New forms of organizations in the knowledge economy. The concept

dr inŜ. Małgorzata Zięba
Zakład Zarządzania Wiedzą i Informacją Naukowo-Techniczną
Politechnika Gdańska
e-mail: [email protected]
New forms of organizations in the knowledge economy. The concept of a flexi organization.
Summary
The article presents various forms of organizations, which are the
answer to the challenges of a knowledge-based society. Nowadays organizations need to transform themselves into new units and act according to new rules. The asset of crucial importance is not land or capital, but
knowledge. The success of an organization depends to a great extend on
this how it can collect, store, use and share its knowledge about customers, processes or competitors. The article first describes new organizational forms and then presents the concept of a flexi organization.
1. The characteristic of knowledge economy
Despite the fact that present economy is more and more often called
“knowledge economy” or “knowledge-based economy”, it is a great challenge to define what knowledge economy really is. Despite the fact that
many descriptions of knowledge economy can be found in the literature,
there is still no consensus on the definition of this kind of economy. For
example, according to Bryans and Smith1 in knowledge economy “the
development and application of knowledge replaces capital, raw materials
1
Bryans P., Smith R., Beyond training: reconceptualising learning at work, Journal of Workplace
Learning, Vol. 12, No. 1, 2004
and labour as the main means of production”. This definition seems to
highlight the growing importance of the major asset nowadays – knowledge. In the past various resources were the basis of economy: first it was
land, then work and capital. Only recently knowledge is considered to be
the fuel of economic development.
What are the reasons for this situation? Why is knowledge gaining
such a remarkable position? To answer these questions one has to analyse
several processes taking place in the contemporary economy. First of all,
the resources of information and knowledge are growing at a tremendous
speed and are becoming easier to reach with the use of the Internet and
modern technologies. Secondly, as Castells and Aoyama2 noticed, the
object of economic activity is not only the production of goods, but to a
growing extend the delivery of services. In the industrial economy the
manufacturing sector was of the greatest significance. Presently, the
greater the level of economic development is, the greater percentage of
employment is devoted to services. Thirdly, the development of a knowledge-based economy would not be possible without a great boom of information and communication technologies (ICT), observable in the last
decades. These technologies eliminated the barriers of time and space and
brought new opportunities to companies. ICTs are powerful tools in hands
of a manager as they contribute to a better efficiency of various economic
activities and support innovative actions3. Finally, the process of globalization, i.e. integration of economies and societies all over the world into
one, global economy. This process spurs the development of knowledge-
2
Castells M., Aoyama Y., Paths towards the informational society: Employment structure is G-7 countries, 1920-1990, International Labour Review, Vol. 133, No. 1, 1994
3
Anell B. I., Wilson T. L., Prescripts: creating competitive advantage in the knowledge
economy, CR, Vol. 12, No. 1, 2002
based economy as it allows the distribution of knowledge with enormous
speed despite any barriers.
2. Organizations in the knowledge economy
Due to the above-mentioned phenomena, economies all over the
world are transforming from industrial economies into knowledge-based
ones. This can be observed on the example of companies, which value
results from non-material resources. The most popular examples of this
kind are: Coca Cola company, which major value constitutes its logo, and
Microsoft, deriving its profits from the knowledge on software. Organizations are becoming aware of the fact that knowledge can be their source
of long-term competitive advantage as non-material resources are difficult
to copy by other organizations. As Kessels4 highlights, “the ability to
gather information, generate new knowledge, disseminate and apply this
knowledge to achieve improvement and innovation is an organization’s
knowledge productivity. Knowledge productivity will remain the dominant economic factor in a knowledge society”. Therefore, organizations
have to focus on effective use of their knowledge in order to reach a better
position on the market. This is a difficult task though as organizational
knowledge is usually tucked away in employees’ heads.
Furthermore, constant fluctuations in the environment force organizations to being flexible and adaptable. Customers’ demands are becoming more and more complex. Only those organizations which detect and
fulfil new needs and demands of their customers better, faster and cheaper
than others will achieve success.
4
Kessels J. W. M., Learning in organizations: a corporate curriculum for the knowledge
economy, Futures, Vol. 33, 2001
3. New forms of organizations
Organizations try to cope with the above described challenges in
various ways. Some of them introduce processes such as decentralization
or flattening of their structures. Others convince their employees to team
working, continuous learning and knowledge sharing. Finally, organizations experiment with new organizational forms. In the following part of
the article, the author will try to analyse selected organizational forms and
propose an integrated approach of a ‘flexi organization’.
Learning organization
This concept of an organization, created by Peter Senge5, is quite
popular among managers and directors. According to this concept, organizations should focus on the constant process of learning, which allows to build and sustain the competitive advantage6. In a learning organization people are not afraid to think and present their ideas. The
learning process is not limited to the learning of individuals, it is extended
to the learning of the whole organization: teams, project groups, units, etc.
The concept of learning organization highlights the importance of absorbing new knowledge and experience for the organization. In the environment where new technologies and methodologies substitute older ones at
an enormous speed, people are permanently faced with the need of learning new tools, ways of action, behaviour, tasks and functions7. Learning
in an organization means constant testing of experience and transforming
5
Senge P. M., Piąta dyscyplina. Teoria i praktyka organizacji uczących się, Dom Wydawniczy ABC, Warszawa 1998
6
Stanczyk-Hugiet E., Organizacja ucząca się, in: Krupski R., Zarządzanie przedsiębiorstwem w turbulentnym otoczeniu, Polskie Wydawnictwo Ekonomiczne, Warszawa 2005
7
Brilman J., Nowoczesne koncepcje i metody zarządzania, Polskie Wydawnictwo Ekonomiczne, Warszawa 2002
it into the knowledge available to every person in an organization and
crucial from the point of view of the major organizational goal8.
Agile organization
The concept of agile organization originated in manufacturing research by the Iaccoca Institute. The agility of an organization is its ability
to quickly react to changes on the market and in the business environment. An agile organization can easily adapt to unexpected changes in
order to cope with business threats. A great role in the agility of an organization play information systems and ICT9. The assumption of this
concept is that competitive advantage may be obtained not as a result of
copying methods and tools used by the Japanese in lean production, but a
result of implementing such solutions which are not used by competitors10. The idea is to give the enterprise the characteristics of agility,
which on the basis of knowledge supports its adaptation to changes in the
business environment. One can state that knowledge is the major resource
in the creation of organizational agility. An organization is not agile when
it just eliminates activities that does not bring profits or increases its efficiency; it is agile when it achieves successes in turbulent and unpredictable environment. Organizational agility is determined by the knowledge,
experience and invention of its members.
Network organization
8
Senge P. M., Kleiner A., Roberts Ch., Ross R. B., Smith B. J., Piąta dyscyplina. Materiały dla praktyka, Oficyna Ekonomiczna, Kraków 2002
9
Breu K., Hemingway Ch. J., Strathern M., Bridger D., Workforce agility: the new employee strategy for the knowledge economy, Journal of Information Technology, Vol. 17,
2001, pp. 21-31
10
Trzcieliński S., Modele zwinności przedsiębiorstwa, in: Trzcieliński S., Nowoczesne
przedsiębiorstwo, Politechnika Poznańska, Poznań 2005
A network organization is created as a combination of autonomic
and specialised units or enterprises for the purpose of a common aim realization. This organizational form benefit from the synergy effect. According to K. Łobos11, the network organization is based on the following
characteristics:
• decisions on resources are undertaken not only by the sides of transactions, but also together by the cooperating sides;
• resource flow between the cooperating partners is of repetitive, not
temporary character;
• mutual expectations of the cooperating sides cover long-term horizon;
• information available to the cooperating sides are more extensive than
in the case of market coordination;
• the form of action coordination between the cooperating sides are negotiations and agreements, not competition.
In a network organization a significant emphasis is placed on the
idea of information exchange and mutual trust. In order to convince the
employees of an organization to share all their knowledge and wisdom
with others, it is necessary to provide an atmosphere of trust and security.
Another aspect of a network organization, highlighted by researchers, is its strong dependence on information and communication technologies12. ICTs in a network organization are claimed to foster the development of innovative products and a speedier response to change.
Virtual organizations
11
Łobos K., Organizacja sieciowa, in: Perechuda K., Zarządzanie przedsiębiorstwem
przyszłości. Koncepcje, modele, metody, Agencja Wydawnicza, Warszawa 2000
12
See for example: Symon G., Information and communication technologies and the
network organization: A critical anaylis, Journal of Occupational and Organizational
Psychology, 73, 2000
Virtual organization is sometimes considered as a special form of a
network organization. In this kind of organization, the cooperating units
exchanging competencies are dispersed in various locations.
According to Niemczyk and Olejczyk13, the aspects of a virtual organization often highlighted in the management literature are as follows:
• the significance of information resources in the organization;
• kind of goals, which the organization should aim at;
• dominating features of organizational relations with its environment.
Grudzewski and Hejduk14 define a virtual organization as a dynamic management tool based on computer networks and the possibilities
of using information banks, such as the Internet, ideal for reaching comparative advantage. Virtual enterprises can also be perceived as “a temporary consortium of enterprises that strategically join skills and resources,
supported by computer networks, to respond better to a business opportunity”15. To sum up, this kind of organization also to a great extend relies
on ICT, which serve to eliminate the boundaries of time and location.
Process organizations
A process organization consists of units attributed to particular
processes, where processes are actions connected with the realization of
customer’s needs. As Cieśliński16 wrote, the role of process management
in organization is:
13
Niemczyk J., Olejczyk K., Organizacja wirtualna, in: in: Krupski R., Zarządzanie …op. cit.
14
Grudzewski W., Hejduk I., Przedsiębiorstwo przyszłości, Difin, Warszawa 2000
15
Camarinha-Matos L. M., Afsarmanesh H., Rabelo R. j., Infrastructure developments for agile
virtual enterprises, Int. J. Computer Integrated Manufacturing, Vol. 16, No. 4-5, 2003
16
Cieśliński W., Zarządzanie procesami, in: Perechuda K., Zarządzanie …op. cit.
1. to increase the effectiveness of human actions by structuring the activities according to the criterion of value added;
2. to structure actions by defining: tasks, decisions, documentation and
their flows;
3. to describe the process in an enterprise in a dynamic and spatial approach;
4. to indicate the dominating role of the customer.
Process organization is often a matrix organization in which coworkers are included in competence units, product areas, etc, and business
processes are imposed on them17. In a process-oriented organization the
greatest focus is on the customer and products delivery.
4. Flexi organization – an integrated approach
The concept of a flexi organization is another proposition for managers and company owners aiming at success in a knowledge-based economy. The word flexi is an abbreviation of flexible. The word flexible generally denotes the ability to adapt to changes and alterations in the environment. Flexibility in the organizational context might be applied in a
variety of dimensions, which is depicted in the picture below.
17
Karlof B., Loevingsson F., A to Z Management Concepts and Models, Thorogood, 2005, p. 290
Political
environment
Social
environment
Labour force
Company
Suppliers
Customers
Economic
environment
Picture 1. Dimensions of flexibility in a company.
Source: Own.
Organizations may undertake attempts to introduce flexibility in
three major dimensions: labour force, customers and suppliers. Below all
three dimensions are described in detail.
Labour force flexibility
Many years ago Charles Handy18 described contemporary organization by the metaphor of a shamrock. According to his concept, organizations should comprise of three groups of employees: one-third core staff,
one-third subcontractors and one-third part-time staff and professional
advisers19.
18
Handy Ch., Wiek paradoksu, Dom Wydawniczy ABC, 1996
Morgan R. E., Outsourcing: Towards the ‘Shamrock Organization’, Journal of General Management, Vol. 29, No. 2, Winter 2003
19
Nowadays the proposal of Charles Handy is more attractive than
ever. Many organizations employ temporary workers, specialized vendors, and consultants in order to flexibly cope with new opportunities or
threats20. Furthermore, the practical knowledge of employees and their
ability to quickly deal with unanticipated situations has become an essential resource of every organization21. Therefore, the flexibility with regard
to employees does not only encapsulate resilient employment management, but also the flexible behaviour and abilities to act of the employees.
Customer flexibility
The second dimension of flexibility regards customers. Their present needs fluctuate at incredible speed. Many products become obsolete
from day to day. It is of crucial importance for every organization to
quickly respond to market demands and competitors undertakings.
Knowledge on customers and their needs gives the basis for the company
to react ahead of time and to obtain revenue growth and customer
satisfaction. Flexibility with this regard require the implementation of
knowledge management strategies. The ability to gather, store, use and
share knowledge on customers might be the source of a long-term
competitive advantage.
Supplier flexibility
The third dimension of flexibility concerns suppliers. Similar to the
second dimension, it also requires the implementation of knowledge man-
20
Bahrami H., The emerging flexible organization: perspectives from Silicon Valley,
California Management Review, Summer 1992
21
Shoham S., Hasgall A., Knowledge workers as fractals in a complex adaptive organization, Knowledge and Process Management, Vol. 12, No. 3, 2005
agement strategies. Being in the possession of data about suppliers and
their production process, organization may negotiate profitable agreements. It may also select the best suppliers, and if need be, quickly
change the supplier.
Apart from the close environment, organization are vulnerable to
contingencies from political, social and economic environment. These
contingencies are in most cases impossible to predict. Therefore, it depends on the flexibility of an organization whether it will be able to survive in unfavourable circumstances.
5. Conclusion
To sum up, the concept of a flexi organization is a proposal for
companies to cope with the challenges of a knowledge-based economy.
This article presents a flexi organization within the scope of flexibility
dimensions. Further studies will aim at clarifying what practical implications this idea bears.
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