LITHUANIAN LABOUR EXCHANGE AS NETWORK AND LEARNING ORGANISATION: MAIN FEATURES

Daiva Bukantaitė, Rimantas Lauzackas,

VytautasMagnusUniversity

K. Donelaicio 52- 401, 44244 Kaunas, Lithuania

Paper presented at the European Conference on Educational Research, University of Crete, 22-25 September 2004

Summary

Network and learning organizations are analyzed on the basis of scientific literature analysis, distinguishing their features, types, functions, advantages, and comparing with other organizations. The Lithuanian Labour Exchange as a network and a learning organization is presented in the second part of the article,.

Key words: network organization, learning organization, features of a network organization, labour exchange.

Introduction

In the contemporary world of “vanishing distances”, with rapid development of the knowledge society, which is sometimes called “digital” or “network” economy, new laws of human life are formed. Ulrich (1998) claims that the major difference between the “winners” and “losers” in business is their ability to learn and go hand in hand with the change. The “winners” will be able to adapt, learn and act fast, whereas the “losers” will waste time trying to control and overcome the change. In this context, organizations and their structure change as they pursue to adapt and respond to the challenges impacted by the change. Organizations can no longer grow directly and increase their hierarchic structures, as due to their ponderosity they do not manage to keep up with the change. Lusthaus (1997) notices that organizations acquire unequal forms and generate different ideas. Katsanis and Davidson (1995) claim that strategies and structures that prevailed in the past, under the influence of the new technologies and new knowledge, have become obsolete; therefore, it is necessary to find other forms of organization. One of such structures is a network, which could integrate organizations for a more efficient activity. This form of organizations, according to Chisholm (1996), emerged at the end of the 20th century and is a perspective of the 21st century.

Oberg’s (2002) response to the question: “Is a network organization a completely new idea or is it a rather well known phenomenon in a ‘new package’?” was that it is a completely new structure of organization, having no analogous. Therefore, the structure of a network organization was chosen as the object of this research.

The purpose of the research is, on the basis of the research by various authors, to analyze network and learning organizations and define labour exchange as a network and a learning organization.

The objectives of the research:

  1. Theoretically to substantiate the concept and the essential features of the learning organization.
  2. To substantiate the concept of a network organization, its essential features, functions and discern advantages in comparison with traditional structure of organizations.
  3. To establish the principal features of the market as a learning organization.
  4. To perform the analysis of the Lithuanian Labour Exchange as a network organization.

Systemic logics and possessive activity attitude was chosen for the research, which enabled to analyse the market as a system. There were these methods used in the research: analysis of the scientific literature, questionnaires, and statistic data analysis.

I. Concept of network organisation and its essential ideas

Morgan (1989) remarks that more and more organizations live through the change from bureaucratic to network organization (see Fig. 1). The figure presents a six-type organizational structure – “tough” bureaucratic, bureaucratic with a management team, bureaucratic with project and task groups, matrix, project, and network organizational structures. The author stresses that this is not a model of organizational structure change, in order for a bureaucratic organization to become a network organization, it is not necessary to pass through all the stages of structures. Whereas Oberg (2002) states that organizations, which become network organizations usually have passed these structural stages.

“Tough” bureaucratic / Bureaucratic with a management team / Bureaucratic with project and task groups / Matrix / Project / Network

Fig. 1. Model of organisational structures (Morgan, 1989)

Various concepts of a network organization are found in scientific literature (Adams, 1980, Chisholm and Elden,1993, Handy, 1991, Ilinitch, 1996, Kaušylienė, 2001, Morgan, 1989, Powell, 1990, Sorengen, 2002): alliance, coalitions, strategic groups, strategic partnership, “imaginary”, „amoeba”, „spaghetti” organizations.

The authors define network organizations in a different way. According to Adams (1980), these are the organizations that function in a certain area and have direct and indirect impact upon each other. Powell (1990) highlights a mutual cooperation and interchange. Hall (1988) emphasizes voluntary cooperation among professionals having similar goals. Oldroyd, Elsner, Poster (1996) define a network as a non-hierarchic human organization or institution related and communicating with each other for a common goal. Dubini and Aldrich (1991) define it as relations among people, groups and organizations linked according to a certain order, Jarillo (1988) stresses the sustainability of permanence and competitiveness in a network organization, whereas Garavan, Costine, and Heraty (1995) stress trust and common benefit. Borys and Jemison (1989) summarize a network as a common management of several organizations and agreement to use common resources. Nohria and Eccler (1992) define a network as a structure of relations in a social system among separate individuals, organizations, and industries that have common goals and objectives. These relations are the basis for common actions, discussions, authorization and interchanges.

Summarizing the definitions of a network organization it is possible to foresee specific features used to define a network organization: goal, communication and relations, partnership, influence, information and membership. A network organization is a voluntary cooperation of autonomous elements (organizations or structural divisions), which, in their reciprocity, assume obligations to one another and sustain long-term trust-based relations. Therefore, an organization with a network structure is a set of autonomous organizations, which acts as one large organization and uses social mechanisms for the purposes of coordination and control (Staniulienė, 2003).

Chisholm (1996) indicates that a network organization fulfils four functions: vision, forum, change of attitudes and perception, communication.

Vision summons the thinking of participants, planning, all kinds of discussions are carried out in a network – complicated developmental issues are clarified, and the interested parties are rallied for a common activity. The members of every individual organization have to realize that their organization belongs to a higher-level system, i.e. network. With the help of communication, openness and constant contacts are maintained in the organization and its role is perceived in the common system.

Trist (1983) separated the following functions: a regulative, to ensure appropriate orientation and maintain its value; a network organizational - related to a common understanding about a perspective and the upcoming problems; direction developmental - related with support of infrastructure to organize a network, maintain and manage it.

Snow, Miles and Coleman (1992) distinguish three types of network organizations: internal, stable and dynamic. Hinterhuber and Levis (1994) indicate internal, vertical, dynamic and virtual organizations. According to Katsanis (1997), in pursuit to identify the type of organization it is necessary to pay attention to the following:

-dominating structure – if it is hierarchic or non-hierarchic,

-concentration on resources – stored in one organization or all of them,

-large or small number of the produced outcomes,

-broad or narrow scope of partnership.

According to Tichy (1981), three levels of structure are possible: group or “cluster” inside a network – such groups are formed to perform a concrete task, roles are distributed to group members; networks working in an organization, like communicative links among various organizational structures, individuals, their groups that perform certain tasks, and inter-organizational networks connecting various organizations by direct and indirect links.

What features are peculiar to a network organisation? Oberg (2002) claims that the advantages of a network organisation structure emerge when the shortcomings of a traditional structure are excluded, such as: inefficient communication process, too slow and unreliable transfer of decisions, too low respect for separate employees, a multitude of tasks are allotted at the same time, it is difficult for a separate employee to understand the present organisational situation, “overlapping activities”, causing the increase of mistakes and decrease in quality, too much control that triggers tension.

Oberg (2002) indicates the following features characteristic of a network organisation:

  1. Core values clearly and fully implemented and realised, which link all the employees of an organisation. Awareness (acquisition) of values reduces control.
  2. “Cluster” groups that make the backbone of the organisation. Departments and divisions in a network organisation gradually diverge into separate independent units (groups) or join strategic alliances. This way people have stronger impact and authority upon the group and, herewith, upon the whole organisation.
  3. The role of executives/leaders is expanded. In a network organisation executives and leaders are not “separated by levels”, as there is no organisational hierarchy; thus in one situation the same person can be an executive, in another – an employee. The following roles of executives/leaders are characteristic of a network organisation: the process manager, group manager, competence manager, human resource manager.
  4. Employees are independent experts who are initiative, mature, responsible, broadly competent, able to plan, and constantly developing.
  5. The limits of a flexible organisation affect not only a free movement in a network but the flexibility of a working place and working hours. Flexible, not hierarchy-based relations prevail between employees and executives; they are external partners who share information and opinions.
  6. Strong positive dependence on each other. Every member of a network organisation realises that only together it is possible to achieve.
  7. Transparency. A network organisation is characteristic of the clarity of tasks, clear and understandable control. Transparency is an indicator of high quality and assumption for the development of independent experts.

Nohria and Eccles (1992) claim that a network organisation can be characterised by relations and interaction among different organisations, diverse sharing (of employees, ideas, information, money), defined limits of a network, specific goals, mutual investment and dependence.

Staniulienė (2003) summarises the observations of various authors (Burt, 1992, Perrow, 1992, Sorensen, 2002, Zack, 2000) and distinguishes the following features of a network organisation: holistic or chaotic nature, heterogeneity, instability, flexibility, centralized nature, diffusive character, cooperativeness, trust, power rule, smallness, mutual benefit and family relations. The author admits that these characteristics are not comprehensive but sufficient to summarise the essence of network structures.

Summarising the characteristics distinguished by the above-mentioned authors, it is possible to conclude that a network organisation is peculiar of the following:

-Interaction of autonomous organisations,

-Commitment of one organisation to another/other organisations,

-cooperation,

-common goals and vision,

-broader role of executives/ leaders (more functions are performed),

-employees of broad competence,

-strong positive dependence of one organisation on another,

-transparency – clarity of tasks and perceived control,

-defined limits of a network,

-mutual investment.

Features, characteristic of organisations, which aim at becoming network organisations or at joining the already existing network, depend on the purposes. If one of the main reasons of network development is pursuit of higher goals, then one of the necessary conditions is rallied activity with systemic orientation. Cooperation on parity grounds, emotional affection (trust, pleasant cooperation), cosmopolitan and open relations with other network organisations, common goal and its perception, emphasis on mutual benefit are the factors which determine the success of a network organisation.

A network organisation is efficient under unstable conditions, when it faces the requirements and problems that cannot be solved in a hierarchical organisation where distribution of specialists and roles exists. Communication between people in such an organisation is more similar to a consultation rather than teamwork (Attewell, 1984).

Having joined a network, the organisations change their activity form, models, correct their vision, the possibility of experience sharing the changes in a network - organisations can foresee to integrate their educational events, seminars and lectures into production or any other activity. In the network, when its members realise that their organisation is a part of a higher-level system, i.e. network, a higher and more global communication is expected from the network members. Thus, the structure of a network organisation itself creates more favourable conditions for personnel development.

A network organisation can consist of organisations of different status and authority. Then “weaker” organisations are interested in raising their quality level aiming at equivalent relations in the network. The “stronger” organisations are also interested in raising the level of the “weaker” one, as it would have impact upon the quality of the whole network and its ability to sustain in the competition fight.

The network improves and speeds up the acquisition of information technologies. This determines a more rapid spread of new programmes and projects among the members of the network. This spread can be regulated by network rules and other common agreements.

II The content of learning organization and essential ideas

In popular and scientific literature (Easter-by-Smith, 1997, Everard and Moris, 1977, Kreitner and Kinicki, 1995, Longworth, 2000, Moingeon and Edmondson, 1996, Pedler, Burgoyne, Boydell, 1991, Probst and Buchel, 1997, Senge, 1990, Simonaitiene, 2001, Tsang, 1997 and others) many definitions for learning organization may be found, where the emphasis is put that much organization has to be experimental, open to communicating and dialogue, has to support the vision, which would motivate organization members and “provide the trend” for the organization itself, it has to support and develop systemic learning and thinking, such organization is not only the gate to the knowledge society but also the guarantee of survival in it. Clark (2001) distinguishes that the learning organization may be called an organization, which gives preference to the requirements of new society; it is not only adjusting to the changes but also influencing them, and using human resources at most. The mentioned author points out these key characteristics for learning organization: team work and learning, culture of inter-organizational cooperation, the shared system of values, goals and objects, experiential learning, the stimulation of new ideas, methods and the development of processes, market stimulation, representation of responsibility and authority, maximum use of skills of everybody. Peddler, Burgoyne, Boydel (1991) claim that these features are characteristic for the learning organization:

-Formulating of strategy, vision objectives (when all the organization members take part) organized as a learning process,

-Communication and cooperation of subdivisions, groups and individuals,

-Flexibility and openness of the organization,

-Collecting information, evaluation and spread (sharing) ,

-The creation of the organization climate, which will stimulate learning, opportunity to improve for every member of the organization.

Simonaitiene (2001), having summarized the concepts of various authors (Flood 1993, Garrat 1997, Kreitner, Kinicki 1995, Longworth 2000 Senge 1990, Shein 1994, Pedler 1991), stated that the principal methodological basis of the learning organization is learning through activity (action science, action learning), when learning is carried out reflecting its practice, considering and changing it, in that way providing possibilities for new experience and learning.

Marquardt (2001), introducing the systemic model of learning organization, claims, that the system of learning organization consists of five dynamic subsystems, which complement each other and influence:

-learning as a driving power,

-reorganization of the organization,

-participation of workers,

-knowledge management,

-use of technologies.

According to the model’s author, learning is the main subsystem, penetrating into other subsystems, which are necessary to strengthen and supplement the quality of learning. These subsystems are needed for the creation of learning organization, its maintenance and confirmation. If one of the subsystems gets weaker, or does not participate in the learning process, the efficiency of other subsystems notably decreases. Learning subsystem consists of individual, group or team and organization learning levels (Hand, 1991); the matching of types of learning (learning from experience and reflection), prediction (future projecting), generating (learning while analyzing); activity research; one-turn, two-turn, three-turn learning, Deuter’s learning. (Deuter’s learning theory claims that when the individual obtains knowledge and skills, he also obtains such skill, which eases his future learning); learning skills of the organization- systemic thinking, thinking models, individual skills, overlapping vision, communicating skills.

Organization’s subsystem, in which the learning process itself is progressing, consists of four main components- vision (organization goals, future objectives), organization culture (overlapping values, beliefs, rituals, practical work), strategy (activity plans, methodology, tactics, steps, how the vision and goals will be achieved) and structure (organization levels, management, departments), which is streamline, non- hierarchic, with indeterminable lines.

The worker’s subsystem of the organization covers not only those working in the organization, but the external partners, clients, suppliers, the society of the organization. Knowledge management system consists of learning, knowledge creation, saving, transforming and use.

The subsystem of technologies consists of supporting, integrating, systems of technology use and information means, allowing us to have access to the information and learning possibilities to share it. Technical processes, systems, cooperation structures, management and coordination belong to this subsystem. Two biggest components of the technological subsystem are learning, based on technologies and knowledge management, based on technologies as well.

Huber (1991) analyzing the learning organization claims that, firstly, it is appropriate to imply informative system in it, with the help of which the data flow will circulate in the organization. This system consists of four constructs:

-information acquisition, grasp the information,

-information distribution,

-information interpretation,

-organization memory focuses quite strongly on the information systems of organization.

Cross and Hulland (1996) supplement this system with five sub- constructs:

-inborn learning (knowledge available before the organization’s establishment),

-experiential, based on experience learning (learning from the experience of the organization),