IN THE FIELD OF TECHNOLOGY DEGREE PROJECT
MECHANICAL ENGINEERING AND THE MAIN FIELD OF STUDY INDUSTRIAL MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM SWEDEN 2018,
Learning Mechanisms from Digital Innovation Projects
A Case Study of the Swedish Construction Industry
HÅKON HAUGSTEN HANSEN NIKLAS LOASON
KTH ROYAL INSTITUTE OF TECHNOLOGY
SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT
IN
DEGREE PROJECT INDUSTRIAL MANAGEMENT, SECOND CYCLE, 30 CREDITS
STOCKHOLM SWEDEN 2018,
Learning Mechanisms from Digital Innovation Projects
A Case Study of the Swedish Construction Industry
HÅKON HAUGSTEN HANSEN NIKLAS LOASON
KTH ROYAL INSTITUTE OF TECHNOLOGY
SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT
Learning Mechanisms from Digital Innovation Projects
A Case Study of the Swedish Construction Industry by
Håkon Haugsten Hansen Niklas Loason
Master of Science Thesis TRITA-ITM-EX 2018:230 KTH Industrial Engineering and Management
Industrial Management SE-100 44 STOCKHOLM
Inlärningsmekanismer från Digitala Innovationsprojekt
En Fallstudie av Den Svenska Byggbranschen av
Håkon Haugsten Hansen Niklas Loason
Examensarbete TRITA-ITM-EX 2018:230 KTH Industriell teknik och management
Industriell ekonomi och organisation SE-100 44 STOCKHOLM
I Master of Science Thesis TRITA-ITM-EX 2018:230
Learning Mechanisms from Digital Innovation Projects
Håkon Haugsten Hansen Niklas Loason
Approved
2018-05-29
Examiner
Niklas Arvidsson
Supervisor
Saara Hollmén
Commissioner
Knowit AB
Contact person
Fredrik Höök
Abstract
Today, organisations in multiple industries are faced with challenges connected to digitalisation. The construction industry is one of the sectors in Sweden that are struggling most to digitalise, despite their efforts. The construction industry consists of project-based organisations, which literature have proven to have difficulties with managing complexity.
Furthermore, there is a lack of experience with innovation projects and digitalisation knowledge. The purpose of this study is to investigate how large-size construction companies utilise learning mechanisms to capture the knowledge obtained from digital innovation projects and retain it as an organisational memory. By increasing the focus on managing learning mechanisms with a suitable knowledge management strategy, it is possible to improve the organisational performance in relation to digital innovation. The theoretical approach of inter- project learning is used to analyse the Swedish construction industry by doing a case-study of four large-size construction companies which are operating in Sweden. The data is gathered through semi-structured interviews of two different hierarchic members in each case company and through investigations of their webpages, annual reports and existing written materials.
Additionally, interviews with experts and interest organisations are included in the data gathering.
The investigation presents that digitalisation and digital innovation in the construction industry are connected to digital tools, such as BIM. We also see a shift in attention, where digital tools originally were supposed to solve concrete tasks, whereas they now have a more process- oriented focus with changes in the organisations to smoother digital implementations. Creating
II
standard digital tools, which is utilised in all the projects in the industry and are ready for use will smooth the implementation. The learning mechanisms that exist in digital innovation projects are presented in relation to the decentralised environment. The variety of individual knowledge codification is high, with an absence of knowledge articulation and a high presence of experience accumulation. From a project perspective, there is an evolvement from local to a more central focus for digital innovation initiatives. In an organisational perspective, there is no clear knowledge management strategy, but we argue to see a shift towards a more navigator learning landscape, where emphasises on knowledge articulation is increasing. A discussion of the shift in perception of digital innovation and the evolvement to a more central focus of innovation initiative will increase digitalisation is provided, with a conclusion where the importance of not losing the advantage of having a project-based approach is highlighted.
The main limitation of this work is that the research only consists of large-sized companies;
therefore, this investigation may not highlight the whole industrial organisational behaviour.
Instead, it can provide an understanding of the different learning mechanisms in relation to digital innovation. Further work should investigate small- and medium-sized organisations in the construction industry.
Key words: Inter-project learning, Digitalisation, Innovation, Knowledge management strategy, Learning mechanisms, Construction industry, Project-based organisation
III Examensarbete TRITA-ITM-EX 2018:230
Inlärningsmekanismer från Digitala Innovationsprojekt
Håkon Haugsten Hansen Niklas Loason
Godkänt
2018-05-29
Examinator
Niklas Arvidsson
Handledare
Saara Hollmén
Uppdragsgivare
Knowit AB
Kontactperson
Fredrik Höök
Sammanfattning
Organisationer i flera branscher står idag inför utmaningar, där hanteringen av digitalisering är en av dem. Den svenska byggbranschen anses ha en stor utmaning med digitalisering.
Byggbranschen utgörs till stor del av projektbaserade organisationer och litteratur visar att branschen har svårigheter att hantera komplexitet. Det finns också brist på erfarenheter av projekt relaterat till innovation och även en brist på kunskap om digitalisering. Syftet med denna studie är att undersöka hur stora byggföretag samlar kunskaper från digitala innovationsprojekt genom att utnyttja inlärningsmekanismer och på så sätt behålla kunskapen som en lärdom inom organisationen. Genom att fokusera på hantering av inlärningsmekanismer med en lämplig kunskapsstrategi är det möjligt att förbättra organisationen i förhållande till den digitala innovationen. Den teoretiska aspekten för intern projektinlärning används för att analysera den svenska byggbranschen och detta görs genom en fallstudie av fyra stora byggföretag som är verksamma i Sverige. De data som används har erhållits genom semistrukturerade intervjuer av personer från två olika nivåer inom varje företag och via granskning av företagens hemsidor, årsredovisningar och befintligt skriftligt material. Dessutom ingår intervjuer med experter och intresseorganisationer i datainsamlingen.
Studien visar att digitalisering och digital innovation inom byggbranschen är kopplad till digitala verktyg, såsom BIM. Studien visar också på ett skifte i fokus bland de undersökta företagen från ett tidigare fokus på digitala verktyg som löser konkreta problem ändras till ett mer processorienterat fokus. Detta innebär att inkludera förändringar i företagsorganisationen vilket förenklar implementeringen av digitala lösningar. Detta kan göras genom att ha ett utvecklingsfokus av de digitala verktyg som redan används. Dessa kan då delas mellan
IV
projekten och vara färdiga för att användas från projektstart. De inlärningsmekanismer som finns i digitala innovationsprojekt förklaras i förhållande till den decentraliserade miljön de är verksamma inom. Mångfalden av individuell kunskapskodifiering är hög, liksom insamlandet av upplevelser. Däremot finns det en brist på kunskapsstrategier inom de studerade byggföretagen. Från ett projektperspektiv sker det en utveckling som går från ett lokalt till ett mer centraliserat fokus gällande digital innovation. Från ett organisatoriskt perspektiv finns det ingen tydlig strategi för kunskapshantering, men vi argumenterar för att det ska ske ett skifte mot ett mer styrt lärandelandskap med en betoning på kunskapsledning. Vidare görs en diskussion huruvida denna utveckling är relevant och om den kommer att öka digitaliseringen.
Slutsatsen poängterar vikten av att inte förlora fördelarna med ett projektbaserat arbetssätt.
Begränsningen av denna studie är att enbart stora företag studerats. Därför kan studien inte fungera som en överblick för hela byggbranschens beteende, utan ger en förståelse för en utveckling av inlärningsmekanismer i samband med digital innovation. Framtida studier bör behandla även små och medelstora företag inom byggbranschen.
Nyckelord: Intern projektinlärning, digitalisering, innovation, kunskapsstrategi, inlärningsmekanismer, byggindustri, projektbaserad organisation
V
Table of Contents
Abstract ... I Sammanfattning ... III Table of Contents ... V List of Figures ... VIII List of Tables ...IX Foreword ... X
1. Introduction ... 1
1.1 Background ... 1
1.1.1 Digitalisation as a game changer ... 1
1.1.2 Sustainable organisations with digitalisation ... 2
1.1.3 Multiple interests in digital innovation and digitisation ... 2
1.1.4 Lack of Digital innovation in the Swedish Construction Industry ... 3
1.2 Problematisation ... 3
1.3 Purpose and Research Questions ... 4
1.4 Contributions ... 4
1.5 Delimitations ... 5
1.6 Disposition of the Thesis ... 6
Chapter Summary... 8
2. Previous Research ... 9
2.1 Construction Environment ... 9
2.1.1 Complex environment ... 9
2.1.2 Managing knowledge in the construction environment ... 11
2.1.3 Managing innovation in the construction environment ... 11
2.2 The Innovation Behaviour in the Construction Industry ... 12
Chapter Summary... 15
3. Theoretical Approach ... 16
3.1 Project-Based Organisations Theory ... 16
3.1.1 Key elements and communication in project-based organisations ... 17
VI
3.1.2 Knowledge management in project-based organisations ... 18
3.2 Knowledge Transfer Theory: Learning Mechanisms ... 22
3.2.1 Learning mechanisms ... 22
3.2.2 Factors affecting knowledge transfer ... 22
3.3 The Applied Theoretical Framework... 23
3.3.1 Inter-project learning as a function of landscape ... 24
Chapter Summary... 28
4. Method ... 29
4.1 Research Approach ... 29
4.1.1 Case studies ... 29
4.2 Empirical Collection ... 30
4.2.1 Literature review ... 30
4.2.2 Semi-structured interviews ... 30
4.2.3 Ethical approach ... 32
4.3 Research Quality ... 33
4.3.1 Reliability ... 33
4.3.2 Internal validity ... 33
4.3.3 External validity and generalisability ... 33
4.4 Research Process ... 34
Chapter Summary ... 36
5. Empirical Discovery and Analysis ... 37
5.1 Digitalisation Focus in the Construction Industry ... 37
5.1.1 NCC ... 38
5.1.2 PEAB ... 39
5.1.3 SKANSKA ... 40
5.1.4 VEIDEKKE ... 41
5.1.5 Digitalisation as a function of perspectives ... 41
5.2 Decentralised Learning Mechanisms in Project Environment ... 46
5.2.1 Individual level ... 46
5.2.2. Project level ... 49
5.2.3 Organisational level ... 50
VII
5.2.4 The decentralised learning landscape ... 52
Chapter Summary ... 55
6. Discussion ... 56
6.1 A New Perception of Digital Innovation ... 56
6.2 Increase the Digitalisation with the Process-Orientation for Knowledge Strategies ... 57
6.2.1 The value of process-orientation for managing learning mechanisms ... 57
6.2.2 The value of project-based orientation for managing learning mechanisms ... 58
6.3 Practical Implications for a Decentralised Industry ... 58
6.3.1 Changing the organisational structure ... 59
6.3.2 Individual behaviour under pressure ... 60
6.3.3 Delivery recommendation for consultancy firms ... 60
6.4 Increasing the Digitalisation Rate in the Swedish Construction Industry ... 60
6.5 Limitation and Suggestion for Further Research ... 61
Chapter Summary ... 63
7. Conclusion ... 64
List of References ...i
List of Appendixes ... vi
VIII
List of Figures
Figure 1: The construction environment and its couplings ……….………10
Figure 2: Organisational forms related to functionality ………..………16
Figure 3: Communication channels in project-based organisations …..……….18
Figure 4: Applied framework ……….………...………..24
Figure 5: The explorer learning landscape ………..………..………..25
Figure 6: The navigator learning landscape ………26
Figure 7: The exploiter learning landscape ……….27
Figure 8: The created individual learning mechanisms ………..………47
Figure 9: The created project learning mechanisms ………..…………..…...49
Figure 10: The created organisational learning mechanisms ……….……….51
Figure 11: The learning landscape for the construction industry ………...55
IX
List of Tables
Table 1: Overview of the deposition of the thesis …..………...7
Table 2: The factors affecting the complexity in the construction environment …………....10
Table 3: The connection between knowledge and strategies ...………...19
Table 4: Successful factors affecting knowledge management ..………21
Table 5: The investigated companies …………..………...……….30
Table 6: List of conducted interviews from the case companies ………..…..31
Table 7: List of conducted interviews from other actors and experts ……….…..……..32
Table 8: Method used to fulfil the purpose ...………..…………..35
Table 9: Focus and statements connected to digitalisation ………..………..………...38
X
Foreword
We will start by expressing that this work has been supported by multiple others, although we are the responsible for this work. Here we will like to thank some of the particular importance.
First, we would like to thank Saara Hollmén, who has been the academic supervisor of this work, by providing feedback and guidance on the written material as well of the working process. Further, we thanked the employees at Knowit AB within the transformation department for enthusiastic encouragement and especially Fredrik Höök, who provided this topic and helped us framing it to an exciting and relevant study. Our thanks to the interview objects in the construction industry, who have taken their time to make this study valuable and engaging. We would also thank our peer students attending the seminars at the Department of Industrial Dynamics and Sustainability, KTH – Royal Institute of Technology, for providing us with helpful feedback. Finally, we would end with express our sincere gratitude to our family and friends for supporting us through our studies.
1
1. Introduction
This chapter will introduce the investigated topic and motivate the purpose and research questions of this work. The background will provide the current situation for organisations in the construction industry, by focusing on the ongoing digitalisation. Followed by a problem formulation, which defines clearly what challenges these organisations face. Also, this investigations contribution to existing literature and the necessary delimitations will be presented. Lastly, this section will end with an overview of the papers´ disposition.
1.1 Background
This section will provide the background for how digitalisation is affecting organisations, through challenging their behaviour in relation to the Swedish construction industry. Firstly, the term digitalisation will be presented together with its effect on organisational behaviour.
Then, a presentation of the initiator of this investigation and their interest for supporting this investigation. Finally, a description of the current situation for the Swedish construction industry is provided.
1.1.1 Digitalisation as a game changer
The ongoing development of new technology is changing the business world and increase the complexity of the market situation. The organisations are forced to adapt quickly to this situation characterised by an increase of disruptive innovations and shared economies.
(Hernaus, 2008) This has led to the term digitalisation, which is pointed out to be one of the forces that create strategic tension for organisations by changing the competitive situation. (Doz and Kosonen, 2008, Hernaus, 2008) IT Gartner defines digitalisation to be “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business” (Gartner, 2018). This definition presents a close relationship between the organisation and technologies utilized within the organisation to create a sustainable business. It is important to distinguish between digitalisation and digitisation. Digitisation refers to transferring analogue information to digital information, while digitalisation is the possibilities of different processes that technical development gives.
To sum up, digitalisation makes it possible to develop and challenge existing solutions as well as create totally new solutions to previously unknown problems. (SOU, 2014:13)
2
1.1.2 Sustainable organisations with digitalisation
Digitalisation of an organisation could be initiated both as a transformation process or as an innovation process, both can be detected as a “change of routine”, but with different time horizons and within different departments inside the organisation. (Bygballe and Ingemansson, 2014) Whereas an innovation process is more a short-term project-based approach, a transformation process will be top-bottom long-term approach. (Rogers, 2016) In both cases the organisations are designed to disturb their own operating model, to force changes to happen.
Otherwise, there is a risk that the company will lose their competitive advantage and their organisational market relation. (EY, 2011)
One of the main effects of this changing behaviour and innovation is the creation of individual knowledge. This is considered as a necessity for sustainable business development. (Nonaka, 2000) Then, in a digital future, the organisational goal is to transfer this knowledge into an organisational memory which in long-term could be an organisational capability. (Tupenaite et al., 2008). Nevertheless, investigations have shown that organisations and particular project- based organisations do not have routines and expertise for handling knowledge, especially the acquired knowledge from previous innovation projects. (Ajmal et al., 2010) One way of managing this knowledge is by focusing on learning mechanisms, which focus on individual behaviour in relation to classic knowledge management strategy in order to increase the innovation performance. (Trigo, 2013)
1.1.3 Multiple interests in digital innovation and digitisation
There exists a big interest from multiple perspectives to increase the digitalisation rate and digital innovation, and not only for the affected organisations itself. An industry that has increased their delivery of services related to digitalisation is the consultancy business. They focus on assisting organisations to increase their success rate in digital innovation and digitalisation, by focusing on management, digital solutions and education. (Desai, 2016) This service has become relevant since organisations in traditional industries do not have time or knowledge about how to digitalise efficiently. (Consultancy.uk, 2017) This service is in constant development to fit the continuing changes, and therefore the consultancy firm Knowit AB initiated this paper with the following problem:
“What behaviour and organisation structure creates the right conditions to become a winner in digitalisation?”
Knowit AB addresses the challenge of increasing the digitalisation rate to the individual organisations´ structure and behaviour. By answering this, a further understanding should assist Knowit AB to increases their efficiency when developing services for preparing clients for future market disruptions.
3 1.1.4 Lack of Digital innovation in the Swedish Construction Industry
In the recent years, the Swedish construction industry has been faced with very high returns, which has created an industry with wealth and solid firms (Sveriges Byggindustri, 2016).
Looking at the industry in a macroeconomic perspective, the industry has historically met cyclical periods that are related to the overall business cycles in the economy (Pigou, 2016).
Investigations of previous business cycles have revealed that these fluctuations could vary and have different sources (Schumpeter, 2017). This indicates that the construction business will be faced with a period of lower returns in the future, but digitalisation and digital innovation represents an opportunity to increase efficiency and decrease long-term cost. (SOU, 2014:13) Moreover, the construction companies could risk not being relevant in a digital future, if they are not able to adapt their behaviour to follow their costumers' digital requirements. (EY, 2011) At the same time investigation shows that there is a lack of knowledge about digital tools in the construction business, one could increase their knowledge and implemented it in their organisational performance. This is augmented to be a reason for why the construction business is lagging behind in efficiency, collaboration and standardisation. (Gangatheepan et al., 2017) Furthermore, an investigation also suggests further work of inter-organisation learning behaviour, to get a more in-depth understanding of the working process in innovation projects to increase the innovation success rate. (Bygballe and Ingemansson, 2014)
1.2 Problematisation
Managing innovation in the construction environment is proven to be complex and challenging.
(Bouchlaghem, 2001, Ajmal et al., 2010) Simultaneously, having a suitable knowledge management strategy is determined to be a key factor for successful innovations (Darroch, 2005), and innovation is perceived to be an important tool for increasing digitalisation.
(Ministers, 2015) Ajmal et al. (2010) have shown that transferring the knowledge from innovation projects to the main organisation is not optimal in organisations with a similar structure as construction organisations (Ajmal et al., 2010). Many theories and strategies are developed for managing knowledge inside an organisation, such as Wiig´s model, Arthur Anderson and APQC´s model, Leonard-Barton model, Choo´s model, (Wiig, 1994, Andersen et al., 1996, Leonard-Barton, 1995, Holsapple and Joshi, 1999). Different learning landscape is created (Prencipe and Tell, 2001), however a special learning landscape with the corresponding learning mechanisms and knowledge management strategy for managing innovation projects in the construction business is lacking. During the past years, the construction business in Sweden have had relatively low digitalisation rates, and at the same, time they have had high revenues compared to other industries in the same region. (Visma, 2016, Sveriges Byggindustri, 2016) Weick and Quinn (1999) present that in periods with high returns the focus on organisational changes are low. With digitalisation the norm has changed, now every organisation should focus on challenging their operating model regardless of returns,
4
since digitalisation represent an opportunity to increase efficiency (Weick and Quinn, 1999) Also, the low knowledge level about existing digital solutions within the construction industry could be an obstacle to construction organisations. Particularly, this is stated to be an essential factor for increasing digitalisation (Gangatheepan et al., 2017). This knowledge could be an significant organisational capability to perform in the future market. (Grant, 1996, Davenport and Prusak, 1998).
1.3 Purpose and Research Questions
The goal of this study is to understand the enablers and obstacles in the process of increasing the digitalisation in the Swedish construction industry. This investigation will perform an understanding of the term digitisation and digital innovation for the industry, as well as highlighting the existing learning mechanisms in the digital innovation projects. The purpose of this study is to investigate how large-size construction organisation is utilising learning mechanisms to capture the knowledge obtained from digital innovation projects and retain it as an organisational memory. To fulfil this purpose, one main research question is provided along with two sub-questions.
Main RQ: How do construction companies manage the existing internal learning mechanisms from digital innovation projects?
RQ1: How is digital innovation perceived in the construction industry?
RQ2: How does the construction industry capture knowledge from digital innovation projects?
1.4 Contributions
By fulfilling the presented research question above, this paper will contribute to the existing literature on inter-project learning behaviour, as well as of knowledge management strategies within project-based organisations. Several papers and books that provides knowledge management strategies and learning mechanisms for business development. (Davies and Hobday, 2005, Prencipe and Tell, 2001) However, it has been limited focus on the relationship between learning mechanism, learning landscape and the knowledge management strategies in project-based organisations in relations to digitalisation attempts. This investigation addresses the problem within classical project-based organisations such as the construction industry, by focusing on their organisational learning behavioural. The gathered empirical data contributes to a broader understanding of how current knowledge management strategies are designed in digital innovation projects. Furthermore, it shows how learning mechanisms are emphasised within large-sized project-based organisations, along with how the construction industry
5 defines digitalisation. The empirics also contribute within the field of organisational structure development in large-sized enterprises. A deeper understanding of how these organisations utilise learning mechanisms and the correspondent knowledge management strategy could create a higher possibility of successful innovation and digitalisation (Darroch, 2005, Prencipe and Tell, 2001), which is in the interest of this paper initiator.
1.5 Delimitations
As described in the background, the investigation is delimited to organisations within the construction industry in Sweden. This thesis investigates four construction companies that consist of more than 1500 employees, which are defined as large-size organisations1. According to organisational and managerial theory, this should make the knowledge management more complicated compared to medium- and small-sized organisations. (Blau, 1970, Damanpour, 1996) The targeted case companies are not covering all the large-sized organisations in the Swedish market. Multiple other organisations would also be categorised as large-sized in the Swedish market. This investigation delimits the work to four companies to be able to obtain a complete picture of them. Furthermore, by not investigating the medium- and small-size organisations, there is a risk of not being able to make an industrial and generalisable conclusion. While previous studies have detected that the large-sized organisation is struggling most when changing organisational behaviour related to knowledge management (Blau, 1970, Damanpour, 1996), and it seems to be a higher risk of being irrelevant in an increasingly more digitalised world. (EY, 2011)
The chosen theoretical approach for investigating the digital innovation process in the construction industry is delimited to inter-organisational learning mechanisms. Other theoretical approaches could also be used to fulfil the goal of our study, while the previous investigation presents a lack of understanding related to inter-organisational learning behaviour. (Bygballe and Ingemansson, 2014) Additionally, the investigated construction organisations are delimited to only consist of the operational part, which is the organisational part that is involved in working with building and assembling constructions, and not the parts that involve architectural management or real-estate management. The investigation will also exclude regulative aspects that could affect the internal processes within a construction organisation since regulative problems with digitalisation should be considered before initiating digital innovation projects. All the investigated companies are multinational corporations, but the investigation is delimited to Sweden and will not deal with country inequalities. Finally, the industrial perspective of the individual, functional and industrial level will be used when
1 Large organisations are defined as organisations with 250 employees or more. EUROSTAT. 2016. Glossary:
Enterprise size - Statistics Explained [Online]. Available: http://ec.europa.eu/eurostat/statistics- explained/index.php/Glossary:Enterprise_size [Accessed 28. January 2018].
6
answering research question one. Where the individual level is connected to individual behaviour within organisations, the functional level is connected to the internal process, and the industry level is the relationship between organisations and their relationship outwards.
(Blomkvist and Hallin, 2015)
1.6 Disposition of the Thesis
The following chapters of this thesis are structured as presented in Table 1. The introductory of this investigation continues with chapter 2. This chapter introduces previous research on innovation projects within the construction organisations. These different studies will be presented by focusing on the findings from learning mechanisms and knowledge strategies perspectives when executing these digital innovation projects. The intention of presenting the previous research is to state the relevance of the field of study and address it to a theoretical concept. Chapter 3 will give a presentation of the theory related to project-based organisations, and wherein these organisations innovation projects are usually located. Also, the theoretical approach of learning mechanisms and the framework used to analyse the construction industry is provided. This framework naturally involves a description of different knowledge management strategies, which also will be provided. Further, chapter 4 addresses the challenges and motivates the method used when evaluating the knowledge management of digital innovation projects. This will be performed by discussing the terms of reliability, validity and generalisability. Also, the date of the interviews, duration and position of the objects will be presented.
Chapter 5 will present and analyse the empirics addressed to the research questions, by comparing it to previous literature and theory. Firstly, the findings from public sources connected to digital solutions and digitalisation to each case company is presented. Here the goal is to answer research question one. Secondly, the framework presented in chapter 3 will be utilized when evaluating the interviews further to answer the second research question.
Finally, the chapter ends with a presentation of the identified learning landscape for the industry, where the main research question is answered.
Chapter 6 discuss the findings presented in the previous chapter and present some suggestion for the managerial implication to both the construction organisations and organisations similar to the investigation initiator. This to increase the opportunity for successful digitalisation in the construction industry, by illustrating the current situation and give guidance in knowledge management performance. The discussion will end with limitations connected to the investigation and present further research. The concluding chapter starts by summarising the findings and highlighting the vital information obtained from the case companies and relate it to the introduced research questions. This paper ends with acknowledgement and clarifies the
7 further research. A summary is provided at the end of every chapter and will give a short overview of the chapters´ content.
Table 1: Overview of the disposition of the thesis.
Introduction
Background | Problematisation | Purpose and Research Question | Contribution | Delimitation
Previous Research
Construction Environment | Innovation Behaviour in the Construction Industry Theoretical Approach
Project-Based Organisation Theory | Knowledge Transfer Theory | The Applied Theoretical Framework
Method
Research Approach | Empirical Collection | Research Quality | Research Process Empirical Discovery and Analysis
Digitalisation Focus in the Construction Industry | Decentralised Learning Mechanisms in a Decentralised Environment
Discussion
A new perception of digital innovation | Increase the Digitalisation with the Process- Orientation for Knowledge Strategies | Practical Implication for a Decentralised Industry |
Increasing the Digitalisation Rate in the Swedish Construction Industry | Limitation and Suggestion for Further Research
Conclusion
What is digital innovation in the construction industry | How does the construction industry capture knowledge | How does the construction organisation manage the existing internal
learning mechanisms
8
Chapter Summary
This chapter has introduced the topic of digitalisation and digital innovation within the Swedish construction industry. The complexity of the business and the lack of experience with innovation projects are presented to be the main challenges for digitalisation of the industry, while digitalisation has become a necessity for being relevant in the future market. By increasing the focus on the learning mechanism and knowledge management performance; the ability to successfully implement new digital solutions and another digitalisation solution should increase. This, because innovation projects are considered as an essential tool for digitalisation, and proper knowledge strategy is then viewed as a necessary factor for successful innovation. Then, this study investigates how large-sized construction organisation is utilising learning mechanisms to capture the knowledge obtained from digital innovation project and retain it as an organisational memory.
9
2. Previous Research
This chapter will provide previous research relevant to the investigation. Including research on management of construction organisations, with focus on the obstacles related to the construction environment and innovation. First will the literature related to the environment be presented, followed by different implementations attempts of digital solutions in the construction industry. This should address the challenges associated with managing learning mechanisms in the construction industry. Then, this chapter will end with construction organisational behaviour in relation to innovation.
2.1 Construction Environment
The construction industry is described to be characterised by three main areas. Firstly, the production and design are organised around projects. Secondly, they produce highly customised products and services. And thirdly, they have diffuse collaboration with companies along the supplier-customer chain. (Gann and Salter, 2000) The supplier-customer chain involves many actors and interactions at multiple levels, which have different economical preferences.
(Bygballe and Jahre, 2009) The construction organisation is also categorised by literature to be a project-based organisation or a project-led organisation, due to the project focus which drives most of their income. (Gann, 1993, Hobday, 2000, Gann and Salter, 2000)
2.1.1 Complex environment
Gidado (1996) presents that the complexity of the construction industry can be divided into two main categories. First the uncertainty, which “deals with components that are inherent in the operation of individual tasks and originate from the resources employed or the environment.”
The other form of complexity is interdependence and originate from bringing different parts together to form a chain. (Gidado, 1996) Dubois and Gadde (2001) present factors which are affecting the complexity in the construction environment shown in table 2. These factors are all affecting the projects and its complexity, but are in the nature of the construction environment.
(Dubois and Gadde, 2002)
10
Table 2: The factors affecting the complexity in the construction environment. (Dubois and Gadde, 2002)
Complexity
Uncertainty Interdependence
- Lack of complete specification of activities
- Unfamiliarity with local resources and environment
- Unpredictability of environment - Lack of uniformity of materials, work
and teams with regard of time and place
- Number of technologies and the interdependence between them - The overlap of stages or elements - The firmness of sequences between
the various main operations.
Figure 1 presents Dubois and Gadde (2002) overview of how construction projects are connected to the complex environment. The individual projects are consisting of tight couplings within the temporary network, which are the projects supplier-customer chain. Tight couplings are described as the mechanism that occurs when the activities are heavily connected and dependent on each other. Then there will be a need for a close relationship and corporation. The construction projects are embedded in loose couplings in the permanent network of the construction industry. (Dubois and Gadde, 2002) Loos couplings are events that are responsive, but they are also perceived as an own identity. (Weick, 1976) The community of practice has collective adaptions, which provides means to deal with the tight couplings in the projects as well as flexibility for maintaining the permanent network. Collective adaption is a standardisation by having common knowledge that is shared and understood by the participants.
(Dubois and Gadde, 2002)
Figure 1: The construction environment and its couplings between projects, industry (permanent network), and community. (Dubois and Gadde, 2002)
11 2.1.2 Managing knowledge in the construction environment
The construction organisations are historically used to work in the project-based structure, where the induvial participants have a certain amount of autonomy. (Cox and Thompson, 1997, Ajmal et al., 2010) The role of the project in the construction industry has historically consisted of specific planning, monitoring and control techniques. In today’s environment, the focus has shifted to a more inter-organisational development role, which includes knowledge management. (Ajmal and Koskinen, 2008)
Egbu (2004) and Enshassi et al. (2016) has done an investigation of what is critical when managing knowledge in the construction industry. Egbu (2004) used three case studies done in the construction industry in the United Kingdom, where the aim is to highlight the success factors for knowledge management impact on innovation. He finds and concludes that a meaningful innovation strategy is when there is unequivocal support from the top management.
Another success factor is the ability to manage and build knowledge enhancing approaches in relation to the individuals, product and service. Further, the construction industry has started to change its behaviour from an adversarial to a sharing culture. This sharing culture is crucial for building core competence, maintain capability and benefit from innovation. He also stresses the complexity of innovation and knowledge management in relation to the business in a social process. (Egbu, 2004) Enshassi et al. (2016) investigated 300 projects in the Palestinian construction industry by using a survey with a participation rate of 92 %. (Enshassi et al., 2016) Egbu (2004) expresses the need for further training of personnel concerning knowledge management, innovation and intellectual capital. (Egbu, 2004)
2.1.3 Managing innovation in the construction environment
Researchers have pointed four main characteristics that are special when managing innovation in the construction industry. This could be seen in relation to the previous characteristics of the construction industry, especially regarding complexity.
Regulations, the government has strict regulations connected to the construction industry. These regulations influence the business and the processes, while it does not affect the customer preferences in the same way. (Bouchlaghem, 2001, Gann, 2000, Pries and Janszen, 1995)
Culture differences, in construction projects there are often multiple organisations involved, where different cultures meet, which complicates the innovation process.
(Bouchlaghem, 2001, Bygballe and Ingemansson, 2014)
Project processes, the construction industry is based on temporary projects with a clear time frame. There is usually a weak link between these projects and the overall
12
business processes, which have a much longer time aspect. This leads to a higher risk of rapid assimilation of new ideas and thoughts. (Bouchlaghem, 2001, Gann and Salter, 2000)
“Engineers´ paradigm”, the project processes also lead to an emphasis on short- term management, where the long-term business management would lose focus.
This is a result of the fact that management is origin within the value-creating parts, and this would be the local projects for the construction companies. (Bouchlaghem, 2001, Pries and Janszen, 1995)
Previous investigations have also found that innovation and change attempts outside the project is unusually and can be directly connected to project processes and engineers’ paradigm.
(Tatum, 1987) Investigations from the late 90´s and early 00´s suggest that the construction business should and must be more extrovert and market-driven in the future, with a changing focus on their capabilities. (Pries and Janszen, 1995, Bouchlaghem, 2001, Gann, 2000) Newer investigations of the organisational structure in the construction industry have relieved different approaches that could be connected to a more innovative focus, where the organisation is more market-driven. (Walker, 2015)
2.2 The Innovation Behaviour in the Construction Industry
Bygballe and Ingemannson (2014) investigated the construction industry in both Sweden and Norway by merging two studies, which are conducted between 2010 and 2011. Both studies had the same survey and structural interview questions and are done with a total of 20 different industry actors. This includes construction companies such as NCC, Skanska and PEAB as well as one consultant company, multiple suppliers and production companies. The aim of the paper is not to compare the two countries, but to conduct information which should make the investigation more generalisable. The investigation had four research questions, which are: (1) what is being renewed in the industry, (2) how it is done, (3) who is involved and (4) why do or do they not innovate? (Bygballe and Ingemansson, 2014) To evaluate their empirics, they use a network perspective on innovation to investigate the research questions obtained from Snehota and Håkansson (1995). This implies that companies are embedded in a network where different actors, resources and activities are connected. With this view, innovation is seen as a
“result of an interplay between two or more actors” (Snehota and Hakansson, 1995).
They use previous literature to address their research questions, where the interaction with other actors is pinpointed to be one of the most significant findings for successful implementation of a new solution. (Blayse and Manley, 2004) Dainty et al. (2001) presents that the industry is characteristic by mistrust and scepticism (Dainty et al., 2001), and Fearne and Fowler (2006) argue that a change in the managerial relationship between the clients, contractors and sub-
13 contractors is necessary to improve the future constructional performance (Fearne and Fowler, 2006). Bygballe and Ingemannson argue that these could further be addressed to Dubios and Gadde´s (2002) findings, presented in chapter 2.1.1, of “loose couplings” in the industry, which are creating an inability to provide a network that is efficient when improving productivity and innovation. (Bygballe and Ingemansson, 2014)
Bygballe and Ingemannson´s (2014) finding connected to their research question one is that the last years' innovation is mainly related to process and organisational arrangements. Particular in relation to activities, routines and planning of projects. To reinforce this finding, they use Building Information Modelling (BIM) as an example, where the development of this tool has changed the way project is designed, planned and produced. Although with this focus, nearly half of the respondents are prioritising standardisation or has seen it as an area of renewal when having technical development. For further descriptions of these findings see attachment I.
(Bygballe and Ingemansson, 2014)
The findings that are connected to research questions two and three, where the innovation happens and the involved functions in innovation, are presented by dividing it to explore and exploit behaviour. Projects are considered as an invaluable arena for innovation and where explorations occur. New ideas and solutions are discovered during projects (informal) and are shared by having a more formal diffusion of knowledge into the organisation. This happens by talking with colleagues, visiting projects, bring ideas/experience into new projects. Also, feedback loops are a method utilised for sharing knowledge. It is a method where the whole organisations take place with or without being centrally managed by the top management. The learning by doing and sharing of knowledge are considered as essential resources for doing innovation in the construction industry. The time to share knowledge is also top priority, while they are admitting that struggling with exploiting the new solutions. (Bygballe and Ingemansson, 2014)
The findings connected to the last research question are that the industry clients´ focus on price and control prevent the construction companies from experimenting with new alternatives.
Furthermore, there also exists a lack of trust from the clients on how construction companies are driving projects. This further influences the supplier side and make it hard to have long- term relationships. This illustrates that the interaction between the actors in the industry network is heavily connected. However, they conclude that the price focus and the inability to establish a long-term relationship with the suppliers are indicating that the construction companies have an exploitative learning behaviour and the competitors are considered to play a minor role as a driver for innovation. Bygballe and Ingemannson (2014) further argue, when having the internal network valued higher than the external network in the industry for learning opportunities, it will have negative consequences for learning and innovation. They also express
14
the need for further investigation of inter-organisation learning behaviour when having innovation projects in the construction industry. This to get a more in-depth understanding of the working network and patterns inside a construction organisation. (Bygballe and Ingemansson, 2014)
Comparing this to Bouchlaghem (2001), which investigated implementations of Virtual Reality (VR) in an English construction house-building firm, by doing a case study of the development and implementation in a regional office and also the expansion of it to other regional offices, in the period between 1997 and 1999. They find that the communication between the group who develop the new solution and the user of this non-diffused innovation was critical for success.
Also, a communication platform between the top managers, which decide the overall business strategy, and the middle managers, which may be technical managers and/or project manager, would make it possible to have a simultaneously innovation at both project and business level, since decision-making at both levels will allow the solution to be placed in an organisational context. Instead as a tool, which is often placed beside the organisation process. The initiator of the investigated implementation was stated to be the CEO, but the responsibility was quickly given to a middle manager. Lack of direct involvement from the top level after giving it to the middle manager was expressed as one of the key problems. (Bouchlaghem, 2001) It was considered as the same findings that an earlier investigation of CAD implementation in different UK industries between the 1986 and 1988 (Currie, 1989). Where this lack of involvement led to a mismatch between investments and a broader corporate strategy, so the short-term benefits were emphasised rather than the long-term benefits (Bouchlaghem, 2001, Currie, 1989). The expansion of the implementation to other regions was also considered as slow, due to the workload of the middle manager and the agreements needed in many different levels inside the company. The middle manager who was responsible for the implementation got notable changed roles during the implementation, for being a local CAD manager to a group design system manager. Bouchlaghem (2001) also express the importance of further research on innovation and especially software innovation in the construction industry to improve and explore the innovation process in a construction organisation. (Bouchlaghem, 2001)
15
Chapter Summary
This chapter has introduced previous literature consisting of several aspects of the construction environment. The complexity of the industry can be divided into uncertainty and interdependence. The uncertainty may include incomplete specifications of activities, and interdependence could be the firmness of sequences between the variety of main operations.
The individual projects consist of temporary networks, and the construction projects are responsive, but also perceived as an own identity. Regarding managing knowledge in the construction industry, the findings prove that interactions generate new knowledge environment. Managing innovation in the construction environment can be described as a relation to the previous characteristics of the construction industry, especially regarding complexity. This complexity consists of regulations, culture differences, project processes and engineers’ paradigm. The innovation behaviour in the construction industry implies that companies are embedded in a network where different actors, resources and activities are connected. To answer where and how innovation is occurring, the most important resource to consider is learning by doing and sharing of knowledge. The time to share knowledge is also a top priority, while they are admitting that struggling with exploiting new solutions. Findings show that the communication between they who develop the new solution and the user of this non-diffused innovation was critical to success.
16
3. Theoretical Approach
This chapter presents relevant information about how project-based theory, communication structure and knowledge transfer theory addresses the problem of managing digital innovation in the construction industry as well as managing the learning mechanisms. It is further addressed to an overall organisational knowledge management strategy. Finally, the applied framework in this investigation is presented.
3.1 Project-Based Organisations Theory
Figure 2 illustrates the six different approaches for organisational structures. These are dependent on the strategical focus of the organisation concerning the environment. (Davies and Hobday, 2005) The functional structure is defined as an organisation with pure functional departments, while the functional matrix is including a weak project orientation. The balanced matrix has a stronger orientation towards project orientation compared to the functional matrix.
The project matrix is then an organisation that has project managers and functional managers with equal status. Project-led and project-based organisations are both project-focused, but when having larger organisations, it is usual to include functions in a project-based organisation. (Davies and Hobday, 2005)
Figure 2: Ideal forms of organisational structure related to functionality. (Davies and Hobday, 2005)
17 Project-based organisations are defined as an organisation where the majority of the products designs are customised. (Ajmal and Koskinen, 2008) Davis and Hobdy (2005) also include that the project units are the primary form of production, innovation and competition. These projects are a business mechanism for coordinating and integrating the organisational functions.
Compared to the traditional matrix and functional structure, project-based organisations provide higher flexibility when managing complex, multi-disciplinary and unique tasks. A continuously need for changing their activities in the delivery end leads to these project-based organisations. This allows the organisation to re-structure itself by combining projects in different organisational settings. It is highlighted to fit medium-sized organisation well, and for large-sized organisations, it is usual to involve functional departments that capture the general standard tasks, such as financial and HR departments. This leads to a project-led organisation, which create an organisation that is dynamical with a fixed core. This means that structures and business processes are likely to be shaped by the environmental demand for defined projects.
(Davies and Hobday, 2005)
A project could involve different parts of an organisation but will consist of a group of individuals that working together with shared responsibilities and resources to achieve the organisational goal. (Maylor, 2010) Most project-based organisations are engaged in multiple projects simultaneously. Such projects are usually complex, large, expensive and with a clear timeframe, budget and agreed level of performance. (Kerzner, 1998, Ajmal et al., 2010) Although most projects are unique and have specific overall goals and instructions, the participants make decisions based on the data and information accessible by using their knowledge and communicate with others.
3.1.1 Key elements and communication in project-based organisations
The design of a project-based organisation is to have the senior management at the top like an umbrella above all projects within the organisation. Within these projects a hierarchically structured model of management is common. It gives the project manager great influence over the resources in the projects, while beneath it consists of different functionalities and team managers depended on the complexity and size of the projects. (PM4DEV, 2007) Therefore the communication should have a straight line to the project manager, as the figure 3a illustrates.
Since it is few internal lines between the other participants the communication should not interfere with the project objectives, and the coordination of tasks and goals become more straightforward and transparent. The top management has then a clear connection with every project through the project managers. Also, when communicating with the external actors in project management, the communication will have a clear structure with straight lines. (Davies and Hobday, 2005) This is illustrated in Figure 3b.
18
Figure 3: Communication channels in project-based organisations. (Davies and Hobday, 2005) 3.1.2 Knowledge management in project-based organisations
Strategies for knowledge management are how the organisation wants to facilitate a sustainable competitive advantage, by better exploitation of the available resources (Choi and Lee, 2002, Choi et al., 2008). These strategies should guide the knowledge management processes to improve the organisational performance. In project-based organisations, the knowledge management is about the efficient distribution of knowledge within the organisation. Then, it is crucial to develop strategies for handling the processes connected to the innovation projects, so these projects also create value in long-term. (Nonaka, 2008) The processes could be designed differently, dependent on which knowledge transformation process it is supposed to cover (see chapter 3.2). The general strategy for knowledge management is divided into two categories or dimensions, which focus on creating, sustaining, applying, sharing and renewing knowledge to enhance the organisational performance in various contexts. (Lai and Chu, 2000) The first is called Codification or System, which emphasis to carefully code and store knowledge. Then it will be accessible for everybody in the organisation. While the second one is Personalisation or Human, where individuals develop and share knowledge through direct person-to-person contact. (Hansen et al., 1999, Choi and Lee, 2002) These two categories have a clear relationship with tacit and explicit knowledge. Table 3 present the connection between the strategic dimensions and the different categories of knowledge.
3a
3b
19 Table 3: The connection between knowledge and strategies. (Hansen et al., 1999, Choi and Lee, 2002)
Strategy Knowledge
Tacit Explicit
Codification / System Utilize technology systems to create communication networks.
Use traditional or new methods to codify knowledge.
Personalisation / Human
Create smaller
communication communities for emphasising person-to- person contact.
Supporting transmission of knowledge by emphasising contact opportunities.
Zollo and Winter (2002) are using the same theory, but present three options for organisational capabilities and operation routine instead of two strategies. Where knowledge codification is described as a condition when individuals are cognitively able to transfer their knowledge and deliver it as explicit knowledge. Further personalisation could be interpreted as two categories.
The first one is experience accumulation, which implies to the learning process of operating routines in an organisation. This is connected to the tacit knowledge which evolves within the individuals when obtaining new knowledge from different tasks. The other one is knowledge articulation, which emphasises the learning process of shared knowledge through collective discussions. They describe codification as a step beyond articulation since knowledge articulation is needed to achieve codification and the opposite order is not possible. They also present a theory where additionally cost for an organisation, when releasing resources to codify the articulated knowledge is the reason behind low codified knowledge within organisations.
(Zollo and Winter, 2002)
Further, theory presents the reasons for knowledge management initiatives to involve improving business processes, financial savings, generating higher revenues and/or enhancing user acceptance and increasing competitiveness. (Ajmal et al., 2010, Chua and Lam, 2005) When taking these initiatives into the project-based context and conditions, where issues of corporate culture, workflow and the integrations of the individuals, knowledge are relevant because of the verity in project members background. (Yeh et al., 2006) In addition, the identification of critical knowledge and the ability to exploit are proven to be important for project-based organisations, since the project is typically transient and lack a structure for capturing knowledge to retain it as an organisational capability later. (Kasvi et al., 2003) Then, a strong organisational moral and budgetary management is needed, as well as a planned knowledge structure. (Ajmal and Koskinen, 2008) However, successful factors have been
20
identified through case studies and are presented in table 4. The most important success factors are indicated to be incentives for team members in the project and a clear and simple system that handle knowledge among all the project participants. (Ajmal et al., 2010) Egbu (2001) state that managing knowledge in a project is “harnessing individual and project knowledge to the benefit of the projects”. Therefore, the challenge of managing these projects will be to recognise the limitations connected to the project environment and also find the means that support the knowledge transformation. (Egbu, 2001)
21 Table 4: Successful factors affecting knowledge management in project-based organisations.
(Ajmal et al., 2010)
Successful factors Description
Familiarity with knowledge management The members of the org. and the projects must have a perception of knowledge management and how they can contribute to the different knowledge management initiatives.
Coordination among employees and org. Bring together individuals where they can share and communicate with each other and with the right individuals.
Incentive for knowledge efforts Different factors that motivate people to adapt to knowledge management. Such factors can be categorized into three broad groups:
- Remuneration, which is materials rewards to underpin a certain way of behaviour/actions.
- Moral, which uses the individuals conscience to underpin a certain way of behaviour/actions.
- Coercive, which is to underpin a certain way of behaviour/actions by giving another option that leads to an adverse consequence.
Authority to perform knowledge activities The employees must have the authority to share knowledge and utilize knowledge.
Systems for handling knowledge A structure (often technology), which increase the efficiency of communicating, collecting and re-use knowledge.
Cultural support An organisational culture that encourages to perform the best of their abilities and share their knowledge with other employees by using the system offered.
22
3.2 Knowledge Transfer Theory: Learning Mechanisms
The value of knowledge is limited if the knowledge not gets shared within the organisation.
Then, the ability for an organisation to share the obtained specialised knowledge will be important to create and sustain competitive advantage. (Grant, 1996) The knowledge transfer process can occur between individuals, groups, individual to group and group to the organisation, which give a transmitter and a recipient of knowledge. (Grant, 1996, Karlsen and Gottschalk, 2003) Knowledge transformation in an individual level separates from an organisational level by its definition of “how knowledge acquired in one situation applies to another” (Singley and Anderson, 1989). In an organisational level, the knowledge transformation transcends individual level and also includes a higher level of units. This makes knowledge transfer in an organisation more psychological complex, where a higher rate of irrational cognitive behaviour is present. (Argote and Ingram, 2000) An investigation has shown that knowledge transfer provides the possibility of mutual learning, understanding and interunit cooperation to create new knowledge and also contribute to the organisational ability to innovate. (Tsai, 2001)
3.2.1 Learning mechanisms
Zollo and Winter (2002) defines learning mechanisms in relation to the evolution of the three organisational capabilities and operating routines, presented in section 3.1.2. (Zollo and Winter, 2002) Where this learning mechanism should guide the development of the organisational capabilities, which are a result of the learning mechanisms shape. (Easterby- Smith and Prieto, 2008, Winter, 2003, Zollo and Winter, 2002) Orlikowski (2002) has a more specific practical approach to this development, where skill development, mentoring, and reward system is the outcome. (Orlikowski, 2002) Overall, these learning mechanisms would enable the organisation to reconfigure its behaviour when it comes to resources and routines by knowledge management, (Easterby-Smith and Prieto, 2008) and should be seen as capability- building mechanisms (Zollo and Winter, 2002).
3.2.2 Factors affecting knowledge transfer
The factors affecting knowledge transfer is investigated in various context with different focuses. The knowledge transfer is a time-consuming and a difficult task (McNichols, 2010), and when applying it in an organisational level “it must be congruent with the existing social network“(Guzman and Wilson, 2005). Szulanski (1996) studied knowledge transfer within an organisation, and the result indicated that the knowledge could stay in an organisation for years without getting shared. Also, if the knowledge was recognised as valuable, it could still take more than two years before it got transferred to others. The investigation presented four preliminary barriers for knowledge transformation within an organisation: ignorance, no assortative capacity, lack of pre-existing relationships and lack of motivations. (Szulanski, 1996) Davenport and Prusak (1998) conclude that organisation focus too much on the visible
23 and formal knowledge infrastructure, the hard aspects. This could be email or other forms of technological communication. Instead, there is a lack of focus on less formal infrastructure, the soft aspects. This would be where tacit knowledge gets shared by talking together in daily work.
Darr and Kurtzberg (2000) find that “strategic similarity” increases the possibility for successful knowledge transfer, where “strategic similarity” is defined as similarity in tasks and the general strategy. (Darr and Kurtzberg, 2000) Other studies have also indicated an effect of knowledge transfer by the characteristics of the internal social network ant the social ties between the participants affect the outcome. (Argote and Ingram, 2000) Chang et al. (2012) suggest, by doing a literature review, that motivation for transfer knowledge increase with the opportunity to solve difficult tasks. Also, the expatriate ability has a positive effect on the knowledge transfer. They also conclude after an investigation of multinational organisations that the absorptive capacity goes beyond the impact on the knowledge transfer compared to technological skills. (Chang et al., 2012)
3.3 The Applied Theoretical Framework
Inspired by Prencipe and Tell´s investigation of inter-project learning, this investigation uses the same framework to obtain a picture of how the construction industry works with knowledge transfer within their digital innovation projects. This framework describes tools and elements for obtaining and transferring knowledge, which is defined by learning mechanism theory. Then by connecting it to horizontal and vertical dimensions, they are able to localise and illustrate which knowledge management strategies that are emphasised and in which level the organisation is focused. The vertical dimension is the different organisational levels, which are individual, group/project and organisation. (Prencipe and Tell, 2001) The horizontal dimension is divided into three learning processes defined by Zollo and Winter (2002) that are presented in chapter 3.2.2. Figure 4 presents the whole framework where a description of every learning mechanism is given in Appendix II.
The inter-project learning framework is used to answer the research question two, presented in chapter 1.3, by localising the learning mechanisms through the interviews conducted. Prencipe and Tell also uses the qualitative date when utilising this framework for creating learning landscapes. They did three interviews in each organisation at a different hierarchic level in the organisations. A discussion of the limitation of the framework and how it has been applied is provided in chapter 7.4.
