| Summary: | Globalization was the turning point when many large corporations started to begin their operations in foreign countries which provided them with new markets to sell their products as well as new manufacturing facilities. While this trend of internationalization was not new but what was interesting was the speed at which this happened with globalization. The large enterprises were the first to internationalize but later this trend was growing where SME’s have also diversified their operations in foreign countries because of new opportunities available, low cost of labor, and limited growth opportunities in their home countries (Vachini, 2005). While this expansion opens new doors, there are lot of challenges that could firm could face in the host country (Vachani, 1998). The world economy at present is moving rapidly towards a knowledge-based economy. According to OECD (1996) the term knowledge based economy is the total recognition of the role of knowledge and technology in economic growth. Knowledge is being widely accepted as the most important resource which is an intangible resource, hard to imitate and these makes it a source of competitive advantage for organizations. But, merely recognizing the importance of knowledge is not sufficient to have competitive advantage, Organizations must understand how to best manage this precious resource and it requires great effort in terms of how to create, share and utilize knowledge. If this knowledge is not managed properly it could affect growth, operational efficiency and innovation capacity (De Long & Davenport, 2003). === N/A
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