The course of know-how transfer of multinational corporations in developing countries is presently considered to be very problematic from the view of multinational corporations as well as from the view of developing countries. This paper first develops a descriptive model of this problem. The descriptive model is based on empirical and secondary statistical investigations of Japanese, US-American and German assembling industry multinationa1 corporations (automotive industry, electrical industry and mechanical engineering industry). The descriptive model shows that the know-how transfer process is a process of structural change resulting from the interaction of multinational corporations, local corporations and developing countries. Based on this descriptive model we have developed a formal mathematical model of the evolutionary process of know-how transfer by introducing "spiral loops" as a methodological extension of the system dynamics approach. The spiral loop concept which is based on new developments in evolutionary theory and in the field of artificial intelligence is used to model the qualitative changes in interaction processes which are responsible for structural change and evolution. The feedback loop concept and the concept of shifting loop dominance are used to model quantitative changes in interaction processes. The combination of the traditional feedback loop concept of system dynamics with the spiral loop heuristic allows us to model dynamic interactive processes between two or more autonomous systems in their quantitative and qualitative dimensions. Plots from simulation runs of the model show the evolutionary pattern of the existing know-how transfer process, which is considered problematic. We have analyzed different patterns of this process with model tests in order to generate policy and strategy recommendations for managers of multinational corporations and politicians in developing. countries.

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Date created

• 1986

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• Document

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• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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Collection

System Dynamic Society Records

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Collecting area

• This collection is part of the University Archives