Making Knowledge Permanent in Temporary Structures : The Role of Incentives for Knowledge Integration in Project-based Organizations

MASTER OF SCIENCE IN BUSINESS ADMINISTRATION

Yichu Chung

Andreas Jonsson

LIU-IEI-FIL-A--14/01817--SE

Making Knowledge Permanent

in Temporary Structures:

The Role of Incentives for Knowledge Integration in

Project-based Organizations

Yichu Chung: +46(0) 722-00 04 43, yicch569@student.liu.se Andreas Jonsson: +46(0) 706-69 54 72, andjo804@student.liu.se

LIU-IEI-FIL-A--14/01817--SE

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© Yichu Chung and Andreas Jonsson

TABLE OF CONTENTS

ABSTRACT ... I

PREFACE ... III

TABLE OF CONTENTS ... IV

FIGURES ... VI

TABLES ... VI

GRAPHS ... VI

1. INTRODUCTION ... 1

1.1.

T

HEORETICAL

B

ACKGROUND

&

C

ONTEXT

... 4

1.1.1. Emergence of Knowledge Integration In Organizational Contexts ... 4

1.1.2. Reaping Knowledge Assets and Difficulties in Temporary Structures ... 5

1.1.3. Nexus of This Study ... 6

1.2.

P

URPOSE

... 7

1.3.

R

ESEARCH

S

COPE

... 8

1.4.

T

HESIS

D

ISPOSITION

... 9

2. THEORETICAL FRAME OF REFERENCE ... 10

2.1.

E

XPLICATING

K

NOWLEDGE

M

ANAGEMENT

... 11

2.1.1. What is Knowledge and Why Is It Important? ... 11

2.1.2. What is Knowledge Integration? ... 13

2.2.

K

NOWLEDGE

M

ANAGEMENT

S

TRATEGIES

... 14

2.2.1. Formal Structures of Integration through Direction and Routines ... 16

2.2.2. Informal Integration through Social Capital ... 19

2.2.3. Knowledge Integration Mechanisms ... 22

2.3.

K

NOWLEDGE

I

NTEGRATION AS A

P

ROCESS

... 22

2.3.1. The Activities of the Knowledge Integration Process ... 25

2.4.

I

NTEGRATING

K

NOWLEDGE IN

T

EMPORARY

S

TRUCTURES

... 28

2.5.

I

NCENTIVES FOR

S

TIMULATING

K

NOWLEDGE

I

NTEGRATION

... 31

2.5.1. The Failure of Integrating Knowledge by Relying on System Solutions ... 31

2.5.2. The Use of Intrinsic and Extrinsic Motivation for Integrating Knowledge ... 33

2.5.3. Implications of Motivation Theory for Incentive Systems for Knowledge Integration ... 35

3. MODEL OF ANALYSIS ... 37

4. METHODOLOGICAL POSTULATION ... 42

4.1.

S

TEP

1:

I

NITIAL

L

ITERATURE

R

EVIEW

... 44

4.2.

S

TEP

2:

E

MPIRICAL

P

RE

-

STUDY

... 45

4.3.

S

TEP

3:

P

ROBLEM

F

ORMULATION

... 46

4.4.

S

TEP

4:

I

N

-

DEPTH

L

ITERATURE

R

EVIEW

... 46

4.4.1. Ethical Considerations During Literature Review ... 47

4.5.

S

TEP

5:

F

ORMULATING

M

ODEL OF

A

NALYSIS

... 48

4.6.

S

TEP

6:

E

MPIRICAL

C

OLLECTION

... 48

4.6.1. Sampling ... 50

4.7.

S

TEP

7:

A

NALYSIS OF RESULT

... 53

5 EMPIRICAL FINDINGS ... 55

5.1.

I

NTRODUCING THE

S

TUDY

O

BJECTS

... 55

5.2.

T

HE

C

ASE OF

PM

C

ONSULTING

... 58

5.3.

T

HE

C

ASE OF

IS-1

C

ONSULTING

... 59

5.4.

T

HE

C

ASE OF

IS-2

C

ONSULTING

... 61

5.5.

T

HE

C

ASE OF

IS/IT

C

ONSULTING

... 63

5.6.

T

HE CASE OF

A

UDIT

C

ONSULTING

... 65

6. ANALYSIS ... 68

6.1.

L

OCATED

K

NOWLEDGE

I

NTEGRATION

M

ECHANISMS

... 70

6.1.1. How Size and Maturity May Influence Knowledge Integration ... 72

6.2.

H

OW TO

M

OTIVATE

A

CTION FOR

K

NOWLEDGE

I

NTEGRATION

... 74

6.3.

T

HE

R

OLE OF

I

NCENTIVES FOR

I

NTEGRATING

K

NOWLEDGE

... 77

7. DISCUSSION ... 81

7.1.

R

EVISION OF

B

ASIC

A

SSUMPTION

... 81

7.2.

C

ONCLUSION

... 82

7.3.

R

ESEARCH

I

MPLICATION AND DIRECTION FOR

F

UTURE

R

ESEARCH

... 84

REFERENCES ... 86

APPENDIX I ... 91

FIGURES

FIGURE 1:THE KNOWLEDGE INTEGRATION PROCESS IN CONSULTANCY FIRMS ... 2

FIGURE 2:MAIN THEORETICAL FIELDS ... 10

FIGURE 3:A FIRST DRAFT FOR THE SEQUENTIAL ACTIVITIES OF KNOWLEDGE INTEGRATION. ... 24

FIGURE 4:THE CUMULATIVE PROCESS OF KNOWLEDGE INTEGRATION ... 24

FIGURE 5:KNOWLEDGE INTEGRATION AS A CUMULATIVE PROCESS INFLUENCED BY SOCIAL CAPITAL -ADOPTED FROM ROUSSEL &DELTOUR (2012) ... 28

FIGURE 6:FIRST VERSION OF THE MODEL OF ANALYSIS ... 37

FIGURE 7:EXTENDED VERSION OF THE MODEL OF ANALYSIS ... 38

FIGURE 8:FINAL VERSION OF THE MODEL OF ANALYSIS ... 41

FIGURE 9:METHODOLOGICAL SEQUENCING OF OUR THESIS ... 43

FIGURE 10:MODEL OF ANALYSIS, A REMINDER ... 84

TABLES

TABLE 1:THESIS DISPOSITION ... 9

TABLE 2:CHARACTERISTICS OF INTRINSIC AND EXTRINSIC MOTIVATION - ADOPTED FROM WHITTOM AND ROY (2009) ... 35

TABLE 3:INTERSECTION OF THE KNOWLEDGE FACETS WITHIN THE RESEARCH... 40

TABLE 4:RESPONDENTS FROM INTERVIEWS ... 50

TABLE 5:CHARACTERISTICS OF THE STUDY OBJECTS ... 56

TABLE 6:PMCONSULTING KNOWLEDGE INTEGRATION MECHANISMS AND INCENTIVES ... 59

TABLE 7:IS-1CONSULTING KNOWLEDGE INTEGRATION MECHANISMS AND INCENTIVES ... 61

TABLE 8:IS-2CONSULTING KNOWLEDGE INTEGRATION MECHANISMS AND INCENTIVES ... 63

TABLE 9:IS/ITCONSULTING KNOWLEDGE INTEGRATION MECHANISMS AND INCENTIVES ... 65

TABLE 10:AUDIT CONSULTING KNOWLEDGE INTEGRATION MECHANISMS AND INCENTIVES ... 67

TABLE 11:LOCATED KNOWLEDGE INTEGRATION MECHANISM FROM FIVE SWEDISH CONSULTANCY FIRMS ... 71

TABLE 12:LOCATED INCENTIVE SYSTEMS FROM FIVE SWEDISH CONSULTANCY FIRMS ... 76

GRAPHS

GRAPH 1:LITERATURE SOURCES FROM THE INITIAL REVIEW ... 45

GRAPH 2:LITERATURE SOURCES FROM IN-DEPTH REVIEW ... 47

GRAPH 3:PERCEIVED PROFICIENCY IN KNOWLEDGE INTEGRATION IN THE CASE FIRMS AND FIRM SIZE... 73

GRAPH 4:EMPHASIS ON KNOWLEDGE INTEGRATION STRATEGIES IN THE CASE FIRMS AND FIRM SIZE ... 74

GRAPH 5:USE OF DIRECTED INCENTIVES AND FIRM SIZE ... 78

GRAPH 6:USE OF EXTRINSIC REWARDS AND FIRM SIZE ... 79

1.1. Theoretical Background & Context

1.1.1. Emergence of Knowledge Integration In Organizational

Contexts

1.1.2. Reaping Knowledge Assets and Difficulties in Temporary

Structures

1.1.3. Nexus of This Study

2. Theoretical Frame of Reference

Project-Based

Organizations

Knowledge

Integration

Motivation

and

Incentives

2.1. Explicating Knowledge Management

2.2.1. Formal Structures of Integration through Direction and

Routines

2.2.3. Knowledge Integration Mechanisms

2.4. Integrating Knowledge in Temporary

Structures

2.5. Incentives for Stimulating Knowledge

Integration

2.5.1. The Failure of Integrating Knowledge by Relying on

System Solutions

2.5.2. The Use of Intrinsic and Extrinsic Motivation for

Integrating Knowledge

2.5.3. Implications of Motivation Theory for Incentive Systems

for Knowledge Integration

4.3. Step 3: Problem Formulation

4.5. Step 5: Formulating Model of Analysis

Res

po

n

de

n

t

Co

m

pan

y

P

osi

tio

n

D

at

e

an

d

T

im

e

Rec

orded

4.6.2.1. Aiming to Ensure Objectivity

5 Empirical Findings

6.1. Located Knowledge Integration

Mechanisms

6.1.1. How Size and Maturity May Influence Knowledge

Integration

6.2. How to Motivate Action for Knowledge

Integration

6.3. The Role of Incentives for Integrating

Knowledge

7. Discussion

7.3. Research Implication and direction for

Future Research

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Appendix I

Intervjufrågor

Öppen frågeställning

Vad skulle ni säga är ert företags största tillgång? –> varför?

Berätta lite om vad ni gör för att integrera kunskap och dela lärdomar mellan

varandra i organisationen. Upplägg.

Varför dessa?

Vad är fördelen med dem för medlemmarna?

o Vad vinner den anställde på att vara med och integrera kunskap?

o Finns det några nackdelar?

Hur framgångsrika/populära är dessa verktyg bland medlemmarna i

organisationen?

Hur får folk reda på vad verktygen är? // När de hålls. Finns det några regler

kring deltagande?

Vad gör ni för att uppmuntra folk att delta?

Finns det några konsekvenser eller belöningar av att delta?

Konkret frågeställning

Vilka formella strukturer har ni för att dela/sprida kunskap mellan anställda?

o Hur motiverar/uppmuntrar ni till detta?

Vilka formella strukturer har ni för att skapa kunskap inom företaget?

o Hur motiverar/uppmuntrar ni till detta?

Vilka formella strukturer har ni för att förankra och fästa den nya kunskapen

inom företaget?

o Hur motiverar/uppmuntrar ni till detta?

Vilka informella tillvägagångssätt har ni för att dela/sprida kunskap mellan

anställda?

o Hur motiverar/uppmuntrar ni till detta?

Vilka informella tillvägagångssätt har ni för att skapa ny kunskap inom

företaget?

o Hur motiverar/uppmuntrar ni till detta?

Vilka informella tillvägagångssätt har ni för att förankra och fästa den nya

kunskapen inom företaget?

Appendix II

Interview Questions

Open questions

What would you say is your company's greatest asset ? -> Why?

Tell us a little about what you are doing to integrate knowledge and to share

lessons learned from each other in the organization. Disposition

Why these?

What is the benefit for members ?

o What do the employee gain from participating and integrating

knowledge ?

o Are there any disadvantages?

How successful / popular are these tools amongst the members of the

organization?

How do people find out what tools are ? / / If they are kept. Are there any rules

for participation?

What do you do to encourage people to participate?

Are there any consequences or rewards for participating?

Focused questions

What formal structures do you have for sharing / dissemination of knowledge

between employees?

o How do you motivate / encourage this?

What formal structures do you have for creating knowledge within the

company?

o How do you motivate / encourage this?

What formal structures do you have to anchor and attach the new knowledge

within the company?

o How do you motivate / encourage this?

What informal approaches do you have to share / disseminate knowledge

between employees?

o How do you motivate / encourage this?

What informal approaches do you have to create new knowledge within the

company?

o How do you motivate / encourage this?

What informal approach , you have to anchor and attach the new knowledge

within the company?