New Organizational Forms, Social Identity, and Learning

The globalization of markets and rapid advance of new technology is making competition increasingly knowledge-based in terms of the premium attached to innovation and to early awareness of changing market conditions. Non-business organizations are not immune either from pressures for new and improved services and responsiveness to public demands. These conditions clearly favor organizations that are fast learners and able to change quickly (March, 1995). Consequently, there has been a search for new forms of organization that reduce internal identity barriers, or transcend external identity differences, in the interest of improving learning capabilities and adaptability.

The new thinking on organization encompasses a move away from rigid bureaucratic structures toward the adoption of flexible unconventional forms. The contemporary design paradigm is shifting away from the hierarchy, in which it is assumed that the most valuable knowledge is held by top managers, and toward a ‘distributed network of minds’ (Gibson, 1997:8). Authority, power, responsibility, and resources are decentralized to semi-autonomous teams or work groups consisting of knowledgeable, professional, or multi-skilled, staff (Barley, 1996). They can also include relevant ‘outsiders’ such as suppliers and customers. These teams and work groups work with a high degree of local initiative, though it is recognized that their knowledge-creating activities need to be goal directed and contribute to the wider organization. (Hedlund, 1986; Wellins et al.,1994). Organizational teams are today formed around different axes of social identity such as professional and disciplinary groupings, as well as nationality, ethnicity, gender, and hierarchical position. Cheney’s (1991) observation that in post-industrial societies organizational rhetoric is about the management of multiple identities is very pertinent to these developments.

One example of a relatively new organizational form that aims to transcend inter-organizational identity barriers with the intention of promoting learning and knowledge transfer is the strategic alliance. Globalization has encouraged the formation of international alliances between two or more partner organizations coming from different countries. This increasingly common kind of hybrid organization has to cope with differences in both organizational and national identities. Alliances with local partners are often seen as a means to accelerate learning about new markets that a firm seeks to enter (Luo, 2002). Technology partnerships are undertaken as a means of sharing knowledge or generating new knowledge, especially if the partner organizations possess complementary competencies and/or if the cost of innovation is high (Hagedoorn and Schakenraad, 1994).

The strategic alliance formed in 1999 between auto manufacturers Nissan and Renault faced considerable differences of organizational and national identity. This was one of the reasons why almost all commentators and industry experts predicted that the alliance would fail. As one said at the time, ‘at their core they [Nissan and Renault] are both nationalistic and patriotic, and each believes its way is the right way to do things’ (Morosini, 2006: 273). Moreover, Nissan was nearly bankrupt in 1999. However, within five years the Renault–Nissan alliance had become one of the world’s most profitable car manufacturers accompanied by a substantial increase in market share. A willingness to transcend the different social identities of the two companies was initially founded on the trust built between their corporate presidents and then extended operationally through a number of organizational initiatives which promoted a great deal of shared knowledge exploitation. These initiatives included a mixed leadership team, a common language (English), the setting of a common mission in the form of a Nissan revival Plan, cross-country project teams to work on its implementation, and an open communications culture. As Morosini (2006: 285) notes, these developments created mutual social capabilities which became ‘knowledge interactions.’

There can, however, be a negative side to the adoption of new organization forms. In some cases this can breach and destroy the very trust that was manifest in the Renault–Nissan alliance and had positive results for knowledge generation. For example, the downgrading of hierarchy involves de-layering and a hollowing out of middle management. The shift towards smaller units, combined with competitive pressures, has led to widespread downsizing and layoff (Cascio, 2002). The push towards greater flexibility has shifted the focus of the employment relationship from career to contract, undermined employment security, and thrown the onus of ensuring a long-term income stream onto the shoulders of the individual. The distinction between core and non-core activities has also increased the differentiation between primary and secondary status employment. These developments have often been associated with acquisitions which are intended to exploit the assets of the acquired company while failing to respect the social identity of its members (Rodrigues and Child, 2010).