International business and transfer of management development practices: Evidence from Sri Lanka

A recurring debate within academic circles has been the importance of learning in international business, and implications for the transfer of management practices across cultures. Several researchers have suggested that learning is a central process in international business and provides a platform for organisational learning, giving access to skills and capabilities of partners. Hence, international business is perceived as a means of knowledge transfer. On the other hand, there are many different and equally successful ways of organising management in the market economy. It is documented that when companies locate their businesses abroad, they retain and transfer their unique sets of management practices across cultures. This paper analyses the arguments on the importance of knowledge creation and implications for the transfer of management practices. By drawing upon research evidence from Sri Lanka, where international businesses operate in the export-oriented clothing manufacturing industry as wholly foreign-owned and foreign/local joint ventures, the paper also presents empirical evidence for more similar management development practices across companies of different ownership (wholly foreign-owned, foreign/local joint ventures and wholly locally owned). The paper found that although practices of management have to be derived from and reflect the national culture of the country in which an organisation originates, in the Sri Lankan context, already available management development practices are closely related to the Western world. Based on these evidence the paper argues that the unavailability of any distinct management development practices across companies may be due to several reasons, which are 1) the colonial legacy left by the British, 2) the educational background of the Sri Lankan managers, 3) the impact of technical assistance, 4) the transfer of foreign management practices by multinational companies, and 5) the impact of globalisation on management practices through industrialisation, and the use of international quality standards.