THE INFLUENCE OF TEMPORARY WORKERS ON ORGANIZATIONAL INNOVATIVENESS
By
THOMAS AREND DE VRIES
University of Groningen
Faculty of Economics and Business
MSc Business Administration, Strategy & Innovation
July, 2009
Rijksstraatweg 19 9257 DR NOORDBERGUM
06 50 990 831 devriesthom@gmail.com Student number 1737139 Supervisor: I. Orosa Paleo Examiner: T.L.J. Broekhuizen
ABSTRACT
Organizations increasingly hire temporary workers to gain flexibility and to reduce fixed costs. This has led to a rapid increase of research addressing the issue how to manage such
‘alternative’ workers. However, the effects of temporary workers on organizational innovativeness remain to a large degree unclear. This study therefore highlighted the effect of temporary workers on organizational innovativeness. For this purpose a conceptual model was developed and tested with the use of self-administrated surveys in the Dutch local government sector.
The results showed that temporary workers influence organizational innovativeness.
Evidence was found that temporary workers enhanced the knowledge combination and the substantive conflict level in a workgroup. In turn these effects enhanced organizational learning/knowledge creation, which was found to be a key antecedent of organizational innovativeness. Next to positive effects, this study found evidence that temporary workers increased the affective conflict level in a workgroup. This led to decreased knowledge sharing and, subsequently, to less overall knowledge creation & learning in a workgroup. However, the effect of temporary workers on affective conflict was moderated by the integration efforts of an organization.
The findings of this study increase the understanding of temporary workers’ influence on organizational innovativeness, and so enable organizations to profit from the advantageous influence and to limit the disadvantageous influence of temporary workers on their organizational innovativeness more effectively.
PREFACE
Having worked as a temporary employee for various organizations and having wondered how processes could be improved in those organizations, I became intrigued by the idea that temporary employees could function as a potential innovation source. In a search for literature that could help me to understand how temporary workers exactly influence organizational innovativeness, I was astonished to find that such literature is to a great degree missing.
Therefore, I devoted my master thesis to this purpose: to investigate if and how temporary workers influence organizational innovativeness.
Although some organizations were initially interested in facilitating this journey, eventually most thought it would not stick and held on tight to their mental pictures of the traditional role of temporary workers in organizations (ironically, my study shows that temporary workers could help to break with those potentially outdated views). Nevertheless, with the help of Iván Orosa Paleo and Thijs Broekhuizen I am confident that the study has become very interesting for anyone who is keen on countering the view that temporary workers are only suitable to reduce cost structures, gain labor flexibility or to replace core employees who are on leave.
INDEX
Abstract ... 2
Preface ... 3
1 Introduction ... 6
2 Literature review ... 8
2.1 A definition for temporary workers ... 9
2.2 Organizational innovativeness and organizational learning/knowledge creation ... 10
2.3 Insights in organizational learning/knowledge creation ... 11
2.4 The influence of temporary workers’ knowledge dissemination capabilities on organizational learning/knowledge creation and the competitive advantage... 13
2.4.1 Temporary workers as external knowledge sources ... 13
2.4.2 The amount of temporary workers’ knowledge as a moderating factor of the relationship between temporary workers and the combination phase ... 15
2.4.3 Integration efforts as a moderating factor of the relationship between temporary workers and the combination phase... 15
2.5 The influence of temporary workers’ characteristics on organizational learning/knowledge creation... 16
2.5.1 The influence of substantive conflict on organizational learning/knowledge creation 16 2.5.2 Temporary workers as promoters of substantive conflict... 17
2.5.3 Temporary workers as promoters of affective conflict... 18
2.5.4 Integration efforts as a moderating factor of the influence of temporary workers on affective conflict levels... 20
2.6 The behavior of temporary workers as a moderating factor ... 21
2.6.1 Organizational Citizenship Behaviors of temporary workers... 21
2.6.2 Integration efforts as the antecedent of temporary workers’ Organizational Citizenship Behavior ... 22
2.7 Control factors: organizational learning/knowledge creation enablers... 23
2.7.1 Organizational culture ... 24
2.7.2 Organization and workgroup size ... 24
3 Methodology... 25
3.1 Research method... 25
3.2 Survey items... 25
3.3 Sample... 25
3.4 The procedure ... 26
3.5 Response rate and respondent characteristics ... 26
3.6 Item analysis ... 27
3.6.1 Unidimensionality of constructs ... 27
3.6.2 Reliability ... 28
4 Results... 30
4.1 The impact of organizational learning/knowledge creation on organizational innovativeness... 30
4.2 The indirect positive influence of temporary workers on organizational learning/ knowledge creation ... 31
4.3 The direct positive influence of temporary workers on organizational learning/knowledge creation... 33
4.4 The indirect negative influence of temporary workers on organizational learning/ knowledge creation ... 35
5 Conclusion... 37
6 Discussion ... 38
6.1 The positive influence of temporary workers on organizational innovativeness... 38
6.1.1 Organizational learning/knowledge creation as an antecedent of organizational innovativeness... 38
6.1.2 Substantive conflict as an antecedent of overall knowledge creation & learning and the combination phase ... 38
6.1.3 The influence of temporary workers on substantive conflict levels ... 39
6.1.4 The influence of temporary workers on the combination phase... 41
6.2 The negative influence of temporary workers on organizational innovativeness ... 42
6.2.1 The influence of temporary workers on affective conflict levels ... 42
6.2.2 Integration efforts as a moderating factor of temporary workers’ influence on affective conflict levels... 43
6.3 Managerial implications... 43
6.4 Limitations ... 44
6.5 Future research... 44
References ... 46
Appendix ... 51
1 INTRODUCTION
Globalization, information technology developments, and deregulation of industries have created a new competitive landscape that challenges organizations to cut costs, to shorten lead times and to cope with fiercer competition (Matusik & Hill, 1998). As a result, organizations in almost all industries face rapidly changing environments (Hurley & Hult, 1998). On the one hand this has caused organizations to shift from internal labor markets (educating &
promoting core employees) to external labor flexibility (hiring temporary workers ad hoc) (Caroli, 2007) in order to remain flexible and to decrease labor costs (Chambel &
Castanheira, 2006; Gallagher & Sverke, 2005; Connelly & Gallagher, 2004). On the other hand, these developments led to the view that innovating is the primary way for organizations to stay ahead of competition (Tee Ng, 2004; Popadiuk & Choo, 2006).
Surprisingly, research has only extensively investigated temporary workers as resources to cope with momentary leaps in the market and as a means to improve cost structures (Matusik & Hill, 1998). Potential effects of temporary workers on the antecedents of organizational innovativeness, such as knowledge creation processes (Connelly &
Gallagher, 2004; Caroli, 2007), remain largely unaddressed. The exception is the study of Matusik & Hill (1998), in which the knowledge-based view of the organization (Grant, 1996) is stretched to include the external knowledge that can be contributed to an organization by temporary workers. These scholars state that temporary workers can improve the knowledge stock of an organization, and thus its long term competitive advantage. Unfortunately, such studies are very scarce and an empirical verification of the statements of Matusik & Hill is absent.
Furthermore, tenure diversity research shows promise to elucidate the relationship between temporary workers and organizational innovativeness. Tenure diversity is regularly defined to include diversity in contract length/time of entry of employees in the organization and is therefore inseparably connected to the inclusion of temporary workers in a workgroup.
Furthermore, tenure diversity is proposed by some scholars (e.g. Pelled, 1996) to positively influence the antecedents of organizational innovativeness. The review of the literature on this subject by Mannix & Neale (2005), however, shows that tenure diversity is predominately researched in relation to organizational cohort and that the influence of tenure diversity on factors that are important for organizational innovativeness (e.g. personal initiative, creativity levels) is only marginally explored. Moreover, Mannix & Neale (2005) indicate that the
impact of tenure diversity tends to be measured only on top-management team levels. As a result, the main advantages of diversity are derived from studies that have measured diversity in functional backgrounds (Mannix & Neale, 2005).
Nevertheless, anecdotal evidence highlights the possible advantages of incorporating temporary workers in the organization. Examples include the temporary hired Caroline Davidson to develop the Nike ‘swoosh’ logo in 1971, which became one of the most recognized corporate logos ever. Another example regards Linda ter Borgt, who was a student trainee at Heinz ketchup with the assignment to search for cost-cutting process innovations. In the search to complete her assignment, she reexamined and improved projects which Heinz regarded unprofitable. The result was that she suggested using tomato replacements, saving Heinz an amazing 2.1 million Euros each year (Aarts, 2003).
Clearly, the impact of temporary workers on organizational innovativeness needs further clarification. Therefore, the research question of this study is: how do temporary workers influence organizational innovativeness? The study has practical relevance since it offers organizations new strategic perspectives on how temporary workers might affect their organizational innovativeness. Furthermore, the research contributes to the literature in two ways. Firstly, it increases the understanding of the relationship between temporary workers and organizational innovativeness by building a nomological framework that explores the antecedent and effects of temporary workers on constructs that are related to organizational innovativeness. Secondly, the study empirically validates the theoretical propositions that are made in the framework.
The paper is structured as following. First a literature review is performed to investigate what the underlying constructs of organizational innovativeness are and organizational learning/knowledge creation is set forward as an antecedent of organizational innovativeness. Next, the organizational learning/knowledge creation process is elucidated and the effects of temporary workers on this process are proposed. These propositions are then empirical tested and results are reported. The study is finalized with a conclusion and a discussion of the results. Additionally, implications, future research directions, and limitations of this study are presented.
2 LITERATURE REVIEW
This section will provide a review of the literature regarding the characteristics of temporary workers in relation to organizational innovativeness. Firstly, different types of temporary worker arrangements are elucidated and a focus for this study is set. Secondly, the relationship between organizational learning/knowledge creation and organizational innovativeness is discussed. Thirdly, the organizational learning/knowledge creation process is clarified. Fourthly, the influence of temporary workers on organizational learning/knowledge creation is proposed.
The conceptual model of this study is shown in figure 1. Interpreting the conceptual model, one should keep in mind that the arrows between the organizational learning/knowledge creation phases do not represent casual relationships, but instead show successive steps of the knowledge creation spiral, as was proposed by Nonaka (1994).
(+ .2 2) ***
Figure 1 Conceptual model
2.1 A definition for temporary workers
Temporary workers have been defined in different ways (Feldman, 2006), which has resulted in the common occurrence of inconsistent findings in research (Connelly & Gallagher, 2004).
The emergence of multiple definitions is the result of the great diversity in temporary worker arrangements (Feldman, 2006). Therefore, a classification of temporary worker arrangements is proposed by Gallagher & Sverke (2005) to gain clarity. According to Gallagher & Sverke (2005), temporary workers can be categorized as temporary-help firm workers, in-house temporaries, and independent contractors. Temporary-help firm workers are ‘workers hired on an explicit short term contract through intermediary organizations, [such as] Adecco and Randstad’. ‘In this arrangement, the client organization contacts the intermediary organization to provide workers for a specified period of time and, while work is conducted in the client’s facilities, the temporary worker is assigned and paid by the intermediary organization. In- house temporaries are ‘workers hired directly by the employer organization from its own list or registry of workers to meet short-term or variable scheduling needs’. Independent contractors are ‘self-employed workers who are brought into (or retained by) an organization to provide specific skills, from manual labor to software and other engineering applications’
(Gallagher & Sverke, 2005, p. 187).
The classification of Gallagher & Sverke (2005) is used to convert the diverse temporary worker definitions into a classification. By creating definitional consistency between the studies on which this study builds, the appropriateness and relevance of the used literature in relation to the temporary worker definition of this study is more readily assessable.
This study focuses on temporary workers that are hired without an initial intention to offer them a permanent job and, thus, includes trainees, in-house temporaries without long term job perspectives, temporary-help firm workers, and independent contractors. This focus is chosen for the following reasons. First, the focus creates a surveyable scope for the study and facilitates the collection of a large data sample. Second, since the temporary workers that are included in the definition are hired without the intention to keep them permanently in the organization, they are bound to leave the organization after their contact ends, making this kind of worker truly temporary. Temporary workers are therefore defined in this study as: all temporary-help firm workers, in-house temporaries, trainees and independent contractors working in an organization that are hired without the intention to offer them a permanent contract.
2.2 Organizational innovativeness and organizational learning/knowledge creation Organizational innovativeness is empirically shown to be strongly related to organizational performance (Hult et al., 2004; García-Morales et al., 2006). Organizational innovativeness enables organizations to build competitive advantages, which deal with shifting customer demands and new developments by continuously differentiating products and services (Popadiuk & Choo, 2006).
The innovativeness construct, however, is inconsistently defined and measured across studies (Orosa Paleo & Wijnberg, 2008). According to these scholars, innovativeness can be approached from a product and an organizational perspective. In the latter perspective, innovativeness generally focuses on the capacity of an organization’s social capital to produce innovative products/services/processes. This is in line with García-Morales et al. (2006) who indicate that innovativeness (labeled Organizational Innovation) is the effectiveness of an organization’s dynamic capability to develop an innovation out of an idea, and Hult et al.
(2004), who defined innovativeness as: ‘the [organization’s] capacity to engage in innovation;
that is, the introduction of new processes, products, or ideas in the organization’ (p. 429). The definition of Hult et al. (2004) is used in this study, since it provides a relevant and clear description of organizational innovativeness. Furthermore, the definition clearly focuses attention to the extent to which an organization is capable to improve and renew its products/services/processes.
Organizational learning and knowledge creation both have been identified as antecedents of organizational innovativeness (García-Morales et al., 2006; Hurley & Hult, 1998; Hult et al., 2004). However, the definitions of the constructs show much overlap.
Organizational learning and knowledge creation have been simultaneously defined as the process through which an organization adapts and learns through obtaining new knowledge and perspectives (e.g. Fiol & Lyles, 1985; García-Morales et al. 2006; Nonaka 1994; Nonaka, Von Krogh & Voelpel, 2006; Wang et al., 2008) and are therefore integrated in this study in the construct ‘organizational learning/knowledge creation’. For this study, organizational learning/knowledge creation is defined in line with Nonaka, Von Krogh & Voelpel (2006) as the ‘continuous process through [which] boundaries and constraints imposed by information and past learning [are overcome] by acquiring a new context, a new view of the world and new knowledge’ (p. 1182). Important elements of organizational learning/knowledge creation include an organization’s absorptive capacity (Cohen & Levinthal, 1990), knowledge sharing,
organizational memory, and knowledge receptivity (Wang et al., 2008). These elements will be addressed to and explained throughout this study.
The relationship between organizational innovativeness and organizational learning/knowledge creation is explained as follows. According to Popadiuk & Choo (2006), organizational innovativeness is dependent on the development and the combining of ideas, which is only likely to occur in environments where people deeply interact. The knowledge sharing element of organizational learning/knowledge creation is therefore crucial for organizational innovativeness, since it facilitates developing/combining new ideas by amplifying individually held ideas/knowledge through interaction (Nonaka, 1994).
Furthermore, prior knowledge, i.e. the absorptive capacity element of organizational learning/knowledge creation, enables an organization to recognize valuable new knowledge and to develop this new knowledge into innovations (Cohen & Levinthal, 1990).
Additionally, the knowledge receptivity element of organizational learning/knowledge creation facilitates the exploration and adoption of new ideas in an organization (Wang et al., 2008) and so improves organizational innovativeness. Hult et al. (2004) further note that an organizational learning/knowledge creation orientation enables organizations to be in better contact with their customers, and so increases access to external knowledge and consequently facilitates the creation of innovative new products, services and processes. In conclusion:
Proposition 1: a higher degree of organizational learning/knowledge creation leads to a higher degree of organizational innovativeness.
2.3 Insights in organizational learning/knowledge creation
Several attempts have been made to open up the black box of organizational learning/
knowledge creation, by integrating its elements in an organizational wide process (Wang et al., 2008). One of the most influential reports on this topic was written by Ikujiro Nonaka in 1994. Nonaka (1994) describes the organizational learning/knowledge creation process in the Socialization, Externalization, Combination, and Internalization (SECI) model. This model threats knowledge not as the ‘truth’, but rather defines it as a ‘justified true belief’ (p. 15) so that the dynamic justification process of knowledge can be incorporated. Nonaka (1994) regards the main forms of knowledge to be ‘explicit’ (codified knowledge) and ‘tacit’
(unarticulated knowledge, residing in the individual) in the model. Organizational knowledge is created through dynamic interactions/conversions between tacit and explicit knowledge.
Furthermore, the model assumes that knowledge is held by individuals and is sophisticated in the organization through the four successive SECI-phases.
The knowledge flow in the SECI model is described by Nonaka (1994) as follows. In the socialization phase individuals transmit and share their tacit knowledge through interaction. Interaction is defined in this study as: ‘a sequence of two contiguous behaviors’
(Courtright et al. 1989, p. 777). The tacit knowledge is then converted through dialogue in which team members explicate their hard to communicate viewpoints. In attempts to create more universal concepts, the explicit viewpoints are combined with existing data and other viewpoints. The trial-and-error process during the combination process of explicit knowledge facilitates knowledge internalization. Repeating of this cycle takes the knowledge of the organization to the next level as a virtuous circle (figure 2).
Externalization:
explicating tacit viewpoints through
dialogue Internalization: trail-
and-error process of combining explicit knowledge leads to tacit
individual knowledge
Combination: creating universal concepts through combining explicit viewpoints Socialization: sharing
of individual tacit knowledge though
interaction
Figure 2 Organizational learning/knowledge creation process, based on Nonaka (1994)
Although some scholars state that further empirical verification is necessary (e.g.
Gourlay, 2003; Powell et al., 2007) and that the theoretical assumptions of the model suffer from some problems (e.g. McAdam & McGreedy, 1999), the SECI model has received
‘paradigmatic’ status and is regarded by the same critical scholars to be very beneficial for science for multiple reasons (e.g. Powell et al., 2007). First of all, the SECI model focuses attention on an understandable range of aspects (i.e. the four phases), and so facilitates the investigation of organizational learning/knowledge creation on a deep level, which would be unimaginable without the presence of such a paradigm (Powell et al., 2007; Martín-de-Castro et al., 2008). Furthermore, the SECI-model presents an extensive picture of the organizational learning/knowledge creation process, including its underlying elements (e.g. absorptive capacity and knowledge sharing). The SECI-model so elucidates the interrelations between the underlying elements and functions as an integrator of the dispersed research in the organizational learning/knowledge creation field. Therefore, the SECI-model is used in this
study as a point of departure to gain an understanding about how temporary workers impact organizational learning/knowledge creation. The effects of the characteristics/knowledge possessed by temporary workers on organizational learning/knowledge creation are investigated in the following paragraphs.
2.4 The influence of temporary workers’ knowledge dissemination capabilities on organizational learning/knowledge creation and the competitive advantage
This paragraph discusses temporary workers as important external knowledge sources and as knowledge leaks who can disseminate private organizational knowledge in the external environment. It is argued here that the advantages of temporary workers outweigh the disadvantages. Furthermore, it is proposed that the positive influence of temporary workers is moderated by the amount of external knowledge that is held by temporary workers and the employing organization’s integration efforts.
2.4.1 Temporary workers as external knowledge sources
Temporary workers often have been exposed to a great variety of organizations and have worked in various positions (Feldman, 2006). This has facilitated temporary workers to become familiar with knowledge that lies outside the environment of their current temporary employer and, thus, to have gained a great amount of external knowledge (Matusik & Hill, 1998). Access to such outside knowledge is regarded by Cohen & Levinthal (1990) and Bathelt et al. (2004) to be crucial for organizational learning/knowledge creation and the subsequent innovating processes since external knowledge can be combined with organizational knowledge and so facilitates the creation of new knowledge (Nonaka, 1994).
Furthermore, the absence of external knowledge can lead to competitive disadvantages since an organization’s knowledge base can become outdated (Uzzi, 1997, Matusik & Hill, 1998).
Temporary-help firm workers, independent contractors and in-house temporaries were therefore proposed by Matusik & Hill (1998), Galup et al. (1997) and Caroli (2007) to be advantageous for organizational learning/knowledge creation, because they are a method to gain access to/assimilate external knowledge into the organization. One of the reasons why temporary workers arrangements are especially apt to enhance an organization’s knowledge stock relates to the willingness of individuals to engage in a long selection process in relation to their skill and knowledge level (Galup et al., 1997). When the skills of an individual are not high in demand, and thus less likely to be of high value to an organization, he/she is more willing to engage in a long hiring process. Highly skillful and knowledgeable workers,
however, lack such willingness (Galup et al., 1997). Temporary worker arrangements prevent in this situation that organizations are only able to attract less valuable workers, and provide organizations access to external knowledge that is critical for learning and innovation (Wang et al., 2008). Next to being an effective access point to external knowledge, temporary workers also facilitate faster access and assimilation of external knowledge in the organization, compared to advancing the skills of core employees through educational efforts (Caroli, 2007).
However, temporary worker arrangements can also create knowledge spill-over risks, which can facilitate the imitation of an organization’s competitive advantage. Such dissemination, however, can be limited by formal mechanism (e.g. non-disclosure agreements), walling off highly valuable knowledge, and by shortening the contract length of temporary workers (Matusik & Hill, 1998) and is only likely to occur when temporary workers are exposed to component knowledge (Matusik & Hill, 1998; Fallick et al., 2006), which is likely to represent only a small part of an organization’s knowledge stock (Caroli, 2007). Furthermore, dynamic environments (Matusik & Hill, 1998) and industries were knowledge sharing is important (e.g. Open Source and public sectors) often cause the advantages of access to external knowledge to outweigh the risks of potential private component knowledge dissemination by former temporary workers. Moreover, even when private component knowledge is disseminated, it might be impossible for a competitor to use that knowledge to duplicate a competitive advantage, due to the casual ambiguity, social complexity, and path dependency that can characterize the competitive advantage of the organization from which the knowledge originates (Barney, 1991).
In conclusion, the advantages of temporary workers as external knowledge sources are considered to outweigh the risk that former temporary workers disseminate private component knowledge. Therefore, temporary workers are proposed to be important for organizational learning/knowledge creation, as fast carriers of external knowledge. This external knowledge can then be used to renew, refine, and combine with an organization’s private knowledge.
This positive impact of temporary workers on organizational learning/knowledge creation is proposed to be most visible in the combination phase, since this phase’s primary function is to combine private knowledge that was explicated in the organization with additional knowledge, residing both within and beyond organizational boundaries (Nonaka, 1994).
Proposition 2a: The external knowledge held by temporary workers enhances the combination phase of the organizational learning/knowledge creation process
2.4.2 The amount of temporary workers’ knowledge as a moderating factor of the relationship between temporary workers and the combination phase
As was discussed above, external knowledge is very important for organizational learning/knowledge creation, and in particularly for the combination phase. However, such external knowledge can be obtained through other channels as well. What makes a temporary worker a better knowledge transfer mechanism than other mediums (e.g. internet, literature) is the fact that in order to be able to apply such external knowledge successfully in a working situation, tacit understanding of the external knowledge is required (Gourlay, 2003), which is primarily held at the individual level (Caroli, 2007). Therefore, Nonaka states: ‘The prime mover in the process of organizational knowledge creation is the individual’ (1994, p. 21).
However, if this tacit understanding of external knowledge is missing, temporary workers offer no added value as an external knowledge source, compared to other (often cheaper) mediums. The emergence of organizational learning/knowledge creation advantages hence depends on the amount of knowledge that temporary workers possess.
Proposition 2b: The influence of temporary workers on the combination phase of the organizational learning/knowledge creation process is moderated by the amount of knowledge that temporary workers possess.
2.4.3 Integration efforts as a moderating factor of the relationship between temporary workers and the combination phase
Next to knowledgeable temporary workers, integration efforts moderate the influence of temporary workers’ external knowledge on the combination phase of the organizational learning/knowledge creation process. Firstly, integration efforts help to display temporary workers as valuable assets, and so will motivate core employees to work with them (Koene &
van Riemsdijk, 2005). Continuous interplay between the knowledge of core and temporary workers so facilitates the combining of knowledge in the workgroup (Nonaka, 1994).
Secondly, integration efforts enhance an organization’s memory (Wang et al., 2008), since core employees are more exposed to the knowledge of temporary workers and so guarantee that the knowledge of a temporary worker will reside in the organization long after the temporary worker has left the organization.
Proposition 2c: The influence of temporary workers on the combination phase of the organizational learning/knowledge creation process is moderated by the integration efforts of the employing organization.
2.5 The influence of temporary workers’ characteristics on organizational learning/knowledge creation
After having discussed the advantages of temporary workers’ external knowledge, this paragraph proposes that temporary workers have deviating characteristics compared to core employees. These deviations are argued to be important for organizational learning/knowledge creation, since they increase the cognitive diversity in the workgroup.
This diversity triggers substantive conflict that is needed to break with ineffective routines and unbeneficial consensus. Furthermore, effects of affective conflict, which temporary workers might cause, on organizational learning/knowledge creation are discussed.
2.5.1 The influence of substantive conflict on organizational learning/knowledge creation Organizations have a natural tendency of accumulating members who think alike and belong to the same social groups. Schneider (1987) states that core employees are attracted to an organization which is composed of other core employees that correspond to their own personal characteristics. If, however, this initial assessment of the organization is incorrect, the employee will leave. This cycle of attraction and attrition leads to organizations which are solely composed of people with similar cognitions and behaviors. Similarly, Nooteboom (1992) and Wuyts et al. (2005) mention that organizations function as a focusing device, facilitating the coordination and achievement of a common purpose. In time this leads to the development of similar mindsets in the organization (Nooteboom, 1992), which can cause tunnel vision or groupthink.
Unless the forces that create similar cognitions are countered, the organization in time will be unable to change, or see the need to change, when the environment around them alters (Schneider, 1987). Cognitive diversity is therefore a requirement for an effective organizational learning/knowledge creation process. This is acknowledged by Fiol (1994), who argues that differences in cognition, alongside the contradictory consensus, enables the modification of interpretations of events and actions and, thus, is a key building block for organizational learning/knowledge creation. Furthermore, Bood & Postma (1997) argue that diversity in cognition facilitates addressing issues with a broader perspective, because cognitive diversity results in a certain degree of disagreement that is beneficial for the
creativity level in a group and facilitates building robust innovations. Consequently, a multitude of practical solutions have been suggested to enhance organizational learning/knowledge creation by facilitating divergence in cognition. Nooteboom (1992) and Uzzi (1997), for example, suggest that organizations need inter-firm linkages with other organizations, composed of employees who have different views of the world, in order to prevent groupthink. Bood & Postma (1997) further argue that organizations should prevent cognitive inert managers by confronting them with diverse views of the world that are held by other managers, resulting in mental stretch.
The underlying mechanism that explains how cognitive diversity results in enhanced organizational learning/knowledge creation, functions through the emergence of substantive conflict out of diverse views (Pelled, 1996). Substantive conflict revolves around job-related issues and is defined as: ‘the perception among group members that there are disagreements about task issues including the nature and importance of task goals and key decision areas, procedures for task accomplishment, and the appropriate choice for action’ (Pelled, 1996, p.
620). Such disagreement is beneficial, since it improves the exploration of opposite positions, access to additional information, and deepens the understanding of discussion issues (Rahim, 2002; Pelled, 1996). Furthermore, the constructive challenging of ideas, initiated by substantive conflict, was empirically found by Amabile et al. (1996) to be significantly related to high levels of creativity. Therefore, organizations are advised to maintain a certain level of substantive conflict, and even to arouse it when absent, to enhance organizational learning (Rahim, 2002). However too much cognitive diversity and the resulting substantive conflict should be prevented, since it can decrease mutual understanding of organizational members (Nooteboom, 1992; Wuyts et al., 2005), can create negative affective conflict (see section 2.5.3) and can interfere with the completion of assignments (Rahim, 2002).
2.5.2 Temporary workers as promoters of substantive conflict
Additional to inter-firm linkages (Nooteboom, 1992) and mental stretching (Bood & Postma, 1997), the inclusion of temporary workers in a workgroup can enhance the substantive conflict level in a workgroup. As was earlier mentioned, temporary workers often have different backgrounds compared to core workers, which lead to certain deviating characteristics. Temporary workers, for instance, only work for a short period in the same organization and often have multiple employers simultaneously (Feldman, 2006), which causes temporary workers to differ on tenure characteristics compared to core workers.
Furthermore, temporary workers often have different educational and functional backgrounds
compared to core employees (Feldman et al., 1998). Examples include college students and other individuals who bridge the time until they obtain a job for which they are educated and trained by accepting a temporary job.
Since such worker characteristics are highly job-related (i.e. tenure, education &
functional background), they are closely connected to the workers’ view of how work processes should be performed and optimized. Diversity between core and temporary workers on these characteristics, therefore, triggers constructive debates about job related issues and, subsequently, enhances the substantive conflict level in a workgroup (Pelled, 1996). This substantive conflict then increases the cognitive task performance of the workgroup, which includes vital ingredients for effective organizational learning/knowledge creation such as decision making, problem solving (Pelled, 1996) and creative idea generation (Amabile et al.
1996). It is therefore proposed that the inclusion of temporary workers in a workgroup will have a positive influence on organizational learning/knowledge creation as a whole, through increased levels of substantive conflict. Furthermore, the combination phase is proposed to be especially positively influenced by additional substantive conflict in the workgroup, caused by temporary workers. This phase revolves around discussing, deciding and creatively combining existing knowledge (Nonaka, 1994), making it likely that the effect of enhanced creative idea generation, decision making and problem solving is highly visible and strongly related to this phase of the organizational learning/knowledge creation process.
Proposition 3a: Temporary workers enhance the overall knowledge creation &
learning by increasing the substantive conflict level in the workgroup.
Proposition 3b: Temporary workers enhance the combination phase of the organizational learning/knowledge creation process by increasing the substantive conflict level in the workgroup.
2.5.3 Temporary workers as promoters of affective conflict
Although substantial forms of conflict are beneficial, affective forms of conflict are disadvantageous for cognitive task performance and organizational learning (Rahim, 2002) and, thus, disadvantageous for organizational learning/knowledge creation. Affective conflict concerns non-work related issues and is defined as: ‘the perception among group members that there are interpersonal clashes characterized by anger, distrust, fear, frustration and other forms of negative affect’ (Pelled, 1996, p. 620). Both highly visible and non job-related differences between workers facilitate the emergence of such affective conflict (Pelled, 1996).
This is in line with Mannix & Neale (2005) and Broschak & Davis-Blake (2006) who state that negative outcomes are more common in groups composed of members with observable differences (i.e. high visibility), while groups composed of members that differ on non- observable (i.e. low visibility) dimensions are more likely to enhance creativity and group problem-solving. Although temporary workers primarily differ on tenure characteristics compared to core employees, which is a job-related form of diversity (causing substantive conflict), it is also a highly visible diversity form (causing affective conflict) (Pelled, 1996).
Therefore the relationship between temporary workers and the emergence and consequences of affective conflict are discussed here.
The emergence of affective conflict out of non job-related diversity and/or highly salient job-related diversity is explained through ascriptive inequality, the outcome of a categorization process through which individuals stratify other individuals on the basis of their characteristics which are beyond their control (Reskin, 2003). In the case of temporary workers such categorization is primarily triggered by the salience of their tenure diversity.
Through categorization core employees automatically identify fellow workers as favorable (the in-group) or as people with less favorable characteristics (the out-group) to minimize brain efforts (Reskin, 2003). After the in and out-groups are mentally formed by core employees, cooperation is favored with, trust is vested in, and opportunities are allocated to the in-group (Reskin, 2003), while affective conflict is felt and directed towards out-groups (Pelled, 1996).
As was argued by Schneiders (1987), the in-group is likely to be composed of people similar to the core employees, which puts temporary workers with different tenure characteristics in a disadvantageous position. Moreover, disadvantages that temporary workers might cause for core employees can create additionally prejudices which facilitate the categorization of temporary workers as out-group members by core employees.
Disadvantages of temporary workers can include a negative impact on the core worker’s well- being (Twiname, Humphries & Kearins, 2006) because of felt competition for promotion with temporary workers (Barnett & Miner, 1992), status struggles between core and temporary workers (Broschak & Davis-Blake, 2006), worsened relationships between supervisors (who have to direct their attention to temporary workers) and core employees (Davis-Blake et al., 2003), and assignment of core employees to more difficult and complex tasks without compensation to relieve the often less experienced temporary workers (Broschak & Davis- Blake, 2006; Feldman et al., 1998).
This probable categorization of temporary workers as out-group members can lead to higher levels of affective conflict in the workgroup. The consequences of affective conflict include workers who leave the workgroup (either physically of mentally), evade encounters with other employees, and are mentally unfit to process new or complex information (Pelled, 1996). Subsequently organizational learning/knowledge creation is hindered, due to decreased knowledge sharing between employees and a lacking ability to combine complex/new knowledge. Since organizational learning/knowledge creation is dependent on knowledge sharing between individuals (Nonaka, 1994), temporary workers are proposed to indirectly hinder the entire organizational learning/knowledge creation process though their influence on knowledge sharing. For example, less knowledge sharing could reflect itself in less transmission of tacit knowledge in the socialization phase, fewer dialogues in the externalization and combination phase, and subsequently less immersion of knowledge in the internalization phase. This leads to the following proposition:
Proposition 3c: Temporary workers decrease the knowledge sharing by increasing affective conflict levels in the workgroup, thereby negatively impacting organizational learning/knowledge creation.
2.5.4 Integration efforts as a moderating factor of the influence of temporary workers on affective conflict levels
Organizational actions can determine the degree of salience which is attached to the deviating characteristics of temporary workers. Subsequently, organizational actions can prevent or facilitate the categorization of temporary workers as out-group members. In this respect, organizational actions that make job-related diversity more salient by displaying temporary workers as distinct from core workers, will increase the affective conflict level and so be devastating for the positive effect of temporary workers on substantive conflict levels to show. Irregular working schedules of temporary workers and not being allowed to participate in worker festivities (such as teambuilding, company picnics) (Broschak & Davis-Blake, 2006) are just two examples of how organizational actions can increase the salience of differences between core and temporary workers.
This segregation can be decreased by integration efforts that reduce the salience of the differences between core and temporary workers which, subsequently, makes the relationship between the two types of workers less problematic (Pelled, 1996; Broschak & Davis-Blake, 2006; Matusik & Hill, 1998). Furthermore, integration efforts are likely to prevent differential
reward and opportunity allocation associated with ascriptive inequality (Reskin, 2003), and thus lead to less inappropriate and conflicting behavior in the workgroup. Taken together, less differential behavior and easier relationships between core and temporary workers lead to less affective conflict and more interaction between core and temporary workers. The proposed influence of temporary workers on affective conflict, and subsequently on the knowledge sharing in the workgroup, is therefore moderated by effective integrating efforts.
Proposition 3d: The relationship between temporary workers and the affective conflict level in the workgroup is moderated by integration efforts of the employing organization.
2.6 The behavior of temporary workers as a moderating factor
The previous sections highlighted the possible advantages and disadvantages of temporary workers for organizational learning/knowledge creation. This paragraph considers if and how temporary workers are motivated to deliver the proposed advantages to their temporary employer. Integration efforts are proposed to be the motivator for temporary workers to enhance organizational learning/knowledge creation.
2.6.1 Organizational Citizenship Behaviors of temporary workers
Temporary workers are often reported to show less positive behaviors in comparison to core employees (Feldman et al., 1998; Feldman, 2006), because they receive less education, are often assigned to simpler and less significant tasks, and operate with lower autonomy and discretion (Ang & Slaughter, 2001). Considering this, one might wonder what the consequences are for the engagement of temporary workers in extra-role behavior that is needed for the potential positive influence of the temporary worker’s added diversity and external knowledge to show.
Although the quantity and quality of the work that is performed by temporary workers is not widely researched, research on Organizational Citizenship Behavior (OCB) of temporary workers shows prospect for understanding the contributions of temporary workers to the workgroup (Feldman, 2006) and relates to the individual commitment requisite of Nonaka (1994) for effective knowledge creation. OCB shows to what degree employees indulge in extra voluntary work that benefits the workgroup, not formally required or rewarded (Podsakoff et al., 2000). Van Dyne & LePine (1998) show a close relation between the voice behavior type of OCB and organizational learning/knowledge creation. These
scholars state that voice behavior involves ‘making innovative suggestions for change and recommending modifications’ (p. 109). Voice behavior is defined as: ‘promotive behavior that emphasizes expression of constructive challenge intended to improve rather than merely criticize’ (Van Dyne & LePine, 1998, p. 109) and so relates strongly to the earlier mentioned substantive conflict. Without such initiative, the thoughts and knowledge of temporary workers, how useful they may be for an organization, remain at the individual level and are unlikely to benefit the employing organization. Therefore, OCB of temporary workers is proposed to be a moderating factor for the potential positive influence of temporary workers on the combination phase and the substantive conflict level.
Proposition 4a: The positive effect of temporary workers on substantive conflict is moderated by the temporary workers’ OCB.
Proposition 4b: The positive effect of temporary workers on the combination phase of the organizational learning/knowledge creation process is moderated by the temporary workers’ OCB.
2.6.2 Integration efforts as the antecedent of temporary workers’ Organizational Citizenship Behavior
Although most OCB-studies do not discriminate between core and temporary workers (e.g.
Podsakoff et al., 2000; Van Dyne & LePine, 1998), there is evidence that OCB differs between the two worker groups. Gilder (2003), for example, concludes in his empirical research of the behavioral differences between temporary and core workers that the former group shows less OCB compared to the latter group. Some researchers (e.g., Van Dyne &
Ang 1998; Matusik & Hill, 1998), however, argue that there is no evidence for significant differences between the OCB level of temporary and core workers.
Further investigations in the varying presence of temporary worker OCB has led to convergence around the conclusion that establishing non-transactional, psychological bonds with temporary workers is a forerunner of temporary workers’ OCB (Van Dyne & Ang, 1998;
Chambel & Castanheira, 2006). In an attempt to understand how organizations can create such non-transactional, psychological bonds with temporary workers to increase their OCB, Koene & van Riemsdijk (2005) explain that the underlying construct is the identification of temporary workers with the organization. A human resource identity policy that integrates temporary worker in the organization is, in this respect, critical. An organization can choose for a collective identity orientation, a personal identity orientation or a relational identity
orientation. In the collective identity orientation temporary workers are seen as commodity resources and stereotyping between ‘good and valuable’ core employees and ‘commodity’
temporary workers is facilitated (Koene & van Riemsdijk, 2005). Such stereotyping of temporary workers is still a common phenomenon and limits the motivation of a core employee to gain knowledge from a temporary hired worker (Matusik & Hill, 1998). In the personal identity orientation, temporary workers are left on their own, work individually and feel that understanding and support for their work is lacking (Koene & van Riemsdijk, 2005).
Finally, in the relational identity orientation, temporary workers are seen by the organization as unique and valuable individuals who are important to cooperate with (Koene & van Riemsdijk, 2005). Koene & van Riemsdijk (2005) state that organizations who adopt the latter orientation improve the identification of temporary workers with the organization, which leads, among other things, to temporary workers who show more OCB. This is in line with Connelly & Gallagher (2004), Moorman & Harland (2002) and Ang & Slaughter (2001) who argue that organizational treatment, such as integration efforts, impact the OCB of temporary- help firm workers and independent contractors. The case of Galup et al. (1997) further shows that treating temporary managers in the same way as permanent managers leads to higher levels of temporary manager satisfaction. Since satisfaction is an antecedent for OCB (Podsakoff et al., 2000), integration efforts are again shown to be beneficial for OCB.
In summary, there is convergence around the conclusion that integrating temporary workers as valuable assets in the workgroup is beneficial for their OCB levels. Subsequently, integration efforts are proposed in this study to be a necessary precondition for the OCB of temporary workers.
Proposition 4c: The OCB of temporary workers is enhanced by integration efforts of the employing organization that profile temporary workers as valuable assets.
2.7 Control factors: organizational learning/knowledge creation enablers
This study incorporates the organizational culture and workgroup size as control variables that may influence organizational learning/knowledge creation. Furthermore, organization size is included as a control variable for organizational innovativeness. As such, this study can better predict the effects of the independent variables, since it controls for confounding effects from exogenous variables. The motivation to select these control factors is outlined in the following paragraphs.
2.7.1 Organizational culture
The organizational culture is especially relevant for motivating individuals to share their tacit knowledge. Individuals may be reluctant to share knowledge because they may perceive it as giving up a certain amount of power (Wang et al., 2008). An appropriate culture, which motivates the sharing of knowledge, might overcome these barriers and is therefore crucial for organizational learning/knowledge creation.
The degree to which an organization’s culture facilitates knowledge creation is reflected in the ‘knowledge receptivity’ construct of Wang et al. (2008). This construct highlights the extent to which an organization is receptive to internally developed ideas.
Receptivity is necessary for the organizational learning/knowledge creation process to run smoothly, as is illustrated by the case of Galup et al. (1997). These scholars investigated the role of temporary managers in the process of introducing a new information system in a local government. The reason of the local government to use temporary managers is shown in the following quote; ‘The director realized after the failure of two internally staffed management teams that the inherent resistance to change in the information systems service department required the introduction of new ideas and experience’ (Galup et al., 1997, p. 111). Without such receptivity the virtuous knowledge spiral is unlikely to exist, and again provides a reason to bring in temporary workers. Therefore, knowledge receptivity is incorporated in this study as an enabler for organizational learning/knowledge creation.
2.7.2 Organization and workgroup size
A control factor that might explain high organizational innovativeness is organization size.
When organizations tend to become larger, more resources become available for innovation practices and processes, creating higher organizational innovativeness (Read, 2000; Hurley &
Hult, 1998). Therefore, organization size is included in this study as a control factor for organizational innovativeness.
Furthermore, workgroup size is included as a control factor for organizational learning/knowledge creation. Workgroups composed of more organizational members are proposed to experience a faster knowledge creation spiral and facilitate a fertile environment for interaction and dialogue since there are more sparring partners available to help articulate and combine an individual’s knowledge and perspectives. (Nonaka, 1994). However, larger groups are not by definition advantageous. Nonaka (1994) states that group sizes should not exceed 30 members, since larger groups could decrease group interaction.
3 METHODOLOGY
3.1 Research method
Online self-administrated surveys were used to gather data for this study, because this method offered easy access to persons who were dispersed across organizations. Furthermore, online self-administrated surveys require only a minimum of research staff/investments and allow for rapid data collection and therefore fitted the budget and the timetable of this study. Common barriers to online self-administrated surveys (e.g. high development costs) (Cooper &
Schindler, 2006) were tackled by using Open Source survey and website content management software, provided by LimeSurvey and Joomla1.
3.2 Survey items
The survey was constructed with validated items to facilitate good measurement. The survey’s content/face validity (Kent, 2001; Cooper & Schindler, 2006), practicality, language, and understandability was assessed by five local government practitioners with various functional backgrounds. The assessment resulted in the altering of the survey scales, since the initial 7- point interval scale created interpretation difficulties. Therefore, Likert summated rating scales were used in the survey. A drawback of Likert scales is that they confuse two dimensions, namely direction and strength (Kent, 2001), which has resulted in some researchers to propose more extensive survey item scales. Nevertheless, Likert scales were selected for their understandability and to prevent a too lengthy survey. The complete survey is included as appendix A.
3.3 Sample
The data for this study was collected from the Dutch local government sector. This setting was chosen because government organizations are increasingly required to increase their performance and service quality levels with the use of fewer resources (Kickert, 1997).
Although these requirements will probably always create challenging objectives, the characteristics of local governments further complicate fulfilling these requirements. Local governments are namely characterized by a diverse service range (Quilivan, 2000), complex connections between stakeholder groups (McAdam & Walker, 2003), and a discrepancy between the corporate vision and the departmental vision (Umashev & Willett, 2008).
1 See http://www.limesurvey.org and http://www.joomla.org
