00%
Rejected
3.03%
21.71%
10.00%
By the local
18.29% 10.75%
12.63%
By foreigner
15.24% 14.55%
28.42%
Compromise
61.59% 55.00%
48.42%
-0.676
0.966
By third party
4.88%
19.70%
10.53%
-0.603
29.88% 34.88%
f70.12% I
__
165.12%
29.00%
I
171.00%
Action with
method
statement
after
If revised or
rejected how
resolved
Work carried Normally
out...
Better
Strong+ve
Weak -ve
Moderate-ve
Strong+ve
Strong-ve
35.42%
1
48.96%
Principal
issueresolved Cost
Weak -ve
-0.070
0.190
Primary
successfactor Co-operation
Principal
motivator
Strong ve
Strong+ve
Weak +ve
22.08%
-0.962
0.819
-0.596
0.875
-0.122
0.122
1
Moderate+ve
Significant +ve
Moderate-ve
Strong+ve
Weak +ve
Strong-ve
Weak -ve
Strong-ve
Strong+ve
Significant-ve
Strong+ve
Significant-ve
Strong+ve
Significant -ve
Weak -ve
Weak +ve
Table 8.4. The correlation betweenknowledge transfer and economicdevelopmentin
Jiangsu, Henan and Xinjiang, PRC
121
There follows a step by step interpretationand analysis of the findings. Table 8.4.
indicatesa numberof correlationbetweenaspectsof knowledgetransferand economic
development in Jiangsu, Henan and Xinjiang. According to the correlation results
shownin Table 8.4, the relationshipbetweencertain aspectsof knowledgetransferand
economicdevelopmentcanbe predicated.
8.4.2. Explaining the Implications for Knowledge Transfer
In accordancewith the sequencesand naturesof the questions,given the analytical
strategyof pattern-matchingand explanation-building,ten major themestogetherwith
the implication for knowledgetransferarepresentedas follows:
1. Why is the Method StatementNeeded
In the main study, this themeis a startingpoint, lefl with an openanswer,which is used
to collect various opinions towards using a method statement.It should be noted that
almost all of the respondentsin the three regions returnedthe assessmentinventories
in
Fortunately
the
this
respondents the
a majority of
without answering
question.
Xiaolangdi Project answeredthis question. 45% of the 61 respondentsreturned the
assessmentinventories without answer.However, 55% of the 61 respondentsreplied
with answers. Some even wrote a paragraph to express the reasons why the
constructionmethod statementwas needed.The analysis suggeststhat there are two
(A).
is
(F),
is
functional
One
the
other administrative
categoriesof answers.
category
Table 8.2 shows the briefing record of various key reasons that the respondents
provided,which havebeencategorisedas"F" and"A".
Table 8.2. Key answersto QuestionI in the AssessmentInventory
Question:
Why did you need to determine
the method
Functional
Administrative
statement?
Kev Answers:
"Method statement is important to guarantee quality, time and
cost of the project".
F
"This is in accordance with requirement ofthe contract".
A
"This is in accordance with IS09001".
A
"Method statement is very effective".
F
"Method statement is neededfor the resource allocation
F
122
A
"This isfor the satisfactionof the client".
"For health and safeV'.
A
"It helps to solve constructionproblems".
"For the administrationof the contract'.
F
A
(Please note that the following answers are provided by
respondentswho gave their titles and positions as they are
recorded).
"Nothing cannot be doneproperly without methodstatement".
Senior
F
Engineer
PhD
and
candidate
-A
"Using methodstatementcan clarify aims and responsibilities
of both parties so that the task can be completedwith high
quality ". -A SeniorEngineer
F
"Method statementis the best way to solve variousproblems,
improve productivity and make up the shortcomingsof the
F
original plan". - ProjectManager
"Method statementis a way to shorten the time of completion,
to guaranteethe quality and improve logistic management".An Engineer
"The speciality of project investment requires the use of
methodstatement".- An Engineer
F
"Method statementis an effective way to combine technology
and management'.- An Engineer
F
"Method statementagreeswith natural law". - An Engineer
"To ensurethat the work is carried out orderly, efficiently and
F
safely". - Head Consultant,Adviser and Engineer
"To organise a repetitive task in a consistentmanner". -A
PlanningAdviser
"Using method statementis mandatory". -A
Engineer
F
Project Service
"To satisfy the contractual requirementsand in order to carry
out the work". - Managerof Hydro-MechanicalDepartment
"Method statementis one of the most important documentof
the construction, which has a big influence on quality,
F
A
organisation and cost'. - Managerof Work Department
A
123
2. Form of the Method Statenicnt
As regards with the form of method statcmcnt, 3 choices in flic assessmentinventory
were provided. They are "fornial document", "sketch or note" and "verbal". Aniong the
total of 450 responses, 55.81% confinned that "fornial dOCLIIIICntS-were LISCdto
ý)
communicate the method staternent. "Sketch or note" and "verbal" account Ior 3 1.89'ý,
and 12.30% respectively. This result Implies that construction people prefer "llormal
document rather than the inforrnal means Of C011111ILMICatIOn.
Chart 2 represents these
different implications.
ri Formal document!
0 Sketch or note
r-1Verbal
Chart 2. Form of method statement
3. Foundation of the Method Statement
[:i Copyofhandbook 1
MPre\AousMS
EiContract
document
EiHandmadeon
spot
In temis of foundation of niethod staternent, 53.37% of responses in the study
responded that the forri-i of niethod staternent was rnainly based upon "contract
docurnent" while "copy of handbook" accounts for 16.59%, "prcviOLISMS- "ICCOLIntS
for 18.27% and "handniade on spot" accounts for 11.54% respectively. This I'CSLIlt
integral
be
that
that
ail
iniplies
construction people suggest
niethod staternent should
part ofthe contract docurnent. Chart 3. Foundation of niethod stateincrit
4. Further Reasonsof Using Method Statement
124
hold ditTerent views towards
It is controversial that the respondents in the three rcipons
Z:)
the further reasonsof using method statement. "Coniplicated task- accounts I'Or9-02",
"resource allocation" accounts for 37.36'Vo,",."Llidance
tý
of' work" accounts I'm- 17.1)()'//o
and "required by client" accounts for 35.12'Yorespectively. Chart 4 shoxvsthe (111TO-cilt
views about this issue.
C]Complicated task
Resource
allocation
n Guidance of work
[:)Required by client
Chart 4. Further
reasons of using method
statement
5. Authority over Method Statement
In tenns of which party has the control over the method statement issue, 59.2 1'Yoof tile
responsesconfirmed that the foreign and local partners should work "together" closely
and make decision "together" whereas 18.34% of the responses still favour "local"
partner and 22.34% of the responsesstill favour "foreign" partner.
Cliart 5. Authority over Method Statement
6. Parties Involved with Method Statement
It seerns necessary for both the foreign and local partners to always (IISCLISS
Method
statements together and solve the problems together. In file StUdy, 67.61'ý'(,of' the
responses confirined tile Issue Whereas 14.351N,of' the responses still Cavour "local"
partner and 16.74% of the responsesstill Cavour"llorcign" partner.
125
Local
Foi eip i
E] Together
Chart 6. Parties involved
with
method
statement
7. What Is Being Transferred
The empirical evidence from the interviews carried out on the Xiaolang(h ProJect has
.
shown that tacit knowledge transfer occurs from tinic to tinic durin- tile CXCCLIIIOII
01'
(F) and a local
the project between members of management pairs composed aI, OrCILý11
(L) manager. The data collected in the main Study has FurtherCOIII-11-111CLI
tile tI-M1SI`cIOf'
tacit knowledge, (management know-how). In the study, 80.28% of the responses
confirmed that management know-how needed to transfer in construction, whereas
19.72% of the responses confirmed that construction ICC1111010,11Y
needed to trallsier
between foreign and local partners. In tile Study, 68.66% of responses confirmed that
management know-how was actually transferred between Iorcign and local partners
during the construction practice whereas 31.11% of' tile responses confirmcd that
construction technology was actually transferred. (i-cf-erChart 7 and Chart 8).
IT,I
Construction
technology
M Management
knowhow
Chart 7. What neededto be transferred
120
IEj Construction
technology
[I Nbnagernent
know how
Chart8. What was actually transferred in practice.
8. Explicit Knowledge or Tacit Knowledg
It should be noted that this therne is similar to the last therne. The repetition was LISC(IIS
a check on the respondents' s understanding. It was apparent that the respondents had
no clear understanding of "explicit" knowledge and "tacit" knowledge.
In the main study, 53.180/0of responses confirmed that tacit knowled"C needed to
transfer between foreign and local partners during tile construction practice whereas
53.99% of the responses confirmed that it was tacit knowledge that was actually
I
transferred. Chart 9 shows that tacit knowledge transfer dominates tile question "What
needed to transfer" while Chart 10 shows that tacit knowledge transl'er again dominated
the question "what actually did transfer".
I-o Explicit know ledge
IM Tacit Know ledge
Chart 9. What needcd to transfer
127
[I Explicit know ledge
[3 Tacit Knowledge
Chart 10. What actUally did transfer.
9. How Was Knowledge Transferred
The study has shown that explicit knowledge is In general transferred through formal
means, such as conferences, meetings, seminars and training sessions while tacit
knowledge is transferred through informal means, such as, oil tile job training,
telephonic communication, social occasions and chance meetings. In the design of the
assessmentinventory, the intention was to know the main channels Im- both the explicit
and tacit transfer, but it seems that there is no clear trend to distinguish Which Channel
is the main channel. "Conferences" accounts for 29.95%, "niectings" accounts I'or
33.33%, "seminars" accounts for 27.54% and "training sessions" account for 10.39"o.
"Job training" account for 24.44%, "telephonic communication" account foi- 20.49(Yo,
- social occasions" account for 35.80No and "chance niectings" account 110118.170N'
However, the study corifinned that tile transfer of explicit and tacit knowledoe takes
place in a different arrangement, where they have their own special ways of' transfer.
Chart II shows the channel of explicit knowledge transfer while Chart 12 shows the
transfer.
channel of tacit knowledge
1ý
128
Conferences
Meetings
r-1Seminars
E]Training sessions
Chart 11. Channels of explicit knowledge transfer
Job training
M Telephonic
mmunication
Ei Social
occasions
r-I Chance meeting
Chart
12. Channels
of tacit knowledge
transfer
Given the dimension and channels for knowledge transfcr, the study discovers that
explicit knowledge is often transferred through WCH-StRICtured
written document while
tacit knowledge is transferred when the message is passed by. However, it should be
noted that 51.32% of the responses of foreign and local managers confirmed that
knowledge transfer in particular in terins of' management know-how is a "two-way
process" between multinational and local partners, while 33.48% of the responses
believe that knowledge transfer is one way fi-orn foreign to local and while 15.2()",,) of
the responses believe that knowledge transfer is one way fi-oni local to forcign. Chart
13 shows that "a two-way process of knowledge transfer" dominates tile process of
knowledge transfer.
129
Foreign to local
Local to foreign
Two way
process
Chart 13. Patterns of knowledge transfer
10. Factors in Achieving
g
Successful Knowledge Transfer
Barriers of Knowle(lge Transfer
In the survey of the literature of technology transfer, inany factors, such as cconomy,
people, business, and government, are cited as potential barriers to thC Success Of
technology transfer. In addition to the above dimension, tile other factors that have been
identified such as "culture", "language", "cornmon objective" and "social value" give
significant impact to the process of knowledge transfer. However, "culture" accounts
for 18.31%, "language" accounts for 40.85%, "con-urion objective" accounts for
21.36% and "social value" accounts for 19.48%. Chart 14 shows the barriers of
knowledge transfer.
Culture
Language
Ei Common objecti\e
Ei Social values
Chart 14. Barriers of knowledge transfer
Factors of succcssful knowlcdgc lmnsfclIn terms of the factors in achieving a SUccessfulknowledge transl'er, 28.87"o M' the
respondents have chosen "11111tUalrespcct", 54.461YOof' the rcspondents havc choscii
130
Main
have
"appropriate
tile
16.67%
in
co-ordination"
chosen
close co-operation while
Study. Chart 15 shows the factors of successful knowledge transt'cr.
E] Mutual respect!
N Close cooperation
[:i Appropriate
coordination
Chart
15. Factors of successful
knowledge
transfer
Motiv,atot-s of successful knowlctlge transfer
In terms of the motivators in achieving a successful knowledge, in the study, 37.94% of
the respondents have chosen "mutual benefit", 34AYN, of the respondents have chosen
have
11
27.63%
the
chosen "completion of
respondents
collaborative attitude" while
of
task" in the Main Study. Chart 16 shows the motivators of successful knowledge
transfer.
[]Mutual
benefit!
E] Colaborative
attitude
[]Completion
task
of
Chart 16. Motivators of successful knowledge transfer
11. Key and Critical Issues
In construction, time, cost, safety and quality are always important issues. I lowever, tile
data from the Main Study show that people pay more attention to quality and sal'cty
issues rather than time and cost issues. "Safety" accounts for 31.43'Noand "quality"
lbi-21.90%,.
accounts for 40.63% while "Time" accounts for9.21% and "cost" acCOL111tS
131
Chart 17 shows the di fferent implications ofthe attitude ofthe respondents towards this
issue.
OTime
Cost
EiSafety ýý
Ei Quality
Chart 17. Key and critical issues
12. Consequenceof Knowledge Transfer
During the whole life of a project contract, there are problems, some of them are
technical, some of them are personnel, some of them are easy to solve, some of them
are not. However, the discussion of a method statement is one of the ways to resolve
various problems in order to make a successful project. In tile study, 74.29% of
responsesconfirmed that the method statement was "revised" after the discussion oftlic
method statement between foreign and local partners while 16.26 of the respondents
confirmed "Implemented" and 9.45% of the respondents confirmed "rejected". ]'his
strongly indicates that the construction people are willing to exchange ideas and share
information so as to make improvement of work. Against this background, it is possible
to argue that this revised or refined method statement will contain significant elements
of
knowledge that has been flowed between the two parties when they have the
conversation, argument, and exchange of idea and information. From this study it is
reasonable to suggest that knowledge, in particular, tacit knowledge was transt'en-cd
during the discussion of the method statement, which is in this study referred to that
"tacit knowledge transfer was achieved through intimate 111,11"Ilan
interaction". Chart 18
shows that the result of the discussion of the method statement leads revision of it.
132
E] Implemented
M Re\Ased
F-iRejected
Chart IS. Revision of method statement
If this mc1hodstatement was revised or rejected, 59.47% of the responses In tile Study
confirmed that the actual method staternent was devised through comprise by both
parties, while 12.92% of the respondents confirilled "by tile local", 16.48% of tile
respondents confirrned "by tile foreigner" and 10.47% of the respondents confirilled
"by the third party". That seems tile reconfinnation of the previous findings that Mutual
benefit, close co-operation and appropriate coordination are the important factors III
achieving a successful knowledge transfer. Chart 19 shows the attitude ofcoinpronlise
in dealing with method statement.
E] By the local
M By the foreigner 1
Ei By compromise
C] By a third party
Chart 19. Compromise in dealing with method statement
133
There is no doubt that knowledge transfer is a positive thing and is important because
of the close relationship
predominantly
proposition.
majority
between knowledge
transt'er and economic development.
of 71.65% of the responses in the Study has confirmcd
A
the
Chart 20 shows the result of knowledge transter.
---
Normally
M Better
Chart 20. Consequenceof knowledge transfer.
8.4.3. Explaining the Relationships between Knowledge Transfer and Economic
Development
In the last chapter, based on the comprehensive analysis of the ecorionlic condition of
Jiangsu Province, Henan Province and Xinjiang Autonomous Region, it was conclude(]
that Jiangsu Province is in the position of having a well developed economy, Xinjiang
Autonomous Region has a less developed economy, while Henan Province is in an
intermediate position, with a newly developed economy. However, bearing in mind the
correlation between knowledge transfer and econornic development, the data allows
further comprehensive comparison between the three economics in terms of'
perspectives, attitude, and philosophical concepts, towai-ds tile phenomenon and issues
of knowledge transfer against the economic development levels.
In this section, it is intended to present and compare the different philosophy, attitude
and perspective of people towards knowledge transfer iSSLICS
So
I-C-i,
'1011S
in tl1C(1111'el-Cilt
as to identify
various associations between knowledge transtler and cconomic
development and the coherent relationship between explicit knowlCdi.ýCtl-,IllSfCl-and
134
tacit knowledge transfer. Appendix 6 shows a comparison of' data collectcd From
Jian-, su Province, Henan Provincc and Xinjiang, Autonomous Region, IIRC.
II
1. Reasons of for Usiniz a Method Statement
In the last section, the various reasons for using a method statement was explained 11,
detail. Therefore, "reasons for using a method statement- will not be dwelt upon in
order to avoid the overlapping.
2. Form of the Method Statement
In Jiangsu and Henan, there is a clear tendency for construction people to prefer to
communicate method statement through "formal document" rather than "sketch or
note". People almost give up "verbal" mechanism to communicate method statement. It
should be pointed that "verbal" communication of method statement had been almost
avoided in Henan. However, in Xinjing Autonomous Region, "formal document",
"sketch or note" and "verbal" account for 41.58%, 32.67% and 25.74% respectively.
Therefore, compared with Jiangsu and Henan, it seems that there is a lesser tendency
for managers in Xinjiang to use "formal document" rather than "sketch or note" and
verbal". It is clear that the different attitude of using method statement among the 3
regions implies that in a well developed economy people tend to communicate
important issues through a structured way, while in a less developed economy pcople
have not established the idea,
be
dealt
the
with
should
issues
important
which
appropriate mechanism. Chart 2 representsthese different implications.
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Chart 2. Comparison of fon-n of method statement
135
3. Foundation of the Method Statemcnt
In terins of the foundation of method staterricrits, a majority (53.3)7,(',) of responses
indicated that the form of method statement was mainly based upon "contract
docurnent", which has confirrned that method statement is a part of the contact and a
pre-requisite of doing construction project. It Should be noted that there is a high
percentage of respondents in Xinjiang to indicate that the form of' method statenicnt is
based on "handmade on spot", Henan is in the intermediate position, while 11,1110su
.
does not favour having method statement through -handmade oil tile spot". The
different attitude towards this point suggests a strong correlation between knowledge
transfer and economic development. Chart 3 representsthe comparlson of' foundation of
rncthod statement.
60.00%
-----I
[I Copy of
50.00%
handbook
40.00%
a Pre\Aous MS
30.00%
E] Contract
document
20.00%
10.00%
0.00%
Jiangsu
Henan
Xinjiang
Ei Handmade on
spot
Chart 3 Comparison of foundation of method statement
4. Further Reasons for Using a Method Statement
The respondents in the three regions held different views towards the further reasons of'
using method staternent. Both Jiangsu and Xinjiang favoured "resource allocation"
while Henan favoured "required by client".
Chart 4 shows the different views abOUt
this issue.
136
60.00%
[]Complicated
50.00%
40.00%
30.00%
M Resource
allocation
20.00%
[]Guidance
task
of work
10.00%
1
0.00%
Jiangsu
Henan Xinjiang
Ei Required by
client
Chart 4. Comparison of further reasonsof method statement
5. Authority over a Method Statement
In ternis of which party has the authority over the method staternent, a general tendency
foreign
by
dominant
59.21%
the
that
the
and
responses is
confirrned
of
majority of
local partners should work together closely and make decision together,
while In the
study 18.34% of the responsesstill favour the local party and 22.34% ofthe responses
still favour the foreign partner. However, Henan province prevails over the other two
regions in supporting the view that "the foreign and local parties Should work together
and solve the problems together".
This data implies that in the less developed
Chart
5
knowledge
transfer.
the
of
mechanism
economy, people are still confused about
shows which party has the authority over method statement.
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Chart 5 Comparison of authority over niethod statement
137
6. Parties Involved with Method Statement
A dominated majority (67.61%) of the responses confirmed the need 1'01-both the
foreign and local partners to discuss method statenients together and solve pi-oblems
together. It should be noted that the attitude towards this Issue IS I)OSItIN'Cly
I'CLUC(lWIth
econornic development. The "together" columns have formed into a ladder with Jiangsu
being the highest, Henan in the middle and Xinjiang the lowest. This data suggest that
knovvledge transfer and economic development has a strong relationship and positively
effected. ( refer Chart 6).
80.00%
60.00%
0 Local
m Foreign
40.00%
r-1Together
20.00%
0.00%
Jiangsu
Henan
Xinjiang
Chart 6. Parties mainly involved
7. What Is Being Transferred
Based upon the study, it is reasonable to assurnethat knowledge transfer Occurs during
the implementation of contracts of international joint venture projects. However, tile
data analysis of the present research suggests that the transfer of management knowhow dominates overwhelmingly the process of knowledge transfer. It should be noted
that there is high demand for construction technology in Xinjiang while there is a high
demand for management know-how both in Jiangsu and in Henan. Tills data suggcst
that there is more demand for tacit knowledge in a well developed economy while there
is more demand of explicit knowledge in a less developed economy. Chart 7 represents
what needed to transfer whereas Chart 8 represents what actUally did transCer in
practice.
138
100.00%
80.00%
0 Construction
technology
60.00%
m Management
knowhow
40.00%
20.00%
0.00%
Jiangsu
Chart 7. Comparison
Henan
Xinjiang
of what needed to transfer
80.00%
60.00%
[]Construction ý
technology 1
m Management
40.00%
knowhow
20.00%
0.00%
Jiangsu
L
Chart 8. Comparison
Henan
Xinjiang
of what did actually
transfer
8. Explicit Knowledge or Tacit Knowledg
The comparison of the data suggests that tile transfer of tacit knowledge dominates tile
process of knowledge transfer. However, there is the hesitation of people to express
their intention towards explicit and tacit knowledge transfer. In particular, tills is the
case in Xinjiang, where people are not clear about tile Concept of explicit all(] tacit
knowledge. However, there is a clear tendency in Jiangsu that people have signiticant
demand for transfer of tacit knowledge while Henan still remains in tile ulternic(liale
position. Chart 9 shows what needed to transfer while Chart 10 shows what did actually
transfer in practice in terms of explicit and tacit knowledge.
139
70.00%
1 60.00%
50.00%
40.00%
30.00%
r-1Explicit
knowledge
[]Tacit
Knowledge
20.00%
10.00%
n nno/-
Jiangsu Henan >Onjiang
Chart 9 Comparison of what needed to transfer
60.00%
50.00%
Explicit
knowledge
40.00%
30.00%
E)Tacit Knowledge
20.00%
10.00%
0.00%
Jiangsu Henan Xinjiang
Chart 10. Comparison of what did actually transfer
9. How Was Knowledge Transferred
It has been identified
that both explicit
knowledge
and tacit knowlcdi. ýc have special
ways of transfer. There is no agreement regarding the main channel oftralls1'er ai'1011-g
the regions.
niceting"
However,
the data show that construction
people in licnan
believe
Xiii.
bclieve
knowledge
transfer
liang
while
in
is the main channel of explicit
seminar" is the main channel of explicit
that "job training-
knowledge transt'er. III I IcIlan It is hcliCN.cd
is the main channel of tacit knowledge
transCer while Jiangsu and
Xinjiang believe "social occasion" is tile main channel oftacit knowledgc transfcrThe analysis suggests that knowledge transfer is a "two-way process". I
construction managers in Henan strongly bclievc that knowledge transt'cr take place
IM that tlICI-c is 11-aiisfel"from foreign partners to local partners" While In X111.111ing
from "local to foreign". These data SLILýgCSt
that PCOplCIII XIIIJIang are Still (111clear
about the basic elements and tile definitions of'kiio\vlcdgc transt'er. Chao II shows dic
comparison of the main channel of explicit knmvlediýe trailst'er, Chart 12 show's Ilic
140
comparison of the main channel of tacit knoxviccigetransl'Cr,while Chart 13 slio\\,s thc
comparison of the principal pattern of knovviedge transl'cr.
60.00%
50.00%
r-1Conferences
40.00%
EgMeetings
30.00%
[]Seminars
20.00%
[]Training sessions
10.00%
0.00%
Jiangsu
Henan Xinjiang
Chart 11. Comparison of main channels of explicit knowIcdgc transf'ci-
60.00%
E3Job training
50.00%
40.00%
30.00%
N Telephonic
communication
20.00%
Ei Social occasions
10.00%
E3Chance meeting
0.00%
Jiangsu
Henan Xinjiang
Chart 12. Comparison of main channel of tacit knowledgc transfer
60.00%
50.00%
40.00%
Ej Foreign to local
30.00%
0 Local to foreign
20.00%
Ci Two way process
10.00%
0.00%
Jiangsu Henan Xinjiang
Chart 13. Comparison of the principal patterns ol'knowledge transl'er.
141
10. Successof Knowledge Transfei
In ternis of which factor is the main InnucrIcIng factor oCknowled-c translCr, It should
be pointed out that a clear majority (75.83'YO)of responses III Henan I)cllc\-c t1lat
"language" is the main influencing factor and 36.42 '/o of'responses III Jianosu bc11c\,
cd
that "common objective" is the main ninuencing factor,
whereas 32.32",, of' the
responses in Xinjing, believed that "culture" is the main inflimicino I'actor. III terms of
I"I
principal factor in achieving a successful knoxvIcd9e transficr, however, there is an
C)
agreement that "close co-operation" is the primary factor in achievin-I successful
knowledge transfer. In terms of principal motivator in achieving successful knowledoe
-I
transfer, it is notable that in Jlampu 44.74% of' the respondents Ilivours -inutual
I
benefit", while in Henan 5 1.26% of the respondents favours "conipletion task", and in
Xinjiang 40.00% of the respondents favours "inutual benefit". Chart 14 slio\vs the
argument over the issue among the three regions. Chart 15 shows the compari soil over
the primary factor in achieving a Successfulknowledge transfer while Chart 10 shows
the argument over the principal motivator in achieving successful knowled(ic transfer.
I
70.00%
60.00%
50.00%
- Culture
ri
A
0 Language
40.00%
30.00%
l
20.00%
10.00%
0.00%
,
Ei Common
objective
Ej Social values
Jiangsu
Henan
Xinjiang
Chart 14. Comparison of main influencing factors
70.00%
60.00%
50.00%
[]Mutual respect
40.00%
30.00%
N Close cooperation
EiAppropriate
coordination
20.00%
10.00%
0.00%
Jiangsu
L-
Henan
Xinjiang
--
142
Chart 15. Comparison of' principal Cactor In achlevilig succcSS1,111
kilmvic(Ige
transfer
50.00%
D Mutual benefit
40.00%
1 30.00%
o Colaborati\e
attitude
1 20.00%
n Completion of,
task
b4
10.00%
0.00%
Jiangsu
Chart
Henan
16. Coinparison
Xinjiang
of principal
motivator
in achieving
successful
knoMedge
transfer
11. Key and Critical Issues
It seems that there is agreement that the construction maanoers in Xlll*',
I IC11,111
11
Ill",
111d
1
,
.
Jiangsu pay attention to quality, safety, cost and time. I loxvevcr the degree of' attention
to the above four issues decreases from "quality"
ISSLICto '11111CISSLICOradUaliv.
Chat 17 shows the comparison of these particular issues.
50.00%
40.00%
[]Time
30.00%
Cost
113
20.00%
Ej Safety
10.00%
[: I Quality,
0.00%
Jiangsu
Henan
>Gnjiang
Chart 17 Comparison oftlie kcY and critical issues
12. Afterniath of Knowledu c Ti -ansfer
.,
An interesting
liangsu,
.
61.24%
Finding of' this study is that the imkjority
in Henan
of' respondcnts,
and 69.00 (!/,, in Xinýjiang), confirmcd
statement will be redsed as a reSURordiscussion
(,S3.64",.
that the incthod
ol'tlic nictliod statcnicni.
143
ill 11,11ILS11,
method stalonew was revised or rcj co ('11",tile 11i'doritv (01.51)"'. 1
11
.
55.00'10in Henan and 48.42Vo in Xinjiang) confirmed that the actual method statement
"4'this
was devised through compromise between tile 1-01-eign
and local partners.
It seenis that this recontirms the previous 1-111(fill"s
that nuitual holellit, closc cooperation and appropriate coordination are the Important Iliclors III achlevilik, 11
successful knowledge transf-er.
No dOLibt knoxvIcdge transfer is a positiVe
Sil'IliflCM11
COIISCLILICIICCS
!lIld bC,11-S
I
because of the close relationship between technology transiler and CCO1101111C
growill.
The majority
confirmed
(70.121N, in hangsu,
the proposition.
75.12'Yo In Henan and 71.00',"o ill X111,11illig)has
Chart IS shows the reSUIt 01'(IISCLISSIIILý
a 1110110dSLOCIUCIlt
leads to the revision of the method statement. However, this issue is also positively
related with economic development,
as the "revised"
Columns have 1,01-Illeda ladder
with Jiangsu being the highest, Henan being In the middle and xlnjlamý hC111"Ilic
11
lowest. If the method staternent was revised or rejected, Chart 19 shows the actual
method statement was devised through comprise by both parties. Chart 20 shows the
improvement of work done in accordance With tile revised nictliod Statement.
100.00%
80.00%
E] Implemented
60.00%
El Re\Ased
40.00%
E3Rejected
20.00%
0.00%
Jiangsu
Henan
Xinjiang
Chart 18. Result of discussing nictliod statenicnt Icads to revision ofit
144
70.00%
60.00%
50.00%
C] By the local
a By the foreigner
40.00%
30.00%
20.00%
10.00%
Ei By compromise'
Ei By a third party
A
0.00%
Jiangsu
Xinjiang
Henan
Chart 19. The actUal method statement was devised till-OLIghC0111116SC
I
Chart 20. Improvement of work done in accordancc Nviththe reviscd method slatcnictit.
80.00%
60.00%
0 Normally,
40.00%
M Better
20.00%
0.00%
Jiangsu
Henan
Xinjiang
It should be pointed that all tile figures and the bar charts mentioncd-abovc have
formed Interesting pattems, associations and col-l-clatloll, Which \vIII be presented Ill
Chapter Nine.
8.5. Summary
This chapter has cxamincd critical issues, certaill clelliclits
and mcchall Isills, of'
knowledge transfer in temis of:
What has been transferred?
It has been confimied
both explicit
in the Main Study that durim, the kiio\\, Ic(l,, c trails1'er [)"()Ccss Of
knowledge
and tacit knowledge,
element along with explicit
however, tacit kiio\\-Ictl. ic
is a ina.lor
knowledge that lias been transilcri-cd hetween I'Orcign and
local partners.
14S
How was knowledge transferred?
The analysis of the Main Study data suggests that knowledge is transferred when
foreign and local managers have intimate interaction and work together. Ilowcvcr,
different knowledge, i. e. explicit knowledge and tacit knowledge have different way of
transfer. In fact, the nature of the knowledge has decided the way of its transfer.
Explicit knowledge is transferred in a formal or structured way while tacit knowledge is
transferred in an informal manner, or somewhat arbitrary manner.
Why was knowledge transferred?
It has been identified that the motivation is an important issue of knowledge transfer. In
order to achieve the common goal for the completion of a specific project, both foreign
involve
in
joint
local
to
significant
need
a
venture,
and
managers, who are working
knowledge
information,
transfer,
interactions
not
and
of
amounts of
and exchange
because they want to transfer knowledge, but they have to.
RelationshiD between knowledge transfer and economic developmen
The correlation between knowledge transfer and economic development in the three
economieswas presented.
146
Chapter Nine
Research Findings and Implications
9.1. Introduction
First of all, this chapter examinesthe aims and objectives of the current research.
Following that, the chapter discussesthe implications of a relationship between
knowledge transfer and economic developmentand a relationship between explicit
knowledgetransferandtacit knowledgetransferin the context of a systematicapproach
to tacit knowledgetransfer. The effect of Xiaolangdi Project itself on responsesfrom
Henan will be explored. The chapter then discussesthe implications of policy and
practice.Finally the chapterpresentsan assessment
of the contribution to knowledgeof
the study and suggestionsfor further research.
9.2. Aims and Objectives Are Examined
The aim of the study (re-statedfrom Chapter1) was to investigatethe current
mechanismsof technologytransferand the aspectsof technologytransferbetween
joint venturesin China.However,the
foreignandlocal managers
within international
aim has thereforeachievedstep by step basedon firstly the establishmentof a
theoreticalframework for analysingtechnologytransfer processof construction
industrybetweendevelopedanddevelopingcountries,secondlyon a pilot studythat
projectat Xiaolangdi,
wasundertaken
on the Sino-foreignjoint venturedemonstration
thirdly on a structuredsurveythat was carriedout in Xinjiang, Henanand Jiangsu,
People'sRepublicof China.
The objectivesof the study are thereforere-statedhere for convenienceof discussionin
this chapter.They were:
1. From the literature, to establish a theoretical framework for the tracking of the
technologytransferprocess;
2. To establishthe basicpatternsof knowledgetransferthrough a pilot study;
3. To evaluate the appropriatenessand effectivenessof the study by using a main
study;
147
4. To identify the implications of the relationship between technology transfer and
economicdevelopmentlevels.
The extent to which theseobjectiveshave achievedwill now be examined,taking the
objectivesone at a time.
Objective 1: A theoretic framework for tracking of the technologytransferprocesshas
been establishedin the study through an extensivereview of literature and the current
state of knowledge of technology transfer. What has become apparent is that
knowledgetransferis crucial during the processof technologytransferas knowledgeis
the key to control over technologyas a whole.
Objective 2: The basic patternsof knowledge transfer have been establishedthrough
the semi-structuredinterviews of foreign and local managersat Xiaolangdi during the
pilot study. Furthermore,a typical managementstructureof Sino-foreignjoint venture
in Xiaolangdi was developed,which has provided a platform for the identification of
the physical structureof the dyadic interaction.
Objective 3: Following the study of economic indicators of construction industry in
Xinjiang, Henan and Jiangsuand basedon a structuredsurvey in thesethree regions,
the appropriatenessand effectivenessof the study was evaluatedby examining the
processof dealing with constructionmethod statement.The result of the study among
the three regions has indicated strong correlation between knowledge transfer and
economicdevelopment,which will be discussedin the Sectionof ResearchFindings of
this Chapter. Furthermore,the processof knowledgetransferwas further defined with
the establishmentof the conceptand significanceof tacit knowledgetransfer.
Objective 4: The relationshipbetweentechnologytransfer and economicdevelopment
was exploredthrough the analysesof the data collected in the main study by using the
correlation technique of Pearson's Product-Moment Correlation Coefficient.
Moreover, implications of relationshipbetweentransferof explicit and tacit knowledge
havebeenidentified. However,the following text will further explain the issuesof aims
and objectivesof the current study and the researchfindings.
148
9.3 Research Findings
Are
What is the relationshipbetweenknowledgetransferandeconomicdevelopment?
Basedon
theypositivelyor negativelyrelated,or is therelationshipmorecomplicated?
the data obtainedfrom both the Pilot Study and the Main Study,this sectionwill
considerthesequestions.
9.3.1. Relationship between Knowledge Transfer and Economic Development
The study of construction activities with a comparison of the economic indicators
among Jiangsu Province, Henan Province and Xinjiang Autonomous Region suggests
a notional hierarchy of economic development. Jiangsu is at the higher level with
Xinjiang
at the lower level, and Henan is in the middle position. Analysis and
comparison of the data collected from the three regions suggests that certain aspects of
knowledge transfer is paralleled by the notional line of economic development. In other
levels
be
features
knowledge
to
that
transfer
there
with
associated
appear
words,
of
are
between
knowledge
it
differently,
development.
To
this
relationship
of economic
put
transfer and economic development is positively effected. Figure 9.1 represents a
knowledge
between
transfer and economic growth.
the
simplified view of
relationship
The arrow in the figure indicates that the demand for knowledge transfer grows as the
economy increases.
Jiangsu
Demandfor
Knowledgetransfer
Henan
Xinjiang
Figure 9.1. Relationship (notional hypotheses) between knowledge transfer and
economic growth
149
In ChapterEight (Table 8.4; Chart 2; Chart 3; Chart 5&6;
Chart 13; Chart 18) the
results showed clear relationships as presentedin Figure 9.1. between aspectsof
knowledgetransferand the different levels of economicdevelopmentas exemplifiedby
the threeregionsunderexamination.Theseaspectsare now connectedin more details.
9.3.2. The Relationship between Transfer of Explicit Knowledge and Tacit
Knowledge
A comparison based on economic indicators of the three regions suggests that in the
well-developed region there is more demand for tacit knowledge transfer, while there
is more demand for explicit knowledge transfer in the less developed region. In other
words, people in the most-developed economies are keen to obtain tacit knowledge
(soft knowledge),such as managementknow-how, while people in the least developed
economiesare keen to obtain explicit knowledge(hard technology),such as a specific
technologyto manufacturea product. Thus, the relationshipbetweenthe need for tacit
knowledge transfer and explicit knowledge transfer is X-
Shaped.This is shown
diagrammaticallyin Figure 9.2.
Need for
tacit knowledge
Need for
knowledge
transfer
Needfor
eXDlicitknowledLye
Levels of economicdevelopment
Xinjiang
Henan.
Jlangsu
Figure 9.2. Relationship (notional hypotheses)between tacit knowledge transfer and
explicit knowledge transfer
150
In Chapter Eight (page 140 Chart 7; page 141 Chart 9;) the results showed a clear
relationship as presentedin Figure 9.2. betweentacit knowledge transfer and explicit
knowledge transfer as exemplified by the three regions under examination.
Based on the above, it is suggestedthat the desire to obtain more tacit knowledge
increasesand the desireto obtain more explicit knowledgedecreaseswith the levels of
economic development.In other words, in a developing economy, people are more
thirsty for explicit or hard knowledge,such as a specific technologyto manufacturea
product that enables people to survive than for tacit or soft knowledge, such as
managementknow-how that enablesan economyto havesustainablegrowth.
9.4. Systematic Approach to Tacit Knowledge Transfer
It hasbeenrecognised
from thePilot StudyandtheMain Studyof the research
project
that tacit knowledgetransferis oftenblockeddue to the very natureof that form of
knowledge.However,as identifiedin the studies,thereare certainchannelsof tacit
knowledgetransfer,such as, "telephoniccommunication","social occasions",and
"chancemeetingat work" (referto Figure6.4.). This suggests
thatthe channelsof tacit
knowledgetransferappearto work currentlyin a somewhatarbitrarymanner.It is
to suggestthat the transferof tacit knowledgecan be more systernatised.
reasonable
knowledge
Figure 9.3 represents
transfer,wherecertain
tacit
of
a systematicmodel
influencing factors,motivation and congruenceof knowledgetransfer have been
highlighted(refer to Section6.6.7 of ChapterSix and page 131 Chart II& 12 of
ChapterEight).
For thosewishing to encouragethe transferof knowledge,it would be helpful to adopt
a more systematicapproachthat deals with the multi-faceted aspectsof knowledge
transfer. Such a systematic approach would consider all available resources,
foreseeable
influencing
factors,
and
constraints, relationships, motivators,
channels
contingenciesas a part of a dynamic whole in order to arrive at the most effective and
efficient means of meeting the knowledge transfer objectives. The successful
implementation of knowledge transfer on a joint venture project requires an
understanding of the objectives and the challenges facing the project's working
151
enviromnent, and requires the application of conceptualskills, relevant and adequate
systems, and information technology tools and concepts.
152
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9.5. Effect of the Xiaolangdi Project on Responses from Henan
As previouslyestablished,the Xiaolangdiproject was consideredby the Chinese
Governmentas an excellent example of the practice of internationalproject
Duringthe implementation
management.
of youngengineers
of the project,thousands
havebeentrainedand haveacquiredboth professionalknowledgeand management
expertise.As Zhang(1997)pointedout,"it will be a greatandanarduoustaskto assess
the social'and economicresult of knowledgetransferin Xiaolangdiproject. It is
necessaryto establisha researchinstitute,which will promoteinternationalproject
theinternationalprojectmanagement
experience
management
research
andsummarises
in
theoryandpractice
of Xiaolangdiprojectin a systematic
and
guidance
way
provide
in the future".
Appraisal of the teamworkof the Xiaolangdi Projectby the currentDeputy Presidentof
the World Bank has suggestedthe successfultransfer of managementknow-how
betweenthe local and foreign partners.The collaborativeattitudesof both foreign and
local partners has been highly valued and appreciated. Xiaolangdi Project was
international
let
Xiaolangdi
Project
was
under
completed quickly and effectively.
is
in
has
brought
World
Bank
is
far
As
the
the
what
competition.
as
project concerned,
itself,
but
funding
for
the
the
the
of
project
also accessto
not only
construction
for
has
technology
created
a
platform
expertise,
which
advanced
and management
domestic and international contractors to have technical co-operation, technology
transfer, and competition. Among all the projects founded by the World Bank,
Xiaolangdi Project hasbeena particular successin terms of time, cost and quality. The
in
hydro-power
the
has
great achievementof which
not only set up a good example
constructionin China,but also hassignificancein the world (Gouna,2000).
The analysisof the data,as it stands, from the beginning to the end of the main study
issues,
in
in
is
Henan
Province
terms
that
such as
various
shows
of
a superiorposition
'
attitude, interest, perspectiveand motivations towards knowledge transfer though the
is
Province
is
in
intermediate
Why
Henan
development
level
the
economic
position.
alwaysin a predominantposition?(Refer to Chart 3, Chart 5, Chart 7, Chart 9, Chart 19
and Chart 20 of ChapterEight). The most obvious interpretationis that the Xiaolangdi
154
Project itself has given significant impact to the Province. The Xiaolangdi Project,
located in Henan Province, involved thousands of people (technical and administrative)
from the Province during the implementation of the project. Local people and
foreigners worked together for the common goal to achieve a successful project. When
people were exposed to a certain culture or environment, the philosophy and the
1.
This again
in
be
perspective and the way of thinking would
a certain way
affected
proves that knowledge transfer did occur during the implementation of the project and
the positive effect of knowledge transfer as well.
9.6.
Implication for Policy and Practice
Knowledgetransferhasbeenshownto bepositivelyeffectedby the levelsof economic
developmentof the recipients.As discussedin the last chapter,in terms of the
thereexistsa largegapbetweenJiangsu,Henan
communication
of methodstatement,
and Xinjiang. In Jiangsu,constructionpeoplerarely use "verbal" mechanismsto
communicatemethod statement;in Henan, constructionpeople avoid "verbal".
However,thereis a strongtendencyin Xinjiang for using the "verbal" mechanism
to Chart 2 of ChapterEight). Knowledge
rather than a "formal document"(Refer
in
thatconstruction
transferis a two-wayprocess.However,it appears
people Xinjiang
feel thereis "knowledgetransferfrom local to foreign"while constructionpeoplein
Henan strongly believe that there is "knowledgetransfer from foreign to local".
Constructionpeoplein Jiangsusupportthe idea that knowledgetransfertakesplace
from foreignto local.
Given the situation that joint venture is a preferred vehicle for technology transfer to
China, it is reasonable to suggest that it would be wise and practical to promote the
establishment ofjoint ventures between Xinjiang and Jiangsu, or between Xinjiang and
Henan rather than to promote setting up joint ventures between, for example, Xinjiang
and the western countries. Knowledge transfer is not obtainable if there is a too big gap
In thestudy,thedataweredealtin two ways.Onesetof dataconcerns
Xiaolangdiin thecontextof
HenanProvince.Anothersetof dataconcerns
XiaolangdiProjectseparate
fromHenanProvince.These
two setsof dataare attachedas Appendix 6 and Appendix 7.
155
in terms of economic development between transfer and transferee, despite the
governmentsand funding agenciespromote technology transfer. It appearsthat there
are 20,500 Sino-foreignjoint venturesin Jiangsuand 2000 Sino-foreignjoint ventures
in Henan, which are operating effectively and efficiently, while statistics show that
therewere Sino-foreignjoint venturesin Xinjiang till 1998(refer to ChapterSeven).Of
course it ha4 been recognisedin the study that the joint ventures between Jiangsu,
Henan and the West countries are effective approachfor transferring technology and
developingthe economy.
9.7.
Contribution to the Understanding of How Knowledge is
Transferred
Because of the inability to meet the demands of economic growth from current
indigenousresources,the Chineseconstructionindustry relies on foreign investmentin
its various forms. This is a short-termmeasure,but in the long-term China seeksthe
additional benefit of sustainabletechnology transfer. There are various modes of
international activity that could have an effect. Of these, internationaljoint ventures
appearto be the preferredvehicle for both the recipientsin question- China - and of its
major externalfunder of constructionactivity - the World Bank.
The potential is recognisedby the World Bank. In 1993 the Bank adoptedan explicit
policy of requiring a commitment to technology transfer from its contractorsto the
construction industries of the host country. According to Abbott (1985), an essential
condition for effecting such technology transfer is the clear specification of the
requirementin a contract.The World Bank's policy in principle was that organisations
should not be awardedcontractswithout forming meaningful partnershipswith local
companies. Despite the existence of the policy there appears to be few, if any
mechanisms for ensuring that technology transfer has actually taken place or to
measureits appropriatenessand effectiveness. The World Bank has itself already
recognisedthe difficulties in monitoring such a policy. Yet this deficiency resultsfrom
the belief that there is something inherent in the technology that determines the
effectivenessof transfer. This research supports the view that the nature of the
technologyis not a major factor. In fact, the field-work undertakenin China as part of
156
this research,gives a clear indication that it is quantity of knowledge transfer that
predominantlyaffectsthe successof the technologytransfer. In fact, it further appears
that there is a pronouncedeffect in the relationship between the type of knowledge
required and the technicaldevelopmentof the recipients. An important contribution of
this researchto the efficiency of the Chineseconstructionindustry has beento analyse
the componentsof knowledgetransferand determinehow andwhy it is being inhibited.
The tracking of Method Statementsshowedthat in general,explicit knowledgeis being
readily transferred. However,it is the tacit knowledgethat hasbeenneglected. Results
from the fieldwork showed clearly that there were no systematicchannelsfor tacit
knowledgetransferin place. This fact could have an adverseinfluence on the potential
for inward technologytransfer. Tacit knowledgehas not even been recognisedas an
important factor and its transfer has been merely reliant on chance encounters. To
improve its delivery, this study points out that a more systematicapproachis required
for tacit knowledgetransfer.
Therefore, in associationwith the specification of technology transfer in a contract
framework
has
to
by
Abbott,
the
established
a
addressed
current researchproject
has
Furthermore,
the
transfer.
technology
terms
the
study
specify
and conditions of
clearly defined that knowledge transfer is crucial during the process of technology
transfer.Without knowledgetransfer,technologytransferwill not work.
9.7.1. Theoretical Contribution
This study has provided an original contribution towards an understanding of the
investigation
further
has
In
this
technology
transfer.
made
a
study
process of
addition,
into the mechanisms of the tacit knowledge transfer between international joint venture
partners. The pilot study, the main study and the evaluation of the research model for
the present research, which were designed to take place within the context of three
different economies in China, are coherently related, and therefore the aims and
objectives of the research project have been achieved. It is believed that this crossculture research with the application of a psychological methodology proves successful.
From an academic point of view, the study has produced insights into the transfer of
tacit knowledge that had not existed hitherto in an area that has attracted little previous
research. The present research focuses on the way that technology transfer has
157
developedinto knowledgetransfer, in particular, tacit knowledge transfer,which is at
the forefront of research in this area.
Furthermore,the relationship betweenknowledge transfer and economic growth and
the relationship betweenexplicit knowledge and tacit knowledge has provided further
insights and groundingfor the theoristsand economiststo addresseconomicissuesboth
at macro-economicand micro-economiclevels.
9.7.2. Practical Contribution
It should be noted that this study has provided a useful contribution to tracking the
process of technology transfer in practice. The distinctiveness of the research
programme lies in that the understanding of tacit knowledge transfer, which has been
developed and evaluated within the three different economies,
will
enable the
recipients and donor organisations as well as international funding agencies to identify
the essential ingredients of a particular aspect of technology transfer, namely the
transfer of tacit knowledge. It is believed that the theoretical framework of the research
may provide guidance and enable policy-makers within the governments, sponsors of
projects and the executives of the companies involved to address the existing
deficiencies in the process of technology transfer, and assist in development of more
appropriate arrangement for the transfer of management knowledge.
9.8. Recommendations for Further Research
The boundaryof the currentresearchhasbeenset within the contextof construction
industryin The People'sRepublicof China.However,the qualitativedatahasbeen
is
It
collectedfollowed by a comprehensive
comparison.
quantitativeanalysisand
hopedthat basedon the advancesmade in the study, the practicalassessment
of
know-howandthe furthertrackingthe processof tacit knowledgecanbe
management
approachedin future research.Ideally, the samplingplacesfor undertakingmajor
in differentcountries,possiblyrepresenting
studieswouldbe threedifferenteconomies
advancedindustrialisedcountries,newly developedcountriesand less developed
countries,ratherthan threeregionsin China.
158
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med.umkc.edii/tl,,
vbiostats/coiTseat
Copyright 1996 by T. Lee Willoughby
166
Appendix
1: A Sample of Assessment Inventory
for the Pilot Study
Date: 8h February 2000
Dear Respondent:
Subject: Knowledge Transfer in International
Joint Venture Projects in China
The researchaims to investigatethe currentmechanismsof technologytransferand
the aspectsof technologytransferbetweenforeign and local partnerswithin
internationaljoint venturesin China andto generatea model for its effectiveness.The
resultsmay ultimately assistin assessingthe efficacy of technologytransferandmay
inform decision-makersin the recipient and donor organisationsaswell asinvestors
such asthe World Bank, who imposecontractualprovisionsthat require technology
transfer.
inventorieshavebeencreatedto help identify the knowledge
The attachedassessment
components,channelsandmotivationsof knowledgetransferaswell asinfluence
factorsof knowledgetransferbetweenforeign partnersand local partnersthrough
humaninteractionsin the Sino-foreignjoint venturesin China.
The assessment
inventorieshavebeendesignedwith questionsand answersranging
from 0 to 5 grades.You may tick from GradeI to Grade5 if you agreewith the
researcheraccordingto the degreeof your agreement.Grade0 representsyour
agreementwith the authorin principle, while Grade5 representsyour complete
agreementwith the researcher.
If you have any questions or you wish to contact the researcher for more information,
please feel free to e-mail: Richard. lihua(a-)unn.ac.xik. Also, you may contact us by
telephone at: 00 44 191227 3493 or by fax at:00 44 191227 3167. Full
confidentiality of your responseswill be assured.We will be happy to share with you
the compiled results of this survey.
Thank you in advancefor your kind assistanceand feedbackyou canprovide. We are
looking forward to hearingfrom you soon.Pleaserespondby April 25,2000, at the
latest.
Regards
Richard Lihua
PhD Researcher
The Schoolof Built Environment
University of Northumbria at Newcastle
Ellison Building
Newcastleupon Tyne
NEI 8ST
The United Kingdom
167
Tl
Knowledge Transfer Assessment Inventory
Please give more details if you can besides the questions in the boxes.
How do you rate technology components
applied in the construction industry?
Hard technology
Soft technology
Management know-how
Explicit knowledge
Tacit knowledge
T2
How do you evaluate the main responsibilities of
a construction manager?
Difficulty-overcoming
Problem identification
Problem analysis
Problem-solving
Decision-making
T3
How do consider the following channels
of explicit knowledge transfer9
Conferences
Meetings
Seminars
Training sessions
Workshops
T4
How do you consider the following channels
of tacit knowledge transfer?
Toolbox talks
Telephonic communications
Social occasions
Chance meetings at work
Apprenticeships
IF5
How do you evaluate the following
motivations of knowledge transfer?
Completion of the present construction work
Having good partner in future work
Showing collaborative attitude
Win-win solution
Mutual benefit
2 13
0
1
4
5
0
1 2
3
4
5
0
1 2
3
4
5
0
1 2
3
4
5
_j
0
1
2
3
4
5
168
T6
How do you think of the following
skills of communications/interactions
Capitalise on your thought speed
Behaviour description
Listen patiently and without interruption
Strive for clarification
Feedback
_O
1
2
3
4
5
1 2
3
4
5
21 3
4
5
T7
How do you think of the following
timing and regularity of dyadic interaction?
Meeting weekly
Training sessionsat the start of the project
More toolbox talks daily
More telephonic communications daily
Meeting at social occasion weekly at the weekend
0
T8
How do you evaluate the
success of dyadic interaction?
Self-organising team
Self-controlled time
Self-arranged place
Appropriate co-operation
Appropriate co-ordination
T9
How do you evaluate the
purpose of dyadic interaction?
Solving a problem
Overcoming a difficulty
Making a decision
Expressing satisfaction
Learning from each other
Tio
How do you evaluate the
influencing factors of knowledge transfer?
Cultural differences
Language barriers
Different objectives
Social values
Technical development level
.0
1
II
I
0
1 2
3
4_ 5
0
1
2
3
4
I A
I
5
I
169
I
Appendix 2: Transcriptions of Interview in the Pilot Study
(1) Interview with
Mr. Friedrich Redie
Super Intendent
CGIC Joint Venture
Xiao Lang Di Multipurpose Dam Project
PRC
July, 1999
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
As I mentioned to you, technology transfer is very important issue in
construction industry. The understanding is that there must be
technology transfer between the developing countries and developed
countries, especially now in international joint ventures. I assume that
there is technology transfer or knowledge transfer between foreign
partners and local partners. How do you think of these issues?
It is true.
OK., well is technology transfer free of charge? How do you deal with it
when you do some transfer between you and your Chinese colleagues.
It is free.
So that is free. And why is it free?
It is free for the progress sacrifice and the completion of the project. As
we are working for the same project. The early successful completion of
the project is our common goal. As for that we are willing to transfer
what they need for free of charge.
So, this is an important motivation.
Yea, yea! Most, Most
........
It is the most important motivation for you transfer some knowledge to
your Chinese partners.
Yes.
So Mr. Radie, can you please give me an example of how you transfer
knowledge to your local Chinese partner?
know-how.
I told you
them
technical
we
oh....
call
something
.......
So, that is on day to day basis and most of the time, when you work with
from
learn
Chinese
they
you.
something
may
and
colleagues
your
Really they are expecting some kind of knowledge, in
particular management know-how.
Could you pleasetell me that generallyhow long do you spendwith your
Chinesecolleaguesin this constructionsite. Could you tell how long do
you stay in your office for one day?Justthe averagehours,for example,
8 working hours?
Most of the time. I spendhalf of the day in dealingwith various
problems.
what problems?
Both technicaland administrative.
So that is around4 hours.And how do you allocatethe other time?
Not in this office, most of the time, we are on the constructionsite.
170
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RILH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie
RILH:
Redie:
RILH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
with the Chineseengineers?
Yes.
Do Chineseengineerscometo your office from time to time.
Yes, they cometo my office.
Do you havechancesto be in their office?
Sometimes,I do.
So Mr. Redie,what I am assumingis that managementknow-how canbe
transferredover the telephone,do you believeit? Do you havesuch
experienceover the telephone?
Normally, if I tell them how to solve the problem if they phoneme to ask
for a specific inquiry. Sometimes,if I am not satisfiedwith their work, I
will tell them over the telephoneaswell. However for the important
issues,I will tell them personallyfaceto face.
How do you think of the meetings?You know, sometimesyou may have
a site meetingto discusssomeproblem?
Yes, we do. Actually, the site meetingis very important for problem
is
know,
You
decision
there
unexpected
sometimes
making.
solving and
issuecomeout and you haveto sort out asquickly aspossiblebefore
proceedingany work.
Do you go to the constructionsite and tell peopleto solveproblems.
SometimesI haveto go to the site to meetpeopleand solve the
problem on the spot.
OK. Are you satisfiedwith the performanceof your Chinesepartners?
More or less
So far so good?
(nod his head):yeah.
If you make comparison,now andwhen you startedwork at the
beginning,are you satisfiedor were you satisfiedwith their
performance?
Well, actually, I am satisfiedwith their work.
Yes, You are satisfiednow, but were you satisfiedbefore,I meanat the
beginningwhen you startedworking together?
Well, I havebeenworking with peoplefrom more than 20 countries.
Sorry, I meanon this constructionsite.
Yes, I am satisfiedwith their work. In general,Chinesepeopleare easy
peopleto work with.
Could you tell me when did you come to this construction site?
1998
So you have been here more than one year already.
Yes.
I was here four years ago, and later I went to the UK to do my research. I
used to be a consultant for some part of the project and haven't seen the
site for long time. So you mentioned you have worked in many
countries.
Yes, more than 20 countries.
171
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
That's wonderful. Ok, thereis anotherquestion,I guesstheremust be
somebarrierswhen you work with your colleaguesfrom another
countries.I meanfrom your experience,do you have such feeling
betweenyou and your Chinesecolleagues?Any what do you think the
barrierscomefrom?
Which kind of barriersdo you mean?
Well, if you work with a Chineseengineerwho can not speakEnglish
with you...
You meanthe difficulties.
Yes.
Of course,thereis, definitely. For me, the most significant problem is
communication.A lot of, or evenmost of the Chineseengineersdon't
speakEnglish. In addition,translation(interpretation),becauseof
variouspersonalityetc. also causedifficulties. I can only transmit 70%
of what I want to express.
So becauseof the languagebarrier, You can not passwhat you want
them to know and show them how to do things, thereis difficulty.
Yes, thereis a big languagedifficulty.
Have you ever find the culture difference.You know, the differences
betweenthe East and West?Sometimes,we call it culture shock.
Well, you know, I havebeenworking for so many countriesandbecome
more internationalized,so I am very flexible and culture differences
doesn't seemto be a problem for me.
So the difficulty that you think is the languagebarrier. Do you think that
things may be betterthat if your partnersarewell educatedand they can
speakEnglish andhavemore internationalexperiencesasyou?
Comparingwith the local partnerswho cannot speakEnglish and
without internationalworking experiences,the peoplewho arewelleducatedandhavemore internationalexperiencesarepreferred.
RLH:
Redie:
Have you found you learnt anything from your partners?
Sure, but not technical lesson. I learnt a lot about the national and local
culture, the customs, habits, etc. but not in the senseof technology or
technical side.
RLH:
How aboutyour colleague'sattitudeon technologytransfer?Are they
willing or eagerto transferthe technology?
Sure.Yes, what we discussedat the beginning,the strongmotivation for
transferringtechnologyis progressand successof the project. The only
way to achievethis is to transfertechnology,helping them, to work
together,not to hide, otherwise,you can not be successfulin completing
your project.
Redie:
172
RLH:
Redie:
RLH:
Redie:
RLH:
Redie:
RLH:
I think the relationshipbetweenthe Foreign andLocal partnersis just
like a marriage.Sinceyou married,that means,you have to do the best
to keepthe relationshipandto achievethe target.
Yes, absolutelyright. We haveto make effort to keepthe relationship
until the divorce.
Could you tell me when you train the local partners,what your
mechanismsis? How do you train them?A form lesson,a training class?
We just cometogetherand I explain the bestway to do it. It's not a onestop training, it's a daily work from office to the constructionsite.
BecauseI don't havetoo much time, just start the work, during the work,
I find problem andtell themhow to do. It's a long way, but the bestway,
you know, is throughpractices.And you canbe successful.
Yes, I agreewith you. Did you do the samewhen you worked in the
other countriesapartfrom China?
Yes, when I worked in Africa I did the samething before I came
to China.
Thank you very much,Mr. Redie.
173
(2) Interview with
Mr. Han Zonghai
Director, Senior Engineer
Foreign Affairs Department
Yellow River water & Hydropower Development Corporation
Ministry of Water & Electricity
PRC
July 1999
ChineseVersion:
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:
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hard technology,like construction
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technology
how,
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English Version (Translation)
Li:
Mr. Han, I know that technologytransfer is a large topic as we discussed
last time. However, I would like to further discussthis issue.There are
two typesof technologytransferin general.One is called hard technology
transfer, for example, construction technology; the other is called soft
technologytransfer, for example,managementknow-how. The focus of
my researchaims at transfer processof managementknow-how in the
constructionindustry. Take Xiaolangdi for example,the understandingis
that the foreign expertsfrom the West have transferredcertainknowledge
175
to the Chinesepartners,and vise versa.What I want to know from you is
whether there are examples of technology transfer and how was
managementknow-how transferred.
Mr. Han:
Xiaolangdi Project is a largehydraulic andpower project, which hasbeen
from
financed
by
World
Bank.
The
the
came
all over
contractors
partly
the world, especiallyfrom Europe.Their constructiontechnologyis well
developed with advanced management expertise. For example,
contractors from Germany, France and Italy. In terms of technology
transfer,there are two items, that is hard technologyand soft technology,
I call it managementknow-how. It exists from the designphase.During
the designphase,it involves designmanagement.
I cameto know the conceptof designmanagementwhen I had the project
management training in Canada in 1997. In China, we regard
"engineering" as project itself. As a matter of fact, "engineering" means
"engineering management"or "engineering control". This covers the
finish
When
designing
to
the
project.
and completing
whole processof
the design and when to finish the constructionhas been scheduledin a
plan. This is managementknow-how.
It is not obvious that knowledge was transferred in terms of design
management.However,the transferof managementknow-how take place
from time to time during the constructionof the project. The channelof
transfer are "by telephone", "interaction or conversation", "through
lot
have
learned
We
"through
a
contract management".
meetings" or
from foreignersand they learneda lot from us aswell.
In terms of the constructionof hydraulic and power project, the Chinese
difficulties
it
force
is
do
to
as
any
without
and complete
construction
able
the hydraulic and power technology in China is fairly advanced.If you
is
job,
do
Chinese
the
the
to
the
answer
ask whether
engineersare able
"yes". If you ask whether the Chineseengineersare able to do the job
itself
Management
be
this
will
answer.
complicated
well,
will
a
contribute a lot to the question. It is an important achievement to
introduce foreigners to the Xiaolangdi project. They have brought
in
Xiaolangdi.
them
they
with
when
along
work
expertise
management
176
Foreign contractorshave a strict and systematicmanagementprocedure
in terms of construction,which covers daily communication,meetings,
etc. Working togetherwith foreigners,the Chineseconstructionforce has
to learn from them. They have to work in the way through which the
foreignersdo. Otherwise,there will be claims againstthe Chineseside.
The foreign expertshave brought new blood to the Chinesemanagement
system. The Chinese engineersand workers learn to become familiar
with the advanced managementsystem gradually. The conceptually
acceptationof the scientific managementsystemis a contribution to the
constructionof the Chinesehydraulic andpower engineering.
Li:
I understandfrom what you have been talking that technology transfer
occurs from time to time in Xiaolangdi. Could you explain to me how
was it transferred?
Han:
As my observation,there are two dimensions. One is called active way,
the other is called passiveway. In an active way, people are willing to
losing
In
technology
transfer.
of
way,
people
are
afraid
accept
a passive
face, to be looked down, they have to learn and acceptnew knowledge,
otherwise,the worst will be that theremight be claim againstthem.
Li:
Do foreigners and Chinese engineers have sufficient time to work
together?
Han:
They work in the same office.
Li:
Thank you
177
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Appendix 5: AssessmentInventory in the Main Study (English Version)
METHOD. OF W0PJdNG
PROJECT
-*RESEARCH
POSITION OF RESPONDENT:COPJSU.LT'J)VC fN(d#eDATF-.;
ANSw'fi'A ro Posr
coAir&#crv4j.
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My researchinterest is how*solutionsto constructionproblemsare resolved.I would likeO
to haveyour help in deterinining'theinteractionbetweenlocal-and foreign managers.To
focus the process,I would like you to considera particularbuilding task, whýre you
neededto determinethe method.Wastherea formal met4od.statementor did you devise
your own informal schedule,sketchor notes?Could y6u,pleasechooseone answerand
tick the appropriatebox to the following questionsandif possibleadd a few notes to
explain what actually happenedafter eachquestion?
1. Why did you need to determine the method?
AJOwoler-
Sýf"A- -M DýO"sWIIMovr HS;WaD
2. How did you communicate the method statement?
(from now on I will call this the 'method statement')
51Formal document
E] Sketchor note
I
E] Verbal
What was the form of method statementmainly basedupon?
El Copy of handbook
11Previousmethodstat6ment
Contractdocument
0 Hand"madeon the spot
4. What was the main reason that a method statement was needed for the task?
Complicated
Resourceallocation
task
[]
Guidance
by
Required
the client
of
work
EX
5. Which party had the final say in terms of method statement?
0 Local.
XTogether.
OForeign.
6. Which party was mainly involved in the processof discussipg method statemefit?
OForeign.
0 Local.
Together.
181
7. What was the main type of knowledge that needed to flow between foreign and
local managers?
11 Management know-how
Construction technol9gy
8. What was the main type of knowledge that actually did flo,,ý between
foreign and local managers?
Construction technology
Management know-how
9. What was the main type of knowledge that needed to flow between foreign and
local managers?
RExplicit knowledge (e.
0
(e.
knowledge
Tacit
g. uncodified)
g. codified)
10. What was the main type of knowledge tha t actually did flo between
foreign and local managers?
El Tacit knowledge
CRExplicit knowledge
11. What was. the main channel of explicit knowledge transfer?
Seminars
Conferences
sessions
E]
XMeetings
[]Training
0
12. What was the main channel of tacit knowledge transfer?
0 Telephonic communication
R On the job training
Chance meetings at work
0 Social occasions
13. What was the principal pattern of knowledge transfer?
OForeign 4 Local
19Two way-process
0 Local 4 Foreign
14. What is the main influencing factor of knowledge transfer?
0 Social values
XCornmon. objective
Culture
OLanguage
11
182
iý
15. What is the primary factor in achieving successful knowledge transfer?
0 Mutual respect
gqClose co-operation
[]Appropriate co-ordination
16. What is the principal motivator in achieving successful knowledge transfer?
Completion
Collaborative
0 Mutual-benefit
attitude
of task
(X
[: ]
17. What principal issue was resolved in the discussion of method statement?
X Quality
0 Time
0 Safety
0 Cost
18. What mainly happened to the method statement after the discussion by
both parties?
LKImplemented
11Revised
13Rejected
19. If this method statement was revised or rejected how was the actual
method statement devised?
By
0 By the local
foreigner
By
third
the
a
party
of
compromise
[]By
,
20. How was the work being qrried
EDNorinally
% Better
out with the revised method statement?
THANKs.
RICHARDLIHUA
PHD RESEARCHER
UNIVERSITYOFNORTHU.
NMRIAAT NEWCASTLE
NEWCASTLEupoN TYNE
THE UNrMD KINGDOM
16'"HOCTOBER,2000
183
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Appendix 5: Assessment'Inventory in the Main Study (ChineseVersiLon)
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