ORGANIZATIONAL FORMS: KNOWLEDGE, MOTIVATIONAL AND POWER DYNAMICS. Ayşe Saime DÖNER* - PDF

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Akademik Hassasiyetler The Academic Elegance ORGANIZATIONAL FORMS: KNOWLEDGE, MOTIVATIONAL AND POWER DYNAMICS Ayşe Saime DÖNER* Abstract There are various forms of organizations acting as platforms for

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Akademik Hassasiyetler The Academic Elegance ORGANIZATIONAL FORMS: KNOWLEDGE, MOTIVATIONAL AND POWER DYNAMICS Ayşe Saime DÖNER* Abstract There are various forms of organizations acting as platforms for economic activities. While the existing theoretical studies in economics analyze organizations in relation to the firm and mostly focus on distinguishing between firms and markets, they don t propose the sufficient variety that can explain the observed organizational forms. This paper attempts to re-conceptualize the organizational forms in business by studying the necessary coordination mechanisms related to knowledge and motivational dynamics of intra-organizational relationships. Acknowledging also the role of power distribution among the actors, organizational forms are specified as different combinations of these mechanisms. Business organizations are essentially loci for interactions between economic actors during economic activities. In view of the fact that today knowledge is the critical resource in the production of all goods and services, economic activities are mainly viewed as knowledge activities i.e. sharing, integrating and creating knowledge. Since these activities need to be regulated for efficiency, interacting actors should coordinate their actions with each other. More precisely, they need to adjust their collaboration degree according to the needs of knowledge activities given the characteristics of actors absorption capacity and the characteristics of transacted knowledge codifiability, observability, teachability, complexity, systemic dependency, and newness. Another dimension to consider is the fact that the economic actors involved in these interactions may behave in an opportunistic way and have potentially conflicting interests which would hinder the performance of their collective activities. If the actors have intrinsically aligned interests, they are already motivated to coordinate their productive efforts without questioning the intentions of the others. In this case the control mechanisms are fairly informal, and the interactions occur on equal ground. However, if the individual interests are conflicting, actors need some coordination mechanisms to solve these conflicts and to continue on with their interactions. Finally, the process of reaching agreement gives rise to power plays. As a result of power distribution, the institutions are put in place in order to extrinsically align actors interests. Hence, interactions during knowledge activities occur both in a technical division of labor referring to knowledge governance and in a social division of labor related to management of social conflicts and rivalries. Thus, coordination mechanisms in a business organization have to take into consideration the knowledge, motivational and power dynamics. In this sense, we attempt to define organizational forms based on these three dimensions. * Yrd. Doç. Dr., Beykent Üniversitesi İİBF Uluslararası Lojistik ve Taşımacılık Bölümü, 27 Ayşe Saime Döner Key Words: Organizational Form, Knowledge-Eased Economy, Cognitive Coordination, Motivational Coordination, Power Distribution. JEL codes: D21, L22, L24 ORGANİZASYON FORMLARI: BİLGİ, MOTİVASYON VE GÜÇ DİNAMİKLERİ Özet Ekonomik faaliyetler farklı organizasyon formları dahilinde yürütülmektedir. Sanayi ekonomisi literatüründe varolan teorik çalışmalar, bu organizasyonları çoğunlukla firma ile ilişkilendirerek ve firma-piyasa ayrımına odaklanarak incelerken, gözlemlenen organizasyon formlarının çeşitliliğini açıklayan tek bir çerçeve sunmamaktadır. Bu çalışma, organizasyon içindeki farklı dinamiklerin yarattığı koordinasyon gerekliliklerini öne çıkararak gözlemlenen bu çeşitliliğe kavramsal bir çerçeve sunma amacındadır. Organizasyon içi dinamiklere dair üç boyut incelenmektedir: (1) bilgi yaratımı ve transferi, (2) birimler arası çıkar çatışmaları, ve (3) birimler arası güç dağılımı. Günümüzde bilgi, ekonomik faaliyetlerde kullanılan kaynakların en önemlisi olarak kabul edilmektedir. Dolayısıyla ekonomik faaliyetler de temelinde bilgi faaliyetleri olarak ele alınmalıdır. Farklı ekonomik birimlerin kontrolünde olan bilgilerin paylaşımını, transferini ve yeni bilgilerin yaratımını içeren bilgi faaliyetleri etkinlik açısından düzenlenmelidir. Aktörler bu faaliyetler sırasında şekillenen ortak çalışmalarını, hem kendi özelliklerine göre dışardan gelen bilgiyi emme kapasiteleri- hem de paylaşılan bilginin özelliklerine göre kodlanmışlık, gözlemlenebilirlik, öğretilebilirlik, karmaşıklık, sisteme bağımlılık ve yenilik- eşgüdümlemelidir. Bu çalışmada, bilgiye dayalı ekonomi literatürü takip edilerek, bilgi yaratımı ve transferinin koordinasyonu, ortaya çıkan organizasyon formunun birinci ve en önemli bileşeni olarak ele alınmaktadır. Ancak bilişsel düzeydeki bu koordinasyon tek başına yeterli değildir. Zira ortak bir bilgi faaliyetinde çalışan ekonomik aktörler fırsatçı davranabilir ya da çıkar çatışması içerisine girebilirler. Eğer aktörlerin çıkarları kendiliğinden birbirleriyle çatışmıyorsa, bu aktörler birbirlerinin niyetlerini sorgulamadan ekonomik faaliyetler içindeki görevlerini eşgüdümlemeye hazır olurlar. Bu durumda ilişkilerin koordinasyonu güven esaslı gayri resmi kontrol mekanizmalarıyla sağlanabilir. Öte yandan, çıkarların çatışması durumunda, aktörler ekonomik faaliyetler içindeki görevlerini yerine getirmeden önce kendi haklarını korumak isteyeceklerdir. Bu da, ortak çalışmaya başlamadan önce bir anlaşmaya varmalarını ve aralarındaki ilişkileri resmî kural ve kanunlarla düzenlemelerini gerektirmektedir. Sonuç olarak, ekonomik faaliyetler sırasında ortaya çıkan organizasyonların şekillenmesinde, resmi ya da gayri resmi kurumlarla ekonomik aktörlerin çıkarlarının korunmasına yönelik koordinasyon mekanizmaları ikinci bir bileşen olarak karşımıza çıkmaktadır. En son bileşen de ekonomik birimler arası güç dağılımıyla ilişkilidir. Her ne zaman iki ya da daha fazla taraf arasında sözleşme ihtiyacı ortaya çıkarsa, güç oyunları da kendini gösterecektir. Her aktör kendi çıkarlarını koruyacak şekilde anlaşmayı düzenlemek isteyeceğinden, aktörler arasındaki güç dağılımı, ortaya çıkan koordinasyon mekanizmasının şekillenmesinde önemli bir rol oynamaktadır. Özetlenecek olursa, 28 Organizational Forms: Knowledge, Motivational and Power Dynamics temelinde bilgi faaliyetleri olan bütün ekonomik faaliyetler üç boyutlu bir dinamik çerçevesinde sürdürülmektedir ve buna bağlı olarak ortaya çıkan organizasyonların formları da bu üçlü dinamiğe uygun olarak ortaya çıkmaktadır. Bu çalışmada da, farklı organizasyon formları, bu dinamiklerin gerektirdiği koordinasyon mekanizmalarının farklı bileşimleri olarak önerilmektedir. Anahtar Kelimeler: Organizasyon Formları, Bilgiye Dayalı Ekonomi, Bilişsel Koordinasyon, Motivasyonların Koordinasyonu, Güç Dağılımı. Introduction Economic system hosts various forms of organization: markets, firms, subcontracting agreements, strategic alliances, communities of practice, epistemic communities, etc. These organizational forms act as platforms for producing and exchanging goods and services between economic units of various sizes individuals, groups of individuals or groups of groups. The existing theoretical studies in economics analyze organizations in relation to the firm and the boundaries of the firm within the theories of the firm (Coase, 1937; Alchian-Demsetz, 1972; Williamson, 1975; Jensen-Meckling, 1976; Grossman-Hart, 1986; Foss, 1993, 1996; Kogut-Zander, 1996; Hart-Holmstrom, 2010; Aghion-Holden, 2011). While they are mostly focused on distinguishing between firms and markets, they don t propose the sufficient variety that can explain the observed organizational forms. Furthermore, the term firm remains ambiguous in terms of organizational forms inasmuch as it may indicate a hierarchical form (as in vertically integrated Chandlerian firm) as well as a cooperative form (as in joint-ventures or consortiums) (Grandori, 2001). Avoiding the use of given structural alternatives, this paper aims to study boundaries of business organizations. In view of the fact that today knowledge is the critical resource in the production of all goods and services (Teece, 1981; Nonaka, 1994; Grant, 1996; Cohendet et al., 2006), economic activities are mainly viewed as knowledge activities i.e. sharing, integrating and creating knowledge. Interactions appear among economic actors when they want to exchange their complementary resources with each other or put them into a common use in order to generate new resources or goods and services. Since these interactions need to be regulated for efficiency, these actors should coordinate their actions with each other. Another dimension to consider is the fact that the economic actors involved in these interactions may behave in an opportunistic way and have potentially conflicting interests which would hinder the performance of their collective activities (Foss, 1996). If the actors have intrinsically aligned interests, they are already motivated to coordinate their productive efforts without questioning the intentions of the others. In this case the control mechanisms are fairly informal, and the interactions occur on equal ground. However, if the individual interests are conflicting, actors need some coordination mechanisms to solve these conflicts and to continue on with their interactions (Ouchi, 1979; Dekker, 2004; Vlaar et al., 2007; Foss et al., 2010). The process of reaching agreement gives rise to power plays. As a result of power distribution, the 29 Ayşe Saime Döner institutions are put in place in order to extrinsically align actors interests. Hence, interactions during knowledge activities occur both in a technical division of labor referring to knowledge governance and in a social division of labor related to management of social conflicts and rivalries, as pointed out by (Poitou, 1991). Thus, coordination mechanisms in a business organization have to take into consideration the knowledge dynamics on the one hand and motivational dynamics on the other. Following mainly behavioral and evolutionary theories of organizations (March-Simon, 1958; Cyert-March, 1963; Nelson-Winter, 1982; Poitou, 1991; Dosi-Marengo, 2007), this paper studies coordination mechanisms as common building blocks of all organizations. In order to define the relevant coordination mechanisms, organizational routines are considered a starting point. Routines are described as regular and predictable behavioral patterns (Nelson-Winter, 1982: 14). These behavioral patterns correspond in fact to coordination mechanisms. They may characterize production techniques, procedures, decision rules or policies. Studies exploring organizational routines underline two dimensions: cognitive and motivational (Cohendet-Llerena, 2003; Becker et al., 2005). While cognitive dimension of routines are required for problem solving within knowledge activities, motivational dimension refers to alignment of individuals interests. Routines as truces are supposed to ensure some balance between the participants interests. (Becker, 2004) argues in this line that implicit truces may exist between those giving and those executing orders as long as these orders are within the zone of indifference (Barnard, 1938). Establishing a zone of indifference means also reaching a compromise, which refers to the definition of organizations as coalitions of varying interests (Cyert-March, 1963). While routines are balancing individuals varying interests, they provide to some extent a stable power distribution in organizations (Becker et al., 2005). Thus, routines as coordination mechanisms consider also power plays between the participants. Essentially, power plays are closely related to the motivational dimension of economic behaviors. When interests are intrinsically aligned within the organization, there is no reason for power struggles to exist. In such an organization, the power distribution will be horizontal. However, in case of conflicting interests, power struggles may appear while establishing the relevant extrinsic motivation system. So, power distribution must also be viewed as an important feature dictating the forms of business organizations. This paper proposes to re-conceptualize the organizational forms in business by putting forward the necessary coordination mechanisms related to the cognitive and motivational dimensions of intra-organizational relationships. Acknowledging also the role of power distribution among the actors, organizational forms appear as different combinations of these mechanisms. In this sense, cognitive coordination mechanisms are discussed in Section 2. Then, motivational coordination mechanisms and power distribution within the organizations are examined respectively in Sections 3 and 4. Combining the insights gained within these sections, the paper attempts to propose taxonomy of organizational forms in Section 5. The paper concludes with a summary. 30 Organizational Forms: Knowledge, Motivational and Power Dynamics 1. COORDINATING KNOWLEDGE GENERATION AND TRANSFER Following the knowledge-based approaches, the need to produce (and not the need to align interests) is viewed in this paper as the principal reason leading to the emergence of business organizations. Actors interact in order to share, integrate or exchange their resources with the intention of achieving a specific outcome. During these interactions, coordination mechanisms are needed for synchronizing the efforts of these actors holding complementary assets. Assuming sufficiently aligned interests between actors (Nelson-Winter, 1982; Dosi-Marengo, 2007), the foremost purpose of coordination mechanisms appears as easing the knowledge transfer and integration between the actors (Foss-Mahoney, 2010). Knowledge activities involving several actors require interactions of varying level of intensity. The intensity of interactions may be characterized by the physical proximity between actors, as well as the duration and the breadth of these interactions. Cognitive coordination mechanisms are defined as practices and instruments that maintain the interaction levels as required by the knowledge activities. These levels may vary on a continuum from tight to loose. Tight interactions refer to situations where actors collaborate in proximity, over a long period and by sharing a wide range of assets. Loose interactions indicate relationships between actors working at distance, by short encounters and with as few as possible assets to share. Here, we will show the relevant interaction levels for knowledge activities considering mainly two sets of factors. These factors are the actors absorptive capacity (Cohen-Levinthal, 1990; Nooteboom, 2000; Nooteboom et al., 2007) and the characteristics of the knowledge assets to transfer or to integrate (Winter, 1987; Zander-Kogut, 1995; Grandori, 2001; Birkinshaw et al., 2002; Contractor-Ra, 2002). Absorptive capacity is described as the ability to evaluate, to access and to assimilate outside knowledge (Cohen-Levinthal, 1990). This capacity depends closely on the prior knowledge held by the actors. The latter generate and accumulate knowledge and capabilities through learning processes (learning-by-doing, learning-by-using, learning-by-interacting). Given the varying duration and intensity of learning processes, actors develop different levels of absorptive capacity. Furthermore, in view of the fact that every actor specializes in specific activities, their absorptive capacity may differ depending upon the knowledge to absorb. Thus, actors do not have the same level of absorptive capacity for all the knowledge they want to access to. They need to put extra effort when the relevant outside knowledge is not covered by their own knowledge base. Proximity and long term contacts with the holder of the relevant knowledge are thus necessary. In this case, the relationships are characterized by tight interactions. Otherwise, if the recipient actors knowledge base provides the necessary prior knowledge to understand, evaluate and assimilate the outside knowledge, relationships with the holder of the knowledge are less tight. Another way of looking at the absorptive capacity of actors, especially in a situation involving a two-way knowledge transfer, is analyzing the cognitive distance between them (Nooteboom, 2000). The cognitive distance is described as the difference in cognitive functions of different actors. Simply put, cognitive function refers 31 Ayşe Saime Döner to absorptive capacity. As Nooteboom (2000) indicates, bridging cognitive distance between two actors can be done by communication which can yield overlapping between absorptive capacities of these actors. So, the higher the cognitive distance is, the more these actors need communicating frequently and in proximity. If the cognitive distance is weak, the actors can understand each other easily, which indicates that they don t need tight interactions, the transfer may occur through in-distance communication means. Furthermore, for a given cognitive distance between actors, the knowledge transfer may necessitate different levels of interaction depending on the characteristics of the relevant knowledge. The easier the knowledge transfer between two actors, the looser the interactions are between them. Here, we analyze contributions of different scholars in order to identify the dimensions of knowledge assets in terms of the ease of their transfer. The first taxonomy is suggested by Winter (1987) who identifies four dimensions of knowledge assets: (1) tacit / articulate; (2) observable in use / not observable; (3) complex / simple; (4) dependent (element in a system) / independent. Following Winter taxonomy, Zander- Kogut (1995) propose five constructs by which to characterize knowledge assets: (1) codifiability; (2) teachability; (3) complexity; (4) system dependence; (5) product observability. The first characteristic in both of the taxonomies refers to the basic distinction between tacit vs. codified knowledge. This distinction derives mainly from the difference between knowing and communicating. As (Polanyi, 1958) suggests, we know more than we can tell. Hereof, Grandori (2001) considers tacitness as a component of a wider epistemic problem: the epistemic complexity. She describes the epistemic complexity as the difficulty of observing phenomena and diagnosing cause-effect relations and the difficulty in constructing valid and reliable knowledge (ibid:392). In this sense, observability and teachability can also be regarded as aspects of this epistemic problem. Moreover, Grandori (2001) defines another component of knowledge-complexity: the computational complexity referring to the number of elements and symbols making up the relevant knowledge. This characteristic corresponds in fact to the complexity dimension in Winter and Zander-Kogut taxonomies. Indeed, Zander-Kogut, (1995:82) define complexity as the number of distinctive skills, or competencies, embraced by an entity or activity. Furthermore, as a fifth dimension in our list, system dependence refers to the extent to which the relevant knowledge is a function of a system or context. The more the knowledge is system dependent, the more the transfer of the knowledge in question requires the transfer of other components of the system in which the latter is embedded. Finally, Simonin (1999) introduces the notion of knowledge ambiguity based on some of the aforementioned characteristics of knowledge and some other. More precisely, knowledge ambiguity is affected by tacitness, specificity, partn
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