The implication for the distribution of decision-making in this discussion will focus on the balance between centralisation and decentralisation hence, it follows from the ‘role of hierarchy in decision-making’. The aim of this section is less to discuss the linkage between decision rights and ownership per se, as this drives a discussion into the theory of the firm which is not the focus of this research. However, Agency theory was mentioned earlier to highlight the problems of divergent goals within individuals.
73 | P a g e The previous section established that the quality of decision-making could be affected by the barriers of vertical knowledge transfer. Grant (2011) argues that there is a weakness of scientific management and hierarchal models in particular, which assume that managers have accessibility to the knowledge of their subordinates.
Nevertheless, there are two strategic options. The first option is that decision-making can be allocated to the individual specific knowledge holder or group of specific knowledge holders, who then have to establish a mechanism for decision-making. The second option is that decision-making is centralised to the desired location. Nickerson and Zenger (2004) argue that high degrees of different types of knowledge for knowledge integration results in high degrees of knowledge sharing and hence, favour consensus-based decision-making over centralised decision-making. The earlier section already discussed that less centralised environments support lateral and vertical communication and enable ‘experts’ to have a greater say in decision- making than the designated authority (Rishipal 2014; Burns and Stalker, 1961). Hence, the organisational management literature mostly concludes that flatter structures are facilitative to knowledge management success (Islam et al. 2015; Foss et al. 2010, Gold et al. 2001; Grant 1996; Damanpour 1991) and positively related to the effective production and integration of knowledge in the firm (Beveren 2003; Gold et al. 2001; Grant 1996; Nonaka and Takeuchi 1995).
However, the KBV does recognise that lower complexity and therefore, more explicit driven knowledge could be transferred at low cost and aggregated to a central location which would support the earlier identified subsequent assumption of economies of scale in decision-making, with examples given as single corporate treasury or purchasing of standardised items (Grant 2002).
On the other hand, the implicit assumption is that, if decisions require specialisation of knowledge and if that specialisation results in high complexity of knowledge, especially if the common knowledge between knowledge holder and decision maker
74 | P a g e is limited, then centralised decision-making will be of poorer quality then co-location of decision-making.
In order to satisfy the first research objective and advance the KBV as an act of strategy formulation, this thesis discussed different types of knowledge and undertook a subsequent discussion about the SCA of the firm. A firm theoretical perspective was discussed and linked to the KBV. Furthermore, KBV was broken down into more specific themes that could be linked to SCA as well as understanding their assumptions and possible mechanisms that may inform knowledge processes. A need for an environment to link SCA to the KBV-themes is emerging that can unveil and either strengthen or weaken some of the assumptions deducted or made. Hence, the following section will have an in-depth discussion to justify such an environment.
75 | P a g e
2.5 - Knowledge Transfer Partnership (KTP)
The sections above highlighted some major challenges for empirical research which this chapter will address while placing a Knowledge Transfer Partnership (KTP) as a strategic research fit to satisfy the second research objective:
To investigate a unique environment with potential to overcome the main issues of causal ambiguity
As well as overcoming the causal ambiguity challenge, the case study also needs to have the capacity to shed light into, and not hinder any of the four main assumptions of the KBV derived in the earlier section. The four assumptions are:
knowledge is considered to be the most strategically important resource of the firm
that there is a difference between tacit and explicit knowledge with tacit knowledge being essential to achieve SCA
that tacit knowledge is acquired and stored in a ‘highly specialised form’ within individuals
that production needs a widespread range of knowledge
Furthermore, this chapter will provide some more information to understand KTPs. The Methodology chapter will place KTPs as the main case study example which will be used to satisfy the third objective. Therefore, this section will form a rationale to have found an environment which can retrospectively observe and gain some insight into the KBV’s ‘magic’ (reference to previously used analogy).
76 | P a g e
2.5.1 - KTP Background
The KTP programme and its predecessor, the Teaching Company Scheme has a track record of over three decades to create impact in the area of SCA and Innovation. It is currently headed by the Technology Strategy Board and supported by 12 other public sector funding bodies including research councils and government departments. The Teaching Company Scheme was based upon the teaching hospital idea ‘learning by doing’ and originally funded under the Science and Technology Act 1965 and established in 1975 by the Science and Engineering Research Council. The standard funding for KTPs usually covers 300 projects a year and an additional £30m was announced by Innovate UK to support an extra 200 KTPs during 2017 (Hastings 2017).
“The benefits of this investment are projected to be a £211 million increase in annual profits for businesses involved, 450 new jobs and 6,000 company staff trained” (Innovate UK 2015)
KTP is nowadays seen as an important way for universities to interact with businesses, helping them to improve their productivity, performance, develop innovative solutions and increase competitive advantage by closing their identified knowledge gap (KTP 2009).
Every KTP project has a proposal (application) and an end project report. The proposal can be used to find suitable KTPs as it will discuss the knowledge gap to be filled and explain the strategic importance of the KTP. The end project report will reflect on the outputs identified at the start and discuss how successful the KTP was perceived by the KTP Key Stakeholders. The report will also highlight outcomes such as increased sales because of the KTP activity and may even have the benefits which will state, for instance, 15% increase in sales during the period of KTP activity. However, it is envisaged that most of the benefits will be realised after KTP closure which means that this information should be gathered from the Key KTP Stakeholders with a time gap (ex-post) so benefits can be identified and linked to SCA. Consequently, the use of the end project report is not essential to satisfy the aim of this thesis. However, it
77 | P a g e would be important to select KTPs based on their project proposal and end project report. Furthermore, the methodological approach to the selection and use of reports will be discussed during the methodology chapter.