ORGANIZATIONAL THEORY

Transcription

1 S P R I N G Copenhagen Business School ORGANIZATIONAL THEORY March 13th 2013 STU count: Copenhagen Business School BSc International Business and Politics Organizational Theory Exam 1

2 Introduction The main subject of this paper is knowledge management in global arrangements. The way this paper chooses to dive into the subject is through an analysis of the knowledge sharing processes in the NPO called AIESEC. AIESEC is the world s largest student run organization, which boasts over members in universities across the globe. AIESEC is a leadership platform that facilitates exchange for students and recent graduates, working towards their vision of peace and fulfillment of humankind s potential. The organization was founded in 1948 in seven European countries and has now expanded to 113 countries and territories. What is remarkable about AIESEC is that its vast amounts of knowledge from 65 years of experience along with 113 different cultures involved, needs to be passed on annually as AIESEC replaces its leadership body across the globe every single year. This is why this paper focuses on AIESEC. The organization poses some very interesting dynamics by being student-run, voluntary and with an annual leadership change. In the perspective of organizational theory this presents us with constantly changing and extremely dynamic internal working conditions, which knowledge management needs to address. This paper will take an intra-organizational, modernist perspective on how AIESEC can best optimize these knowledge transfers year after year without losing important knowledge. It will do so by attempting to answer the research question: How can AIESEC attain and transfer the knowledge accumulated through time and space, taking into consideration the annual replacement of all leadership bodies? This paper will do so by primarily classifying AIESEC through Mintzberg s five types of organizational structure. Hereafter it will look into the definition of knowledge and attempt to identify the modes through which this knowledge can be conveyed, using Nonaka and Takeuchi s four modes of knowledge transfer and the Knowledge Spiral. To continue we will apply Jay Galbraith s modernist model of organizational design on the issue of transaction costs in knowledge transfer and how to minimize them. Finally, we will use Schein s theory of organizational culture to analyze the motivation behind knowledge management in AIESEC, considering its voluntary nature as an NPO. The paper will end with a summary and conclusion of its findings. 2

3 Classifying AIESEC as an organization This paper takes its departure in a classification of AIESEC as an organization using Henry Mintzberg s five types of organizational structure (p. 105, Hatch, Mary J. Organization theory: modern, symbolic, and postmodern perspectives. Oxford: Oxford University Press, 2013), adding his own expansion of the theory in In the 1979 book The Structuring of Organizations Mintzberg created his famous structure in fives, classifying organizations in five ideal types. First is the simple structure, which is the most basic, classified by a power concentration in the top and with easy access between managers and employees. This type is typical for smaller companies. Next is the machine bureaucracy which focusses on standardizing the organization s processes. This type is very efficient, but not particularly flexible and relies on detailed planning, hence making it fit for companies involved in mass production. Third is the professional bureaucracy which is similar to the machine bureaucracy, but relies more on standardized skills rather than processes. This type is less hierarchical and is most suited for organizations in complex yet stable environments. The fourth structure is the divisionalized form, characterized by somewhat autonomous divisions running their own productions while having their performance monitored by divisional managers, based on standardized measurements. This structure is best in complex and unstable environments due to its flexibility. Finally is the adhocracy which relies on teams of experts who innovate new ideas and solutions to ever-changing problems. Here power and decision-making is highly decentralized. This structure is best in turbulent and insecure environments in need of constant innovation. (p. 106, Hatch, 2013) When looking at these five typologies it can be a bit difficult to place AIESEC in a category that truly fits. One may be tempted to place it in the divisionalized form when viewing the organization from an international perspective as each country runs its own operations with bases in several Local Committees across the country, that report back to headquarters in Rotterdam. Although the process for opening and closing divisions is not particularly simple, it can still happen within a year. Still, this type does not capture the full spectrum of what AIESEC is as it neglects that AIESEC is student-run, voluntary and not-for-profit. In 1989 s Mintzberg on Management, the Canadian expanded his classification to include a sixth type of organization; the missionary organization. In this type of organization the mission is central, clear and inspiring. Every member of the organization identifies with this common goal and shares common values, while being motivated by their own passion to fulfill these (MBS Portal, 2013). As opposed to the original five, this classification explains above all the type of organization AIESEC is. With their common vision, mission and goals (AIESEC CBS HP) the first part of the description is fulfilled. Simultaneously, considering that AIESEC is student-run and voluntary, with 3

4 income not as a motivation, this coincides with the statement that a missionary organization s central motivational factor is the employees own passion for what they do. What is interesting to look at in regards to AIESEC as a missionary organization, is what lies behind the motivation. Which incentives drive members to convey and share knowledge across barriers between 113 countries and how is this structured with no initial pay-back than the experience? This will be considered throughout the paper. What is knowledge and how is it conveyed? In order to talk about knowledge management, it is first important to define what we mean by knowledge. Using the dictionary definition, knowledge is the fact or condition of knowing something with familiarity gained through experience or association (Merriam-Webster, 2013). We can further define knowledge by dividing it into two types, namely explicit and tacit knowledge. Explicit knowledge is codified, registered and stored, for example in books or databases. Tacit knowledge on the other hand is distinguishable by the inability to really articulate what is known. Drawing on Polanyi s early theory of tacit knowledge, it cannot be articulated because it is understood ambiguously, if it is understood at all (p. 304, Hatch, 2013). To look into how knowledge is attained and conveyed across borders with annual leadership transition in AIESEC, we will analyze parts of AIESEC s Global Learning Environment (AIESEC International, HP1) on the basis of Nonaka and Takeuchi s theory of Four Modes of Knowledge Transfer. The four modes each adapt a separate process for knowledge transfer. Transferring tacit knowledge tacit knowledge is through a socialization process with a central focus on the culture of the organization in question. When transferring tacit knowledge explicit knowledge it is a process of codification, strictly speaking taking intangible knowledge and conceptualizing it. Third, when transferring explicit knowledge explicit knowledge it is a question of combination of knowledge, made possible by the development of digital information systems and their upkeeping. Finally is the transfer of explicit knowledge tacit knowledge which is classified as a mode of internalization and applying theory to practice. AIESEC presents the Global Learning Environment as the way in which leadership skills are developed and passed on within the organization (AIESEC International, HP1). The GLE is characterized by six modes of learning of which we will focus on two specific ones. These include individual discovery, team experience, mentoring, learning circles, conferences and seminars and virtual spaces. We will look at the last two. 4

5 To begin, we look at conferences and seminars in the perspective of Nonaka and Takeuchi s four modes of knowledge transfer. Conferences are an integrated part of the AIESEC experience and take place on several levels - locally, nationally and internationally - being a main breeding ground for knowledge sharing across borders (AIESEC Denmark HP). A great example would be EuroCo, taking place every October, as an introduction to new Local Committee Presidents in AIESEC globally as a part of their transition into the position (EuroCo HP). The conference aims at passing on the knowledge gained by Alumni and previous Presidents to the newly elect, thus giving examples of both tacit explicit knowledge transfer and explicit tacit knowledge transfer depending on which part of the process one looks at. Going back to the start, the tacit explicit notion takes place when previous or current and higher-standing leaders in the organization codify their experiences and the processes they have gained knowledge of through experience. This happens during session preparation by the conference facilitators and results in a series of concrete theories and processes that can be passed on to the receivers. Once the knowledge has been processed, it is managed, which can be classified as the explicit explicit mode of knowledge transfer in which facilitators through peer review and material creation, register the information they have uncovered. The materials used during AIESEC conferences are uploaded onto their internal database (MyAIESEC, 2013), thus fulfilling the domain of an information system in the Nonaka and Takeuchi table. We will get back to that below. The final step in the conference is when the knowledge is taken home by delegates and applied to the strategies connected to their new positions, thus engaging in an explicit tacit knowledge transfer or internalization of the knowledge. As can be seen in a conference like this, the transfer of knowledge gets through a few modes, which makes it appropriate to describe via Nonaka and Takeuchi s Knowledge Spiral (HubPages, 2013). The Knowledge Spiral describes the process of converting tacit knowledge into explicit knowledge and then passing this knowledge on to a receiver. The receiver then converts it into their own applicable and internalized tacit knowledge. The process is used as a basis to generate organizational innovation and learning, by passing on current knowledge and giving receivers the possibility to build on top of and modify it to their own strategies. 5

6 As mentioned above, and as the second aspect of the GLE this paper will focus on, we will take a look at the development of information systems within AIESEC as a measure taken to ensure proper information transition with no loss of knowledge. The database in question is the internal information platform for AIESECers worldwide called MyAIESEC (MyAIESEC, 2013). The database is a prime example of explicit explicit knowledge transfer. In other words a transfer of data, theories, facts and measurements that are accumulated through time and space and shared with the entire network via the internet. The build-up of the database is a simple and open environment for sharing, comprised of Wikis that can be set up by anyone and are then codified and catalogued for future online access. The choice of a virtual information sharing platform in combination with other virtual spaces for knowledge sharing and communication, can prove to be important in the cut-down of costs in knowledge management and sharing. Here costs can be referred to as time consumption, communication issues considering the extensive cross-border collaboration AIESEC relies on, as well as general knowledge loss from generation to generation. Unfortunately, all of these are not avoided through the use of virtual spaces and several knowledge gaps still afflict the knowledge sharing process during leadership transition, something that is not considered in analysis using Nonaka and Takeuchi s theories. To address this we will look into transaction costs of information sharing and possible solutions. Information processing Above we answered the question of what knowledge is through classification and analysis of knowledge sharing in AIESEC. Next, this paper will answer the question of where knowledge is found and from this look at how knowledge/information sharing processes can be optimized to minimize the transaction costs mentioned above. The simple answer to where knowledge is found, is in the processes. Both tacit and explicit knowledge reflects back on the execution of tasks and the steps taken to get from start to finish. As seen in the above analysis of knowledge sharing within AIESEC, tacit knowledge that is integrated into work processes has to go through several steps in order to finally reach the receiver and be utilized. Experience shows that this is where knowledge gets lost. Now, information processing looks into the actual processes that lie behind and studies the management and sharing of information within an organization. Several theories exist on the subject, but this paper will rely on the work of Jay Galbraith. Galbraith proposed that complexity, uncertainty and interdependence all demand communication within an organization in order to process information and coordinate and optimize activities within (p. 151, Hatch, 2013). 6

7 Galbraith s model of organizational design for reduction of information processing needs, along with his theory of Seven Lateral Relationships ( helps to give suggestions as to how AIESEC can optimize the knowledge transfer between leadership bodies across borders. Galbraith s model suggests five approaches to how an organization can achieve a higher level of information processes. They are as follows: 1. More coordination, rules and procedures 2. Stronger hierarchy focused outside of the norm 3. Clearer targets and goal settings 4. Reduction of the necessary amount of knowledge processing 5. Increase in capacity to process information through investment in vertical information systems or enhanced lateral relationships In AIESEC today, two of these approaches have been implemented, namely approaches 1 and 5. If we begin from approach 5, AIESEC has with its expansion been increasing its number of lateral relations through global task forces and support teams operating virtually and across borders (AIESEC International, 2012). Their creation not only increases access to knowledge through a larger spectrum of contact opportunities, but also reduces the knowledge burden being placed on each individual. With a growing number of members and higher activity (AIESEC International, 2012), more information is continuously stocked up. To disperse this, an expansion of lateral relations is immanent. Looking at this in terms of the transaction costs identified above, it reduces the communicative barriers with through extended communication options as well as the knowledge gap that can occur when too much needs to be passed on too quickly. In terms of manhours needed for this approach, the costs increase, but this can be viewed as a natural development as the organization expands and learns. Returning to the first mentioned approach of creating more coordination, rules and procedures, this happened with the restructuring of MyAIESEC in 2011 (AIESEC International, 2011). Through a restructuring of their internal communication platform, new standards were set for the wikis being created and documents being uploaded. These demands for quality in knowledge management were passed on to national and local boards, thus pushing for an international restructuring and an all-encompassing effort to create a culture of knowledge sharing, all with the goal of smoothing information processes throughout the organization. Whether or not this has been the case will be shown with time as the true results will be visible when next generations need the knowledge of people no longer part of AIESEC. The main issue when discussing this type of approach in regards to a volunteer organization like AIESEC is the question of motivation. Creating rules and regulations saves time costs in the future, as processes will occur faster with existing knowledge rather than working from scratch, but simultaneously, creating these knowledge banks takes time for people now. With no initial motivation in the sense of payment, but rather motivation through 7

8 simple recognition, the question is whether or not such innovation of information processing can even happen. The following segment of the paper attacks the question of motivation by analyzing aspects of the organizational culture in AIESEC. It looks at how it plays a role in the motivational factors that drive members in the organization and how this can induce members to store and share the knowledge they attain through their work in AIESEC. What is the motivation behind? Looking into the more psychological aspects of AIESEC, using Schein s theory of organizational culture is appropriate as it provides us with an understanding of the motivations within AIESEC to create and sustain a strong flow of knowledge internationally. According to Schein culture can be broken down into three levels: assumptions, values and norms and artifacts. At the core of the culture one can find assumptions, which are generally taken for granted and are perceived as people s unconscious perception of reality (p.168, Hatch, 2013). Being a voluntary NPO, AIESEC prescribes to very idealistic principles, relying on joint motivation and activity to drive the organization and ensure its existence. Considering that all work is voluntary, another assumption is that the organization is very mission-driven, working towards peace and fulfillment of humankind s potential (MBS Portal, 2013). These assumptions further reflect on the values and norms of the organization. Values are the social principles, which can be viewed as moral codes that guide members of an organization to what is right and what is wrong, while indicating what is important to the organization. From the values one can derive the norms. Norms give a specification of which types of behavior are considered normal and abnormal. Again, both values and norms operate at the subconscious level (p. 168, Hatch, 2013). AIESEC has six core values: acting sustainably, living diversity, activating leadership, enjoying participation, striving for excellence and demonstrating integrity (AIESEC International HP3). The three this paper would like to focus on are acting sustainably, enjoying participation and demonstrating integrity. Acting sustainably can be perceived in two ways, one focusing on sustainability in terms of environment and the other, which this paper considers, in terms of creating a sustainable knowledge flow. This shows that even in the core values, the notion of knowledge transfer is recognized and emphasized as necessarily sustainable and for the long-run, thus coinciding with the initiatives to streamline and enhance the knowledge sharing processes through restructuring of internal databases and expanded global task forces (AIESEC International, 2011). Perhaps even 8

9 more in accordance with the idea of motivation is the value enjoying participation. This characterizes the main pay-off the organization poses for members working voluntarily; simply that members enjoy what they do. Allowing to combine these two values with that of demonstrating integrity one begins to form an image of what the drives the organizational structures to manage knowledge in the way they do. In order for all to enjoy their time and work in AIESEC, it is important to demonstrate integrity in the sense of doing for others what you would like to have done for you - including sharing knowledge which others may rely on. Identifying this sense of accountability and interdependence intensifies the importance of well-functioning knowledge sharing outlets and optimized processes. The artifacts that encompass these values, norms and assumptions are the conferences and information database mentioned earlier. Generally, artifacts are manifestations or expressions originating from the same cultural core as the values and norms do. The cultural significance of artifacts can be interpreted more ambiguously though as they lie further from the basic assumptions than the values and norms do (p. 170, Hatch, 2013). In this case, it must be noted that the AIESEC values were created in plenum with international representation during International Congress in India in 2010 (AIESEC International, 2010), thus giving an impression of the close connection between members of the organization and the core with which they all connect. This means that the levels of organizational culture are tightly knit with one another and deeply rooted in all members. This integration comes across in the pieces of the GLE we have analyzed, as they relate to and portray each of the values. Acting Sustainably is manifested by the creation of a knowledge database with information dating back years while continuously accumulating more. Enjoying Participation comes across in the conferences, giving members an opportunity to meet and have a good time, while learning about the organization. Finally, demonstrating integrity is mediated through the standards set for the knowledge sharing format on the internal database, myaiesec.net. To answer the question of the motivation behind, one must take two things into consideration. First is AIESEC s classification as a missionary organization, which Mintzberg defined as an organization comprising of members who truly believe in the values of their organization and whose main motivation lay in reaching the organizational goal. Second, through our analysis with Schein s theory we can see how closely knit the organization s core assumptions are with the actual artifacts and actions of the members. Both suggest that the motivation to create a sustainable knowledge flow lies in the members drive towards AIESEC s vision of Peace and fulfillment of humankind s potential (AIESEC CBS HP) and is manifested in every aspect of the organization - among which the knowledge sharing outlets we analyzed in this paper. 9

10 Conclusion This paper sought to answer the research question: How can AIESEC attain and transfer the knowledge accumulated through time and space, taking into consideration the annual replacement of all leadership bodies? This was done by analysis through a series of theories and models. First, AIESEC was classified through Mintzberg s five types of organizational structure. The final classification was chosen based on his 1989 addition to the modernist theory, rendering us able to classify AIESEC as a missionary organization. Moving on we looked into defining knowledge, which was done through the typologies, tacit and explicit, and then identifying the modes through which this knowledge is conveyed from type to type. Here we again analyzed from a modernist perspective using Nonaka and Takeuchi s four modes of knowledge transfer and applying the Knowledge Spiral. This explained how knowledge is transferred through AIESEC s Global Learning Environment in the form of conferences and seminars and the virtual database, MyAIESEC. Continuing we used Jay Galbraith s modernist model of organizational design in order to address the issue of transaction costs in knowledge transfer and how to avoid them. We looked into recent optimization processes by AIESEC through newly created global task forces and deeper coordination of the knowledge management principles on MyAIESEC. Finally, we used Schein s modernist theory with a symbolic twist, to analyze the motivation behind knowledge management in AIESEC considering that the only pay-off is the voluntary experience gained. We discovered that the main drive in the organization is the contribution towards to organization s vision, which is in line with AIESEC as a missionary organization. In conclusion this paper acknowledges the use of virtual spaces and teams for knowledge management as fitting for reduction of communicative issues and related transaction costs. Similarly conferences are considered optimal as they along with being a physical knowledge sharing space are a breeding ground for the organizational culture that drives the motivation, in the form of the AIESEC vision and mission. Vision and mission should always be incorporated in AIESEC s actions in order to retain and motivate members in a voluntary organization of missionary character. Further conclusion is difficult without deeper research on the workings of voluntary organizations, which could be an interesting field of further investigation. 10

11 References Books Hatch, Mary J. Organization theory : modern, symbolic, and postmodern perspectives. Oxford: Oxford University Press, 2013 Images Image on page 4 borrowed from Webpages AIESEC Denmark HP: AIESEC International HP1: AIESEC International HP2: AIESEC International HP3: AIESEC CBS HP: EuroCo HP: The above mentioned webpages were accessed on March 12th 2013 in Frederiksberg, Denmark. 11