6 Utilizing employee knowledge

Configuring the structural frame of learning organization and thus enabling practices of relational learning is not only important but a necessary condition, when establishing the management conditions encouraging employee-driven innovation in the firm. Though necessary it is not the sufficient condition to establish the learning environment for innovative capabilities. A sufficient condition within the structural frames for learning relations is the active commitment of and support from the employees. Without this active culture of commitment it will be difficult for management continuously to mobilize the human resources in dynamic organizational adjustments, which is decisive for internal efficiency of strategic capability management.

The employee based cross functional communities of practice would not be inclined to react with the necessary urgency and efficient routines in the direction set by the strategic management level. Most of the organizational principles included in the frames composing relations of the learning organization are dependent on employee involvement as well as relational autonomy within the skillful use of discretion in the work situation and in situations of change.

These principles of work and their implications mean that strategic and tactic management has gained importance and operational management has changed its functions. The decisive point is to which degree the employees feel collective ownership of and influence on developing their frames of work. A very important instrument to build sufficient commitment is to involve the employees in organizational development processes. We have asked the management in 2001 and 2010 how important they think cooperation with employees is when changing procedures or developing the organization.

19982000*

20072009**

Decisive importance

39,2

Great importance

43,3

45,0

Some importance

29,3

10,8

Minor importance

4,5

No importance

10,2

3,0

Don’t know

6,6

1,5

Not relevant

6,0

Table 11 How important is the cooperation with the employees when making organisational changes/developments in the firm? (Percent vertical)
* No response possibility ‘Decisive importance’.
** No response possibility ‘Minor possibility’ and ‘Not relevant’.
Source: Disko 4 and GOPA survey

It is a remarkable development in management evaluation of cooperating on change and development, which can be observed in the table. For the period of 19982000 almost 15 percent considered collaboration on organization development of minor or no importance. Ten years later in the period of 20072009 only 3 percent considered such collaboration of no importance. The same tendency of decline can be observed in the share considering collaboration of some importance. The share in in the last period is reduced to a little more than a third of what it was in the first period. Observing the decisive and great importance, evaluated in the period of 20072009, the management support of collaboration between employees and management represented by 84 percent is quite overwhelming. This is evidence of almost consensus among the management that collaboration with employees is considered important in situations of organizational change. The question which follows is whether and how management makes use of the knowledge resources of the employees in change situations. An indicator of this is how early in the process of change the employees or their representative are involved.

19982000*

20072009

Idea phase

21,1

34,5

Decision phase

21,3

24,7

Implementation phase

41,9

32,5

No involvement

15,7

4,2

Don’t know

4,2

Table 12 At which phase in the change process are the employee representative or/and the employees concerned involved? (Percent vertical)
* No response possibility ‘Don’t know’.
Kilde: Disko 2 and GOPA survey

Parallel to the development in the management evaluation of collaboration it is quite obvious from the table that management makes increasing use of the human resources in the idea phase of the process of organizational change. From one fifth in the first period the share increases to one third in the last period among firm management which involves the employees or their representative in the idea phase of the change process. Not only the idea phase becomes an important collaboration forum but also the decision phase increases in importance. In sum there is a strong linear tendency of management to involve the employees in early phases of the processes of organizational development of the firms. The early involvement allows the employees to influence the decisions and solutions of the change. In this way process knowledge and operational implications becomes integrated in the development and the implementation of the solutions become more efficient without loss of productivity. Even though the figures only present a superficial picture of the employee involvement and their influence, it seems to indicate the extensive preconditions for mobilizing knowledge, learning meta-routines and gaining commitment in this area which all is important for vibrant dynamic capabilities.

The evidence of involving employees and their representatives in the early phases of organizational development makes it interesting to study the development in use of various collaboration channels. In general the collaboration can take place directly between management and the employees or it can take place between management and employee representative within institutional collaboration channels. In many European countries there is a long tradition for this institutional based collaboration between management and employees in firms. The original idea was to introduce democracy in the employee related decisions and give information and influence on management decisions on implementation of new technology, changes in work organization and personnel policy. The employee influence takes place indirect through elected representatives meeting their management counterpart in the corporation committees or ad hoc project groups. In sum the collaboration cannels seen from the individual employee can be direct or indirect through employee representatives (Knudsen et al. 2009). In the table below the use of direct and indirect channels of collaboration is shown for two periods with almost ten years between.

19982000*

20072009**

Employee***

Employee representative participates in management common meetings

17,6

28,8

42,6

Project groups with management and employee representatives

47,3

53,2

49,4

Within the firm’s cooperation committee

29,7

33,7

47,5

Employee representative on firm’s board

13,7

17,7

32,3

Common meetings with employees concerned

83,3

74,2

60,2

Common meetings with all employees

65,0

63,7

59,1

Direct contact with individual employees concerned

89,4

88,0

72,7

Table 13 How is the cooperation between management and employees arranged in relation to internal change processes in the firm? (Percent shares)
* Percent share: ‘Yes’.
** Percent share: ‘high degree + some degree’.
*** Employees in the firms answered precisely the same question as their employers in 2010 GOPA-survey and the ansvers are summarized like above: high degree + some degree’.
Source: Disko 2 and GOPA survey

Theoretically the two forms of influence – direct and indirect – have been considered two essentially different approaches to collaboration between management and employees in firms (Hyman & Mason 1995). The direct influence – is based on management initiative and desire of involving employees in decisions concerning their work processes and conditions. This approach is founded on the relation between individual influence, motivation and performance in work. Thus the direct influence as approach is related to Human Relations-, Motivation- and High Performance theories. The indirect influence is based on employee initiative and desire of democracy in work relations and influence also on the tacit and strategic level of management (Knudsen et al. 2009). This approach is founded on the policy of introducing democratic collaboration principles inside the walls of enterprise which emerged after the Second World War. The approached is related to collective interests and the Industrial Relation theories.

Empirically it is quite evident from the response distribution in the table that the channels representing direct form of influence is more frequently used in collaboration between management and employees on change processes than the indirect form of influence. On the other hand there is no indication of the direct form crowding out the indirect form over time. The share of firms using cooperation committee as channel of collaboration has increased with 13 percent form the first period 19982000 to the last 20072009. In the same way the share mentioning employee representative in management meetings is increased with 64% up to 29 percent of the firms in 20072009. Also the share mentioning employee representative in the board has increased between the two periods. Contrary to this tendency of growth in use of indirect channels, the use of direct channels of collaboration has decreased from the first to the last period. Meetings with the affected employees have decreased from 83% to 74% and also common meetings with all employees have decreased from the first to the second period. The most interesting in relation to changes in usage pattern of indirect and direct channels is perhaps that the employees in their responses are much more inclined to mention the indirect channels of collaboration. The distribution between direct and indirect channels is much more even here, compared to the management responses. Even though the units of analysis are different in the two measurements, this can be indication of variations on normative weight put on direct and indirect channels of collaboration from management and employees.

Research on the employer responses both from the first period 19982000 (Nielsen 2004) and the last period 20072009 (Nielsen et.al. 2012) has shown, that firms with high propensity to innovate product or services as well as organizational processes, frequently combine the two approaches of collaboration and in this way practices a cooperation regime, using both instruments from the collective interest representation and the individual involvement of new organization principles. An important tactic dimension in a model encouraging employee driven innovation in the firm is such a cooperation regime. Basically it combines the individual influence and control of the work processes with relational influence and control within the work group and collective influence in relation to management (Hvid 2009).

It is indeed an interesting question how and to which degree management finds the collaboration furthering or hampering the organization development of the firm. Both the attitude and the qualifications of middle management and of employees on operational level can hamper or further the organizational development just as the more institutional channels of collaboration.

2000

2010

Furthered

Hampered

Furthered

Hampered

Attitudes of employees

32,7

14,7

39,3

6,0

Qualifications of employ.

26,7

11,3

38,0

5,7

Attitudes of middle manag.

43,8

14,8

55,2

5,0

Qualifications of middle m.

35,6

17,8

49,2

6,2

Cooperation committee

21,6

2,0

21,6

3,5

Work environment commit.

23,1

2,5

Shop stewards

18,8

6,1

17,9

3,7

Table 14 Have the following factors furthered or hampered the organizational development of the firm? (percent shares)
Source: Disko 2 and GOPA survey

Observing patterns in the importance of employee’s attitudes and qualifications over time there is clear indication on increase in the share furthering organization development. This is especially the case for employee qualifications. Even more noticeable is the decline of employee’s attitudes and qualifications hampering organizational development. The decline is fifty percent for qualifications and sixty percent for attitudes. Looking at middle management this also confirms the above pattern for employees. The share of firms responding furthering attitudes and qualifications is increasing fifty percent and more from the first to the second period and the share responding hampering attitudes and qualifications is essentially declined. This is quite remarkable because of the advanced and vulnerable position of the middle management in situations of organizational development and change. The observations unambiguously reveal a pattern where middle management increasingly is a proactive resource in organizational developments.

Looking at the importance of the institutional channels of collaboration and their representatives it is clear that the pattern is quite stable over time. Importance of the work environment committee is measured for 2010 only and receives the highest score on furthering and the lowest among hampering among the institutional channels. This could be an indication that work environment considerations play a constructive part in some of the firm’s organizational development processes.