In the case study, it is well described that how two organisation that is Bolivar Group Innovation, along with the support of SIT-Systematic Inventive Thinking launched Effecto I. Bolivar Group has an asset value of more than 10 billion. It was looking for an innovation supplier so that it can achieve the objective of sustained leadership through innovation (Winkler & Wagner, 2017). SIT- Systematic Inventive Thinking is a company with a structured innovation methodology which helps the organisations to create its own self-sustaining innovation.
The Effecto- I helped the Bolivar Group to effectively make a culture and attitude of innovation across the organisation. It helped to create this environment at all the three levels that are- individual, team, and organisational level. Systematic Inventive thinking worked with Bolivar Group and let them establish internal communication mechanisms that can create and give advises on the activities and achievements that are related to innovation (Johannessen, 2020). The model used by both of the organisation led the employees to be more creative at the individual level, teams have better work processes and the organisation has correct structures to implement the changes across the entire company.
In the case where the company is more towards traditional designs and control and command system, major changes are required to bring or shift towards innovative strategies. The situational leadership theory should be used in this scenario. This theory is by Hersey and Blanchard which tries to explain the role of manager and how it should work to influence the employees. The situational leadership theory refers to the case where the leader should try to change and fit in the situation that he is trying to make understand his followers. In this case, the style may continually change according to different situations. There are four parts of this theory: first says proper communication and instruction by the leader or manager which is authoritative approach (Yusof et al., 2016). Second is the selling part, where the leader itself works to persuade the followers, apart from the decision making part. Third part of the theory says participation by the leader, where the leader works with the team and the decision is taken together. Fourth, is delegation by the leader to the respective employees who are specialised in their jobs. This will create a sense of responsibility in the employees. Effective leadership is that in which, the leader is willing to adapt to the changes and abilities/ willingness of the team. In the given situation where the organisation is more oriented to control and command system, this theory will help to bring a change and movement toward an innovative approach.
Knowledge management is also very important and need to be paid attention by the organisation where traditional designs are used. Knowledge management is a process of sharing, using and managing the knowledge within an organisation. It is a way to efficiently use the available knowledge. The importance of knowledge management is that it helps in taking efficient decisions. With proper management of knowledge, all the employees are better and quick in the decision making (Shaikh & Shaikh, 2019). The knowledge management aims to cover several objectives of the organisation such as innovation, better performance, competitive advantage, improved performance of the organisation as a whole and many more. There are various technologies for knowledge management such as eLearning, telepresence, enterprise portals, semantic technology, workflow systems, Groupware software etc. In the case of traditional designs system in an organisation, there is a possibility that knowledge barriers are huge. This should be looked after to avoid it.
There is another theory by which we can bring changes to adopt the model presented in our case study. This is pioneered by Peter Senge and is known as organisational learning. This refers to the process of creating and learning knowledge, so that it can be used in the organisation. This process is used to increase the efficiency of the organisation through learning (Tretiakov et al., 2012). In this, the organisation gains experience and the employees learn and there is increased job satisfaction. The turnover rates of the employees fall and more productivity and profits are noticed. Besides, knowledge is created at four different levels that is individual, group, organisational and inter organisational (Natek & Zwilling, 2016). The best way to measure organisational learning is by drawing learning curves.
Through these curves, we get a relationship which shows that as the organisation produces more goods/ products, there is a rise in profits, productivity, efficiency and quality of production. This occurs at diminishing rate. The learning curves are different for different organisations (Farrell, 2017). This is due to different organisational learning rates. These rates depends on various factors such as organisational infrastructure, individual proficiency, organisation’s technology, structure of the organisation. By taking care of these things, the learning curves can be made better for the organisation. The indicator for organisational learning is knowledge. When knowledge is collected, then there is a way towards organisational learning. Thus, both are connected to each other. Knowledge creation, knowledge retention and knowledge transfer are the three processes that drive to the organisational learning.
Knowledge creation is related to the experience of the organisation and also to its creativity. Knowledge transfers refer to the stage where the knowledge is transmitted and spread across the company (Ortenblad, 2017). This is evaluated using several metrics and also through the learning curves. The learning curves tell us how the production of good is transmitted to the profitability and efficiency of the organisation and what time it takes to do this. Knowledge retention refers to that how the organisation retains its knowledge that has been embedded.
There are many barriers to organisational learning which should be avoided. One is corporate amnesia. This is the environment created which means that no mistakes should be made. This environment should be changed to the atmosphere where mistakes can be made and should not be repeated. This helps to make the learning process more comfortable. Culture plays a vital role in the process of learning. To know the shared vision is important to adapt to new and innovative technologies.
Nonaka's model of knowledge creation consists of four knowledge dimensions, that is, socialisation, externalisation, combination and internalisation. Hence, this model is also called SECI model (Farnese et al., 2019). Ikujiro Nonaka worked hard with two concepts: explicit knowledge and tacit knowledge. These are the two types of knowledge. This has become the cornerstone of knowledge creation theory. Nonaka showed how the knowledge can be created, combined and converted and how it is shared. The first way is, socialisation which is tacit to tacit. Here, knowledge is transferred by guidance, imitation, observation. The other is externalisation. This is tacit to explicit. This is considered as an important conversion mechanism. It is easy to spread tacit knowledge within the organisation as it is codified into manuals and documents. The third knowledge dimension is combination. This is explicit to explicit. This is the easiest form (de Almeida et al., 2016). To develop new knowledge, codified knowledge sources like documents are combined. The last is internalisation. This is explicit to tacit. This helps in the modification of the user’s existing tacit knowledge. The knowledge is internalised when explicit sources are used and learned.
The SECI model is a continuous and dynamic model rather than a static model. Here, the knowledge is continuously created, converted and combined as the users interact and learn. This model is in the core of knowledge management and knowledge conversion theory.
In the model described in the question, it will lead to bureaucratic model. In this scenario, the working is done in a way which has many steps to complete a task and also have strict rules and regulations (Dutta & Banerjee, 2016) In other words, it can be defined as the management by the hierarchical authority with fixed rules. To get control over the individuals, bureaucracy is the best way to lay down the terms and strict rules and regulations. It also reduces the complexity in the functioning of an organisation. In the bureaucratic theory, developed by Max Weber, the organisation has a lot of rules, regulations, controls that lead to less complexities in functioning of the organisation (Shamim et al., 2019). But at the same time that leads to inefficiencies.
Whereas, in the organisational theory, all the members of the organisation come together to achieve an objective of the company. There is no hierarchy in the organisation as in the case of bureaucratic organisation. There is interaction between the people of the organisation and is based on the concept of synergy which means together the goal can be achieved more easily than individually done (Kandukuri, 2017). Suitable structure of an organisation is very necessary to achieve its goal.
To conclude, change management is required to implement the given model in the organisation which is more hierarchical than innovative. This is a systematic approach to deal with the transformation of the organisational goals. Before any change, the problem should be diagnosed. There should be involvement of each and every layer. It should be done at all the three levels: individual, group and organisational level. There should be transparent communication and effective leadership. Also, a comprehensive training program should be conducted. This all can lead to efficiently bringing the change even in a hierarchical organisation.
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