Grant (2002) highlights that the area of organisational structure and design is one of the most potentially interesting areas of the KBV application. This section will link the debate primarily to the organisational structure for decision-making within a KBV.
This thesis is mainly concerned with the firm’s ability to impede knowledge leakage and therefore, protect and sustain a competitive advantage. Furthermore, the goal of this study is to understand how organisation structure and design is used within a KBV strategy formulation. Hence, organisational structure will be linked to knowledge production and coordination while putting emphasis on efficacy and therefore, a debate between centralisation versus decentralisation. The specific focus of this study is based around the themes role and hierarchy in decision-making and location of decision-making which will be discussed in more depth in the following section.
66 | P a g e Organisational hierarchy, rules and regulations, and reporting relationships are comprised within the organisational structure (Herath 2007) and are considered a means of coordination and control in which firm actors can be engaged in the direction of organisational effectiveness (Krakel 2017; Mills and Smith 2010). While the discussion around coordination described eventual processes of production and integration and the types of knowledge required for such processes, the division of tasks between individuals and departmental structures and their interfaces should be explained within the organisational structure and design. Organisational structure and effectiveness have been studied widely, but how a structure passes on its influence on organisation effectiveness is insufficiently acknowledged (Zheng et al. 2010). Organisational effectiveness is:
“the degree to which an organization realizes its goals” (Daft, 1995, p. 98).
This thesis will define and view organisational effectiveness as the efficiency in achieving the knowledge production and coordination outcome as well as making the right decision. Therefore, the aspect of knowledge is central to organisational effectiveness. Argote and Ingram (2000) argue that performance is explained by what the organisation comes to know. Whereby, knowledge production and coordination contribute to improved performance (Epple et al. 1996; McEvily and Chakravarthy 2002).
Effectiveness has been linked by earlier studies to centralisation as the most studied dimension (Rapert and Wren, 1998). In short:
“the extent to which decision-making power is concentrated at the top levels of the organization” (Caruana et al. 1998, p. 18).
However, high centralization has received some critiques as it, for instance, inhibits interactions among organizational members (Krakel 2017; Gold et al. 2001) and reduces the opportunity for individual growth and advancement (Kennedy 1983).
67 | P a g e On the other hand, to achieve a greater level of communication (Holtzhausen 2002) and increase motivation and employee satisfaction (Elnaga and Imran 2014; Dewar and Werbel 1979) a decentralised structure has been favoured. Schminke et al. (2000) link decentralisation to increased responsiveness to market conditions. Furthermore, 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 facilitate knowledge management success (Pandey and Dutta 2013; 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, contributing factors of organisational structures and principles of organisational design within the KBV discussion are still underdeveloped. Henceforth, there is limited ability to explain developments (Grant 2011; Grant 2002) or explain how a KBV strategy can influence organisation structures and design.
Before the focus is given to the implications of the role of hierarchy and the location of decision-making, project management as a movement in management thinking during the 20th century will be highlighted. The second objective of this thesis is to
investigate a unique environment that can overcome issues of causal ambiguity, and the next subchapter will identify knowledge transfer partnerships as such an environment. Since knowledge transfer partnerships are delivered and managed in a project environment, project management excurses within the organisational structure and design discussion may be advantageous for future discussions.
Traditional project management approaches such as ‘waterfall methodologies’ (Giachetti 2016, Royce 1970), followed the scientific approach to management and the division of work and decisions making. One division is the delivering team who specialise in delivering outputs, whereas the other division are managers, who specialise in decision-making. It is basically a sequential process model and most effective when the problem is well defined, and the solution is well understood
68 | P a g e (Verma et al. 2014; Basili et al. 1994). This implies that the surrounding knowledge needs to be of explicit nature. Outgrowing methodologies from waterfall, such as PRINCE2, can have different outputs of production running simultaneously and linking to one another but are still very clear about decision-making rights based on hierarchy and therefore, follow the division of work and decision-making.
A more recent development within project management is agile-based projects (Moran 2015). Agile projects are considered to have a flat organisation structure, which considers flexibility to increase efficiency in delivering outputs. In the core of any agile development is the agile manifesto established in 2001 by the ‘Agile Alliance’, Beck et al. (2001) who states:
“We have come to value:
-Individuals and interactions over processes and tools.
-Working software over comprehensive documentation. -Customer collaboration over contract negotiation.
-Responding to change over following a plan.
That is, while we value the items on the right, we value the items on the left more”
(Beck et al. 2001, p. anon)
There is also a growing research stream that is based around the idea and issues surrounding the implication around knowledge within project management (Todorović et al. 2015; Ahern et al. 2014). However, the literature is lacking a direct link that could be established to the KBV as an act of project strategy.
Project management offices (PMOs) and their potential to act as knowledge brokers between projects, and between project and top management (Pemsel and Wiewiora 2013) has been widely discussed. Thiry and Deguire (2007) analysed developments around project-based organisations (PBO) and recognised that PBO are struggling to integrate knowledge and structures and that projects are often viewed as “singular ventures”. Bredin (2008) however, intended to increase the understanding of human
69 | P a g e resource management in project-based organisations by developing a conceptual framework, by drawing on the capabilities perspective on project-based organisations. Keegan and Turner (2002), looked into the management of innovation within PBO and asked the question if PBOs provide a context supportive of innovation. Corvers et al. (2016) place projects in the context of ‘Problem-Based’ and ‘Project- Based Learning’ for sustainable development. Whereas Pryke (2017) published the first book demonstrating how to apply the principles of social network analysis to managing complex projects.
Considering the second thesis objective - to situate the KBV in a context favourable to unveil SCA for the firm, and considering that projects are temporary organisational structures built to satisfy a project objective that may be linked to superior performance, the project-based approach may be beneficial to unveil SCA of the firm and will be further discussed in section 2.5.