Knowledge that Transforms

This paper differs from previous examinations of organizational learning in that it is broader in scope and more evaluative of the literatures. Four constructs related to organizational learning (knowledge acquisition, information distribution, information interpretation, and organizational memory) are articulated, and the literatures related to each are described and critiqued. The literature on knowledge acquisition is voluminous and multi-faceted, and so the knowledge acquisition construct is portrayed here as consisting of five subconstructs or subprocesses: (1) drawing on knowledge available at the organization's birth, (2) learning from experience, (3) learning by observing other organizations, (4) grafting on to itself components that possess knowledge needed but not possessed by the organization, and (5) noticing or searching for information about the organization's environment and performance. Examination of the related literatures indicates that much has been learned about learning from experience, but also that there is a lack of cumulative work and a lack of integration of work from different research groups. Similarly, much has been learned about organizational search, but there is a lack of conceptual work, and there is a lack of both cumulative work and syntheses with which to create a more mature literature. Congenital learning, vicarious learning, and grafting are information acquisition subprocesses about which relatively little has been learned. The literature concerning information distribution is rich and mature, but an aspect of information distribution that is central to an organization's benefitting from its learning, namely how units that possess information and units that need this information can find each other quickly and with a high likelihood, is unexplored. Information interpretation, as an organizational process, rather than an individual process, requires empirical work for further advancement. Organizational memory is much in need of systematic investigation, particularly by those whose special concerns are improving organizational learning and decision making.

The traditional definition of learning as a shift in performance when the stimulus situation remains essentially the same implies a set of conditions that occur rarely in organizations. Thus, either organizational learning is an infrequent event, or it occurs frequently but takes a nontraditional form. Both possibilities are reviewed and implications for research strategy are suggested.

Although there is general recognition that leadership is important for organizational cultures, the issue of how leadership affects culture has received only scattered attention. Existing analyses have tended to focus on how leaders create or change cultures, ignoring the role that leadership plays in maintaining cultures. This paper focuses on how cultural leadership that innovates, by either creating or changing organizational cultures, is likely to differ from that which maintains organizational cultures. Hypothesized linkages are advanced between nine elements of cultural leadership—drawn from the literature on charisma—and its consequences. The predictions made are derived from a synthesis of existing theory and insights gained from descriptions of leadership in the scholarly and popular literatures. Both descriptions and theoretical considerations suggest that, while cultural innovation and maintenance leadership differs in some ways, the behaviors of effective cultural leaders do not. Cultural leadership apparently has some generic characteristics. Two variants of each of the basic types are identified and linked to extant conceptualizations of leadership. Implications discussed include the risks and advantages of organizations' having multiple cultural leaders at the same time.

Success in the global marketplace increasingly requires that firms develop capabilities in innovation. In this paper we argue that firms can use employment and compensation practices to foster innovation and support for innovation by employees. Conversely, some employment and compensation systems will inhibit innovation. A system that allows gain sharing by employees and provides employment assurance will foster innovation in the firm. However, a system that compensates employees with a fixed wage and allows for termination at will contains anti-innovative incentives. The former system is the prototypical Japanese system (particularly in large firms), while the latter system is the prototypical American system. The commercial success of Japanese firms is increasingly attributed to successful innovation, particularly in processes. We argue that this success is partly attributable to the Japanese-style system of employment and compensation. None of this suggests, however, that the Japanese-style practices constitute a universally superior system of employment and compensation. The Japanese-style system will not necessarily be beneficial to firms, nor be preferred by employees. The preferences of both employees and firms will depend upon market circumstances. In stable domestic markets in relatively full employment economies, companies derive competitive advantage from mass production and scale economies. Under such circumstances, the American-style system is likely to be preferred by both employees and firms. However, when the firm operates in a volatile international market the preferences of both employees and firms will shift toward the Japanese-style system. The employment and compensation systems of both countries were well suited to the market circumstances under which they evolved.

Research on organizational change has been animated by two conflicting perspectives. One line of research has emphasized organizational adaptation (Cyert and March 1963, Lawrence and Lorsch 1967, Child 1972), while Hannan and Freeman (1977) have posed an alternative paradigm in which variation in organizational forms within a population is explained by differential rates of birth and death. Astley and Van de Ven (1983) and Scott (1987) have offered a reconciliation of these divergent perspectives, suggesting that they are in fact complementary. In particular, Scott (1987) argued that a selection perspective is useful in explaining core features of organizations, survival rates of relatively small organizations, and in accounting for changes over long periods of time. In contrast, Scott proposed that adaptation perspectives are a useful complement in examining peripheral features of organizations, survival of larger and more powerful organizations, and change over shorter periods of time. Much recent research has pursued an empirical agenda consistent with this idea that each approach has its own appropriate domain. Both variation in frequency with which change occurs (Amburgey, Kelley and Barnett 1990; Baum 1990; Haveman 1990) and in impact of change on survival rates of organizations (Singh, House and Tucker 1986; Miner, Amburgey and Stearns 1990; Amburgey, Kelly and Barnett 1990) have been examined. As Winter (1990, pp. 292-293) notes, the emerging consensus is not on a particular sweeping generalization about levels of adaptability/rationality or inertia/irrationality that organizations display, but an emerging agreement that arguing about generalizations is less interesting than sorting out cases and testing strength of competing interpretations. This essay proposes a different conception of relationship of adaptation and selection processes. In reviewing some of most recent advances in literature, essay uncovers a view of adaptation and selection not as mutually exclusive alternatives, each with its own domain of applicability, but rather as fundamentally interdependent processes. On one hand, organizational learning contributes, in part, to organizational inertia, which, in turn, is basis of selection processes. On other hand, far from being incompatible with adaptive learning, inertial forces are a prerequisite for intelligent adaptation. In complex decision problems discovery of optimum is an extremely difficult task, with an astronomical numbers of alternatives. This makes it imperative to use building blocks derived from previous good solutions (Holland 1975) even though so doing contributes to inertia. Retaining elements of prior solutions enhances organizational reliability, as suggested by Hannan and Freeman (1984, 1989), and it also facilitates intelligent adaptation in that it allows for clearer inferences to be made regarding efficacy of any experiment in organizational change. But presence of such inertia implies that organizations cannot adapt perfectly to their

The primary purpose of this study was to compare and contrast an organization's official culture and its subcultures. The proposition that soft bureaucracies project a rigid exterior appearance, symbolizing what key stakeholders expect, while masking a loosely-coupled set of interior practices, guided this analysis of a police organization. The official culture (crime-fighting command bureaucracy) was examined as an arbitrary set of symbols and meaning structures arranged according to top management preferences. Using qualitative and quantitative data, the organization's subcultures were profiled. It was demonstrated that top management was unable to impose organization-wide conformance with the official culture. There was close conformance to the official culture in only one of five distinct clusters of officers (“crime-fighting commandoes,” 21 percent of the sample). Officers in the other clusters (“crime-fighting street professionals,” “peace-keeping moral entrepreneurs,” “ass-covering legalists,” and “anti-military social workers”) substantially modified or rejected top management's dictates. They represented resistance subcultures, similar in their opposition to official culture, but unique in form. It was concluded that other organizations, not known for their monolithic image and solidarity, also encompass subcultures.

The interpretive approach to organizational research has been gaining increasing attention as a legitimate alternative to the more traditional positivist approach. The organizational literature has already provided thorough descriptions of each approach, and clarified the differences between them. Indeed, it often appears that the two approaches are opposed, with the differences irreconcilable. This paper will go beyond the differences and establish an integrated framework for the two approaches. An actual, published organizational study will be used as an exemplar for the integrated framework (Nardulli 1978, 1979).

To regard voluntary organizations as unique manifestations of organizational behavior requires an accurate account of the nature of such work systems. This paper appraises existing definitions of the voluntary agency in the context of organization science and presents evidence for replacing the nonvoluntary/voluntary dichotomy with entrepreneurial, professional, and bureaucratic organizations, on the one hand, and two voluntary-organizational subtypes on the other: “voluntary groups,” in which volunteers operate as a socio-technical unit, and “voluntary agencies,” in which volunteers cooperate with paid personnel. Moreover, when paid staff is involved, some voluntary work contexts were found to take on characteristics of all three other organizational types to form a mixed pattern. Further tests of the relative distinctiveness of both subtypes vis-a-vis other organizational types and theories is proposed. The research yields certain guidelines for the design of true group-based organizational systems, thus extending knowledge in that area. It also provides an example of how research extending beyond the narrow confines of bureaucracy to the many other organizational forms known to exist might be conducted; such research is sorely needed to inform the practice of organizational design as a whole.

This paper presents an intraorganizational ecological perspective on strategy making, and examines how internal selection may combine with external selection to explain organizational change and survival. The perspective serves to illuminate data from a field study of the evolution of Intel Corporation's corporate strategy. The data, in turn, are used to refine and deepen the conceptual framework. Relationships between induced and autonomous strategic processes and four modes of organizational adaptation are discussed. Apparent paradoxes associated with structural inertia and strategic reorientation arguments are elucidated and several new propositions derived. The paper proposes that consistently successful organizations are characterized by top managements who spend efforts on building the induced and autonomous strategic processes, as well as concerning themselves with the content of strategy; that such organizations simultaneously exercise induced and autonomous processes; and that successful reorientations in organizations are likely to have been preceded by internal experimentation and selection processes effected through the autonomous process.