IBS

Innovation and Organisational Learning

Learning outcomes

Become aware of the difference of individual and organisational learning.

Understand the impact of organisational learning on overall and long-term competitive advantage.

Seminar tasks

Exercise on the Learning Company.

Case-study analysis

Reading/activity for the week

·      Evans, Paul and Pucik, Vladimir (2002): The Global Challenge: Frameworks for International Human Resource Management, McGraw Hill, Chapter 9

·      Case 5: Smitha Moganthy (2006) : HP’s Strategy and Operations under Carly Fiorina and Mark Hurd. ICFAI Center for Management Research.

1.      Discuss the significance of the HP Way and how it strongly influenced success at HP.

2.      Although Carly Fiorina was appointed to streamline HP’s fragmented business, to what extent were her strategies aligned with the HP way?

3.      Did radical restructuring processes, like the merger with Compaq and others, enhance organisational learning?

4.      What processes could enhance innovation at HP?

Chapter 9. Innovation and Organisational Learning

• The future is increasingly unpredictable. This makes the capacity to change fast particularly important (in contrast to planning), posing new challenges for human resource and organizational management.
• Complex organizational change involves many tensions - between short-term and long-term success, between planning and experimentation, between bottom-up processes and top-down processes. Indeed, tension and paradox are at the heart of change, innovation, and knowledge management in transnational firms.
• Change can be seen as a spiral process in which one has to “anticipate the future in the present: guided by an understanding of dualities.
• When the multi-domestic firm experiences pressures to become transnational the most effective sequence of stages appears to be global rationalization first and then building collaborative integration afterwards. The “sour” is tackled initially, then the “sweet”.
• Subsidiary initiatives and entrepreneurship must be encouraged when the integrated mega-national firm experiences pressures for more local responsiveness. This changes the role and competencies of subsidiary general managers and business area managers.
• Transferring capabilities from the parent to the subsidiary is a complex, stepwise process that can take many years, not simply one of “technology transfer”. “Instant transnational” firms that are not handicapped by long domestic experience in the parent country may be able to shorten the process considerably.
• Professional service firms with their many internal tensions and complex matrices, face unusual tensions as they internationalize. There appear to be three organizational configurations in such firms, with corresponding implications for their approach to global knowledge management:
  • client-oriented,
  • creative problem-solving,
  • and solution-adaptation configurations.
• It is impossible to dictate or control innovation (which is the other side of the coin of knowledge management). But one can facilitate it, by encouraging variation/entrepreneurship and then selecting likely winners, by building trust and entrepreneurial social capital, through variable management geometry, by businesses when this is not possible.
• The mechanisms for fostering innovation all involve linking people, which is easiest when they are co-located and share a common context through socialization. We can expect to see an increasing variety of internal mechanisms (such as centres of excellence) and external mechanisms (learning alliances and communities of creation).
• The striking characteristic of global innovation and knowledge management is that it involves managing paradoxes and tensions. Reconciling these tensions, such as between convergence and divergence, means paying attention on procedural justice and other aspects of social architecture.

The role of HR in change processes: (p. 408-409)

The potential contribution of HR to the change process has so many facets that we can provide only a few examples:

1. Promoting champions of change
2. Creating dissatisfaction with status quo
3. Developing the confidence of top management sponsors to communicate directly with employees
4. Designing processes to build commitment fast through face-to-face confrontation of views
5. Vision building / agenda setting
6. The people aspects of implementation (it depends on the people’s motivation and skills)
7. Attention to succession management
8. Ensuring the balance between short- and long-term pressures
9. Ensuring consistency between words and action

Theses roles are the champion who promotes the need for change, the designer who assists in mapping out an effective change process, the facilitator who acts as a coach and catalyst, and demonstrator who is a role model through consistent behaviour. (Ulrich, 1997)

How Singapore became HP’s global centre of competence for printers – see p. 424.