“Motivate employees to share knowledge with other business units in a
multibrand organisation”
Version: 10
Date: 9th June 2012
Researcher
Student MScBA O&MC Riekold Jan Herborgh Veldkamp S1540688 Noorderspoorsingel 13a 9716 JB Groningen The Netherlands +31 6 266 98 347 riecold@coldworld.nl
Faculty and university
Faculty of Economics and Business, university of Groningen, the Netherlands
Abstract
This research is about a practical problem in a real world organisation. The organisation is active in the human resource and flex-work industry in Europe. It’s organizational structure is different from its competitors: multiple brands are used to position each business unit in a different segment of the external market. Knowledge is fragmented over these business units. Knowledge is sticky and cannot be easily transferred between the business units. This problem applies to business unit headquarters in the Netherlands and Belgium. This diagnostic research provides recommendations to the organisation to improve knowledge sharing between business units by analysing which factors motivate employees to share knowledge. A conceptual model is created, based on interviews with key personnel, the study of existing literature in the fields of social network, gifts and Porter’s generic forces and the study of documents from the organisation. Following contingency theory, the research analyses the influences of the scope of the business units on the motivational factors and their correlation with knowledge sharing. The scope is defined according to Porter’s generic forces. This model with five motivational factors is tested in the organisation with a survey. The results indicate that the scores on the factors are low and thus can be improved. Social interaction was found to have the strongest correlation with knowledge sharing. The importance of other motivational factors (less politicking, importance attached to knowledge sharing, trust and experienced competition in the same external market) differs based on the scope of both the sender and the receiver in the process of knowledge transfer.
Table of contents
Abstract ... 2
Table of contents ... 3
1. Introduction ... 7
1.1 The background of this paper ... 7
1.2 The research objective ... 8
1.3 The contents of this paper ... 11
2. Knowledge sharing in the multibrand human resource and flex- work organisation ... 13
2.1 Introduction ... 13
2.2 The process of knowledge sharing ... 13
2.3 The human resource and flex-work industry in Europe ... 16
2.4 The history and strategic goals of the organisation ... 18
2.4.1 History ... 18
2.4.2 Strategic goals ... 18
2.5 Organisational design and its influence on knowledge sharing ... 19
2.5.1 Multibrand structure ... 19
2.5.2 Financial result controls ... 22
2.6 The relevance of the research ... 23
2.6.1 Relevance of knowledge in the human resource and flex-work industry ... 23
2.6.2 Relevance of knowledge sharing in the industry and the organisation ... 24
2.6.3 Relevance of this research for the academic knowledge ... 24
2.7 Conclusion ... 25
3. The factors influencing knowledge sharing ... 27
3.1 Introduction & sub questions of research question I ... 27
3.2 The motivational factors ... 27
3.2.1 Theoretic framework ... 27
3.2.2 Social interaction ... 29
3.2.3 Trust ... 29
3.2.4 Politicking ... 29
3.2.5 Perceived importance attached to knowledge sharing ... 30
3.3 Business unit’s scope ... 31
3.4 Conclusion & conceptual model ... 33
4. Methodology ... 35
4.1 Introduction & sub questions of research question II ... 35
4.2 Organisational scope ... 36
4.2.1 The need for an organisational scope ... 36
4.2.2 The organisational level ... 36
4.2.3 The countries ... 38
4.3 Semi-structured interviews ... 39
4.3.1 Sub question and data sources ... 39
4.3.2 Data collection ... 40
4.3.3 Data analysis ... 41
4.3.4 Limitations... 41
4.4 Surveys ... 42
4.4.1 Sub questions and data sources ... 42
4.4.2 Data collection ... 43
4.4.3 Data analysis ... 44
4.4.4 Limitations... 48
4.5 Summary of the methodology ... 48
5. Results ... 49
5.1 Introduction ... 49
5.2 Social interaction ... 50
5.2.1 The theoretic correlation between social interaction and knowledge sharing ... 50
5.2.2 Qualitative description of social interaction in the organisation ... 51
5.2.3 Quantitative analysis of social interaction in the organisation ... 51
5.3 Trust ... 53
5.3.1 The theoretic correlation between trust and knowledge sharing ... 53
5.3.2 Qualitative description of trust in the organisation ... 53
5.3.3 Quantitative analysis of trust in the organisation ... 53
5.4 Politicking ... 54
5.4.1 The theoretic correlation between politicking and knowledge sharing... 54
5.4.3 Quantitative analysis of politicking in the organisation ... 55
5.5 Perceived importance attached to knowledge sharing ... 56
5.5.1 The theoretic correlation between perceived importance and knowledge sharing ... 56
5.5.2 Qualitative description of perceived importance in the organisation ... 56
5.5.3 Quantitative analysis of perceived importance in the organisation ... 57
5.6 Experienced competition in the same external market ... 58
5.6.1 The theoretic correlation between experienced competition and knowledge sharing .... 58
5.6.2 Qualitative description of experienced competition in the organisation ... 58
5.6.3 Quantitative analysis of experienced competition in the organisation ... 59
5.7 Multivariate model ... 60
5.8 Summary of the results in the conceptual model ... 61
6. Conclusion & recommendations ... 62
6.1 Introduction ... 62 6.2 Result comparison ... 62 6.2.1 General comparisons ... 62 6.2.2 Social interaction ... 63 6.2.3 Trust ... 63 6.2.4 Politicking ... 64
6.2.5 Perceived importance attached to knowledge sharing ... 65
6.2.6 Experienced competition in the same external market ... 65
6.3 Recommendations ... 66
6.4 Limitations and suggestion for further research ... 68
References ... 70
Literature ... 70
Documents from the organisation ... 74
Appendix 1 – Semi structured interviews ... 75
A1.1 Invitations ... 75
A1.2 Interview questions ... 75
A1.1 Response orientation part ... 75
A1.2 Response research part ... 76
1. Introduction
1.1 The background of this paper
The author of this master thesis is a student of the University of Groningen, the Netherlands. The author is specialised in the field of organisational management and control. From this point of view, the author would like to analyse a real world example of a discrepancy between the expectations of the management on one side and the real organisational situation on the other side. The author found this in a multinational organisation headquartered in the Netherlands. The organisation is active in the human resource and flex-work industry in Europe. A general manager who is responsible for an innovation and knowledge sharing committee asked the author to research how the sharing of knowledge within the organisation could be improved. This general manager (from now on called problem owner) outlined the problem with the following points:
The organisation would like to increase its capabilities to innovate.
We think this organisation has a lot of knowledge, relevant for innovations.
This knowledge is fragmented over business units, because the organisation has a multibrand structure.
We expect that the sharing of this knowledge between the different business units would lead to more and better innovations.
responses from the survey (measured on scales from 1 to 7; realized knowledge sharing: 3,652 and wanted knowledge sharing: 5,612). Why is this problem than a problem for the organisation? The problem owner made the assumption that more knowledge sharing leads to more and better innovations, which he thinks is important for the performance of the organisation. This is related to the business principle “learning”, because that defines innovative behaviour: “to develop skills, curiosity about and receptiveness to new ideas, and an ability to learn from mistakes with the goal of continuous improvement” (cited from the business principles booklet). Based on this information, this paper takes it as granted that the problem exists and has a negative impact on the performance of the organisation as a whole. This problem definition is the first step in the intervention cycle of changing an existing situation (Verschuren & Doorewaard, 2007), Figure 1. The next step is the diagnostic phase in which the background of the problem is analysed. This step has not yet been taken and this research will do so. The result of this research is therefore an insight in these backgrounds and suggestions for improvements. This research will not continue with the design phase, because the master thesis does not provide enough time for this and the organisation has to decide whether it will continue with this change.
1.2 The research objective
The information in the previous section can be summarized into the external objective of this research:
To provide recommendations to the organisation to improve the sharing of knowledge between business units within the existing organisational structure.
Within the organisational structure is explicitly named, because this research has a management control perspective as opposed to a strategic perspective (Merchant & Van der Stede, 2005). Strategic decisions examine the organisation’s place within the external environment and the characteristics of that environment (Merchant & Van der Stede, 2005). These decisions shape the strategy of the organisation. The management control aims to ensure that employees behave
Figure 1 - The intervention cycle (Verschuren & Doorewaard, 2007).
appropriately. Appropriately is defined based on the strategic decisions made (Merchant & Van der Stede, 2005). Practically, the problem definition given provides that is strategically relevant that employees share more knowledge between business units.
As this research takes the organisational context as given, it follows the social network theory to find methods to motivate employees to share knowledge. Therefore, the external objective of this research is accomplished by the internal objective:
To analyse which factors motivate employees to share knowledge.
Combining the internal and external objectives, the research objective (research question) is:
To provide recommendations to the organisation to improve the sharing of knowledge between business units within the existing organisational structure
by analysing which factors motivate employees to share knowledge.
Social network theory Gift theory Porter’s generic forces theory Interviews with key persons Conceptual model Social interaction Trust Politicking Perceived importance attached to knowledge sharing Less experienced competition in the same
external market Result analysis Result analysis Result analysis Result analysis Result analysis Recommendations (a) (b) (c) (d) Internal documents
Figure 2 - Research model.
This research model illustrates the flow of this research. (a) The conduction of interviews with key employees in combination with the study of existing literature (in the fields of social network, gifts and Porter’s generic forces) and study of documents from the organisation leads to a conceptual model, (b) with which the influence of five motivational factors can be evaluated. (c) The combination of the five results provides (d) recommendations to the organisation.
From this model, three main research questions are derived:
I Which factors are expected by existing literature, interviews with key persons and documents about the organisation to influence individuals to share knowledge (a)?
II What is the value of the motivational factors and how strong are the correlations with knowledge sharing in this organisation (b)?
1.3 The contents of this paper
How is this paper organized to answer the three main research questions? The second chapter introduces the subjects of this research: knowledge sharing (2.2) and the organisation (2.3 – 2.5). In the description of the process of knowledge sharing (2.2), it will become clear that knowledge is shared by an individual and that his decision to share is influenced by (a) the organisational context and (b) motivational factors that influence the individuals behaviour. To build an understanding of the influence of the organisational context, the industry (2.3), history and strategic objectives of the organisation (2.4) are described. The next section (2.5) gives an analysis of the organisational context and why its main characteristics (multibrand structure and financial result controls) have a negative influence on knowledge sharing. Section 2.6.1 will explain why knowledge is relevant in the industry of the subject organisation. Section 2.6.2 will explain why knowledge sharing is relevant in the organisation and whether it is in its industry. The relevance of this research for academic knowledge is explained in 2.6.3.
The third chapter aims to answer the first research question by creating sub question (3.1). The next sections answer these sub questions. In 3.2 the theoretic framework and the five motivational factors that follow from it are described. Two types of business units are distinguished in the organisation, specialists and generalists (2.5.1). These types are conceptualized into “narrow scope” and “broad scope” in section 3.3. The third chapter concludes with the conceptual model (3.4), illustrating all concepts and their correlations.
The fourth chapter explains the methodological methods used in this research. It starts by defining the research strategy and the creation of sub questions for the second main research question (4.1). The definition of the parts of the organisation where this research is relevant for is argued and given in 4.2 in the terms of the organisational level (4.2.2) and the countries (4.2.3). The technical research design is provided for the semi-structured interviews (4.3) and the surveys (4.4).
2. Knowledge sharing in the multibrand human resource and flex- work organisation
2.1 Introduction
In the introduction (chapter 1), the research objective was provided and explained:
To provide recommendations to the organisation to improve the sharing of knowledge between business units within the existing organisational structure
by analysing which factors motivate employees to share knowledge.
This chapter is aimed to help the reader understand the background and the project borders of this research. It will start with defining the main subject of this research: knowledge sharing (2.2). This definition also introduces and motivates the theoretical viewpoint of this research. The chapter continues with a description of the human resource and flex-work industry in Europe (2.3), because the organisation is active in this industry. This industry description is based on information found geographical/economic literature. Section 2.4 describes the history and strategic goals of the organisation. This information is based on the annual report of 2008 as well as semi-structured interviews with key persons in the organisation. The semi structured interviews are described in the methodology section (4.3) (because these will be used to answer research questions as well) and the findings are in appendix A. As a result of these strategic goals, two important organisational characteristics are distinguished. An analyses of both characteristics and their influence on knowledge sharing will indicate that this research is relevant for the subject organisation (2.5). The organisational design is described on the basis of the annual report (2008) and the semi structured interviews. The influence of the design on knowledge sharing is analysed with relevant literature from the social network perspective and the semi structured interviews.
2.2 The process of knowledge sharing
Figure 3 - Contingency approaches to the measurement of organisational effectiveness (Daft, 2004) adapted to knowledge sharing.
This paper follows an internal processes approach in the domain of knowledge. This figure presents this approach in relation to the other contingency approaches by linking it to the resource flow within an organisation.
Knowledge is a very broad term, it covers the understanding and awareness of business processes, customers’ demands, supplier power, technological and political opportunities and threats (Davenport & Prusak, 1998). In the previous paragraph knowledge was indicated as a resource of the organisation. Knowledge is an intangible resource and it differs from tangible resources, because it is not lost when used or transferred and it is contained within the human workforce (Dalkir, 2005). The working definition of knowledge used in this research is a widely accepted one, based on the distinction between data, information and knowledge, which follows from Davenport and Prusak (1998). Data is a set of objective and discrete facts. Information is a message, in the form of a document or any other kind of communication. By transforming data into information, the messenger adds value to the data. Different value adding methods can be categorized by the letter C: contextualized, categorized, calculated, corrected, condensed (Dalkir, 2005). When an individual human being receives information, he will interpret it. Interpretation means that he will store the information in his head and combines it with all the other information, experience and emotions in his head. By doing this, the information is transformed into knowledge. The methods for this transformation can also be categorized by the letter C: comparison, consequences, connections, conversation. Following from this, the definition of knowledge is (Dalkir, 2005): “Knowledge is a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied to in the minds of knowers. In organisations, it often becomes embedded in routines, processes, practices, and norms.”
External environment
Resource inputs: Knowledge
Handling knowledge, knowledge management, is a broad term. It covers all processes from knowledge creation, codification to knowledge diffusion and exploitation (Chen & Huang, 2007). Possessing the resource knowledge does not necessarily lead to an improvement of performance (Alavi & Leidner, 2001; Chen & Huang, 2007). The added value is realized when the knowledge is utilized at the place in the organisation where it is needed (Grant, 1996; Spender, 1996; Teece, 2000). Bringing the knowledge to the right place is called diffusion (Chen & Huang, 2007) or knowledge transfer.
From the definition of knowledge it came clear that knowledge is available in the heads of humans and embedded in routines, processes, practices and norms. Knowledge transfer occurs when knowledge from one human goes into the head of another human. The human with the knowledge (sender) transforms this knowledge into information, which can be exchanged with another human (receiver), who transforms the information back into knowledge. This process of knowledge transfer is displayed in Figure 4.
Sender Receiver Decide: what knowledge to share? Transform knowledge to information Receive information
Enrich own knowledge by combining it with the new information Send information
Knowledge
Knowledge
Knowledge transfer
Knowledge sharing Knowledge receiving
Figure 4 - The process on knowledge sharing, based on the definition of knowledge (Dalkir, 2005) combined with actors in the process (Dalkir, 2005; Szulanski, 2006) the breakdown of knowledge transfer into knowledge sharing and knowledge receiving (Szulanski, 2006).
This research focusses on the sharing part of knowledge transfer: the knowledge that an individual shares. Szulanski (1996) has identified four sets of factors that could be of influence on the knowledge transformation process:
The knowledge transferred
The source
The recipient
The context
The factors knowledge transferred and the recipient are of influence on the process of sending and receiving, not on the process of sharing (Szulanski, 1996). Since this research focusses on the source, the recipient and knowledge transferred are not relevant. The characteristics of the source include “lack of motivation” and “not perceived as reliable” (Szulanski, 1996). This “perception” is of influence on the receiving of the knowledge, not the sharing. The factor context consists of two parts: the organisational context and the arduous (distance) relationship (Szulanski, 1996). This research studies one organisation. The context can influence the motivations of the source. It is assumed that the organisational context is congruent with the organisational strategy. The context therefore shapes the borders where within processes can be changed, it should not be changed itself. The important elements in the context of this organisation and their influence on knowledge sharing are analysed in section 2.5.
2.3 The human resource and flex-work industry in Europe
Netherlands (Peck, Theodore & Ward, 2005). In the interviews it was said that Belgium is considered by the subject organisation as mature as well. Countries which are more restrictive are for example Germany, Italy and Spain (Peck, Theodore & Ward, 2005; interviews). Before this liberalization temporary staffing was in some countries forbidden or only accepted in industrial markets: “the two largest industrial markets for temporary staffing were placing men into factories and women into offices” (Ward, 2004) about the 1950’s and 1960’s. This bulk market still exists and is called “generalist” sectors (Ward, 2004). The borders for entry in this branch are low, because everybody could open an office and start making matches between jobs and candidates (Ward, 2004). Because borders for entry are low and national markets are maturing, the margins on the traditional generalists target groups are declining (Ward, 2004). As a result of these declining margins the generalists are diversifying in “higher end” or “more professional” niches (Ward, 2004). Targeting specific niches is what is called “specialists” agencies (Coe, Johns & Ward, 2007). Another measure taken by temporary work organisation to create more margin is offering more services and deepening the relation with clients (Ward, 2004). From the interviews it became clear that this is the most important driver for the subject organisation: the organisation strives to be the most profitable (highest margins) temporary staffing organisation in Europe (2.4.2).
Worldwide there are some large organisations active in the HR & flex-work industry. These larger organisation operate within multiple countries to increase sales volume and enhance economies of scale (Peck, Theodore & Ward, 2005). Different sources show that there are some large corporations that operate in the worldwide HR & flex-work industry, see Table 1:
Source Scope Number of
organisations
Subject included?
Ward, 2004 Top five per country, 2002-2003 (Belgium, France, Netherlands, Spain, Sweden, UK, USA)
5 per country Yes: Belgium, Netherlands
Ward, 2004 Europe, 2001 Top 15 Yes (#14)
Peck, Theodore & Ward, 2005
Global, 2005 “Big six” No.
Coe, Johns & Ward, 2008
Global, foreign revenue, 2007
Top 20 / “Big six” Yes (#5)
Annual Report, 2008 Europe, 2008 Unknown Yes (#4) Table 1 - Multinationals in the HR and flex-work industry.
The subject organisation has grown recently (late 1990’s, beginning of the 2000’s) by acquisitions and was therefore not observed as one organisation in most of the existing research works. In the numbers provided by Ward (2004), several organisations that were later brought together in the subject organisation are named separately. Besides these large dominant players, there are also smaller local organisations active in the industry. The balance between the larger and smaller organisations differs per country (Ward, 2004). In the USA and UK there is a huge number of small firms (Ward, 2004). In France and the Netherland on the other hand, the market is dominated by a small number of large firms: the three largest agencies have almost 75% of the total market (Ward, 2004).
2.4 The history and strategic goals of the organisation
2.4.1 History
The following information about the characteristics and the history of the organisation was found in the annual report (2008). The organisation is a service organisation and is active in the human resource and flex-work industry in Europe. The organisation was founded in 1972 in the Netherlands. In the beginning it grew organic, expanding into its home country and Belgium. From 1992 on the organisation grew rapidly with acquisitions. In 1997 the organisation went to the Amsterdam stock market. Since then, the organisation grew by taking over more and more firms that operate in the human resource and flex work market. Thereby it also expanded into other countries including Spain, Italy and Germany. Most of the acquired firms were placed as individual business units under the umbrella of the corporate organisation, each remaining active in the market with their own brand name. This is what is called “the multibrand structure”.
2.4.2 Strategic goals
All these business units (brands) together now form one large organisation. What does this organisation want to achieve? According to the current strategy that is expressed in the annual report and responses during the interviews, the organisation aims to be the most profitable organisation in the HRM and flex work market in Europe. Profitable is defined as the gross profit margin. This strategy is expressed in the shared values of the holding, or business principles as the organisation calls it:
Respect
Passion
Involvement and commitment
Result driven
These business principles are outlined in a seven-papers booklet available in print and on the corporate website.
The interviews learned that being result driven is the ultimate goal, in order to realize the largest gross margin. The three values learning, passion and involvement and commitment can be seen as enablers or ways to achieve the desired results. The value respect shapes the borders: (financial) results might not be achieved at any costs; the internal and external environment (e.g. co-workers, suppliers, customers) should be treated with respect.
2.5 Organisational design and its influence on knowledge sharing
2.5.1 Multibrand structure
How does the multibrand structure influence the knowledge sharing within the organisation? Szulansi (1996) uses the term “stickiness” to describe the fact that knowledge in a business unit is not easily transferred to another business unit. Szulanski (1996) cites two studies that showed a difficulty in a large multiunit organisation (General Motors and IBM) to transfer best practices from one to another unit. As knowledge thus is considered not to be fluid but sticky, having it fragmented requires transferability which then is difficult to accomplish.
The interviews learned that because each business unit has its own brand identity, they manage a lot of things themselves. The organisation has several tasks centralized at a corporate headquarter level as staff services. For example HR, finance, legal and IT. However, a lot of supporting tasks are still done by each business unit, especially where it can add benefits to the identity of a business unit. This includes marketing, but also to some extent HR and finance. As a result, the knowledge about this tasks is fragmented over the organisation. An interviewee called this “waste” and gives an example about recruitment: “All business units do their own recruitment. The second best candidate is not hired, but also not send to another business unit where he even might have a better fit”. The same “waste” occurs in all other fields as well, another example given from a marketing perspective: “In each business unit, the marketing manager should have experience in and knowledge about both offline and online marketing, which is already hard to bring to one person, but now we have to maintain it in ten locations.” Summarizing this: knowledge about the same subject is fragmented through the organisation.
The interviewees did not expect that every employee would be able to sum up every brand top of mind, because there are so many brands. Although certain elements (part of the corporate logo and name) would return in most of the brand names and logos. One interviewee said that employees at the business unit headquarters located in the same location as other business unit headquarters are expected to be more aware of each other. Most of the different business units have their headquarters in the same building in the same city. Some business units have a headquarter in a different city. Employees are working for their own business and feel responsible for this, not necessarily for other business units or the corporate organisation.
for what people think they belong to, and is thus a form of organisational culture. This means that one has the “Feeling to be tied to a group/ability to identify with a group” (Willem et al, 2005). Is there also a culture that covers all business units? The organisation has official shared values, which are called “the business principles”. These are distributed through the organisation in a booklet and available on the corporate website. The business principles are:
Respect
Learning
Passion
Involvement and Commitment
Result driven
Most of the interviewees did not know the values exactly top of mind (one out of five did), while four out of five were aware of the business principles. One interviewee explicitly said that he was unaware of any shared values of the corporate organisation. One interviewee stated that it is strange to have shared values when the organisation is fragmented in different business units that each have their own identity and values. One interviewee said that he expected that most employees would not know the values of the corporate organisation, but would feel comfortable by these; implicitly these values are part of the daily work.
Five of the interviewees were asked whether the employees of business unit headquarters would see each other as competitors or co-workers. The author relates this question to the broad concept of shared values: “feeling to belong to the same group”. Three answered that business units are only concerned with their own business; they do not care about other business units. Two indicated that when finance plays a role, employees will consider employees of other units as competitors. Three interviewees indicated that a lot of business unit headquarters share the same building and that this adds up to a shared value (sharing the same building). Concluding from this, the shared culture over business units is weak.
have. When two parties that interact share the same norms and values, there is a higher level of mutual understanding which in turn is an enabler for more and better sharing of knowledge (Hewett & Bearden, 2001; Meyer, 1994; Li, 2005; Nahapiet & Ghoshal, 1998; Willem et al, 2005).
2.5.2 Financial result controls
Controls that steer on the basis of performance evaluation and rewards are called result control (Merchant & Van der Stede, 2007) or output measurement (Ouchi, 1987). The interviewees were asked if business units and individuals are steered based on results. Six (out of six) indicated that the organisation strongly relies on results control in all parts of the organisation: business unit headquarters, managers at headquarters, region managers, store managers. Everybody is responsible for his own financial performance: EBIT(DA), margins, revenue, SD&A and growth. Two interviewees also indicated nonfinancial result controls: number of new customers, numbers of existing customers, visits of customers, market segmentation and HR parameters. Three interviewees said that there are a lot of financial bonuses. One interviewee explained that bonuses are the most important tool to steer individuals, to ensure that the company’s most important target of being the most profitable player in the European temporary work market is met. Five interviewees explicitly indicated that only the performance of the own business unit is evaluated: there is no attention for value added to the group. The interviewees were asked to indicate how autonomous they think the business units are. Five (out of six) said that it is the most important that business units achieve their financial targets. However, the business units should behave within the given borders: market segment, usage of shared service centre back office and specific IT products. These borders are behavioural constraints and two interviewees said that these are becoming more important.
What is the influence of financial result control on knowledge sharing? To understand this, the working of financial result controls is explained. It is only feasible when:
the measurability of outputs is high (Merchant & Van der Stede, 2007; Ouchi (1987),
organisations can determine desired results (Merchant & Van der Stede, 2007)
and the individuals whose behaviours are controlled have significant influence on the results for which they are being held accountable (Merchant & Van der Stede, 2007).
make them likely to act in favour of this criteria (Merchant & Van der Stede, 2007). Criteria that are not specified in the results control measurements are therefore likely to be experienced less important (Merchant & Van der Stede, 2007). Merchant & Van der Stede (2007) recognize a myopia where employees are blind for long term effects or other entities of the group. Incentives or bonuses for business unit managers do not always need to be based solely on the performance of that business unit, but also (or solely) on a group of business units or the entire organisation (Gupta & Govindarajan, 1991; Salter, 1973). The balance of rewards based on own business performance and group performance depends for a large extent on the extent of resource (knowledge) sharing between the units (Gupta & Govindarajan, 1991). “The logic behind this finding is that the unit managers’ motivation to engage in interunit cooperation is likely to be greater when their incentives are tied to the performance of the cluster of units as a whole” (Gupta & Govindarajan, 1991). Although there is a logical explanation and empirical evidence (Gupta & Govindarajan, 1991) that a business unit (and its employees) can be rewarded for the performance of the whole organisation, the (third) requirement for successful result controls of significant influence is discussable. Does one business unit have a significance on the results of a group of other business units (for example all business units in one country)?
2.6 The relevance of the research
2.6.1 Relevance of knowledge in the human resource and flex-work industry
Until the 1990’s the work of staffing agencies has been placing employees in standard, lower educated jobs (Ward, 2004). This has changed to more specialized job functions, higher education levels, additional HR services (including permanent placements) (interviews, Annual Report, 2008; Ward, 2004). From the interviews it became clear that the economic conjuncture has a direct impact on the staffing industry. When the economy starts to grow, organisations will expand. To avoid risks, organisations choose to do this with their flexible scale: temporary workers. In an economic recession organisations starts to cut their flexible scale. Knowledge of the economic cycle is therefore important to organisations in the staffing industry, so they can anticipate on it.
increasing the efficiency of internal processes (interviews),
new products/services: online secretary services (Annual Report, 2008), new recruitment channels (interviews)
There are also threats:
The internet has made it easier for competitors to enter the market.
Competitors may be better/faster in exploiting the opportunities.
Knowledge about the new techniques and their impact on the business can help to enhance the opportunities and to oppose the threats.
2.6.2 Relevance of knowledge sharing in the industry and the organisation
Gilbert and Cordey-Hayes (1996) created a model containing different stages of the innovation process: acquisition, communication, application, acceptance and assimilation. In each stage of the innovation process knowledge in the right place of the organisation is essential for success (Gilbert & Cordey-Hayes, 1996). The subject organisation has its knowledge fragmented over different business units. As knowledge is not fluid, but sticky (Szulanski, 1996) the subject organisation has the difficulty to organize the knowledge over its business units. A survey of 431 organisations in Europe and the United States showed that only 13% of the respondents believed that their company was good or excellent at transferring knowledge through their organisation (Ruggles, 1998).
In the industry of the organisation, as described in 2.3, there are a few large firms operating globally. The subject organisation is one of them. The other larger organisations operate with one brand (single branders) and offer all different services with that brand. The subject organisation however is different and operates with a multibrand structure and this structure is the cause of the problem (2.5.1). This difference in organisational structure between the subject organisation and its competitors makes the problem of this research (knowledge sharing between business units with similar operations in the same external market) unique for this organisation, because it does not occur in other organisations in this industry.
2.6.3 Relevance of this research for the academic knowledge
for example Peck, Theodore & Ward, 2005), research about knowledge sharing or organisational design in this industry is not available.
The literature in the field of intraunit knowledge sharing within one organisation is limited. Tsai (2002) tested his hypotheses in one organisation with 24 business units in the USA that is active in the petrol chemical industry. Björkman, Barner-Rasmussen and Li (2004) conducted a research 450 business units in Finland and China that are part of multinational organisations. Willem, Buelens and Scarbrough (2005) researched one organisation in the UK, specialized in the production and retailing of alcoholic drinks. All these research works used their own set of concepts in relation to knowledge sharing. This research combines findings from these existing works and will investigate whether the model applies to the subject organisation.
Past research has shown that many multinational organisations face the problem that knowledge is locked in certain business units (Gupta & Govindarajan, 2000). Organisations can implement different control systems to fit the requirements of the organisation and the business units, based on specific criteria of these business units (Gupta & Govindarian, 2000).
The objective of this research is to help solving a practical problem (1.2). It is also given that this problem is unique to this organisation in this industry (2.6.2). This research will therefore not produce generalizable knowledge. It does, however, aim to create knowledge that might be helpful or provide insights to other researchers, because:
Concepts found in different studies are combined into one conceptual mode (3.4).
The research is introduces a new concept in the social network and knowledge sharing literature: the business unit scope (3.3).
2.7 Conclusion
Every business unit has its own brand and identity. These cultures within business units are strong. There is not a strong shared culture over the business units. According to the theory this absence of a strong shared culture leads to less knowledge sharing over the business units.
The objective of the organisation is to be the most profitable organisation in its industry. As a result, there is a strong reliance on financial result control. Employees will strive to maximize financial results. As they are only held responsible for the results of their own business unit, it is unlikely that they will spend time on creating results for the other business units.
3. The factors influencing knowledge sharing
3.1 Introduction & sub questions of research question I
In this chapter, the first main research question of the research is answered:
Which factors are expected by existing literature, interviews with key persons and documents about the organisation to influence individuals to share knowledge?
From this main research question, five sub questions can be distracted:
Ia Which concepts are provided in the social network theory?
To answer Ia the theoretic framework is motivated in 3.2.1. The concepts found in the literature are then introduced in 3.2.2 – 3.2.6.
Ib What is the influence of the gift theory?
In the literature analysis gift theory was found to be useful in explaining the influence of the factor politicking, which is explained in 3.2.4.
Ic Which motivational factors were observed in the organisation (by interviews and study of documents) that are not found in the literature?
With the study of the annual report (2008) and the interviews, there were no new motivational factors found.
Id Are there characteristics of the sender or receiver that might influence the value of the motivational factors or the correlation effect with knowledge sharing?
The study of the annual report (2008) learned that there are two different types of business units: specialists and generalists. The interviews explained the differences between the two. From a contingency viewpoint, these differences might influence the value of the motivational factors or the correlation effect. Section 3.3 describes these two different business unit types.
Ie How can Porter's generic forces theory be used to categorize business units?
To categorize the two types of business units (Id), the theory of Porter’s generic forces is used. This is motivated and explained in 3.3.
3.2 The motivational factors
3.2.1 Theoretic framework
knowledge and where he translates this knowledge into information. In the process of knowledge sharing the sender is the main actor, because he is the one who possesses the knowledge to share. This actor is an individual employee. The control perspective of this research aims to steer behaviour of employees to be consistent with what is expected of them. To understand how individuals behave, organisational behaviour theories are useful, because these study how to manage individuals and their actions within work situations (organisations) (Kreitner, Kinicki & Buelens, 2002). Organisational behaviour is based on a diverse array of disciplines (Kreitner, Kinicki & Buelens, 2002). In this article the level of the individual is used. This social approach aims to identify what drives, motivates, these individuals. The definition of motivation given by Szulanski (1996) is: “A knowledge source is reluctant to share crucial knowledge for fear of losing ownership, a position of privilege, superiority; it may resent not being adequately rewarded for sharing hard-won success; or it may be unwilling to devote time and resources to support the transfer”. Motivational factors differ per individual and can be managed with controls, within the existing organisational context.
Scholars who used social theories to link individuals motives to knowledge sharing are (Björkman, Barner-Rasmussen & Li, 2004; Tsai, 2002; Willem, Buelens & Scarbourgh 2005). These research works provide the concepts that are expected to influence knowledge sharing.
Tsai (2002) uses a social network perspective of organisational coordination to investigate the effectiveness of coordination mechanisms on knowledge sharing between business units that have both collaborative and competitive ties. The research was a case-study in one large multi-unit industrial company in the USA, founded in 1954. For data collection the author used a survey. There were two times of data collection, first for the independent variables, second for dependent variables with two years in between. A matrix analysis was used. There were 24 business units.
Björkman, Barner-Rasmussen and Li (2004) conducted a study on the impact of organisational mechanisms on inter-unit knowledge flows in multinational corporations. Their hypotheses were tested on 134 Finnish and Chinese subsidiaries with questionnaires.
3.2.2 Social interaction
Social capital is used in theories of the firm to identify a set of resources, which is defined as the sum of all social networks (potentially) accessible possessed by individuals in a firm (Nahapiet & Ghoshal, 1998). Social capital is considered a resource, because it provides access to resources (information, opportunities) through the social networks of those individuals (Nahapiet & Ghoshal, 1998). The usage of this social capital is what in this study is called social interaction: the extent to which organisational members interact with each other (Chen & Huang, 2007). Chen & Huang (2007) have three concepts they include in social interaction:
Communication: communication channels enable the transformation of knowledge
Trust: the extent to which the sender believes the receiver is reliable
Coordination: refers to the integration of individuals in the organisation
This article disagrees with this inclusion and would include only the “communication” parameter inside the social interaction concept (in line with Tsai, 2002). Trust will be treated as an individual concept (3.2.3). Coordination is in this research considered to be part of the organisational context.
3.2.3 Trust
Trust is present when one party has confidence in an exchange partner’s reliability and integrity and refers to the willingness to accept vulnerability based on positive expectations about another’s intentions or behaviours (Li, 2005).
3.2.4 Politicking
Politicking might be connected with gaming: sharing knowledge may not have direct but indirect benefits for the sender. Konstantinou & Finchman (2009) link this perception of a continuous knowledge exchange to the theory of Mauss (1974) that gifts are never free. The analogy is that while gifts (and knowledge sharing) may appear unencumbered, but in reality it creates a reciprocal obligation to receive something in return (Konstantinou & Finchman, 2009). Although this research does focus on a single knowledge transaction and not on a continuous knowledge exchange network (or maybe even a total network of resource exchanges; why should knowledge sharing not be “repaid” with another resource), it might influence the motives of the individual.
3.2.5 Perceived importance attached to knowledge sharing
The importance attached to knowledge sharing by superiors could have been a motivational factor. However, it is not relevant whether the importance is attached. It is more important how individuals perceive this (Björkman et al, 2004). The formulation of the concept “perceived importance attached to knowledge sharing” is chosen, because it matters how an individual experiences this importance. Explicit controls may be absent, but superiors may still tell their subordinates they appreciate knowledge sharing. On the other hand, controls may be there (example: employees are required to document their actions), but they do not perceive it as that there is importance attached to knowledge sharing.
3.2.6 Experienced competition in the same external market from other business units
3.3 Business unit’s scope
In the description of the multibrand stucture (2.5.1), it became clear that among all the different business units two types can be distinguished: specialists and generalists. The contingency theory learns that there is not “one best way” to do things in organisations. Is there a difference in the aspects of knowledge sharing between specialists and generalists? To understand the strategic position of generalists and specialists, a theoretic framework is used. According to Daft (2004), there are two commonly used approaches to define strategic positions of organisations and business units based on their environment and strategic choices: the competitive strategies of Porter (Porter, 1985) and the Miles and Snow’s strategy typology (Miles & Snow, 1978). The first (Porter) is used here, because the typologies used (scope and product characteristics) are the closest to the way specialists and generalists are described so far. The second (Miles & Snow) is not used, because this model examines the way organisations deal with uncertainty and new opportunities. This typology is not related with the distinction between specialists and generalists made in this article.
The first criteria of the model of Porter (1985) is the market scope of the business unit, which can be narrow or broad. The scope determines whether the business unit targets large/many consumer segments (broad) or only a single or small group of specific segments (narrow) (Daft, 2004). It became clear from the interviews and the annual report that generalists have a large scope. Specialists on the other hand target a niche, making the market scope narrow.
follow a differentiation strategy. Figure 5 shows the position of the generalists and specialists in the model of Porter.
Figure 5 - Positioning of generalists and specialists based on generic forces (Porter, 1985).
The two types of business units (specialists and generalists) are positioned in the model of Porters generic forces. Both have differentiated products, but a different market scope.
Although the interviewees said that each business unit (no difference for specialists and generalists) is required to strive to maximize margin, not necessary lowest costs. They argued that lowest costs cannot be achieved, because the differentiation strategy brings a higher cost structure as compared to competitors with a single brand. The higher margin can be realized due to the higher prices that are justified by the differentiation.
The interviewees did not know for sure whether there is a difference in the amount of knowledge shared by generalists or specialists.
The scope of the business unit may thus influence the score on the motivational factors, but also on the strength of the correlation between the motivational factors and knowledge sharing. There are two actors in the process of knowledge sharing (2.2): the sender and the receiver. Although this research is interested in the sender, the scope of the receiver may also be of influence on the decision of the sender whether to share or not (2.2). Therefore, two scope factors are distinguished: the scope of the sender and the scope of the receiver.
The scope of the sender
The sender is either a specialist (narrow scope) or generalist (broad scope).
The scope of the receiver
The receiver is either a specialist (narrow scope) or generalist (broad scope).
3.4 Conclusion & conceptual model
The sub questions of the first research question were answered in the preceding sections. The first research question is:
Which factors are expected by existing literature, interviews with key persons and documents about the organisation to influence individuals to share knowledge?
In this research, the dependent concept is knowledge sharing. It is defined in 2.2. As an answer to the research question: there are motivational factors (3.2) that influence knowledge sharing: social interaction (3.2.2), trust (3.2.3), politicking (3.2.4), perceived importance attached to knowledge sharing (3.2.5) and experienced competition in the same external market (3.2.6). The scope of the sender and the scope of the receiver might have an indirect or interaction effect (3.3). These findings combined result in the conceptual model in Figure 6.
Social interaction Trust Less politicking Perceived importance attached to knowledge sharing Less experienced competition in the same
4. Methodology
4.1 Introduction & sub questions of research question II
This chapter describes how the second research question is answered. This question is:
What is the value of the motivational factors and how strong are the correlations with knowledge sharing in this organisation?
The external objective of this research is to provide recommendations to the organisation. The results should be generalizable to all parts of the organisation that face the problem. The definition of “all parts of the organisation that face the problem” is provided in 4.2. The factors are presented in the conceptual model (Figure 6, 3.4). There are five motivational factors known by literature to have an influence on knowledge sharing. There are also two factors that might have an indirect or interaction effect. A survey-based research fits these requirements of generalizability and quantitative analysis (Cooper & Schindler, 2006; Verschuren & Doorewaard, 2007). This method is used to answer the second research question. As this research is specific to one organisation, a brief qualitative explanation of the motivational factors provides a better understanding to the reader of the motivational factors in the organisation. Given this research strategy, the sub questions to the second research question are formulated and answered per motivational factor:
IIa. What does the literature say about the correlation between the factor and knowledge sharing?
The theoretic framework is explained in 3.2.1. In the results section, the theoretic explanation for the correlation is given. This consists of the following elements: a) what is the direction of the correlation, b) what is the theoretic argumentation for this correlation, c) was this correlation found in the cited research works.
IIb. What is the qualitative explanation about the factor in the subject organisation?
The qualitative explanation is provided by the analysis of semi-structured interviews, 4.3.
IIc. What is the score of the factor in the organisation?
IId. What is the correlation between the factor and knowledge sharing? The hypotheses are: H1 - More social interaction is positively correlated with knowledge sharing
H4 - More perceived importance attached to knowledge sharing is positively correlated with knowledge sharing
H5 - Less experienced competition in the same external market is positively correlated with knowledge sharing
IIe. Is there a difference between generalists and specialists in their score on the factor? IIf. Is there a difference between generalists and specialists in the correlation between the
factor and knowledge sharing?
IIg. Are the motivational factors inter-correlated?
The sub questions IIc – IIg are quantitative and answered by the analysis of the survey results.
This chapter continues by defining the organisational scope of the research. Both research methods are described in the sections that follow: 4.3 Semi-structured interviews and 4.4 Surveys. For each method it is motivated which sources are used, how data is collected, how it is analysed and what the limitations are of this method.
4.2 Organisational scope
4.2.1 The need for an organisational scope
This research aims to provide recommendations to the organisation to improve the sharing of knowledge between business units. Section 2.6 argued why this research is relevant for the subject organisation. But is it for all parts of the organisation? There are two definitions required: the depth and the width. The depth will be defined by (an) organisational level(s). The width will be defined by countries.
4.2.2 The organisational level
Corporate headquarter Country 2 Country […] Country 1 Staff functions Business unit headquarter B Business unit headquarter […] Business unit headquarter A Region 2 Region […] Region 1 Store location […] Store location 1 Store location 2
Figure 7 – High level organogram of the subject organisation based on information provided by the problem owner and information gathered in interviews.
This tree-structure illustrates how the different hierarchical levels in the organisation are related.
To choose what level(s) of the organisation to include, it is important to understand what type of knowledge is of interest. The problem owner has indicated that his experience is that there is a lot of knowledge available in the organisation, but that it resides within business units and is not shared over business units. The results of the interviews indicate the same: while there is information being shared (examples were given), nobody indicated that the amount was high and two interviewees said explicitly that knowledge is shared rarely. This is confirmed by the results of the survey: measured on scales from 1 to 7; realized knowledge sharing: 3,652; wanted knowledge sharing: 5,612.
organisation is about performance and results. This is a level up stream (vertical), where headquarters receive information about performance of their subordinates. The headquarters have the possibility to steer on this. This stream exists in all layers of the organisation. It is an important stream, but not of interest of this research, because it is not related to creation of new or better business opportunities. The different knowledge flows within the organisation are illustrated in Figure 8. The pyramid illustrates the different parts of the organisation in accordance with the organogram (Figure 7). At each level, there are multiple entities, e.g. there are multiple countries and multiple store locations. On the left side of the pyramid, per level it is indicated what type of tasks are performed to illustrate that knowledge of these tasks is required at that level. On the right hand side it is shown that in a horizontal flow (indicated with a vertical error in the pyramid) information about performance is transferred trough the organisation. Knowledge transfer between different entities at the same level is indicated with a horizontal arrow. This is only indicated for business unit headquarters, because the interviews learned that there is not a lot of knowledge transfer on other levels.
The knowledge of interest is thus located at the level of business unit headquarters. The sharing should occur with other business units: a horizontal flow.
4.2.3 The countries
Sharing knowledge between business units in a country is only possible when there is more than one business unit in that country. This research is interested in differences between specialists and Figure 8 - Pyramid with different types of knowledge in different levels of the organization.
This pyramid shows that performance information and steering is bottom-up and top-down (right) and what type of knowledge (left) is used at each hierarchical level (pyramid) in the organization. The highlighted part is researched.
Store locations Regions
Business unit headquarters Countries Corporate headquarter
generalists. As explained in the branch description, a mature labour market is a requirement for specialists to exist. In 2003, the Netherlands and France were considered to be mature markets (Peck, Theodore & Ward, 2005). From the interviews it became clear that in the meantime Belgium had become a mature market as well, which was in development in 2003 (Peck, Theodore & Ward, 2005). The second requirement for the selection of countries is that the organisation is active in it with multiple business units, generalists and specialists. This requirement is linked to the first requirement, because a mature country is required for specialists to exists. However, the subject organisation might not have the same penetration rate in each country. The annual report (2008) shows that only in the Netherlands and Belgium the organisation has more than one generalist business unit. In France, a mature country, the organisation has a relatively low market share, compared to competitors and only one generalist business unit. This research will therefore focus on the Netherlands and Belgium only.
4.3 Semi-structured interviews
4.3.1 Sub question and data sources
The aim of the interviews is two-fold. First an understanding of the organisation was created, which is used for defining the organisational context (2.4), relevance of the problem (2.5), the research scope (4.2), the introduction of the business units scope (3.3) and the organisational scope (4.2). These interviews were conducted after the literature was studied. The second goal of the interviews is to answer sub question IIb and to provide a qualitative insight in the motivational factors and knowledge sharing in the organisation.
are carefully selected. In order to get a rich insight, different view perspectives are required. To achieve this, persons at different positions are included. These persons were selected in consultation of the problem owner.
When the interviews were conducted, the organisational scope (4.2) was not yet defined. The problem was known to exist in the Netherlands. Therefore the scope of the research during the interviews was the Netherlands only (and did thus not include Belgium). The selection of interviewees is therefore aimed to include employees with a focus on the Netherlands or the entire organisation.
Six key interviewees were identified (in a random order):
Confidential
4.3.2 Data collection
The format of the interviews was semi-structured. The researcher compiled a list of basic questions before the start of the interviews. During each interview the researcher decided to ask certain questions or not, or other questions that were not in the pre-compiled list. These decisions were based on the previous answers given by the respondent (questions already answered, asking for clarification, example or opinion). This method was chosen because the primary goal of the interviews was to get an understanding of the organisation.
permission of the interviewees was asked to record the interviews with a voice recorder (which everyone gave). The interviews were recorded and afterwards transcribed in order to avoid data entry errors (Cooper & Schindler, 2006). To ensure that the interviewees felt free to give honest answers they were guaranteed that the recordings would be deleted after transcription and that transcriptions were not distributed. To ensure that answers given during the interviews are consistent with each other (Cooper & Schindler, 2006), certain concepts were explained by the interviewee during the interview when the concept became a subject:
Focus of the research on business units in the Netherlands
Generalists; target broad scope (example business units given)
Specialist; niche players; target small scope (example business units given)
Innovation; broad, new products, new markets, new or improved business processes At the end of the interviews the interviewees were thanked for their participation and asked if they had any questions for the interviewer or that they wanted to add anything to their given answers.
4.3.3 Data analysis
The transcriptions that are made from the interview recordings were used as reference material by the author. The transcriptions were used to create an overview of all given answers per questions. This list is provided in Appendix 1 and is divided in two sections: a part that includes the questions that are used for exploration purposes (introduction) and the part used to answer the research questions (results). Because the interviews were semi-structured, per question it is indicated how many times it was asked. Per answer is indicated how many times it was given. Answers are summarized, so it was possible to group similar questions and answers together to have a clear overview.
4.3.4 Limitations
The results from the interview have a qualitative nature, not quantitative. The answers given by the respondents reflect the opinion of the respondent and do not necessary reflect the opinion of all employees.
4.4 Surveys
4.4.1 Sub questions and data sources
The sub questions IIc - IIg are quantitative questions. There is a large number of research concepts and the scores on variables and correlations are the subject. Therefore a survey research fits these questions (Verschuren & Doorewaard, 2007).
IIc. What is the score of the factor in the organisation?
IId. What is the correlation between the factor and knowledge sharing? The hypotheses are: H1 - More social interaction is positively correlated with knowledge sharing
H2 - More trust is positively correlated with knowledge sharing H3 - Less politicking is positively correlated with knowledge sharing
H4 - More perceived importance attached to knowledge sharing is positively correlated with knowledge sharing
H5 - Less experienced competition in the same external market is positively correlated with knowledge sharing
IIe. Is there a difference between generalists and specialists in their score on the factor? IIf. Is there a difference between generalists and specialists in the correlation between the
factor and knowledge sharing?
IIg. Are the motivational factors inter-correlated?
The concepts researched are perceptions of individuals, the employees of business unit headquarters are thus the object of research. To collect the data about this object of research, the individuals could be observed. It is however difficult and time consuming to observe the concepts of this research. The method chosen is therefore to ask the object of research to provide the required data. The employees are thus respondents (Verschuren & Doorewaard, 2007).
