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Organizational learning and knowledge-sharing are key competitive characteristics of nowadays global organizations. The development and exploitation of the intangible capabilities of an organization is a successful approach for increasing organizational responsiveness to the continuously changing external environment (Little, 2002). Being challenged by the dynamic world of complex needs and expectations, organizations need to effectively and efficiently manage their internal base of resources. An essential organizational resource is knowledge (Choo, 2002).
It is not only an essential resource itself but a facilitator and stimulator of new internal capabilities (Little, 2002). The aim of this assignment is to analyze the World Bank needs and initiatives taken to transform to a knowledge-sharing organization. Each initiative is critically evaluated as each has its advantages and disadvantages. The extent to which the bank was successful is analyzed by evaluating the effectiveness of the Bank to meet the objectives of its knowledge-sharing program. Specific recommendations of what could have been done better are drawn after the summarizing conclusion at the end.
Why did the World Bank want to develop its knowledge-sharing program and what challenges did they face in doing so? The World Bank is a global leader in the provision of financial and non-financial support to slowly developing countries. The dynamic external environment and the emergence of more demanding customers’ expectations as also the increased rivalry from other financial institutions alerted the Bank that internal transformations were necessary to stay competitive and serve the purpose of its existence.
In this respect, the application of a knowledge-sharing program would provide the Bank with the capability to exploit its internal resources and to ‘bloom’ its intellectual and social capital (Little, 2002). The main problem, the World Bank faced, was failing to exploit its abundant information. On the contrary, the organization focused on exploring new information which appeared to be of no use as it was hardly applied during the daily operations. Exploiting existing information was of crucial importance for the Bank as it would has enhanced its internal capabilities (Choo, 2002).
Otherwise as Marsick & Watkins (1999) suggest unexploited information would have the value of meaningless data. That was the reason why the Bank needed to apply its knowledge-sharing program as an essential promoter of transforming abundant information into meaningful knowledge (Marsick & Watkins, 1999). A knowledge-sharing culture would not only make existing information useful but would increase the value of one of the most precious assets praised in the 21st century knowledge-economy ‘ the human capital (Jackson et al. , 2003).
This would be another way to energize its internal capabilities and enhance the intellectual potential in its structures. Critically evaluate the initiatives the Bank took to enhance knowledge sharing and organizational learning. The reforms applied can be categorized as: technological, social, structural and technical. Because of technologies, geographical distances, boundaries and time zones have turned into factors with decreased meaning, (Ackoff, 1994) it can be assumed that they are one of the greatest promoters of communication and knowledge sharing (Yoshihara, 2006).
Having the characteristics of storing, searching, retrieving and re-using, just to name a few, made technologies a fundamental factor for embedding the World Bank’s organizational knowledge and sustaining a memory of values and best practices for future generations (Borhoff & Parechi, 1998). In the present case the World Bank implemented a technological system, called ‘ERP’, to facilitate the process of efficient decision-making by collecting and storing information from international operations (Earl and Fenny, 1996).
Authors suggest that technologies are essential for codifying knowledge but often some analysts as Newell et al. (2002) undervalue their importance, as they are seen as nothing more but tools to facilitate data transaction. In this context the Bank applied an upgraded system as ‘IP’ that would rather focus on the direct communication of employees through virtual visual conferences than just a database to store and retrieve information. It was an approach to transfer bids of tacit knowledge through communication and experience sharing (Newell et al. , 2002).
Despite this meaningful technological approach the World Bank implemented, Cohen and Prusak (2001) argue that video conferencing is unable to transfer tacit knowledge and cannot represent even a small fraction of the way people communicate. Furthermore, technologies are seen as an expensive and time consuming facility (Young & Nie, 1996). It is also doubtful whether companies manage to efficiently exploit their technological resources. In the present case, the World Bank maintains three identical in their characteristics online knowledge sharing platforms which may raise the question of how useful they are for the organization.
Social Technologies can promote explicit knowledge sharing but to get use of its internal capabilities the Bank needed to illicit the ‘hidden’ potential of its employees. As Polanyi (1973) describes people can know more than they can tell. To elicit the implicit and tacit knowledge of its employees the bank organized communities of practice that were called, in the present case, thematic groups. Choo et al. (2002) describes communities of practice as the best way to learn through sharing experience, stimulating innovative developments, exploring and applying variable combinations of new ideas.
Pedlar et al. (1989) describe organizations that engage all of its employees in a continuous process of communication and learning, as learning organizations. Communities of practice with their characteristics of exploiting existing and creating new knowledge, Marsick & Watkins (1999) define them as catalyst and facilitator of the learning environment. Communities of practice have another beneficial characteristic as they would trigger the development of the social capital in the World Bank.
Cohen and Prusak (2001) point out that social capital is the factor that builds trust, loyalty and membership in organizations. Building trust is of essential importance because ‘… when a significant change is announced in an organization, the announcement creates uncertainty that often leads people to reject or block the change. ” (Easterby-Smith & Araujo, 1999) In this sense, the application of the knowledge-sharing programme in the structures of the Bank would be facilitated with the formation of an environment of trust and loyalty.
Apart from the above stated positive characteristics of the thematic groups they can be seen as having a number of disadvantages. World Bank’s communities of practice are ‘nested’ in the structures of the organization. This makes them isolated and unable to address the needs of the external environment. Another characteristic of the thematic groups that can be perceived as disadvantage is that they bring people with different cultural backgrounds. Teale et al. (2003) suggest that cultural and subculture differences in groups may predispose to conflict situations.
However, in the context of social difference and the environment of clashes Wenger (1998) explains that the “…rebellion often reveals a greater commitment than passive conformity. ” Furthermore, diverse group members often have the potential to become more creative than the homogeneous ones (Landau et al. , 2001). In the context of building and supporting social capital as also promoting sharing- experience, storytelling appears to be an excellent incentive. Stories do not aim to report events but values and believes. This creates an emotional connection and promotes trust which strengthens the social capital of the World Bank. Cohen and Prusak, 2001) “Stories carry organizational memory, and the development of stories constitutes organizational learning. ” (Easterby-Smith & Araujo, 1999). Stories would help to embrain fundamental concepts within the reinventing World Bank as they clearly communicate organizational culture and vision through the generations. They help organizations remember their values and beliefs. (Denning, 2001) Stephen Denning (2001) suggests that story telling have disadvantage as they actually does not transfer large amount of accurate information.
Furthermore, stories may be subjective as reflecting personal interests and beliefs. Structural The matrix organization, or also known as, the project organization increases the adaptability and responsiveness of an organization to the external environment. These structures build functional teams that are provided with the opportunity to spread their knowledge and capabilities to tackle variable ad hoc issues in an efficient way (Morgan, 1997). The matrix aims to support fast and frequent resource allocation between functional departments and teams (Kramer & Tyler, 1996).
The dynamics, energy, flexibility and large scale of operations of these structures result in timely responsiveness to customer needs, which makes it appropriate for the World Bank (Pedler et al. , 1991). However, matrix structures may not be an appropriate solution for all organizations. The more complex is the organization the more complex is the matrix structure. This assumes complexity in managing and coordination of operations (Yoshihara & McCarthy, 2006). Matrixes are also seen as costly and time-consuming to maintain (Kramer & Tyler, 1996).
Matrix structures appear to work in theory but not in practice. In practice employees depend on the evaluation of head of units which they are part of or assigned to. This means that sometimes employees participation depend on political reasons rather than on considering the good of the organization (Ackoff, 1994). Policies ‘Incentive structures are important in the individual’s willingness to share or exploit knowledge’ (Scarbrough & Carter, 2001). Moreover, reward incentives not only stimulate people to share knowledge but continuously involve themselves in a learning process.
Implementing reward incentives, would reinforce the transformation of the World Bank to a knowledge-sharing culture. Apart from the positive outcome for knowledge sharing and engaging employees in continuous learning reward incentives appear to burst problems in some situations. Rewarding may be a stimulating experience for some but a disturbing one for others. People may focus on gaining award rather than the organizational prosperity. Such outcomes would result in hindrance of the team work process (Newell et al. , 2002). To what extend did the World Bank’s knowledge management program succeed?
Understanding how successful was the World Bank in applying its knowledge management program is a matter of analyzing how successful was the Bank in addressing its objectives. The Bank would be seen as successful if managed to exploit its dynamic capabilities and thus respond to the external environment in the most appropriate way. The implementation of technological tools to facilitate the sharing processes can be seen as a suitable measure. Technologies are essential factor for companies to streamline and make sense of their abundant information (Newell et al. , 2002).
Otherwise they would not manage knowledge but ignorance (Marsick & Watkins, 1999). In this respect the Bank managed to build the basis of its future. The emergence of communities of practice can be seen as another positive. Thematic groups played the role of essential facilitator and exploiter of learning through experiencing and practicing (Wenger, 1998). Such groups are beneficial for enhancing the value of the social capital by creating an environment of trust and loyalty (Cohen and Prusak, 2001). Having integrated social capital is of great importance for the World Bank especially in periods of changes and transformations.
The more loyal are employees the more devoted to organizational vision and less resistant to change they are (Argyris, 1993). An example of the World Bank’s employees’ devotion to the common goals was the ‘Nigerian query’. In this example a query from Nigerian partner was timely and effectively responded by combining the tangible values of technology and intangible abilities of the social and human capital. However, the Bank can be criticized for the efficiency of its response to the ‘Nigerian query’ as a ‘best practice’ rather than a specifically tailored model was proposed as a solution.
In this context it can be assumed that the Bank has not achieved its optimal efficiency of operations. The Bank still has areas to upgrade such as its operations the functionality of the technologies applied. As described in the present case the inconvenience of not having technical support may hinder the processes of information sharing and organizational learning. This would assume that the Bank is not entirely able to maintain all the needs of its customers as it cannot often apply its tangible assets such as technological facilities properly.
Another area where the World Bank has not achieved perfect efficiency is the thematic groups. Being ‘nested’ within the organizational structure narrows the vision and capabilities of these groups and makes them incapable of fulfilling external demands. In this context, failing to correspond to the external environment appropriately means that the Bank is both failing in its knowledge-sharing program and purpose of existence. Conclusion and recommendations The World Bank developed a knowledge-sharing program which is a bundle of technological, social and technical initiatives.
The technological backbone structured the abundant flow of data to meaningful information and provided employees with the opportunity to extract and create valuable knowledge. The organization promoted incentives that build up the solidness of the social capital which not only promoted trust and loyalty in the vision of the organization but also enhanced knowledge sharing through participation. Continuous organizational learning was stimulated by reward incentives. Furthermore, the matrix structure of the World Bank shaped the organization as boundless and facilitated the transaction of knowledge and apabilities horizontally and vertically within the structures. Important source of knowledge and learning through social participation communities of practice are essential for the Bank’s competitive abilities (Wenger, 1998). That is why it is from first priority for the Bank to leverage their performance and efficiency. Its thematic groups are somehow isolated from the external environment being ‘nested’ in the structures. An approach to overcome this may be the application of incentives to reinforce networking with internal and external communities (Newell et al. , 2002). A specific measure that may be taken is job rotation.
It is a way to diversify employees’ perceptions and enhance their knowledge (Ackoff, 1994). Having efficient communities it is important for the Bank to create an environment where they can flourish. That is why embedding a knowledge sharing culture in the organization is a way to secure continuous learning. Employees should understand that learning is part of their daily activities. Training and coaching is also important but still episodic (Senge, 1992). In this respect the reward incentives that the Bank applied are an excellent stimulator but still short-term oriented and episodic.
Nahapiet and Ghoshal (1998) propose that staff rotation and career advancement opportunities are approaches that can make the Bank’s intangible assets ‘stickier’ and long-term oriented in the successful fulfillment of its mission and objectives. References • Ackoff, R, L. (1994) The Democratic Corporation. New York: Oxford University Press. • Argyris, C. (1993) Knowledge for Action. Jossey Bass Wiley. • Brown, J, S & Duguid, P. (1998) Organising Knowledge. California Management Review. • Choo, C, W & Bontis, N. (2002) The Strategic Management of Intellectual Capital and Organisational Knowledge.
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