 In this topic and further few topics we are going to talk about the process of knowledge management in multinational organizations. This topic is going to introduce to you the concept of knowledge transfer and the importance of knowledge transfer and knowledge management in multinational organizations. You know that the world today is more and more becoming a body of knowledge and knowledge is become one of the most important sources of power. It has always been a source of power but now in the knowledge economies it has become the foremost source of power in the global scenario. And since we are talking about international human resource management and the global scenarios, therefore it is a very important aspect of the global makeup, the global scenarios, the global setups, how knowledge in various different areas of the world is generated and how is it managed. So let's take a look at what is knowledge and how is it created and what is its significance. When we talk about knowledge, what are we talking about? What is knowledge? Knowledge of doing what? It's basically, it is the expertise and knowledge on how to deal with different situations and issues. So knowledge is about the understanding of how you understand a particular situation, how you are able to match it with a similar situation from your experience or from your education. And then how you are able to apply the knowledge that you already have to solve the problem or issue or situation which is in front of you. So basically the task of knowledge is to solve problems. The problem solving aspect of knowledge is the most important one. Why do you require knowledge? Because you are curious because you want to solve the problem. You have questions in your mind and you want to answer those questions and then you go through the problem solving procedure and your knowledge base is enhanced. So that is basically what knowledge is that the ability to deal with various different situations using the understanding that you already have and then applying it to that particular situation. So organizations they gain knowledge in two ways. One is internally and the other one is externally. Internally the knowledge that is gained through experimentation. All these research and development departments have the same work that they have to create knowledge, they have to solve problems, they have to do some innovative work which didn't happen before. And to solve some requirement, to satisfy some need, innovation is done. So innovation is always for solving some kind of problem or satisfying some kind of need. So internal knowledge, internally knowledge that is acquired through experimentation and innovative ideas. And it is also acquired through trainings in-house trainings which are carried out to give the knowledge from one person inside the organization to another inside the organization. So that these are the different types of internal processes of knowledge acquisition. Then organizations acquire knowledge externally as well and they acquire that knowledge externally by their interaction with the outside world. Now this interaction with the outside world could be with the customers, it could be with the clients, it could be with the government agencies, regulatory bodies, it could be with the subject experts, it could be with consultants, it could be with people who have been to certain situations. So it can be any person or any entity outside the organization with which the organization interacts. It could be the market, the entire market itself, it could be nations and ethnicities. So it could be any entity with which when the organization interacts, it understands and it learns something new which it does not know before. So the knowledge is acquired by interacting externally with external factors. And therefore the know-how which is created by these interactions within internally as well as externally with the outside the organization. It gets accumulated over time and it forms the organization's collective knowledge base. A knowledge base of an organization as it grows and enhances, it is essential that the knowledge base of the organization should also grow. Because with the same set of knowledge, an organization cannot grow after beyond a certain extent. And when we are talking about international management, that is about expansion, that is about exploring territories, that is about expanding your boundaries and all that cannot be done without enhancing your knowledge base, your collective knowledge base. This has become more and more important because researchers and academic scholars have looked into this and they now claim knowledge that is one of the major and some claim that is now the only source of competitive advantage. It is the only source of competitive advantage because all the other things they can be replicated. They can be copied, physical structures, machinery, tools, all these things, they can be replicated. But the knowledge base of the organization that resides in the minds and experiences, don't forget that knowledge is made up of your experiences. So a person's experiences, they cannot be replicated by another person's experiences. So knowledge has become one of the major and some say the only source of competitive advantage. So therefore, multinationals, they are not seen as repositories of their national imprint. It's not seen that a multinational which is for example an American organization would be American everywhere. An American organization when it goes to another territory is supposed to learn from that territory and then become a hybrid form of that, of American organization and the host country organization and they need to continuously learn from each other. And they are considered to be instruments of knowledge transfer across the subsidiaries. So wherever they go, they are considered to be instruments of knowledge transfer. They are a means, they are highways on which knowledge is transferred from one place to the other. So multinationals have a huge importance in sharing and transferring knowledge in the world from one place to the other. And they are considered to be instruments and that is and then contributing to further knowledge development. So it's not that you just transfer from one place to the other. What you do is that when you gain knowledge from one place and that is transferred to the other, then you build upon that new things that you have learned and then you use it for your further improvement and enhancement in the new location. So therefore multinational they develop knowledge in one place and exploit it in another. They use that knowledge to then later on go at another place and then use that knowledge to exploit the resources of a new place and therefore this is internal transfer of knowledge. And it implies that competitive advantage is created by its ability to facilitate and manage inter subsidiary transfer of knowledge. So the fact that the knowledge is created in one location and it is transferred to the other location to exploit the or to utilize the opportunities in another place by using the knowledge which was created in one place. That means that the internal transfer of knowledge, the transfer of knowledge in between subsidiaries is something which can lead to creation of competitive advantage, which is what we say that knowledge is something which can create competitive advantage for the multinational organizations. So this is a little bit of introduction about what is the importance of knowledge and why the knowledge is considered to be such an important aspect of management in our times.