Knowledge management and learning organizations

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CHAPTER TWO LITERATURE REVIEW

Introduction

The aim of this chapter is give an overview of what “world class” organisations are and how they can be defined.
This will be followed by a description of organisational development, culture, climate and values. The importance and relevance of knowledge management to learning organisations will be discussed, with a look at models for improving quality. Organisational change in the public service will be described.
Finally, the McKinsey 7-S framework is then discussed in detail.

What is a ‘World class” organisation?

In the 21st century the nature of business has changed dramatically. The world has become borderless, with increased networking and global competitiveness becoming the norm. The two key driving forces of globalisation are increased market growth and cost reduction initiatives in the private sector, whilst in the public service it is a “people first” attitude within the context of cost reduction and value for money service orientation.
With companies striving to be the “best” they are in relentless pursuit of excellence, in products and services within a futuristic perspective. Pralahad & Hamel (1994) state that any organisation that cannot imagine the future will not be around to enjoy it. These visionary organisations continuously reinvent themselves through ongoing research and development, creativity and innovation, and thus ensure their superiority through both strategic and operational excellence. Satisfying customers is a relentless pursuit, and underpinning this quest is the value they place in their employees.
Training, motivation and reward are given priority to ensure that personnel give their best at all times. Progressive organisations view training and development as giving them a competitive edge, producing twice the gains as do mere “investment in plant and machinery” (Khan, 1999:3). Knowledge management or intellectual capital is a key determinant of organisational success (Scarborough and Swan, 2001). Knowledge management is defined as “the process or practice of creating, acquiring, capturing, sharing and using knowledge wherever it resides to enhance learning and performance in organisations‟ (Scarborough, et al 1999:2). It is not only about managing information and ICT, but also about managing people. Visionary leadership is another key element to the success of “world-class” organisations.
According to Dale (2002:28-32) organisations wanting to be “world class” should address three key elements: Organisation management and change; planning, introduction and sustaining total quality management (TQM); and systems, tools and techniques. Under organisation management and change, the main assessment factors include customer or market focus, communication, financial management, recruitment, quality systems and processes, innovation and new practices, regulatory adherence and corporate culture. Conformity within the ISO 9000 standard is also a basic requirement. With planning, introducing and sustaining TQM, the elements of stagnation within organisations should be studied carefully, also how teams are formed and how effective they are, as well as critical self review at regular intervals. Integrated management systems include quality management, environmental management, occupational health and safety, as well as data protection.
Becoming „world-class‟ in its most simplistic sense is becoming competitive with other organisations, and benchmarking your performance against the „best‟ in the industry or sector, like other public sector organisations abroad.

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Organisational Development

The backdrop to this study lies in theories of organisational development that started in the 1960‟s. Organisational development as a field of study has since grown considerably, and has had a profound effect on our understanding of organisations in both the private and public sector.
Organisational development can be defined as response to change, a complex educational strategy intended to change the beliefs, values, attitudes and structure of organisations so that they can adapt to new technologies, markets and challenges, and the dizzying rate of change itself (Bennis, 1969:2).
As a behavioural science, organisational development stresses the use of theory and practice to improve the effectiveness of organisations and the people in them to bring about planned change.

Organisational culture, climate and values

Organisational culture consists of the way people think, reason and make decisions (Pettigrew, 1979). At its deepest level it consists of a set of values, beliefs and assumptions that define how a business carries out its functions, or a public service organisation interacts with its stakeholders. It is a normative system of shared values and beliefs that shape how employees think and behave, as well as how they do things within the organisation and solve problems. Culture is about meanings, not figures or numbers.
In comparative studies carried out by Pascale and Athos (1981) and Peters and Waterman (1982) they reiterated the fact that organisations that have competitive advantage are invariably those that have shared values, even though sub-units within the organisation may have different or competing cultures. Shared values are the glue that bonds employees, creating a sense of loyalty.
Culture and climate are closely related concepts. Culture is made up of a collection of fundamental values and belief systems which give meaning to an organisation, whereas organisational climate are behavioural and attitudinal characteristics that can be empirically measured. Another difference is that culture is made up of shared perceptions (or attitudes and values alone), while organisational climate has to do with shared assumptions, in addition to attitudes and values (Ashforth, 1985). The artefacts of culture include symbols, myths and metaphors which evolve over time within organisations.
Values are a component part of culture, so while culture is observable like the tip of the iceberg, underlying it are various personal and organisational values that make up the iceberg. For value congruence, there has to be alignment between a person‟s individual values and the organisational value system.
Claver, et al (1999:457-8) describe the differences between a bureaucratic and citizen-orientated culture. A bureaucratic culture, while giving a sense of stability, is very often anti-innovation. This culture is characterised as having the following qualities:

  • a management style that is authoritarian
  • little communication between employees
  • limited scope for initiative and innovation
  • a repetitive decision-making process
  • high degree of conformity
  • a belief system that is reluctant to change
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On the other hand, a “citizen-orientated culture” has the following attributes:

  • All tasks and activities are aimed at fully servicing citizens
  • The emphasis is on quality service at all times
  • There are shared values among employees
  • There is frequent contact with citizens
  • Problems that arise are analysed and solved promptly and to the satisfaction of the citizen/customer

In a nutshell, a spirit of batho pele (people first) permeates at all levels in a citizen-orientated culture.
The process of cultural change in the public service is based, according to Metcalfe and Richards (1987), on a transition from a sub-service culture (anything goes) to a culture of shared responsibility (even though this is not part of my job description, I am prepared to help and solve the problem); from a continuity culture (it was always done this way) to a culture of innovation (there is a shorter and more cost effective way of doing it and we are prepared to business re-engineer the process); from a budgeted cost culture (the costs are given, and we have to spend our budget allocated) to a culture of cost awareness (let us save costs by looking at traditional spending patterns differently); and from a stability culture (sticking to the status quo) to a culture of high performance (not afraid of taking risks, improvising and taking tough decisions). This changed culture is not yet prevalent in the South African public service, and is one that has to be striven for.

CHAPTER ONE: BACKGROUND TO THE STUDY 
1.1 Introduction
1.2 Background to the GCIS
1.3 Rationale for the use of the McKinsey 7-S model
1.4 The research process
1.5 Research design and methodology
1.6 Collection of data
1.7 Analysis
1.8 Interpretation of data
1.9 Ethical considerations
1.10 Research constraints
1.11 Chapter and content analysis
1.12 Conclusion
CHAPTER TWO: LITERATURE REVIEW 
2.1 Introduction
2.2 What is a „World class” organisation?
2.3 Organisational Development
2.4 Organisational culture, climate and values
2.5 Knowledge management and learning organizations
2.6 Models for improving quality
2.7 Change Management
2.8 Organisational change in the public service
2.9 Organisation theory
2.10 The McKinsey 7-S framework
2.11 The benefits of using the 7-S model for organisational re-design
2.12 Conclusion
CHAPTER 3 THE RESEARCH METHODOLOGY AND THE INSTRUMENT USED 
3.1 Introduction
3.2 The research propositions
3.3 Research methodology
3.4 Conclusion
CHAPTER 4 DATA AND ANALYSIS OF THE QUESTIONNAIRE 
4.1 Introduction
4.2 Strategy
4.3 Structure
4.4 Systems
4.5 Shared values
4.6 Skills
4.7 Staff
4.8 Style
4.9 Conclusion
CHAPTER 5 RECOMMENDATIONS 
5.1 Introduction
5.2 Strategy
5.3 Structure
5.4 Systems
5.5 Shared values
5.6 Skills
5.7 Staff
5.8 Style
5.9 Synthesis of the above
5.10 Inculcating shared values
5.11 Increasing motivation
5.12 Training and development
5.13 Reengineering of key systems
5.14 Improving internal communications
5.15 Have customer focus
5.16 Improve recruitment practices
5.17 Empowerment and team work
5.18 Strategise on all activities
5.19 Conclusion
LIST OF REFERENCES
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