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Title: The sale pricing and management of the transfer of company know-how in international business
Author: Bryne, J. F.
Awarding Body: Manchester Business School
Current Institution: University of Manchester
Date of Award: 1980
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ThiD .study Is about determining the circumstances which make the international sale of corporate know-how a viable alternative to foreign direct investment and foreign trade for the manufacturing fir~. A conceptual model of intern~tional business incorporating know-how transfer (Chapter 4 ) is derived from a study of the relevant literature (Chapter 2) and an examination of the nature and embodiment of corporate know-how (Chapter 3). Preliminary research indicated that data required for statistically testing this model would be difficult or impossible to obt.ain. The research methodology was, therefore, developed around the case study approach combined with the construction and use of e computer simulation mod6J., the criteria for which are derived in Chapter 5. The computer simUlation model (Chapter 6) can handl~ up to four firms in four separate economic environments. Relationship between the firms can vary from total independence through any combination of foreign trade, know-how sale or equity investment to full ownership by one firm of the other three. The international transfers involved can be subject to the normal restrictions such as tariffs, with-holding tax and currency premia • . The trial simulotiun run (Ch~pt8r 8) was based en a hypcthetic~l product manufactured in four cQuntries. The countries chosen were based on ail analysis of patterns of UK inte.rnational business at 1974 (Chepte= 7). This trial run provided confirmation th~t the simulation model oatisfied the criteria established in Chaptar 5. The three ca3e studies conducted are described in Chapters 9, 10 and 11. One deals with a majority joint venture in Ireland in the ,mechanical engine~ring sector; the second deals with an acquisition in the us in spociali~t textilesf the third deals with a minority joi~t venture in el~ctrical engineering in Malaysia. Each case study is analysed in terms of the conceptual framework developed in Ch~ptei 4~ u~ing the corpor.ate know-how classification devised in Chapt~r 3. Thesimulation model is used to test the viability of case study ,co-inpany' s decision~. The analyses of the three cases were summarised (~hapter 12) ,and the following principal conclusions reach!3d: th'e more explicit the embodiment of corporate know-how, the ~asisr it is to transfer internationally; where manufacturing know-how is exp~icitly embodied in equipment, it can be ,successfully transferr~d without the aid of a ~ local ' p'~rtner inthEl same. product market; where it is 'implicitly embodied in people 'a: local pl!ir:tner in the same product market area J . . ia necessary or at the least veiy ·desirable; the ,smaller the market .and the lower the level of· competlU.oll; the 'less' likely, 'i:a it. that corporate .... . know-how will be explicit Know-how sales are a viable' aiternative , to foreign . trade and foreign ' direct investment, in two principal 'situations. The first is during the early part of the product life cycle where it is necessary to . Justify thti fundi':l9 o.f ' ~r.ocess , developmen~ ' bY ' ensuring a large current or future market share. Where funding is not available cut of current revenue or where current revenue cannot be expanded by exports . and overseas direct invastmeni to provide such funding, then know-how sales are a necessary expedient. The second situation is whan Industry-Explicit know-how is about to be superseded by newly developed Company know-how. In thesE circumstances the firm will not wish to invest further itself in equipment embodying mature know-how, but can make SUbstantial profit by selling such know-how in squipment-embodied form to couhtries which are about to sat up production for their own domestic needs
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Management & business studies Management