Network approach to fundamental tasks in knowledge-based organizations

Abstract

Organizational networks are increasingly drawing the attention of management scholars worldwide. It is commonly expected that certain intra-organizational network structures predict how well the individual, the group, and the firm will perform. This study focuses on the structures and management of intra-organizational networks in knowledge-based organizations, studied with a literature review and with three separate research settings. The settings include the network perspective on the development of a professional service, network analysis of team communication structures, and communication networks among employees in a professional service firm. It is argued in the study that a firm utilizes its knowledge resources in value creation with intra-organizational networks. An essential insight of the study is that production, development and idea generation are the fundamental tasks of a firm, and by managing the intra-organizational networks in these tasks successfully, the firm can find a sustained competitive advantage compared to other firms in the market. The study consists of four papers and an introductory part. Based on the literature review presented in Paper I, it is stated that the structure of a production network is centralized, a development network is distributed, and an idea generation network decentralized. According to the theme-based interview study presented in Paper II, each task-related network needs different management initiatives. In Paper III, it is argued on the basis of theory and a case that the ideal communication network structure of a team in production tasks is hierarchical, in development tasks it is core-periphery, and idea generation tasks are ego-centric. According to the results of statistical analysis in Paper IV, the communication network structure in routine tasks is dense, whereas in non-routine tasks it is sparse. It is also shown in Paper IV that centrality in intra-organizational networks predicts employees' performance according to their roles. Individuals in non-routine roles (managers) benefit more from centrality compared to individuals in routine roles (professionals). The results of the study indicate that there is no one optimal network structure, but many, according to the task. Theoretically, the distinction between the three task-related networks is evident, but in the case study in Paper III, the development network and idea generation network were difficult to distinguish from each other. Therefore, in empirical research, the distinction between routine and non-routine tasks is more useful, as shown in Paper IV. According to the results of Paper IV, centrality predicts employees' performance less than expected - only the managers in a professional service firm seemed to enjoy positive consequences of centrality measured with performance at work. As a managerial implication of the study, it is suggested that managing the three task-related organizational networks separately, the firm will achieve improved simultaneous scanning of the environment, seizing opportunities and transformation of the organization - mechanisms also known as the dynamic capabilities of the firm. The study is related to the disciplines of knowledge management, strategic management, network theory and social capital.