Navigating Through Changing Times

Knowledge Work in Complex Environments

Anne Eskola

• Publisher: Taylor & Francis
• Year: 2017
• Print ISBN: 9781138048461
• eBook ISBN: 9781351674836
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Complexity theory including the concepts of chaos and emergence has been considered one of the most revolutionary products of the 20th century having influence on science, technology and economics among others. Any complex systems, such as organisms, societies, stock market or the Internet, have emergent properties that cannot be reduced to the mere properties of their parts. The theory has been used in organizational studies and strategic management where it offers an alternative way to look at organizations. The theory rejects the idea of organizations seen as machines and a planned approach to organizational change.

Instead, the theory underlines understanding on how organizations adapt to their environments. Complexity theory suggests that organizations tend to self-organize themselves to a state where they regulate themselves. Complexity theory would advocate for approaches that focus on flatter, more flexible organizations. It shifts focus from management control to self-organization and individual interrelations between different people.

The aim of Navigating through Changing Times: Knowledge Work in Complex Environment is to give insights on how complexity has changed the environment of many business organizations. The book aims at identifying and discussing special features of business organizations performing knowledge work in a knowledge-oriented economy. Navigating through Changing Times: Knowledge Work in Complex Environment will be vital reading for those scholar and researchers in the fields of knowledge and wisdom management as well as organizational behavior and communication, HRM, strategy, culture, change and development and other related disciplines.

Part I

New Ways of Working and Leading

1 Knowledge Work and New Ways of Working

Anne Eskola

Knowledge Work Challenges Industry Management Practices

The world has changed faster than the ways in which organizations organize the work. Industrial mass production and its benefits are based on management practices that emphasize predictability, control and long-term planning. Drucker (1999, 79) says that the most important contribution of management in the 20th century was the productivity increase of the manual worker, whereas the most important contribution management needs to make in the 21st century is the increase of the productivity of knowledge work and knowledge workers. Work is becoming more knowledge intensive, and that kind of work is characterized with unpredictability and unclear tasks. Work that requires new solutions, innovation, creativeness and interaction between different people is often a poor fit with traditional industrial structures and management practices.

There are, of course, still many fields of businesses where traditional industrial structures of organizations and management practices work well, but, at the same time, there are also others where new, flat, networked, openly operating businesses are overtaking traditional businesses in many aspects. These companies are competitive because of their ability to put the customer in focus and to use new ways of working and modern technology. Many studies (Appelbaum et al. 2000; Cappelli and Neumark 2001) have investigated how the productivity of organizations could be improved by introducing new ways of organizing working. Also, the new social innovations and the new ways to manage work have been of importance according to prior studies. They have contributed to the productivity, either as such or in combination with product innovations or production innovations (Barney and Wright 1998; Kauhanen and Maliranta 2011; López-Cabrales, Pérez-Lunõ and Valle-Cabrera 2009). According to prior studies, highly productive ways of working are such that they decentralize the organizational decision-making and problem solving and thus increase the employee commitment (Edwards and Wright 2001). The concept of new ways of working is also multidisciplinary: It relates to human resources management, information technology and facilities management (Laihonen et al. 2012, 103).

Complexity theory including the concepts of chaos and emergence has been considered one of the most revolutionary products of the 20th century having influence on science, technology and economics, among others. Complexity theory studies how patterns emerge through the interaction of many agents in a way that the whole becomes greater than the sum of its parts in a way that the whole system cannot be understood by simply looking at its individual parts (Sullivan 2011). The theory suggests that organizations tend to self-organize themselves to a state where they regulate themselves. Any complex systems, such as organizms, societies or the Internet, have emergent properties that cannot be reduced to the mere properties of their parts. The behaviour of these systems is unpredictable and uncontrollable, and it cannot be described in any complete manner (Heylighen 2008).

Traditional management research considers organizations as machine-like mechanisms that can be controlled. It is also common for traditional management theories to assume that organizations need some kind of hierarchical management. Indeed, these kinds of management models function well in the context of physical production, but they seem to be ill-suited in a knowledge-oriented economy (Uhl-Bien, Marion and McKelvey 2007, 298). Prior studies (Daft and Lewin 1993; Mitleton-Kelly 2003) claim that the change of paradigm from traditional management towards complexity theory in defining the context of organizations has changed the ways of working and organizing. Redefining organizational practices means moving away from mass production efficiencies, hierarchical organizations and central control and introducing flexible, learning organizations that constantly change and solve problems through interconnected, self-organizing processes. In short, it has been suggested that future work will be organized like the Internet. Instead of pyramid-like organizations, there will be flexible organizations that hand over management tasks to anybody in the organization who has the knowledge needed in the given situation.

The complexity theory offers an alternative way to look at organizations. The assumption that everything can be modelled given enough time or intelligence has been given up, and, instead, it has become evident that not everything can be formalized into predictable, mechanistic patterns that are easy to understand or recognize (Pelrine 2011, 27–8). This implies that the traditional command and control model has ceased to work in organizations that need to respond quickly to their environment and customer needs and produce new, innovative products or services.

Digitalization, artificial intelligence, technology and robotics are going to replace many traditional tasks in the future. Work is not disappearing, but it is changing its nature.

The automatization of knowledge work is not only a vision anymore. Many tasks are already taken care by robotic process automation. For instance, accounting can be considered a typical example of knowledge work where repetitive and routine work lends itself easily for automatization. Productivity increases when employees can concentrate on their core competencies and let robots take care of their routine work. This way the profitability increases as well. The financial sector is digitizing its services, which may be good news for those customers who prefer taking care of their money affairs using smartphones, but bad news for the employees whose jobs are disappearing—or, at least, there is a new division of labour between an employer and a robot. Another field of industry that has been very keen on the possibilities of robotic process automation is health care, where traditional knowledge workers such as doctors feel that computer work with inadequate information technology systems takes such a lion’s share of their working hours that it has harmful effects on the patient work.

However, at the same time as technological development increases new opportunities for many, it can also cause serious alienation for others, which, in turn, can cause for many kind of social turmoil. This creates challenges for human resources management in organizations.

It seems that innovation, creativeness, learning, interaction and social intelligence are tasks where humans still excel—and that cannot be taken care of by automatization, at least not yet. The level of innovativeness and creativeness in organizations usually increases when everybody working for the organization is allowed to generate ideas and experiments are implemented fast without management decisions. Innovativeness is something that can be learned. A network-structured organization enables faster information sharing, which, in turn, increases the learning ability of a network in a tremendous way comparing to a hierarchical organization. Digital tools enable sharing of knowledge and information, but tools cannot be a solution as such, because no digital tool or technological solution is able to change the patterns of behaviour. Changing the behaviour of people in the organization requires a change in the organizational culture. It starts from changing the ways of thinking: Managers have to be ready to give up their power, and employees have to be ready to share their knowledge.

The insights and examples brought about in this chapter are based on an organizational study that was carried out in Finland. Work life in Finland has encountered many reforms during the past years that have also been characterized by an extremely difficult economic recession. The educational level in Finland is remarkably high and power relations in organizations considerably low by tradition. The employees are empowered in many ways, especially concerning their work conditions. However, changes that have happened in workplaces and their operational environment have increased the demand level of work, while, at the same time, work conditions, collective agreements and management traditions have not always followed these changes.

The ability of companies to look for solutions that boost productivity and job satisfaction may be relatively low because of lack of knowledge, know-how, management practices or motivation. Input needed to improve profitability or the quality of working life can be bigger than the benefits, at least in the short run (Alasoini 2011, 24–5). However, retaining the welfare state needs economic growth through the increase of productivity.

In an economy like Finland, the emphasis of work life has already changed from production and performance into knowledge and thinking, which changes the way in which the productivity of work is understood: It is not about how to produce more, but it is about how to learn more and faster. New ways of working have been introduced as a remedy to improve the productivity of work life on the national level, but there seems to be no mutual understanding on what these new ways of working could be. Instead, to improve the productivity of work life, new quantitative reforms have been introduced instead. However, there is a national project (Valtakari 2015, 3–4) in Finland aiming at improving the quality of work life in Finland to make it the best in Europe by year 2020. It has been recognized that developing the quality of work life conditions and productivity support each other. Differences in the production level are created mostly inside working communities by the way how work is done. Recognizing this change requires renovation in organizations, new practices in working, new kinds or work life skills and ability to utilize the possibilities offered by technology.

Despite all of the above, it is possible to find organizations that can be considered forerunners in terms of new ways of working, productivity, profitability, innovation, reputation and the general quality of working life. People working for these organizations have understood that improving the productivity is a question of organizational learning process where the individual learning of one employee is beneficial for the organization only when it links to the learning of the whole community. The term alternative organization (Reedy and Learmonth 2009, 244) refers to companies whose aims are different from those of so called traditional organizations. The aims can include targets like mutual support, sustainable development, self-management, self-expression or bringing a change in society. These kinds of targets make alternative organizations operate in a different way compared to traditional organizations, especially in terms of hierarchy or power relations. All employees are involved in the development, which also helps in dealing with the changes and insecurity. People working for these companies feel that their achievement level is high and that they get support from their fellow workers and from the management. The benefits of work are spread out evenly, and possibilities brought by new technology are utilized when creating new solutions or services.

This chapter is animated by examples extracted from interviews that were carried out in organizations that can be called alternative organizations. The companies were chosen for the study because they deviated from the mainstream of organizations in the following ways: Their organizational structure is very flat, they use shared management practices, they have a reputation as a good workplace, they have excellent products, they have won many prices in competitions like Great Place to Work and—last but not least —they are highly profitable companies. All the companies are producing information technology solutions or software. This implies that the employees in the companies are typical information era knowledge workers.

The data were collected by conducting ten audiotaped, semi-structured interviews with 14 interviewees in six different companies that were transcribed afterwards. Each of the interviews lasted approximately an hour, and they were always carried out by a pair of researchers. The interviews covered 12 different topics: 1) personal questions about the interviewees and their role in the company, 2) information about the company, 3) the ways of working, 4) the target setting and follow-up, 5) the role of managers, 6) the role of personnel, 7) internal co-operation and organization, 8) remuneration, 9) customer relations, 10) external networks and communications, 11) dialogue and 12) challenges in the past, present and future. The analysis started analysing the interviews line by line, with a process of putting tags, names or labels against pieces of the data. The theoretical framework was used to give observations a meaning, interpretation or explanation and to build a connection between observations and, finally, to draw conclusions on them (Eriksson and Koistinen 2005, 30–1).

Who Is a Knowledge Worker?

Knowledge has become an important commodity in a knowledge-based economy. This has led to the emergence of so-called knowledge worker. Knowledge used to be power, but not anymore: Knowledge is valuable only as long as it is shared and flows and creates value in the organization’s network. That is why knowledge work consists of talking, listening, interaction and information processing.

Knowledge work is a broad term for any profession that produces knowledge. It is typically contrasted with physical work, which contains processes and practices that are predictable and can easily be defined in advance. Digitalization has multiplied the amount of knowledge available. Knowledge work is more complex and difficult than routine work because the problems solved in knowledge work are such that there are no right answers for them. Knowledge work, characterized often with the overflow of information, is a burden for our brain, but not necessarily in a negative sense because complex tasks of knowledge work are connected with a human being’s inner motivation, whereas routine work is considered harmful, unhealthy and unmotivating because it prevents employees from using their higher cognitive skills. Indeed, the importance of motivation and strength are highlighted in knowledge work.

A knowledge worker has been in the focus of many prior studies (Drucker 1969; Drucker 1999; Nonaka and Takeuchi 1998; Storey and Quintas 2001) that highlight the difference of a knowledge worker from a traditional employee because there is a deeper interdependency between a knowledge worker and his employer. Many traditional professions, such as doctors and lawyers or project managers and business analysts, represent knowledge workers. Traditional knowledge workers used to work alone. Nowadays, there is also an increasing amount of information-age knowledge workers whose tasks are typical for organizations operating in complex environments. Co-operation, communities and networks characterize this kind of knowledge work. Among the qualities needed from knowledge workers are creativity, innovation, problem solving, learning, ethics and morale. A manager of an IT company describes: “Decision-making is integrated to work, to the everyday life. It gives an opportunity to learn. And it helps to motivate people. It’s very simple.”

The knowledge workers’ input is highly valued in the external marketplace (by customers), and it is a key to a company’s success: “It starts from customer needs and then we build a project team around it. And the project team and the customer define together how we will do the project.” This fact shifts power to the knowledge workers, which in turn makes them less dependent upon their immediate employer, as demand for the services they produce arises from the customers. The knowledge and expertise of knowledge workers must, however, be enhanced all the time in order to be able to offer customers high-level new knowledge services. This enhancement brings mutual benefits: The market value of the individual increases, while the company maintains its competitive advantage (Donnelly 2006, 81, 92–3).

The only bargain an employer can offer a knowledge worker in return for their commitment—in addition to the remuneration—is the opportunity to develop their skills continuously (Donnelly 2006, 81). A human resource specialist described this by saying that “When introducing this new pilot, we started to think what kind of dreams we have, what each one considers meaningful in the future, what he wants to achieve and for what reason.” The increased expertise increases the employer dependency, and this is why the employers have to invest in the loyalty of their staff if they want to avoid the risk of losing them. This gives the knowledge workers power so that they can exercise considerable influence over factors such as their working environment or either temporal or locational flexibility of their work, for instance (Donnelly 2006, 82, 87).

Knowledge workers demand different things from their employment relationship comparing to traditional workers. They want to manage their own development, and they want their job to reflect their own philosophy of work, career and life in general: “My role in the company has been built on my own opinions. I haven’t been given one single target. If I ever asked what I should start doing the answer was that check what needs to be done. I have created my own role.” On the other hand, knowledge workers depend on their employer—not so much on the employment, but on the ability to enhance their skills and on access to resources (Donnelly 2006, 81).

Knowledge work is done with physical, social, digital and emotional inputs within given time resources. Estimating the productivity of k...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures and Tables
• Preface
• Part I New Ways of Working and Leading
• Part II Lessons Learned from Forerunners
• Part III Practical Guidelines for Changing Times
• About the Contributors
• Index