Organizational Learning and Social Identity

A manufacturing or service value chain relies on the ability to combine and recombine the distinct competencies provided by different groups (Teece et al., 1997). These groups provide the knowledge and skills that enable organizations both to perform effectively in the present and to learn in preparation for the future. Thus, scientific professionals contribute knowledge essential to innovation, and foreign partners can provide invaluable knowledge for operating in new territories. However, while the source of their value resides in the differentiated competencies held separately by such groups, its realization for effective organizational learning requires a degree of reconciliation and integration between them. Here social identity can present obstacles.

The social identity of organizational groups is vested in the systems and bodies of knowledge that they perceive they own. Their members attribute symbolic value to that knowledge and regard themselves as having a right to arbitrate over this value. The implications for the management of organizational learning are very significant. First, the identity of the groups party to an organization will be attached to, and manifest in, their existing practices, thus legitimizing such practices as acceptable conventions. Changes to practice implicit in a policy of promoting organizational learning may therefore be perceived as a threat to social identity, with the result that the people concerned exhibit a reluctance to undertake the ‘unlearning’ that is a precondition for learning to proceed.

A second implication is that those involved in organizational learning will define its legitimate premises, such as learning goals, valid information, and appropriate schemes for classifying knowledge, in terms consistent with their social identities. While this diversity provides a richer palette of resources for learning, the distinct definitions and classifications are quite likely to be contested between the different groups involved. For example, Scarbrough’s study of learning about the possibilities presented by IT for organizational redesign in six Scottish financial organizations led him to conclude that each of the interested specialist groups fought to promote ‘classificatory world-views in which their own expertise is central’ (1996: 200). If this conflict is not resolved, the willingness, indeed ability, of different groups to contribute to organizational learning will be compromised.

There is always a potential conflict between the values and interests signified by occupational, national, and organizational identities. The first two provide a basis for people to preserve some autonomy vis-à-vis the organization (even though this autonomy may in reality be primarily psychological). By contrast, the creation of an organizational identity forms part of a managerial armory not only to encourage knowledge generation but also to ensure conformity and control. The case of ‘WorldDrug,’ a US-owned pharmaceutical MNC studied by McKinlay (2001) illustrates how this conflict can impinge on the capacity to generate organizational learning. In the pharmaceutical sector, accelerating the process of drug development is critical for competitive advantage. Over a five-year period, WorldDrug had focused on leveraging employee knowledge of drug project processes, but with little success. Much of this failure was due to the resistance of knowledge workers to managerial monitoring and attempts to capture their tacit knowledge. This tacit knowledge about the high-level coordinative and improvisational skills essential to successful projects constituted the expertise that defined the knowledge workers’ identities as experts. To surrender that essential tacit knowledge would turn a private asset into a corporate one and threaten the core of the workers’ self-images and interests. McKinlay notes the knowledge workers’ sense of rootlessness within the company as a factor that contributed to their reluctance to co-operate with management in transforming their knowledge into an organizational property.

Organizational learning, therefore, does not occur naturally. It requires the active management of different social identities and of the conflict these differences may entail. Managers cannot assume that an existing organizational identity provides an acceptable psychological contract for group members to willingly contribute their specialized knowledge and competencies to the learning process. People are likely to be comfortable in sharing their knowledge with others in the social group or category they identify with, and this sharing may be facilitated by the use of a common national or technical language. They are likely to be far less comfortable in sharing their knowledge with people outside that group. Groups can acquire an identity by developing a unique knowledge about ways of working successfully (Penrose, 1959), and be reluctant to give this away. Nevertheless, cross-group knowledge sharing is a requirement for an organization to convert fragmented knowledge into a useful generalized form. This means that the knowledge held by, or accessible to, individuals or groups has to be transformed into an organizational property, namely knowledge held in a form that makes it potentially accessible to the organization as a whole.

Overall, organizational learning includes three main processes. The first concerns the acquisition of knowledge from external sources. The acquisition of knowledge often involves the process of knowledge ‘grafting’ discussed by Huber (1991). Here the fact that some members of an organization share a social identity with such sources can facilitate the inward transfer of information and knowledge. For example, scientists employed by a firm will share a degree of professional identity with their specialist counterparts working in universities or research institutes, and this will often ease their access to information from these sources. Similarly, one of the reasons for joining with local joint venture partners in a different country is the expectation that they will enjoy favorable social ties to sources of local market and political information. The second process is the conversion of knowledge from a tacit to an explicit form. Rendering tacit knowledge explicit amounts to capturing it for wider organizational use and reducing management’s dependence on a limited number of people who hold that knowledge. Even some explicit specialist knowledge is effectively tacit for the rest of the organization, and requires conversion to a form that is more generally accessible. In this way, knowledge already resident within an organization can be better exploited. The third process requires a collective contribution of different social groups towards the creation of new knowledge deriving from synergy between their distinct competencies. The distinction between knowledge conversion and knowledge creation is consistent with the one March (1991) has made between exploitation of existing knowledge and exploration of new knowledge.

Exploration depends heavily on the external acquisition of new knowledge, whereas exploitation can benefit both from access to external examples and internal experimentation. A common occupational identity and shared expertise between specialists located in different organizations should facilitate the identification and acquisition of relevant external knowledge. By contrast, the internal absorption of knowledge and its conversion into learning that can be applied may depend importantly on a shared intra-organizational identity that crosses specialist boundaries. Research on absorptive capacity indicates that a balance needs to be struck between external knowledge acquisition and internal knowledge processing for effective learning to take place (Raisch, Birkinshaw, Probst, and Tushman, 2009).

Knowledge acquired from external sources will need to be converted into a form that is intelligible and useful to the organization; in other words, it needs to be made more explicit to other organizational members, especially management. Moreover, imported knowledge may only contribute usefully to the organization’s purposes if it can be brought together creatively and synergistically with knowledge held by other specialist groups. Here we arrive at the paradox that specialist group identity, when it spans the boundaries of an organization, is functional for the acquisition of knowledge but is potentially dysfunctional for the conversion and creation of knowledge. The identity boundaries between different groups within organizations or organized networks can render these last two processes problematic. For group members may be reluctant to release their tacit knowledge to management or to co-operate with people in other groups.

Learning within an organization therefore requires the bridging of identity boundaries on a basis that is acceptable to the parties concerned. For a learning process based on inter-group synergies to be accomplished, it is crucial that an integrating frame of reference be found. This higher order perspective will presumably reflect organizational goals and, if accepted by participants in the learning process, should serve to strengthen organizational identity and identification. If informed by learning, it will also adjust organizational strategies and practices to better suit the present and anticipated conditions for the organization’s success and survival. Successful organizational learning thus strengthens organizational identity in the sense of providing a character (strategy and practices) for the organization that is compatible with its present and anticipated conditions. By providing a more convincing identity, the learning process should also make it easier for people to commit to what the organization stands for and so increase their organizational identification. Moreover, the experience of participating in goal-directed learning should enhance people’s willingness to commit to the fruits of their knowledge creation, thus providing another means of enhancing organizational identification.

The alignment of group identities with organizational identity will be inhibited in circumstances where radical change is introduced in a purely top-down manner. Radical change requires new learning, but a forcing of the change is liable to inhibit identification with the new organizational mission except among the group(s) taking the lead in introducing the change. Such change implies a considerable adjustment of intersubjective meanings for many organizational members, and this may be strenuously resisted (Corley and Gioia, 2003). Thus, when the top management of Telemig, a major Brazilian telecommunications company, tried to introduce a completely new corporate culture and set of practices from the top, it merely succeeded in generating a counter-culture (Rodrigues, 1996, 2006). It was regarded as manipulative and failed to create an effective climate for organizational learning to support the desired change. In such circumstances, many employees shifted the basis of their attachment to the company to one of contract and economic necessity rather than identification.

The sensitivity of social identity for organizational learning is liable to vary depending on (1) the type of knowledge involved and (2) whether the organization in question is unitary in form as opposed to being an alliance or network. Three categories of knowledge can be distinguished, each of which is likely to be perceived differently by the parties concerned in terms of their social identities. The three categories are, respectively, technical knowledge, knowledge about the design of systems and procedures (systemic knowledge), and strategic understanding (Child and Rodrigues, 1996).

Technical knowledge can range from explicit and routine techniques such as statistical quality control and market forecasting to more complex and new technologies that evolve through a process of innovation. The process of acquiring and learning routine techniques may be confined to individuals or small specialist groups, whereas the development of new technologies will typically involve the contributions of several specialist groups. Systemic knowledge is embodied in systems for budgeting, compensation, and production control, in the definition of organizational responsibilities and reporting relationships, and in communication and information systems. This area of knowledge and its application impacts on relationships, across much if not the whole organization. Since new systems normally require a change in organizational behavior and relationships, they are liable to create considerable sensitivity for social identity. Strategic understanding concerns the mindsets of senior managers, especially their criteria of business success and their mental maps of factors that are significant for achieving such success. The prospect of acquiring new strategic understanding can threaten the self-perceived competencies of senior managers. Their social identity as organizational leaders is associated with the policies they have espoused and any substantial change in these promoted by strategic learning is liable to undermine the legitimacy of their position. It can be interpreted as a threat to the very basis of their social identity as senior managers, since this identity is nurtured by the claim to a special set of strategic competencies that identify them as a group of superior standing and privilege. The matter is made more sensitive insofar as the information speaking for strategic change typically comes from other parties, namely experts within and outside the organization.

For these reasons, within a unitary organization, social identity is likely to be more sensitive for systemic and strategic knowledge than it is for knowledge of a technical nature. Systemic and strategic knowledge, and its application, impinges on a range of groups within an organization. It is largely generated within the organization, though often with the help of consultants, and its development requires the willing co-operation of several different groups or units. Such knowledge, concerning as it does strategy and role definitions, comes closer to the core of an organization’s identity than does knowledge of a more technical nature. Technical knowledge is often transferred into an organization and does not always have to be shared with other specialties. Several of its characteristics reduce the social sensitivity of acquiring technical knowledge. One is that it is often expressed in a widely accessible, explicit standardized form, some of it as international standards. Another is that technical knowledge is readily accepted as valid by trained specialists who avoid the ‘not-invented-here’ syndrome by virtue of their relatively cosmopolitan identity. Problems, however, tend to arise when the generation of new technology or new applications of technical knowledge requires the collaboration of people from different specialties, for then the presence of different externally validated technical standards and languages can increase the problem of integration.

The case of an alliance or international organizational network can be more complex. If the alliance or network partners are content to transfer technical knowledge between themselves, the fact that the gatekeepers for such transfer usually share a similar occupational identity can serve as a bridge between the organizations. As such, the transfer of technical knowledge is not likely to be perceived as carrying strong corporate values or involving a kind of imperialism by one national partner over the other. On the contrary, problems are more likely to arise when one partner is attempting to control access to its proprietary technology (cf. Hamel, 1991). This can place technical staff in a situation of dual loyalty and it may rapidly destroy trust between the partners and their staff.

The transfer of systemic knowledge from one partner to another, or pressure from one partner for an alliance to innovate in this area, may be perceived as more threatening to the recipient organization’s identity. This is especially likely in international alliances or networks (Lyles and Salk, 1996). The more that systems introduced from abroad are concerned with ways of organizing and managing people, the stronger the implications for social identity. In these areas, systems and procedures brought in from another country impinge on issues that are deeply embedded in people’s consciousness of the appropriate social order: on matters such as acceptance of responsibility, authority and power distance, relationships, personal dignity, and social equity. It can also be difficult to prove the superiority of foreign practices. One partner may take their superiority for granted and legitimize them as a reflection of ‘global standards;’ other partners may resent and resist this.

The case of strategic learning is different again. Alliances and networks are formed in order to benefit from asset complementarity, scale economies, or enhanced market power. To make economic sense they have to achieve a sufficient degree of strategic fit, which does not, however, mean that their objectives are identical (Child, Faulkner, and Tallman, 2005). If the underlying relationship between partner organizations remains a competitive one, or they regard links to the other partners as essentially short-term, it is unlikely that they will be willing to encourage any significant strategic learning by those partners. Defense of their own strategic identity will remain a paramount factor. Even with alliances between developed and developing or transition country partners, in which the latter explicitly state strategic learning to be one of their alliance objectives, the fact that they will be obliged to accept a learning role implies an inferior right to strategic control over the alliance. They may perceive this inferiority as threatening both their ability to protect their interests and their identity as a partner.