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Organization-internal Transfer of Knowledge and the Role of Motivation: A Qualitative Case Study

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Knowledge transfer within an organization may be thought of as the process by which an organization makes available knowledge about routines to its members, and is a common phenomenon that can be an effective way for organizations to extend knowledge bases and leverage unique skills in a relatively cost-effective manner. With the increasing resource-based focus in strategy research, knowledge and ways to develop and leverage it have become key strategic issues (Barney, 1991; Peteraf, 1993).......

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Nội dung Text: Organization-internal Transfer of Knowledge and the Role of Motivation: A Qualitative Case Study

  1. Knowledge and Process Management Volume 10 Number 2 pp 115–126 (2003) Published online in Wiley InterScience ( DOI: 10.1002/kpm.170 & Case Study Organization-internal Transfer of Knowledge and the Role of Motivation: A Qualitative Case Study Thomas Kalling* Institute of Economic Research, Lund University, Sweden This paper reports a case study of a knowledge transfer programme in a manufacturing MNC, and suggests that firm-internal knowledge transfer programmes are exercises requiring a great deal of recipient motivation. In contrast to existing theory, which has a tendency to address the role of cognitive factors such as tacitness, causal ambiguity and absorptive capacity, this paper suggests that motivation needs to be in place first. In the studied case, differences in local per- ceptions of transfer ventures, aspiration and strategic ambitions, internal competition, the view on the nature of knowledge and local communication seem to explain success and failure in transfer ventures. If motivation is not in place ‘naturally’, it can be managed in different ways, including local and corporate management control routines as well as organization struc- ture. Consequently, we argue that knowledge transfer theory should not presume that organi- zational units are interested in the knowledge transferred, or that knowledge is always ‘good’. Knowledge is contextual, meaning it fits certain operations and strategies better, even in instances where intra-organizational units are homogeneous. Hence motivation is central to transfer success. Copyright # 2003 John Wiley & Sons, Ltd. INTRODUCTION describing success and failure of knowledge trans- fer. Although there are debates about the finer Knowledge transfer within an organization may be details of the roles of these factors, the factors that thought of as the process by which an organization are highlighted are relatively common from study makes available knowledge about routines to its to study. However, there are relatively few in- members, and is a common phenomenon that can depth studies of the ways in which people involved be an effective way for organizations to extend in knowledge transfer ventures behave, how they knowledge bases and leverage unique skills in a perceive these ventures, and whether these factors relatively cost-effective manner. With the increas- are connected to the subsequent success or failure ing resource-based focus in strategy research, of knowledge transfer. Thus the purpose of this knowledge and ways to develop and leverage it paper is to provide some insight into how knowl- have become key strategic issues (Barney, 1991; edge transfers are perceived and managed by those Peteraf, 1993). involved, and how this perception can affect learn- Much of the research focuses on cognition, the ing strategies and subsequent success. nature of knowledge and organizational issues, in The paper is structured in the following way. The next section discusses and summarizes theory on knowledge transfer, and the following section *Correspondence to: Thomas Kalling, Institute of Economic holds a discussion of the interpretive methodology Research, School of Economics and Management, Lund Univer- sity, P.O. Box 7080, SE-220 07 LUND. applied. Then follows an empirical section describ- E-mail: ing a knowledge transfer initiative, framed by the Copyright # 2003 John Wiley & Sons, Ltd.
  2. CASE STUDY Knowledge and Process Management structure provided by interpretations of accounts. the knowledge, is of course central in transfer We have interviewed more than 30 managers and situations (Szulanski, 1996; Simonin, 1999; cf. employees in SCA Packaging (a European paper Cohen and Levinthal, 1990). Furthermore, the value packaging supplier), representing both the sources of the stocks of knowledge at the source is a poten- and recipients of transferred knowledge, about the tial factor. The more valuable it is, the more likely it programme. The effects of the transfer programme is that the recipient will attempt to use it (Gupta have also been measured, enabling comparison and Govindarajan, 2000). The absorptive capacity between successful and unsuccessful plants. In will determine whether it will work or not. Another the subsequent sections we discuss the possible factor, related to competitive advantage, is the explanations to transfer success and its relation to uniqueness and inimitability of the knowledge. If existing knowledge transfer theory. knowledge transferred internally can also be trans- ferred externally, to competitors, for instance through personnel migration or intelligence activ- THEORY ities, there is a risk that the effects, say on costs, can be duplicated by competitors. This can lead Knowledge transfer theory has obvious overlaps to cost reductions across the industry, meaning with general knowledge management, the latter there is a risk that price and profit levels are being defined as the individual and organizational reduced overall. Here, the commonalty of knowl- activities by which organizations develop or lever- edge across actors will determine the risks of fail- age their knowledge base. The specific focus of ure (Zander and Kogut, 1996). knowledge transfer is the processes by which mem- Another risk refers to drawbacks that result from bers within an organization learn from each other, the articulation of knowledge necessary in order to without interacting with the environment. be able to transfer it. Articulation requires simplifi- Knowledge transfer theory attempts to explain cation, which means that finer aspects of the the factors that drive or hamper transfer. But in knowledge might have to be removed or be unin- terms of the dependent variable, the majority of the tentionally lost (Boisot et al., 1997). Some argue empirical research has used ‘accomplished transfer’ that the risks associated with articulating and (von Hippel, 1994; Darr et al., 1996; Szulanski, 1996), transferring tacit knowledge are so high that it is rather than, say, product quality, or even perfor- more effective to avoid transferring such knowl- mance effects (exceptions include Ingram and edge and accept the higher costs associated with Baum, 1997; Levin, 2000; Tsai, 2001, McEvily and coordinating a diverse set of organizational skills Chakravarthy, 2002). Accomplished transfer has (Grant, 1996). However, it has also been argued been measured in different ways. Sometimes it is that organizations must try to diffuse knowledge, based on individual assessments about whether otherwise it will be difficult to reap the leveraged the transfer has been successful, requested through benefits of knowledge (Sanchez, 1997). questionnaire surveys (Szulanski, 1996). In other Apart from cognitive factors, organizational con- studies, accomplished transfer has been measured text is often addressed. Geographical or perceived in terms of whether routines have been improved, proximity helps intensify communication between for instance whether labour cost per unit of output individuals in different units. Phone calls, meetings has been improved (Epple et al., 1991). and personal acquaintances across units are nor- The explanatory factors are subject to greater mally associated with successful transfer (Epple variation. The nature of the transferred knowledge et al., 1991; Darr et al., 1996; Ingram and Baum, is often addressed as an important factor (von 1997). Intensive integrative practices, such as cross- Hippel, 1994). For instance, the more tacit and com- functional meetings and broad participation from plex, the more difficult it becomes to accomplish multiple functions further increase the chances of transfer (Simonin, 1999; Argote et al., 2000; McEvily successful transfer (Hoopes and Postrel, 1999). The and Chakravarthy, 2002). The more ambiguous the richness of communication channels (integrative causes and effects of the knowledge, the more dif- mechanisms such as liaison positions, task forces ficult it is to transfer (Szulanski, 1996, 2000; Stein and interpersonal familiarity) is another factor ˚ and Ridderstrale, 2001). Besides the knowledge (Gupta and Govindarajan, 2000), as is the pre-exis- transferred itself, the cognitive abilities of both tence of social subnetworks, referred to as the inter- the source of knowledge (Foss and Pedersen, relations between organizational members, tools 2002) and the recipient (Gupta and Govindarajan, and tasks (Argote and Ingram, 2000). In terms of 2000; Tsai, 2001) are key factors. Absorptive and interrelations, arduousness (ease of communication) retentive capacity of the recipient, i.e. how well as well strategic similarity (the extent to which units equipped they are to take in, absorb, and apply are related strategically) impact transfer success 116 T. Kalling
  3. Knowledge and Process Management CASE STUDY (Szulanski, 1996; Tsai, 2000). Unsurprisingly, the findings. We do not claim to be able to generalise relative network centrality of the recipient, defined the empirical findings to a larger population, but as the number of communication linkages the unit simply to highlight things in relation to existing has, is positively associated with transfer as well theory about the ways in which knowledge transfer (Tsai, 2001). Furthermore, the perceived trust- can be perceived and managed and how it might worthiness of the source of the knowledge is influence the results of transfer processes. Further- reported to be a factor (Tsai, 2000). more, we deviate from grounded theory in our use A third group of factors falls under motivation. of an a priori theory as guidance. Grounded theory However, the role of motivation appears debatable is normally seen as purely inductive, free from the- and is less clear, according to research. Relatively ory or preconceptions. Some claim that a clear few empirical studies claim that motivation is mindset is important in order to avoid interpreting ˚ important. Stein and Ridderstrale (2001), drawing in accordance with existing theories (Glaser and on Polanyi (1962), suggest that motivational pro- Strauss, 1967; Glaser, 1978), whereas others (Miles, blems, such as unwillingness to absorb or share 1979; Eisenhardt, 1989; Yin, 1994) claim that an a knowledge, could be dealt with through socialisa- priori theory is important for positioning emergent tion, compensation, documentation, toleration, com- theory and stimulating analysis. This study munication and rotation. Motivation was also found acknowledges the latter logic and takes its starting to drive source units to transfer knowledge (Gupta point in the theories described above (see interview and Govindarajan, 2000), but not all studies have guide, Appendix A). However, the overarching been able to corroborate this, either because they ambition is to be able to develop or refine knowl- have not studied it, or because they found it to be edge transfer theory, which is done through a ‘pat- unimportant. Szulanski (1996) studied a range of tern-matching’ method (Yin, 1994). factors and found no link between motivation and transfer accomplishments. Cognitive and relational factors were more important and therefore, Szulans- THE CASE ki suggested, it is better to stimulate learning capa- cities and relations than incentives. In a subsequent The reported case concerns a corporate-spanning study (Szulanski, 2000), the downsides to motiva- knowledge transfer programme initiated in SCAP tion were elaborated upon. Highly motivated adop- in 1997. The objective of the programme is to ters might ‘exacerbate problems of implementation spread best production practices throughout the by prematurely dismissing outside help, expanding plants in order to improve performance in the seemingly straightforward modifications into major less well-performing plants. The programme is projects, making unnecessary modifications to pre- referred to as an exercise in improving production serve pride of ownership and status or to let out skills with the result that cost improvements (less hidden resentment . . . , or switching to new prac- labour and raw material per unit of output) and tices at a suboptimal moment because of unchecked price or sales volume improvements (through stan- enthusiasm’ (Szulanski, 2000, p. 24). dardized qualities, reliable supply) are anticipated. Thus, the theories on knowledge transfer rest SCAP has over 200 plants, but only some 40 (per solidly on cognition, organizational context, and, 2001) are included in the programme discussed in to a lesser extent, motivation. With this as a plat- this paper. The plants (profit centres) are spread form, a very simple theoretical frame of reference, across Western Europe, primarily. The knowledge this paper aims to shed light on perceptions of and inherent in the programme is absorbed both intern- actions in relation to knowledge transfer, and ally (from knowledgeable plants) and externally whether and how this influences success or the (from the field of science, consultants, alliance part- antecedent factors of cognition, organization and ners, machine suppliers etc.), and is continuously motivation. growing and updated. Knowledge may be articu- lated as production methods and procedures, or as recommendations, suitable under certain condi- METHODOLOGY tions and for certain machine types. Methods to reduce machine downtime, improve maintenance This is a case study, and the object of study is the routines and eliminate waste are examples. Meth- transfer of manufacturing knowledge in SCA ods are documented in memos, reports and in data- Packaging (SCAP). Epistemologically, the study bases, accessible over the corporate intranet and bears resemblance to grounded theory approaches direct distribution. Three basic outputs are mea- (Glaser and Strauss, 1967), but deviates slightly in sured per machine: average machine speed, direct its focus on interpretation rather than positivistic productivity and waste; these results are reported Transfer of Knowledge and the Role of Motivation 117
  4. CASE STUDY Knowledge and Process Management monthly from plants to head office. Each machine improvements that had been made, at each of the team sets targets annually, and follows up perfor- 40 plants. Had they succeeded in improving mance regularly. Benchmarking is made feasible, average machine speed, direct productivity and and plants who want to improve performance on waste? This is of course an important issue if one a particular machine can easily track sister plants is interested in determining whether the local per- across Europe who are performing well on that ception and management of the knowledge transfer machine, and approach them for their experience programme potentially affects the results. As it and solutions. Successful machine teams are turned out, four successful plants had improved awarded annually, on the basis of their improve- significantly on waste performance. The other two ments, at an award ceremony attended by top man- failed to improve at all. In terms of average agement and runner-up machine teams. The machine speed, even the two less successful plants programme is administered centrally, by a techni- managed to improve a few percent, but nowhere cal department, including technical experts as near the other four, which improved in a range well as one data administrator. At plant level, the between 15% and 40%. In terms of direct produc- production manager is normally responsible for tivity (annual output per full-time equivalent internal communications and the performance. machine workers), one of the two less successful did improve on par with the average of the other four, but the other unsuccessful plant actually RESEARCH DESIGN experienced a reduction of productivity of 20%. (The six plants are briefly described in Appendix B.) The main data collection method used was inter- In accordance with the grounded approach, the viewing. We basically asked respondents how structure of the presentation of the empirical find- they perceived the programme and its pros and ings below is based on observations, not primarily cons, which the success factors are, if and why on pre-existing theory, and on six dimensions in they have succeeded, their view on the nature of relation to which successful and unsuccessful knowledge, the way they manage the system cen- plants differed. trally and locally, organizational interrelations, control routines, local team work, and so forth (see Appendix A for the interview guide). We EMPIRICAL INTERPRETATIONS singled out five to six people at six of the plants (the general manager, the production manager, In the empirical study, we enquired about a range the sales manager, a supervisor, and one or two of different potential factors behind transfer success operators), located in different countries in Western or failure. Six such factors appeared to discriminate: Europe. We also interviewed staff at the central the perception of the transfer programme, aspira- technical department. In total 36 interviews were tions and strategic ambitions, the view on (firm- made, all personal. Interviews were semi-struc- internal) competition, the view on the nature of the tured, including some closed questions and some knowledge transferred, programme management open to ensure exploration. Here, the factors given and control, and local communication. This section by theory were further investigated, but we also is structured accordingly. The (theoretical) areas asked open-ended questions regarding respon- where successful and unsuccessful plants did not dif- dents’ views. One researcher conducted all the fer are not discussed here, but later in the overall interviews, but fellow researchers assisted in the comparison between empirical findings and theory. interpretation of accounts, checking too radical interpretations. Local perceptions Interviews lasted between 60 and 200 minutes, and the average run length was approximately The way that local managers and workers viewed 120 minutes. Interviews were taped and tran- the programme, in terms of their associations scribed. Where appropriate, for instance regarding and the extent to which they liked it or not, differed accounts of events, we used respondent validation between plants. The two less successful plants, (Van de Ven and Poole, 1990) to ensure reliability. referred to as plant 1 and plant 2, saw the exercise Interviewees were selected in order to provide a more as a ‘stick’ and a competition that they could broad representation of those involved. The case never win, rather than a carrot. None of the ten company has no direct influence on the intervie- respondents in plants 1 and 2 expressed a positive wees sampled. view. To provide a context for the relative success of The fact that not just methods but also the each unit we also studied up-front what sort of results of their application (machine speed, direct 118 T. Kalling
  5. Knowledge and Process Management CASE STUDY productivity and waste levels) were measured generate the margins and returns required, but meant that some plants potentially blurred the supported in specific areas, such as customer con- focus. ‘It is a performance measurement, a control tacts, technology development and information device for managers who do not know production systems. Therefore, local aspirations and strategic well, to set targets for machine men. I cannot see it intents had strong impact on whether central initia- as a carrot, it is a stick’ (supervisor). ‘It is merely a tives (such as the reported knowledge programme) section of the annual productivity budget’ (produc- are being picked up locally. tion manager). Consequently, less successful plants did not see Several respondents claimed they saw it as a production performance as an item on the strategy competition that they could never win, and that agenda. ‘We have other priorities here at the they might not even want to win it, or at least not moment, like developing our customer base. The be awarded for it. ‘The worker of the year approach advice is important, but obviously I am not familiar doesn’t fit our culture, we are not used to being with it. I don’t think we need that production given vases and dinners for doing our job, and knowledge today’ (general manager). Another gen- we are a bit too shy to be put on pedestals’ (general eral manager said ‘We don’t have time. We are not manager). Furthermore, the two plants indicated active enough, definitely not.’ This was true also that the results-orientated approach did not take where the programme fits the local strategy. ‘It local differences into account. ‘I can’t see that it fits our volume strategy well, but we simply don’t contributes a lot to the situation we are in, we don’t have the energy’ (general manager). Respondents primarily need more production improvements, also claimed that they have identified more general we need to focus on winning new customers’ (gen- inabilities to take on new methods. ‘Whenever we eral manager). try to change things here, there are obstacles In comparison, the four successful plants dis- prolonging implementation. Things simply die, played a different view. They focused both on the and so does motivation’ (supervisor). Furthermore, results and the methods, and embraced, to a great- practical arrangements facilitating participation er extent, the benchmarking opportunities. ‘It is were limited. ‘I don’t know of anybody who has about knowledge and benchmarking’ (operator). been trained on how to use the intranet. We have ‘It is a knowledge base that has helped us survive a computer somewhere that accesses the intranet over these years’ (general manager). ‘It is a library but I don’t know where it is’ (supervisor). of methods’ (production manager). They did In the successful plants the situation was differ- acknowledge that there had, previously, been fears ent. They prioritized the programme, despite per- that the programme was a corporate control exer- ceived time limitations. ‘I am deeply involved in cise designed to push up productivity. ‘There was working with taking in new methods’ (general a fear initially that it was just a big stick, but that manager). ‘I am not too active but I have appointed view is gone now’ (supervisor). Respondents also someone to be active for me. We don’t use the indicated that the programme has become integral intranet properly, though. It is a time issue’ (gener- in day-to-day routines. ‘It is institutionalized now. al manager). ‘We now have screens at each of the It is a way of living’ (production manager). ‘It has machines, where they can access the intranet. helped us develop team spirit, it is in the minds of Each team also has formal gatherings where they the workforce’ (operator). The majority of respon- exchange knowledge’ (supervisor). ‘I use the intra- dents expressed positive experiences. However, net several hours a week to seek for new methods. some respondents indicated that their level of But there is a time issue’ (production manager). activity in terms of searching, absorbing and apply- ing new methods was slightly declining. ‘I haven’t The view on internal competition been very active lately in checking which new methods there are’ (production manager). The competitive nature of the programme was addressed by many respondents, and it was a par- ticular area where views differed. The programme Aspiration and strategic ambitions was designed as a competition, with official results Because each plant investigated was run as a profit and annual award ceremonies. The programme centre and was normally measured (by corporate management stressed competition in their commu- headquarters) on operating margin and/or return nications. Posters with formula-one depot teams, on operating capital, there was substantial leeway rowing-boat teams and javelin-throwers stressed and autonomy for local units to decide upon local the sports-related component of the programme, strategies. Corporate headquarters normally intent to make employees aware of the value of allowed plants to work out for themselves how to competition, teamwork and sportsmanship. Transfer of Knowledge and the Role of Motivation 119
  6. CASE STUDY Knowledge and Process Management ‘Merchandise’ such as printed T-shirts, armbands As a consequence, they saw little reason in even and baseball caps were distributed and further trying to make use of it. ‘We have a complex pro- emphasized an athletic profile. cess that we cannot write down. There are many The weaker plants did not see competition as an parameters to think of. We once tried to list all incentive, partly because they were too far from the parameters to consider but it is impossible’ being best in the corporation at the outset. ‘Playing (general manager). ‘There is a large proportion of in Division three you don’t really think about Pre- tacit knowledge that cannot be taught or trans- mier League. Many of our guys have given up com- ferred’ (supervisor). ‘There are many variables, peting’ (production manager). ‘We only have one each machine has its own quirky bits’ (operator). machine with a chance to win, they might be com- ‘A lot of it is very tacit, we see that when certain, petitive, I don’t know really’ (general manager). more experienced people are replaced’ (production Another factor was priority: ‘We’re not driven by manager). being best’ (general manager). ‘There is always Respondents in successful plants displayed a dif- someone somewhere who has better possibilities ferent view. ‘There is a certain tacit component but and knowledge than we do’ (supervisor). In an I want to break it down’ (production manager). ‘We interesting twist of the competition concept, an wrongly believe it to be a form of art rather than operator stated that ‘competition is good here in bringing it closer to science. Some of it is art but the sense that it makes us wanting not to be the we overplay that’ (production manager). ‘Quite a worst’. lot can be written down. We can improve by writ- Successful plants embraced internal competition. ing things down’ (supervisor). Successful plants ‘The people’s perception of competition is impor- also addressed motivational factors. ‘Motivation tant’ (general manager). ‘The transfer programme drives learning here’ (operator). ‘There is a tacit means we can now compete on a constructive basis component, but then you need motivation to be across the company’ (supervisor). ‘The definitions able to take it in, it is a learning curve to pass’ (pro- we use are now agreed upon by everybody in the duction manager). ‘The fact that others [less suc- company. That was not always the case in the old cessful plants] say knowledge is tacit only means days’ (production manager). ‘I don’t think the guys they are not skilled or motivated enough to grasp think about it constantly, but they are very proud it, doesn’t it?’ (supervisor). when they get awarded’ (general manager). Plant- internal competition is still important for the Programme management and control successful plants: ‘We compete with ourselves in relation to last year and we compete between shifts’ The way the knowledge transfer programme was (supervisor). In certain plants, competition is dee- managed also differed between plants. The idea ply rooted. An operator at a plant in the former of the central programme management was that, Eastern Europe said: ‘We are used to socialistic at the least, plants should make yearly plans for competition, to be benchmarked and compared, each machine, outlining performance targets, and and to setting targets and making plans, and being monitor and feedback progress both to the central rewarded or punished depending on our results.’ programme administration and to local staff. Their ambition was that production managers should be involved in the local assessments, if not the general The view on the nature of knowledge manager. Another factor that plants appeared to view differ- The less successful plants indicate less activity in ently is the nature of the knowledge transferred. this respect than the others. ‘I am involved in the The programme clearly was an attempt to explicate planning exercise only, once a year. I never discuss what previously (and to some still is) viewed as these figures explicitly with my boss but we do dis- tacit knowledge. While all respondents admitted cuss productivity on a quarterly basis. Our actual that the knowledge required to run any particular results are reported to me by someone at head machine efficiently was not completely explicit, office. One of our guys enters the data on the intra- there were some differences in whether there is a net’ (general manager). ‘We don’t display perfor- point in trying to articulate and make transferable mance figures on the notice board nowadays’ such knowledge. (production manager). ‘I have meetings with key It appeared that less successful plants perceived operators an hour every three weeks where we production knowledge to be more tacit and diffi- might cover it’ (production manager). ‘I look at cult to articulate, than did successful plants—they the figures quarterly and focus on highlights. I go did not trust the articulated knowledge as forming through it with the production manager then too’ the only basis on which to develop work routines. (general manager). ‘We don’t really discuss the 120 T. Kalling
  7. Knowledge and Process Management CASE STUDY figures explicitly, we used to. The programme is on production performance and if it suits our pur- the backburner’ (supervisor). poses we will communicate it one way or another Successful plants did it differently. The local to our customers’ (sales manager). management was more involved. ‘I discuss these things regularly with production management, at least once a week. I go in ad hoc when needed’ (gen- DISCUSSION eral manager). ‘I get regular updates to be able to inform my sales guys about current production The empirical interpretations of accounts of percep- performance’ (sales manager). ‘I follow it up daily tions and actions in relation to knowledge transfer and have meetings with key staff three times a give some indications in relation to existing theory, week when we discuss it. Monthly I go through it discussed below. with all staff’ (production manager). ‘I communi- The empirical interpretations that there are six cate daily with operators and they really react types of differences between plants that succeed upon it. I have daily meetings about downtime, with internal transfer of knowledge indicate that overproduction and so on. The planning exercise such corporate initiatives need to consider not is dealt with rigorously with shift leaders and the just cognitive factors, but also factors connected to teams. We have broken down annual targets into motivation and local and corporate management quarterly to get better control’ (production man- control principles or routines. Indirectly, the orga- ager). ‘Within the shifts we talk about it when nizational context can be seen as a factor as well. new data is displayed. All workers know about In knowledge transfer theory, cognitive factors the performance’ (operator). such as the nature of knowledge and the absorptive capacity of recipients are key ‘knowledge barriers’ (von Hippel, 1994; Szulanski, 1996; Simonin, 1999). Local communication This study implies that cognitive factors, such as A final factor relates to plant-internal communica- causal ambiguity and tacitness, and absorptive tion of efforts and results. It appeared that the less and retentive capacity, are affected by motivation. successful plants sensed an urge to improve com- The stronger the motivation to learn, the more munication of what is being done and achieved likely it is that individuals will work harder on try- within production to other stakeholders. Improve- ing to learn and pick up new knowledge. Trying to ments of activities other than production appear to make explicit what might be seen as tacit, at least be perceived as potentially conflicting with produc- partly, may improve learning. Here, motivation is tivity improvements. Functions such as Sales or absolutely central; what else will trigger learning, Logistics appeared not to embody or understand if we assume that local knowledge and abilities the principles of the knowledge transfer pro- are naturally inflexible? Thus we propose that gramme, and as a consequence, support and atten- motivation may be a factor behind cognition in tion were limited. ‘Sometimes, the production the first place. figures are interpreted by people who do not Furthermore, the differences in motivation, in the have the whole picture’ (production manager). reported cases, are also evident in local perceptions ‘There is too much focus on productivity, you can- of transfer programmes, by the local aspirations not forget the market side, and we need to invite and strategic ambitions, by the view on internal the sales people’ (general manager). ‘We must com- competition and partly in the internal communica- municate better with Sales. We need to communi- tion. Those who perceive the programme as an cate it better with customers’ (sales manager). opportunity to learn, rather than as a ‘stick’, suc- ‘We need to communicate better across plants’ ceed. Those who see a direct fit with the existing (supervisor). Production too was seen as lacking local strategy and those who aspire to improve in understanding of the programme implications. their performance, are likely to be more keen on ‘We must communicate better with the production using the transferred knowledge. Furthermore, people, they don’t understand it very well here. the will to compete, with other shifts and other They must understand that this is something that plants, also appears to be a motivator. In a sense, makes things easier for them’ (supervisor). the lack of communication in the unsuccessful Communication was not seen as an issue in the plants also highlights a lack of motivation among more successful units. No respondent indicated local managers. If those involved in or affected by that communication is a problem. ‘I am involved knowledge transfer do not understand the purpose on a monthly basis or if there is an ad hoc debate and the contents of it, if they cannot see the reasons about something between Sales and Production’ for it, they are likely to be less motivated to support (sales manager). ‘We are informed about our and contribute. Transfer of Knowledge and the Role of Motivation 121
  8. CASE STUDY Knowledge and Process Management For all these factors, motivation is central. Moti- power of the recipient, the level of workload and vation drives cognition, and if cognition is not there resources available. In comparison, this study has motivation might help. Motivation in turn can be provided some insight on how motivation or lack driven by many things: a weak position perfor- of motivation can occur and be managed in transfer mance-wise, or by a generic will to learn and situations. We also suggested that if motivation is improve. If this ‘natural’ motivation is not in place, not in place naturally, management control routines local management control efforts may create the and organizational context may substitute. These incentive. General managers and production man- factors are slightly more popular in theory (Epple agers can set targets, monitor and feed back to et al., 1996; Simonin, 1999; Argote and Ingram, those involved to stimulate activity. In the reported 2000), while others claim they are unimportant case, we saw that successful plants had very active (Szulanski, 1996). local management in all these aspects. Further- In order to get a more detailed discussion of the more, should local management not be active role of motivation, we need to consult more general enough in inspiring their work staff, corporate (or knowledge management and organizational learn- middle if that is the case) management control ing theory. However, even within the so-called could help instead. In the above case, the corporate organizational learning track (cf. Fiol and Lyles, involvement in terms of stimulating local manage- 1985; March, 1991; Levinthal and March, 1993) the ment was primarily through the award routine. focus on learning is fairly cognitively biased. Con- The regular financial reporting between general sequently, Fiol and Lyles refrain from discussing managers and their superiors did not focus very motivation but suggest that learning is driven by much on the knowledge transfer programme, strategy, structure, culture and the environment. unless the general manager included it himself. As an interpretation, at least the first three of these The management control factor can thus be seen can be said to be connected with the concept of as a way to create an incentive to learn, when there motivation. They set the boundaries of learning is no natural desire to do so—hence it is again a by defining business, norms and beliefs, and orga- factor connected to motivation. nizational infrastructure. Similarly, Nonaka (1994) The role of incentive shines through in the discusses organizational learning and suggests empirical material. It also relates to corporate man- that there are three factors that induce commitment agement control principles and indirectly to organi- in an organizational setting: intention (sense-mak- zational context. The reported company is ing, intentionality), autonomy (autonomous organi- decentralized in the sense that local units are con- zational members that interact can help stimulate trolled financially, only, and local management has ‘unexpected opportunities’ for learning) and fluc- great leeway and is expected to formulate strate- tuation (a discontinuous environment can generate gies themselves. Horizontal communication new patterns of interaction and hence stimulate between plants is desirable but difficult with a commitment to learn). Other than these factors, profit centre structure which forces each unit to car- the so-called not-invented-here concept refers to ry all their costs. In the vertical dimension, a fairly situations where potential recipients of knowledge remote relation between plants and their superiors lack the incentive to learn, primarily because they at corporate level further isolates the local unit. do not sense that sources of knowledge have the Under such circumstances, local motivation is a proper level of authority, and that their own make-or-break factor. knowledge base has a stronger authority (Katz In relation to theory, this paper is strongly and Allen, 1982, Hayes and Clark, 1985). Katz focused on the role of motivation and incentives. and Allen, in particular, stressed the role of the per- Motivation is seldom referred to as an explanatory ception of oneself as an authority as a key obstacle factor in knowledge transfer theory. Szulanski to learning. (1996, 2000) found no or limited support for motiva- But despite the slightly stronger focus on motiva- tion being a factor, and reasoned that it may be tion within general organizational learning theory, because motivation is also associated with uncritical there is little discussion about motivation in knowl- commitment. A few, like Gupta and Govindarajan edge transfer theory. In a sense, existing theory on ˚ (2000) and Stein and Ridderstrale (2001) claim it is knowledge transfer appears to assume that all units important. Gupta and Govindarajan (2000), for within an organization are interested in a particular instance, do discuss the role of incentives and cor- piece of knowledge, and that if they are not, they porate coercion in stimulating motivation. Huber will be forced directly by corporate command to (1991) does not discuss motivation but claims that recognize its importance. It also appears as if exist- internal distribution of information is triggered by ing theory assumes that new knowledge is always the view on the relevance of the information, the ‘good’. In the case above, units are highly similar in 122 T. Kalling
  9. Knowledge and Process Management CASE STUDY terms of machinery and so on, but they have differ- as a particular factor. Motivation aspects were dif- ent strategies, even in such simple dimensions as ferent in character. the choice of generic strategy (Porter, 1980). Some This suggestion also provides some input to go for a low-cost strategy, others are working on managers. It is very important to pay attention acquiring customers through differentiation. The and provide flexibility to make sure there is moti- knowledge in question appears not to be an appro- vation among both sources and recipients in trans- priate fit for both equally well. In organizations fer situations. This could be done through enforced with greater heterogeneity, this will be emphasised control mechanisms and a less decentralized struc- even further. The proposition that theory subcon- ture, but it appears more efficient to stimulate it by sciously makes these assumptions is also reflected making sure recipients understand the value of the by the fact that most of them see the objective of knowledge in question, and by fitting the contents knowledge transfer to be accomplished knowledge and presentation of knowledge in a way that suits transfer rather than improved performance. A recipients. Benchmarking exercises, with internally number of the mentioned texts, like Epple et al. public methods and output results, awards and (1991), Darr et al. (1996), Szulanski (1996), Tsai recognition, team-building efforts, is one way of sti- ˚ (2000) and Stein and Ridderstrale (2001) use accom- mulating motivation. plished transfer as dependent variable. Exceptions A case study of this kind obviously has some include Zander and Kogut (1995), Ingram and limitations in terms of generalization to population. Baum (1997) and Tsai (2001), who all study the Instead, we discuss findings in relation to existing effects of transfer on competitive advantage, survi- theories and propose extensions or refinements in val and profitability. It should also be noted that relation to it (Yin, 1994). A one-case approach also the knowledge transfer theory we have taken into means the character of the particular case has a account is explanatory in nature. There are, as strong influence. The particular pieces of knowl- yet, few theories aimed at outlining the finer causal edge (hands-on production-related knowledge), structures that exists between knowledge and suc- organization (deep decentralization, financial con- cessful knowledge transfer. trol), strategies (local), the heterogeneous, local, character of markets, and so forth, have an impact on the interpretations. This might explain why this CONCLUSION study focuses motivation so much. In a setting where knowledge is transferred between, say, two The purpose of this paper is to increase the under- departments in a functional organization, things standing of how knowledge transfers can be per- might be different even if this case alone gives a ceived and managed, and how choices can affect strong argument why motivation should be part success. We have studied a particular knowledge of a knowledge transfer theory. transfer programme in a manufacturing MNC, The case is representative of a typical, fairly and tried to investigate what differences there mature, manufacturing industry spread out across were between units that succeeded and those European cultures, and interview respondents who did not. While theory on knowledge transfer appear to display views that may well be relevant suggests a number of different factors of which in other industries as well. In that sense, it is not almost all touch upon cognitive matters, the six unlikely that the suggestions here are applicable overarching factors found to be relevant in this elsewhere. What we have suggested is that motiva- case all had a connection to motivation. Conse- tion is important and should be understood and quently, we argue that theory should take into managed. Furthermore, we have suggested ways account these factors among others, not least in which these problems can surface and how because it might be that motivation is a factor in they can be managed. We would argue that on overcoming obstacles provided by causal ambigu- this level of discussion, the findings are probably ity, absorptive capacity and the tacitness of the relevant in other transfer settings, especially if knowledge to be transferred. Motivation is of they are industrial and if the organizational context course not a new concept in the world of manage- (decentralization, financial control, size) is similar. ment research, but it is in relation to theory specific Considering the nature of the knowledge trans- to organization-internal knowledge transfer. The ferred, it is clear that some of it is specialized not-invented-here concept (Katz and Allen, 1982; whereas some is fairly simple in nature. But in spite Hayes and Clark, 1985) and other concepts con- of that, the findings and suggestions made here are nected to motivation have occasionally been probably independent of the type of knowledge in referred to, but with limited explanatory power question. It could be that more tacit knowledge will (Szulanski, 1996). In this case, this did not surface encounter other factors and lead to different Transfer of Knowledge and the Role of Motivation 123
  10. CASE STUDY Knowledge and Process Management situations. Generally speaking, the case operations delivery performance etc) or Costs (less are not so specialized that we cannot discuss labour per output, less raw material con- knowledge transfer and the role of motivation in sumption etc). the way that we have. The role of motivation is c. Customer attitude: do they know about KTP? probably as important in a chain of hotels or super- d. Suppliers? Are they involved in any way? markets, a software vendor or a consulting com- e. Competition? pany, regardless of the nature of knowledge. The 6. Strategic context: method of analysis is generalization to theory, a. Describe the plant strategy and given the level of abstraction in theory, we b. Does KTP support or constrain the plant should be able to discuss knowledge, knowledge strategy? transfer, motivation and other concepts in the c. Is or could KTP be giving you competitive way we have here, albeit taking into consideration advantage? what settings the findings were taken from. d. Could you have good performance without In terms of future research, there ought to be the KTP? plenty of opportunities, considering the increasing 7. How would you describe the production knowl- popularity of knowledge transfer and similar meth- edge made available in KTP? ods of learning. Cases such as SCA Packaging high- a. Does KTP performance reflect desired perfor- light the need to understand better the role of mance? motivation, and what corporate managers can do b. Is KTP knowledge relevant to the plant? to stimulate it. Both case studies, cross-case studies c. Is KTP knowledge well documented and pre- and quantitative studies will be relevant, regardless sented? of which factors and independent and dependent d. Is the KTP knowledge documentation expli- variables one is interested in. cit or does it require further input from local staff to be comprehensive? e. If it requires local input, is this input easily APPENDIX A. INTERVIEW GUIDE documented? f. Does KTP knowledge help you improve 1. The view on the Knowledge Transfer Pro- operations? gramme (KTP)? E.g. a knowledge base, a bench- g. Does KTP knowledge help you challenge marking data base, a competition, a mindset, a your strategies? social ritual, gatherings etc. h. Do you actively search for knowledge? 2. What is the plant attitude now and how has it i. Do you always understand how to use the evolved over the years? new knowledge? 3. The value of KTP? j. Is it reliable? a. Is KTP valuable to the plant? Examples? k. Does it have to be proved elsewhere before b. How has it changed since 1997? you take it in? c. In what way is it valuable? Standardized l. Easy or difficult to understand? behaviour, improved work, control, impro- m. Easy or difficult to apply? ved performance, competitive advantage? n. Does it come from reliable sources? 4. What aspect makes KTP valuable? (Grade each, 8. How do you act when you apply ‘new’ knowl- 1–5) edge? a. The knowledge it contains a. Provide some examples of the plant having b. The competition identified a weakness and actively having c. The social incentives/arrangements solved the issue by using KTP knowledge? d. The benchmarking/Getting a picture of b. Are all machine groups equally good on tak- where we stand ing on and applying new knowledge? e. Being best in the group c. What, in your view, distinguishes between f. Integrating autonomous plants, a more uni- groups’ abilities to assimilate and use KTP fied organization knowledge? Which are the success factors? g. A control device for central and local man- 9. Submitting knowledge: agement a. What contributions has the plant made to the 5. KTP and the Business model: KTP knowledge base? a. Effects on activities and organization? Any b. Is the plant active? Examples? function that suffers while others prosper? 10. Local KTP work. What is done to improve KTP b. Effects on the offering: Quality (e.g. product performance: mix, standardisation, poor product quality, a. Roles and duties? Authorities? 124 T. Kalling
  11. Knowledge and Process Management CASE STUDY b. What procedures are held locally? Plans, Plant 1 is a small plant, based in northern feed back sessions, etc? Europe, with a history of satisfactory profits. How- c. How informed or educated are senior plant ever, during the last five years their profits had management about KTP? steadily declined. Its strategy is primarily aimed d. What sort of training and education is done at differentiating the offering and to acquiring internally? new customers. The workforce has been fairly e. Which functions are involved in KTP-related intact during the last five years, in terms of both work? numbers and people. f. Is there always good motivation to work Plant 2 is a large plant, one of the larger ones in with KTP? terms of output, based in northern Europe, with g. What is the role of plant management? Facil- some problematic years behind them. They have itator, controller etc? been running with a loss for some years, and are 11. The KTP structure, Support currently undergoing structural and manage- a. Centrally? What do they do to help you? ment changes and redundancy programmes. Regular, ad hoc? Examples? Their strategy is a growth-based low-cost strategy. b. Other stakeholders? Personnel turnover is not very high, compara- 12. Structural context: tively. a. Is KTP always a ‘vertical’ organizational pro- Plant 3 is a small plant, also based in northern ject, or is knowledge exchanged also directly Europe, relatively distant from urban areas. It has between plants, ‘horizontally’? a more dated capital base (machines) but a very b. Is KTP discussed on Regional general man- fine yet slightly declining profit margin. The plant agement meetings? has not done too many changes over the years— c. Who, among plant personnel, discusses KTP corporate ideas and ventures are taken in slowly. with members of other plants? The workforce as well as the management team d. Does KTP affect the general manager and has been very stable over the years. Their current plant assessments? strategy is to attract new customers. e. What would happen if KTP performance Plant 4 is mid-sized and based in Central Europe, was added to plant and general manager in a major city. It has been working hard to keep assessments? its profit levels up but have occasionally delivered 13. How would you improve KTP? red figures. Here, personnel turnover is very a. Considering your strategy, how would you high, and the average age of the workforce is change the KTP project to fit better your very low comparatively. They are keen to try out strategy? new corporate programmes be they connected b. If KTP supports your strategy, how would to production, IT, marketing, product design or you modify it? something else. They are currently working on improving customer relations while improving efficiency. APPENDIX B. BRIEF INTRODUCTION Plant 5 is also based in a large city in Central OF THE SIX CASE PLANTS Europe. It is a small plant, but has one of the lowest cost bases in the group. Over the last five years, it The six plants studied share many features, like has gone from running with a loss to making a tidy technology, machinery, skills levels (many opera- profit. This is despite having lost its major tors and workers go to the same type of schools customer some years ago. Management has chan- and colleges and they are trained regularly by the ged, but the workforce has remained fairly intact. same machine suppliers), raw material sources, Production management and cost control have basic manufacturing procedures, structures, custo- been instrumental in managing this. mer segments and physical resources. Plant 6 is one of the largest in the corporation, What separates them are, among other things, based in a rural part of Western Europe. It has culture, size, history, financial performance, and been improving its performance significantly over current strategies, but it is important to realize the last two to three years, but from a low level. that these differences appear not to be related to Cost management has been important in that trans- the differences between the plants in terms of trans- formation. The management team also changed in fer success or failure. Plants 1 and 2 failed to take conjunction with the transformation, but the work- on the knowledge transfer, whereas the other four force has remained fairly intact. They have a low- succeeded. cost strategy, based on scale economies. Transfer of Knowledge and the Role of Motivation 125
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