CLAN, ADHOCRACY, MARKET OR HIERARCHY?

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1 1 CLAN, ADHOCRACY, MARKET OR HIERARCHY? Investigating organizational culture types and knowledge sharing in Bulgaria, Hungary and Serbia Prof. Dr. Zoltán Gaál Department of Management, University of Pannonia Dr. Nóra Obermayer-Kovács Department of Management, University of Pannonia Anikó Csepregi Department of Management, University of Pannonia Albena Antonova Faculty of Economics and Business Administration, Sofia University Ervin Jenei University of Novi Sad, Faculty of Economics Subotica Abstract. What inspires employees especially managers, working under top managers, to share their knowledge within their organization? The authors have conducted an empirical survey in Bulgaria, Hungary and Serbia, which intends to answer this question. Beyond studies focusing mainly on the regions of the USA, Japan and Western Europe, there is barely any research work focusing on knowledge sharing in the Central-Eastern European region, which increases the importance of this research. A questionnaire, which was based on our model, was used to conduct the survey. According to our model one of the influencing factors of knowledge sharing was revealed to be organizational culture. Our paper makes an attempt to compare the organizational culture of the investigated Bulgarian, Hungarian and Serbian managers enterprises and to compare the type of knowledge sharing generated at the dominant culture types of the investigated countries enterprises. Keywords: knowledge sharing, organizational culture 1. Introduction In order to maintain market position, to develop new products and technologies in a knowledge economy, organizations should exploit, develop, collect and also share organizational knowledge effectively and efficiently (Gaál et al. 2008). One of the important features of knowledge sharing is that knowledge stays in the organizations long after the employees leave it. Thus the leaders and managers of organizations should be aware of this and recognize that the old paradigm "knowledge is power" cannot exist today any more. Accordingly, they ought to find ways to motivate, encourage colleagues to achieve the new paradigm of the XXI. century which is sharing knowledge is power (Csepregi 2008). Knowledge sharing will become realistic in organizations if employees working there understand that sharing knowledge can support them in retaining their jobs, doing their jobs more effectively and helping their personal development (Gaál et al. 2008).

2 2 2. Theoretical Background Since knowledge management initiatives are impeded mainly by culture (Benbya & Belbali 2005, DeTienne et al. 2004, Hendriks 2004, Park et al. 2004), having an organizational culture inconsistent with knowledge management programs is realized by managers as an expanding problem (DeTienne et al. 2004). Companies should also harmonize the knowledge management objectives, they aimed to achieve, with the culture of their organization. Furthermore, the adaptation of the knowledge management system to the organizational culture might be more effective than making an attempt to change the culture of the organization (Park et al. 2004). McDermott and O Dell (2001) have also suggested companies to build a knowledge management approach that fits to their culture, since however strong the approach and commitment to knowledge management is corporate culture is much stronger. Hence, the culture of an organization should not be regarded as a result of knowledge management. Rather an antecedent of it. Other studies have also shown how culture can break or make efforts to manage knowledge effectively in an organization (Bair et al. 1997, Davenport & Prusak 1998, Leonard- Barton 1995, Wenger 1998). Koskiniemi emphasises the importance of culture in knowledge sharing as follows successful knowledge sharing is 90 percent cultural, 5 percent tools and 5 percent magic; all the technology and tools in the world will not make you a knowledge-based organization if you do not establish a culture that believes in sharing (Greengard 1998:82). Finally, positive correlations were found between specific cultural attributes, such as trust, working closely with others, team oriented work, sharing information freely and support of employees, and the successful implementation of knowledge management technology and knowledge sharing (Park et al. 2004). According to our research knowledge sharing is a two-way process (giving and receiving knowledge) between the knowledge giver(s) and the knowledge receiver(s) who as participants of knowledge sharing exchange the knowledge found in their minds or in electronic or paper documents; the sharing of knowledge can occur at the same time when the participants are present or at different times when they make their knowledge explicit. Christensen (2007:37) believes that the goal of knowledge sharing can either be to create new knowledge by differently combining existing knowledge or to become better at exploiting existing knowledge.

3 3 3. Methodology 3.1. Research Participants Since our research focuses on managers working under top managers in Bulgaria, Hungary and Serbia we investigated managers working in the field of HR, manufacturing, production, maintenance, logistics, finance, accountancy, controlling, commerce, supply, sale, marketing, project management, quality management and R&D. A questionnaire was composed based on the research and was tested by managers it was sent to. The survey with the final questionnaire has been conducted in Hungary since 2006, in Serbia since 2008 and in Bulgaria since 2009 among managers working under top managers at mainly medium and large sized enterprises. The survey in the investigated countries has not been completed yet. It is still in progress and the present phase of this survey - when the sample is based on the answer of 56 Bulgarian, 100 Hungarian and 50 Serbian respondents already unfolds some interpretative and explanatory coherence, differences or similarities, initial results between the investigated three countries that may affect the research. Figure 1. The distribution of the participants from Bulgaria, Hungary and Serbia This Figure demonstrates the distribution of the managers from the three investigated countries according to their field of work Organizational Culture Although several methodologies (Handy 1993, Trompenaars 1998, Heidrich 1999) are known to examine the culture of organizations, we used the Competing

4 4 Values Framework of Cameron and Quinn (1999) to diagnose the organizational culture of the investigated managers. This Framework uses two dimensions for disclosing culture types. The vertical dimension differentiates effectiveness criteria that accentuate flexibility, discretion and dynamism from another criteria that emphasizes stability, order and control (Cameron & Quinn 1999:34). The horizontal dimension also differentiates two effectiveness criteria from each other: the one that emphasizes internal orientation, integration, and unity from the criteria that stresses external orientation, differentiation and rivalry (Cameron & Quinn 1999:34). Based on these two dimensions their Framework allows for four core culture types to be distinguished, presented in the four quadrants of Figure 2. These culture types are Clan, Adhocracy, Market and Hierarchy culture types. Their names were not randomly selected; they were derived from scholarly literature which explains how different organizational values and forms have become associated. Based on the core culture types the dominant orientations of the organization can be determined. Figure 2. The Competing Values Framework - Corporate Culture types (Cameron Quinn 1999) An organization that has Clan culture type is characterized by internal maintenance with flexibility whilst by possessing an Adhocracy culture type the organization concentrates on external positioning with a high degree of flexibility and discretion. While Market culture type pays attention to external positioning with a need for stability and control, an organization that has Hierarchy culture type focuses on internal maintenance with the need for stability and control (Cameron & Quinn 1999).

5 5 Table 1 contains additional features of these four core culture types. CLAN ADHOCRACY friendly Workplace dynamic, entrepreneurial, creative like an extended family loyalty, tradition, commitment, teamwork, participation human resource development, high cohesion, morale Sensitivity to customers, concern for people Japanese firms mainly after WWII, an Airline in USA in its first 5 years HIERARCHY People Glue Long-term focus Success Example formalized, structured Workplace result-oriented take risks, ready for change, meet new challenges, initiative commitment to experimentation and innovation growth, acquirement of new resources gaining unique, original products or services, being product or service leader Aerospace, software development, think-tank consulting, filmmaking industries MARKET procedure governed People competitive, goal oriented emphasis on winning, formal rules and policies Glue reputation, success competitive actions, achievement of measurable goals, tar- stability, predictability, efficiency focus Long-term gets low cost, dependable delivery, market share and penetration, Success smooth scheduling large organizations, government agencies, U.S. fast food restaurants Example market leadership organizations with results-orelse, taking-no-prisoners competitive approach Table 1. Characteristics of Culture Types (Cameron & Quinn 1999:222) The Organizational Culture Assessment Instrument, which is based on the Competing Values Framework, consists of 6 items. These items are dominant characteristics, organizational leadership, management of employees, organizational glue, strategic emphases and criteria of success. Each of these items has four alternatives, which fits the 4 culture types. 100 points are divided among these alternatives depending on the extent to which each alternative is similar to the organization of the investigated managers. The average score for each culture type is calculated by adding the responses of each alternative and dividing it by 6. This Framework also enables the mapping of the preferred culture types of organizations (as they think their organization should be in the future) besides the present ones (Cameron & Quinn 1999).

6 Knowledge Sharing of Organizational Culture Types This section uses the features of the four organizational culture types of Cameron and Quinn (Table 1) and contains the kind of knowledge sharing generated by them by using the method of deductive logic and literature research. Our statements emerged during the comparison of the results of our organizational culture research and knowledge management research. At Clan culture type the personalization knowledge management strategy has a significant role in the evolvement of knowledge management in an organization. Personalization strategy focuses mainly on the dialogue between individuals, thus at this approach knowledge is shared through networks of people, not only faceto-face communication, but also via electronic communication (Hansen et al. 1999). This culture type has collaborative orientation and is fundamentally based on trust which encourages knowledge sharing. The features of extended family, tradition, loyalty show that the members of the organization are very close and thus the knowledge sharing can be realized easier. Outsiders can hardly gain trust or it takes a longer time for them to gain trust from the insiders. The creative orientation of Adhocracy culture type may appear as a culture type that mainly hinders the sharing of knowledge, since it is mainly based on individuals who for instance like to take risks, meet challenges, be innovative, and commit experiments. In spite of these characteristics the managers should keep in mind that the use of adequate instruments such as motivation, reward, and recognition can facilitate the sharing of knowledge within this kind of organizational culture type as well. The sharing of knowledge in such an organizational culture type can be achieved if the organization itself changes by focusing on and motivating not the individuals, but the group of people who work there. The group should be motivated to be innovative, to meet challenges and take risks, thus the individuals within the group will not compete rather cooperate with each other to do so and finally reach a knowledge sharing culture. Market culture type with its competing orientation may also appear as a culture type that mainly hinders knowledge sharing, but the managers should keep in mind that the use of adequate instruments such as motivation, reward, and recognition can facilitate the sharing of knowledge within the organization. Basically, the determination of measurable goals, targets is the key incentive of knowledge sharing depending on their achievement and valuation. If the goals, targets are defined properly and can be achieved only by the cooperation of people or groups and valuation of the performance will be based on the work of the group, thus the sharing of knowledge can be accomplished easily. On the other hand if these goals, targets are assigned to separate individuals and not to groups, their

7 7 achievement will lead to competition and to individual performance valuation and not to cooperation and to group performance valuation thus the sharing of knowledge cannot be realized. At Hierarchy culture type it is the codification knowledge management strategy that defines the management of knowledge within the organization. This strategy focuses on codified knowledge which is made independent of the person who created or developed it and thus the knowledge can be retrieved, shared without having to contact others, since knowledge is stored in documents, databases, manuals etc (Hansen et al. 1999). The sharing of knowledge is mainly forced since this culture type has controlling orientation and is based on formal rules and policies. If these rules, policies are determined adequately, the forced knowledge sharing can be completed with characteristics that allow voluntary knowledge sharing as well. Similar results were found by other authors (Hendriks 2004, Park et al. 2004) by mainly concentrating on the personal and the codified sharing of knowledge. According to Hendriks (2004) the Clan culture type is favorable for knowledge sharing, particularly through face-to-face and personal meetings. In an independent and individualistic Adhocracy culture type people are rather related to the system thus being task-oriented, than to a person, hence not being person-oriented (Hendriks 2004), thus knowledge is mainly shared using different IT devices. Park et al. (2004) think that when Adhocracy culture type becomes dominant in an organization its individualistic, risk taking, innovative features may appear as hindering elements from succeeding in the management of knowledge. The strong result-orientation and competitive behavior of Market culture is aliened to the philosophy of knowledge management (Hendriks 2004) and disadvantageous for the success of knowledge management (Park et al. 2004). This culture type will only enhance knowledge sharing if employees are explicitly rewarded for sharing what they know (Hendriks 2004). A Hierarchical culture type with its closed, formalized nature favors codification and normalization for achieving internal communication and hinders personal knowledge sharing (Hendriks 2004). The Organizational Culture Assessment Instrument of Cameron and Quinn is not only used for analyzing the knowledge sharing of managers working under top managers, but also at investigating full time university students and their cultural intelligence (Balogh & Gaál 2010), and examining companies in Hungary using e-business solutions (Gaál & Szentes 2009).

8 8 4. Results and Discussion 4.1. Investigation of Organizational Culture Types The following diagram and table in Figure 3 show the present culture types of the examined managers in the investigated three countries by using the Framework of Cameron and Quinn. It can be seen that the organizational culture of the Hungarian and Serbian managers bear a resemblance and difference from the organizational culture of the Bulgarian managers. Comparing each culture type the diagram shows that Clan and Market culture types are very similar to each other in the investigated managers organizational in all the three examined countries. Contrary to these two culture types the analysis of Adhocracy and Hierarchy culture types indicates remarkable differences. Comparing the organizational cultures of the examined countries, the investigated Bulgarian organizations possess the most adhocratic features among the examined countries organizations. The presence of Adhocracy culture type is not only much lower in the investigated Hungarian and Serbian organizations but there are hardly any differences comparing their ratings with the ratings of the examined Bulgarian organizations. Noticeable difference can be revealed at Hierarchy culture type as well. Comparing the ratings of the investigated Hungarian and Serbian organizations with the ratings of the examined Bulgarian organizations it can be seen that the Bulgarian organizations have the least hierarchic characteristics among the organizations of the three countries. Figure 3. Present culture types of Bulgaria, Hungary and Serbia

9 Investigation of the Dominant Organizational Culture Type and Knowledge Sharing The diagram of the present culture types of the investigated countries organizations also shows that while in the investigated Hungarian and Serbian organizations the Hierarchy culture type has a dominant orientation, in the examined Bulgarian organizations the Clan culture type emerges as a dominant culture type among the existing four culture types. The presence of internal focus and integration as the criteria of effectiveness are the common characteristics in these two dominant culture types. Meanwhile Hierarchy culture type also emphasizes stability and control, and Clan culture type stresses flexibility and discretion, as well, investigating the other dimension as the criteria of effectiveness. The investigated Hungarian and Serbian organizations by having a dominance of Hierarchy culture type are held together by formal rules and policies. Their workplace itself is formalized and structured. They emphasize the long-term importance of stability, predictability, and efficiency. The success is defined in terms of low cost, smooth scheduling and dependable delivery (Cameron &Quinn 1999). Employees in such organizational culture types are mainly forced to share their knowledge, but if the rules and policies are created adequately the sharing of knowledge can be completed with characteristics of voluntary knowledge sharing as well. The dominance of Clan culture type in the investigated Bulgarian organizations shows that loyalty or tradition holds the organization together. Employees work at a friendly workplace. Their long-term concern is on the emphasis of human resource development, cohesion and morale. They define success in terms of concern for people and sensitivity to customers (Cameron & Quinn 1999). Knowledge sharing is realized here through networks of people, face-to-face and electronic communication which is encouraged by the collaborative orientation and trust within the organization. 5. Conclusion It is recognized that employees are becoming valuable production factors instead of being only a uniform working mass of little value (Boda & Lőrincz:108). If employees, having critical knowledge for the company, share their knowledge, hopefully it stays in the organization long after they leave it or have to leave it. The sharing of critical and other kinds of knowledge is significantly influenced by

10 10 the culture of the given organization as well. Moreover, the development of an adequate knowledge sharing process will create better conditions for knowledge management. Although our survey is still in progress some interpretative and explanatory coherence, differences or similarities, initial results that may affect the research can be unfolded between the investigated three countries and their organizations, which may be more precise if the sample becomes more extensive in the future. Our paper revealed that the investigated Hungarian and Serbian organizations with their dominant Hierarchy culture types should form their rules, procedures and policies to encourage not only forced knowledge sharing but also voluntary knowledge sharing. The examined Bulgarian organizations with their dominant Clan culture type realize knowledge sharing in a more effortless way because of their collaborative orientation and trust that occurs within the organization. Companies should fundamentally avoid the dismissal of employees with critical knowledge for the company (Boda & Lőrincz:108) and should create a culture that facilitates knowledge sharing and thus these employees will want to share their knowledge with other members of the organization mainly voluntary. If this cannot be achieved, the culture itself should be modified or changed by using different methodologies, devices as motivators and other encouraging techniques to achieve a culture with better knowledge sharing practice. The methodology of PEM, which is mainly used at IT projects but could be applied in case of other projects as well (e.g. changing organizational culture project), can reuse earlier experiences of similar projects coming from inside or outside the organization. PEM can be used at projects, when the sequence of tasks is not fixed, but changable. In the matrix the probability of the tasks is shown that derived from similar projects earlier (Kosztyán & Kiss 2009).

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