Abstract
This case study aims at unravelling the characteristics and the challenges faced by a small professional service firm (PSF) in becoming a learning organization (LO). For case study, both qualitative and quantitative data were collected independently and simultaneously. The Watkins and Marsick (1996) framework of LO was followed in conjunction with the interviews and observations to achieve the study objective. Overall, the status of learning orientation in the consultancy firm is fairly high. The findings reflect that an organization is in a process of expansion and with changing times, there is a need for change in some important areas. Unique Indian cultural aspects are found to be significant in enhancing learning orientation in the studied PSF. Nurturant task (NT) of leadership and a familial culture have been instrumental in creating tacit knowledge in the organization. Study on LO in small PSFs is an under-researched domain. Empirical material offers insights into learning orientation in Indian firms, with a focus on the unique Indian culture.
Keywords
Problem Background and Context
It is a truism that small-sized business enterprises, especially professional service firms (PSFs), operate in an extremely uncertain and hyper-competitive business environment. For these organizations to be successful in achieving their goals and objectives, they need to use learning as a key strategy. Graham and Nafukho (2007) point out that since small-sized business enterprises begin with the main objective of growth and renewal, learning is critical to all the business activities conducted by these enterprises.
Interestingly, there is a growing interest among organization theorists (Greenwood, Suddaby & McDougald, 2006; Kosmala & Xian, 2011; Malhotra, Morris & Smets, 2010; Nordenflycht, 2010; Raj & Srivastava, 2013; Sahin, 2011) in PSFs. They are distinct from other types of firms; they are models of knowledge intensity and operate in a particular environment which demands distinctive management practices (Greenwood, Li, Prakash & Deephouse, 2005; Malhotra, Morris & Hinings, 2006; Raj & Srivastava, 2013; Stumpf, Doh & Clark, 2002). These firms comprise highly educated people, involving high degree of customization, interaction, discretionary efforts and personal judgement by the professional(s) delivering the service, which are provided within the constraints of professional norms of conduct. Strategies of PSFs mainly emerge from managing intellectual capital embedded in social exchange relationships with clients, peers, educators and professional associations (Løwendahl, 1997; Reihlen & Apel, 2007).
As Peter Drucker coined (1964), we are in ‘the knowledge society’, which places emphasis on knowledge, and organizations compete for knowledgeable workers. In this era, knowledge has become the primary factor of production instead of machinery or financial capital as in the old industrial economy (Stankosky, 2012). The PSFs are also targeting global clients and meeting the clients’ diverse needs with specific time frames. They need a highly educated workforce, which pushes them into a ‘war for talent’ (McKinsey, 1997). The PSFs are facing unprecedented challenges.
Given the changing nature of work, organizations have come to view learning as a more critical variable than it might have been in the past (Thomas & Allen, 2006; Wang, Zhongfeng & Yang, 2011). According to Garratt (1988), for an organization to be able to survive in a turbulent environment, it is necessary that the rate of learning should be greater than or equal to the rate of change outside the organization. Harvey and Denton (1999) have also pointed out the necessity to shift the focus on learning as a source of competitive advantage.
The current study looks at the characteristics of a learning organization (LO) in a PSF, which is a management consultancy firm operating in one of the most promising developing economies, India. Considering the relevance of knowledge and learning for PSFs, it is surprising that research on this topic is still very limited (Reihlen & Apel, 2007). The PSFs in India operate in a quite different environment from the West (in terms of cultural and social political environment). Context specificity is central to small- and mid-sized PSFs. According to Hofstede’s (2001) study, India is weak in terms of uncertainty avoidance and strong in terms of power distance, for which he chooses family as the metaphor. The choice of family as a metaphor for Indian work organizations fits with the familial orientation of Indians, as Gupta (1999) suggests that family cannot and should not be ignored in the Indian context. Sinha (1990), Sinha et al. (1994) and Sinha et al. (2001) found familism, personalized relationships and context sensitivity as the major cultural features in the Indian context. In terms of business environment, India is world’s second largest growing economy. There are big PSFs such as McKinsey and small players such as Virtuoso Consulting Services as well. India is shifting towards the service industry (IBEF, 2016). Hence, there is a need to conduct a context-specific study. The current case study is on a small PSF IRM operating in India.
The following section will explain the concept of LO and its significance in PSFs.
Learning Organization as a Concept: Literature Review
The basic rationale for LO is that in a situation of rapid change, only those that are flexible, adaptive and productive will excel. Organizations need to be good at knowledge generation, appropriation and exploitation. The major themes identifiable in the various definitions of LO are continuous learning (Senge, 1994) and improvement (Rowden, 2001), creation, acquisition and transfer of knowledge (Garvin, 1994; Lewis, 2002), individual, team and organizational learning anchored in concrete values, visions and goals (Moilanen, 2005; Senge, 1994), as well as change (Nevis, DeBella & Gould, 1995) and transformation (Pedler et al., 1997).
According to Singh (2010), to meet the challenges posed by a rapidly changing environment, an organization must create and assimilate new knowledge at an increasing pace, encourage innovation and learn to compete in new ways. We see that a number of firms experience short business life cycles and are thrown out of the industry every day. This is because they are not able to identify the latest trends and the latest technology or they are not able to adopt the technology (Ackoff, 1981; Lusher & Lewis, 2008). Due to all of the above-mentioned reasons, the concept of organizational learning came into being. In essence, LO is the product or result of a critical combination of internal change mechanisms and continuous environmental reviews intended to maintain or improve performance (Senge, 1994).
At the empirical level, there have been a large number of studies focused on manufacturing, retail service and technology-based firms which have attempted to examine the dynamics of LOs or the extent to which organizations are internally nurturing the conditions that foster learning (Dymock & McCarthy, 2006; Elgar, 2013; Hayes, Wheelwright & Clark, 1988; Khadra & Rawabdeh, 2006; Yeo, 2008). However, empirical studies remain very negligible in developing countries, especially South Asia, with specific reference to PSFs.
In India, Shukla (1995) offers a theoretical perspective of the definition of organizational learning culture by describing learning capabilities in the learning cycle as capabilities for self-reflection and planning, environmental scanning capabilities, capabilities to disseminate and share information and capabilities to act and experiment.
Bhatnagar (2006) pointed out that managers felt the processes for encouragement of experimentation and environmental scanning needed more attention in the Indian industry. The most important contributions in the way of measurement have indeed come from Watkins and Marsick (1998). However, there are several tools available such as ‘The Learning Company Questionnaire’ by Pedler, Boydell and Burgoyne (1988, 1989), ‘The Learning Audit’ by Pearn, Roderick and Mulrooney (1995), ‘The Learning Environment Survey’ by Tannenbaum (1997), in the Indian context, Pareek (1988) developed the ‘Learning Organization Profile Survey’ and many others.
All these instruments do not look at any performance outcomes, which is the unique feature of the ‘Dimensions of the Learning Organization’ model in which Watkins and Marsick (1993, 1996) have indicated that LO design depends on seven complementary imperative dimensions based on the interaction between people and the structure in the organization. The seven core dimensions of LOs are continuous learning, dialogue and inquiry, team learning, embedded systems, systems connections, empowerment and leadership. This instrument (Dimensions of Learning Organization Questionnaire [DLOQ]) has two outcome variables: financial performance and knowledge performance (Watkins & Marsick, 1998). The definitions of dimensions are given in Box 1. This instrument has been scientifically tested and its validity has been confirmed in the Indian setting (Awasthy & Gupta, 2012; Yang, Watkins & Marsick, 2004). Hence, for the current study, the Watkins and Marsick framework and instrument has been adopted to collect questionnaire data and qualitative data; it has also been analyzed from their perspective.
Studies using DLOQ are carried out in various countries which include the US, Colombia, China, Lebanon, Korea and Taiwan (Davis & Daley, 2008; Ellinger, Ellinger, Yang & Howton, 2002; Song, Baek-Kyoo & Chermack, 2009; Yang et al., 2004). Numerous case studies are based on the Watkins and Marsick framework using DLOQ (Milton, 2003). In 2003, Marsick and Watkins proposed their revised diagnostic tool to diagnose current status and guide change.
Definition of Constructs for the Dimension of the Learning Organization Questionnaire
Create continuous learning opportunities: Learning is designed into work so that people can learn on the job; opportunities are provided for ongoing education and growth.
Promote inquiry and dialogue: People gain productive reasoning skills to express their views and the capacity to listen and inquire into the views of others; the culture is changed to support questioning, feedback and experimentation.
Encourage collaboration and team learning: Work is designed to use groups to access different modes of thinking; groups are expected to learn together and work together; collaboration is valued by the culture and rewarded.
Create systems to capture and share learning: Both high- and low-technology systems to share learning are created and integrated with work; access is provided; systems are maintained.
Empower people toward a collective vision: People are involved in setting, owning and implementing a joint vision; responsibility is distributed close to decision making so that people are motivated to learn what they are held accountable to do.
Connect the organization to its environment: People are helped to see the effect of their work on the entire enterprise; people scan the environment and use information to adjust work practices; the organization is linked to its communities.
Provide strategic leadership for learning: Leaders model, champion and support learning; leadership uses learning strategically for business results.
This article will now take a look at the case under examination and the reasons for choosing it. This is followed by the methodology, results and discussion sections. The article concludes with the implications of the study and suggested areas of future research.
Research Objectives
The current study looks at the characteristics of an LO in a small PSF, which is a management consultancy firm operating in one of the most promising developing economies, India. This research is exploratory in nature since LO in the context of a small Indian PSF has not been studied before. In order to achieve the main objective, the current study collects both qualitative and quantitative data. Concurrent mixed methods is the methodology adopted here. In the study, DLOQ (quantitative instruments) will be used to measure the relationship between people and structural dimensions and its impact on knowledge and financial performance. At the same time, the characteristics of LO will be explored using observations and qualitative interviews with participants at the PSF.
Company Overview
‘IRM’ (Pseudonym) Consultancy Firm
This case study concerns an Indian consulting firm (IRM) which operates in the rural management sector. Most studies talk about large consulting firms, such as McKinsey and Ernst and Young, while this organization is small in terms of the number of employees and its financial turnover. However, it has a good brand reputation in its area of expertise.
The company, especially its founder, has won various awards for its contribution and is considered to be a pioneer in rural marketing in India. According to Patro (2000), in India, the rural market accounts for 60–80 per cent of the total sales for many consumables and therefore corporations in India have shifted their attention to rural markets. There is hardly any exposure of cases in the area of PSFs operating in a developing economy. Thus, the role of PSFs operating in this sector needs to be acknowledged. The contribution of our study lies in bringing forth issues pertaining to small management consulting firms and hence we are aiming to understand how PSFs manage their own learning orientation.
About IRM
IRM, which runs on the partnership model, came into existence in the early 1990s and currently employs 43 people. According to Greenwood, Deephouse and Li (2007) there are two widely recognized primary types of ownership: investor owned and employee owned. The industry contains two variants of employee-owned organizations: private corporation and partnerships.
IRM offers consulting solutions to both the corporate and developmental sectors based on two generic approaches: qualitative research based and quantitative research based. The business model of IRM has been a project-based model for revenue generation. Employees do not have fixed roles. They switch from one project to another and many of them even travel extensively for fieldwork. Mostly, senior- and middle-level employees interact and work closely with the clients. Junior-level employees mainly offer assistance in the background work. The company has not been aggressive about getting business or obtaining new projects and has not displayed a principal ambition to work only for money. Due to this ideology, the organization has always been debt-free.
There is a trend in Indian consulting firms of recruiting people from top management institutes. IRM, on the other hand, is known for employing people who are not from top management institutes and yet it is one of the best organizations in its domain.
IRM is located in a residential area and it is their conscious choice because the founder prefers to keep a family kind of atmosphere at workplace. They have a beautiful balcony garden where employees relax, have tea and engage in discussions. The entrance of the office has a section to showcase awards felicitated to the founder. The social atmosphere looks informal. Employees often order local Indian snacks in the evening. Except the founder, everyone sits in open rooms. No nameplates or designations are used on the workstation. The founder is seen as a fatherly figure in the organization and is approached for guidance by the employees.
The Methodology
A single-case approach has been used for this study. Case studies emphasize detailed contextual analysis of a limited number of events or conditions and their relationships (Yin, 1984). Single cases are best to examine unique cases. The approach helps in examining ‘how’ the organization is progressing towards becoming an LO (Yin, 2009). Mixed methodology was adopted to achieve the study objective as both qualitative and quantitative methods complement each other (Greene, Caracelli & Graham, 1989). The final inferences are based on both sets of data (Creswell & Plano Clark, 2007; Tashakkori & Teddlie, 2003).
The perspective for using mixed methods is to use both the quantitative and qualitative approaches in an attempt to serve the dual purposes of generalization and in-depth understanding. Among the different options of mixed methods, concurrent design was followed (refer Figure 1). In concurrent designs, qualitative and quantitative strands are implemented independently throughout data collection and analysis (Johnson & Onwuegbuzie, 2004). Results from both strands are synthesized to make inferences about the inquiry problem. First, a concurrent mixed methodology allowed us to keep subjective biases at a minimum during data collection and analysis as both sets were collected independently and simultaneously. Second, concurrent mixed method approach saved time in data collection when compared to sequential mixed method approach. The current study carried out observations, semi-structured interviews and a survey based on the Watkins and Marsick (1996) framework of LO to capture a holistic perspective of the case.
As recommended by Teddlie and Tashakkori (2003), I followed ‘within-design consistency’ in terms of data collection, semi-structured interviews and observations, throughout the study for data collection, and ‘conceptual consistency’ was achieved by interpreting both sets of data, qualitative and quantitative, using Watkins and Marsick (1996) framework of LO.
Data Collection
Qualitative data collection: Given the small size of the organization, data were collected from people working at different levels in the organization. In-depth interviews were conducted with 17 people out of which 15 are current IRM employees and 2 are ex-employees. Theoretical saturation was the basis for discontinuing data collection (Strauss & Corbin, 1998).
The author of the study attended some of the meetings held during the data collection phase as a non-participant observer. During interviews, respondents were asked questions around the main study theme, that is, to understand the learning orientation of the organization. They were asked to share their learning efforts at the people and organizational level. They were also asked to discuss what else the organization should be doing to enhance its learning orientation, for example, ‘What individual initiatives have you taken to enhance your knowledge’ and ‘Which all trainings have you undergone?’
Quantitative data collection: The questionnaire data were collected from 30 employees. For the current study, DLOQ by Watkins and Marsick (2003) was used.
Data Analysis
Both sets of data are analyzed independently and triangulated to derive a holistic picture. A major rationale for our use of a mixed-method design was an expectation that there would be convergence in the analysis of the results, and a conscious effort was made to assess the same conceptual phenomenon. Hence, Watkins and Marsick’s framework was used to present both sets of data.
Qualitative data analysis: Template analysis of the interviewed data was carried out and data were interpreted from the Watkins and Marsick’s (1996) framework. Template analysis also allows identifying any emerging issue besides a priori dimensions.
Quantitative data analysis: First, the overall scale and dimensional reliability was calculated. The overall scale reliability was found to be 0.93 in the case of IRM, with 30 respondents. Cronbach’s coefficient alpha was applied to estimate reliability for DLOQ measures. However, the overall reliability estimate for the whole scale was 0.96 (Yang et al., 2004). In order to capture crucial issues, both dimension-wise and item-wise means were calculated. Given the small sample size, advanced statistical analysis was not feasible.
Results
The Qualitative Analysis
The interview responses have been analyzed using the LO dimensions (refer Box 1) given by Watkins and Marsick (1996) framework under specific headings to better integrate both the study approaches.
Continuous learning
The founder is a mentor and a father figure to all the employees. It was pointed out by most of the respondents that on-the-job training mostly takes place and there are no formal training programmes, but self-initiated learning is encouraged. The training is reactive in approach and based mainly on the project requirements. Asselborn and Jans (1995) discussed the importance of self-learning in a changing professional environment instead of traditional training approach (
Recently, IRM has initiated an ongoing dialogue with international stalwarts in various fields related to marketing, strategy, rural development and technology, etc. However, senior academicians interact mostly with senior-level employees, in fact, the founder most of the time.
Across levels, people feel that training and continuous learning should get greater emphasis. In order to meet global quality standards, employees need to develop presentation skills apart from the domain expertise of rural knowledge. Other areas which need attention are related to quantitative research-based projects. This area is still evolving, and designing the questionnaire, implementing and analyzing the results by employees, with minimal errors, continue to be a challenge. However, hands-on experience and interaction with subject experts are found to be useful for learning.
As pointed out by one of the respondents (junior level), ‘designing an error free questionnaire and adopting statistically correct approaches are not known of and thus not practiced due to lack of training’. Another respondent (middle-level executive) said, ‘We have zero support from the organization. We never had a structured training opportunity. No capacity building plans are formulated nor are initiatives taken.’ As has come through quantitative data (presented later) as well, the need for continuous learning is strongly felt by junior-level employees.
Most learning in small- and mid-sized enterprises happens beyond a formal education setting (Billet, 2001; Eraut, 2000). Employees learn from peers and customers by exploring, experimenting, problem solving, opportunities taken and lessons learned from mistakes made in the process (Beaver et al., 1998; Dalley & Hamilton, 2000; Gibb, 1997). Learning in small firms is mainly an everyday phenomenon and possibly has no ending. Therefore, whatever experience people acquire in their everyday life ends up as becoming a part of the learning process (Billet, 2000).
Inquiry and dialogue
Generally, it was felt that self-initiatives are encouraged. However, a culture of questioning and feedback exists only to a moderate level. It was observed that juniors seek much guidance from their seniors. Communication is open across the organization. They feel free to go to anybody’s desk and discuss operational issues related to ongoing projects. However, questioning the implicit knowledge and experimentation across levels does not happen. As pointed out by respondents, ‘people need hand holding because they lack certain skills needed to deliver quality output’.
An area where hand-holding is required is quantitative research, as indicated above.
Encouraging collaboration and team learning
As noted earlier, at the operational level, work teams are a standard practice. People are observed participating in team meetings and discussions take place. The information is shared freely and members coordinate among themselves. The strength of IRM is teamwork. People cooperate with each other and volunteer to take part in different projects. However, the teams need to work more effectively for better outcomes.
Other challenges include poor coordination in team activities and disorganized handling of tasks. Another observation during data collection was that a senior executive was found struggling for half an hour with a junior team member to get basic data which he should have prepared before the meeting.
Another observation on team learning is that there is limited or no client feedback once the project is done. Feedback is given mostly when the client is dissatisfied and seeks some more information. It seems that knowledge accumulated over a period of time, based on ground experience of the rural domain, is not converted into a learning spiral (Lawler, 2003; Nonaka & Takeuchi, 1995). This point is further elaborated under the next point, embedded systems.
Embedded systems
At the systems level, significant non-conformance to quality standards was reported by most of the respondents. There is an absence of routine operations (such as record keeping). An effective information systems infrastructure is necessary for an organization to implement the process. Reports are prepared mainly for the purpose of the client and not for internal use. In addition, the firm lacks in managing proper documentation, which sometimes causes a delay in gathering insights from past experiences.
As pointed by the respondents, besides knowledge-enabled systems and processes, other processes are urgently required with the increasing size of the organization, such as financial systems and HR systems, such as training, mentoring, performance appraisal and so on.
It emerged that employees are given incentives based on their tenure in the organization, which leaves talent invariably under-rewarded and in some cases, the ‘unworthy’ get to climb the corporate ladder. The appraisal system is informal and subjective, and focus is laid on the attitude towards learning. However, people also feel the need to have a formal feedback process. One of the respondents said ‘General comments and encouragement exist, but nothing is said about regular appraisal.’
Empowerment
Marsick (1994) defines empowerment as ‘interactive, mutual decision-making about work challenges in which power for work outcomes is truly shared’. Watkins and Marsick (1993) quoted Linda Honold, former director of member development at Johnsonville Foods, as saying that ‘the LO is the result of empowerment’. Employees have discretion and independence to schedule their work and they have the autonomy to take decisions. The observed organization is decentralized and it was noticed that juniors feel comfortable in the presence of their seniors. Seniors go up to juniors’ desk for discussions or to seek any information. However, in IRM level-wise differences are observed. Senior- and middle-level executives feel more empowered when compared to junior-level executives. This could be because juniors generally look up to seniors for their advice and wisdom and hence might not feel complete empowerment as perceived by middle-and senior-level executives.
External system connection
Based on the qualitative data, it can be inferred that most of the time since the inception of the organization, it has had moderate external orientation in terms of the lack of its ability to perceive other consulting firms as its competitors. Many people in IRM feel that they do not have any competitors, while others feel that other consulting firms are getting into their business domain. However, it is generally accepted that IRM is the leader in terms of its knowledge of the rural domain. It is only recently that IRM has started interacting with people from academia and organizing conferences to increase its interface with industry. Customer satisfaction is given a lot of priority and IRM does its best to deliver, but this process is not measured formally.
Provide strategic leadership for learning
There was a mixed bag of views for the leaders of the organization. One ubiquitous view is that the founder is the main source of knowledge, inspiration and guidance. Another view is that the next level should have been developed before making them partners and the firm should have developed the middle-level executives into taking a leadership role so that they could handle projects independently. Due to the absence of such hierarchy, the senior-level employees are involved in day-to-day operations and do not find time to look at the big picture.
Employees feel that the future challenge for IRM is to work upon its strategic thinking. According to one of the respondents, ‘IRM lacks strategic thinking: There are no long term plans’. It was also pointed out by most of the respondents that business development efforts are not sufficient, and for the growth of IRM, these are very important.
Outcome variables
Financial performance: It was pointed out by respondents that the financial performance of IRM has not been very impressive vis-à-vis their knowledge and experience in the domain of rural management. While financial returns may not be high, the organization is debt-free. IRM is steadily growing by 10 per cent every year. They are among the top 10 consulting groups in the area of rural marketing consulting. Many of their clients are repeat clients. However, IRM was not open to share its financial status with the research team.
Knowledge performance: IRM is well versed with rural realities and well known for innovative projects in the past. The senior level feels that they try to be innovative in their approach in every project. However, due to an inefficient knowledge management system, the organization is not able to make the best use of its experience. According to the respondents, IRM senior-level leaders are comfortable to work with clients from any sector: development or corporate. However, the rest of the team needs hand-holding to work on corporate assignments.
In sum
It has come through repeatedly from qualitative data that people get to learn much from the founder’s on- and off-field experiences. However, junior-level employees feel that the convergence of experiences does not take place effectively due to the absence of systems and practices (to accumulate knowledge), absence of rewards for learning, lack of training opportunities and performance appraisal systems. It can be drawn from the qualitative results that the interactive impact of people and the structural level is not as effective as it could be considering the strong standing of the IRM in the rural domain. This can be further supported by employees’ perception on the outcome variables: financial and knowledge. Quantitative results are presented in the following section.
The Quantitative Analysis
Given the small size of respondents, mean and standard deviation were computed for all dimensions (Tables 1 and 2). A level-wise comparison was also conducted to see if there were perceptual differences at different levels. Table 1 presents the overall mean and level-wise mean score. These perceptions are focused on how well individuals and teams within the organization and the organization as a whole have developed the capacity for learning.
The author did the ranking of the dimensions based on the means. The highest mean is awarded rank 1 followed by 2 to 7. The dimension with the highest mean and rank is ‘connect the organization’, followed by ‘empower people’ and the least rank is given to ‘create system’. Interestingly, senior and middle management has given a higher mean score to the dimension of ‘create systems’ when compared to junior level (Table 1). This may be due to the reason that both seniors and juniors have had corporate experience and thus may have felt a need for systems and processes for better functioning.
Mean Scores of IRM
Item-wise Mean
Furthermore, item-wise means were calculated to explore the issues raised under each item. Table 2 presents item-wise means.
The highest mean score (5.2) was found for two items. One is related to recognizing people for taking initiatives (item 13) and another was related to encouraging people to think from a global perspective (item 16). The second highest mean (5.03) was found for three items. They are: helping each other (item 1), organization giving people control over the resources they need to accomplish their work (item 14) and leaders ensuring that the organization’s actions are consistent with its values (item 21).
On the other hand, the item with the lowest mean (3.67) was related to creating systems to measure gaps between current and expected performance, followed by another item: organization measures the result of the time and resources spent on training (item 10) (mean 3.73).
Items with highest mean are related to empowerment and reflect the culture of informality and self-discipline. That could be the reason for item 21 getting a higher mean score when compared to other items related to providing strategic leadership for learning. A plausible explanation for item 16 could be that currently IRM is trying to get assignments from neighbouring countries as their vision is to have global presence. Lowest mean was found for items related to systems and processes.
Outcome variables
Among the two outcome variables, knowledge performance is perceived as doing better than financial performance. The item with higher mean (4.73) is ‘percentage of skilled workers compared to the total workforce is greater than last year’. Consistently low rating is given to items tapping financial performance in comparison to knowledge performance and other items covered in DLOQ.
The following section will triangulate results based on the two sets of data.
Findings
Triangulation
Based on both sets of data, one of the most neglected areas in IRM is ‘systems’ which helps to capture learning. Since the size of the organization is increasing, it requires some systems and processes to be laid in place, such as people policy. In order to meet global quality standards, presentation and documentation skills are required. The employees, however, have no clear job descriptions and some need is being felt in this domain as well.
From both sets of data, consistency is emerging for the dimension related to ‘empowerment’. As mentioned earlier, IRM encourages self-initiatives and informality. Interestingly, empowerment is high but ‘inquiry and dialogue’ is low (rank 6; Table 1). In IRM, people feel free to go and ask anybody about an issue. However, they mostly seek operational information or discuss implementation plans with team members and seek guidance from seniors. They do not question tacit knowledge or challenge their assumptions. Employees expressed that IRM is a good launching pad for beginners. However, over a period of time, employees start feeling frustrated as they do not get constructive feedback which is necessary for their continuous learning and development.
As per quantitative data, interestingly, middle-level managers feel more empowered than senior-level managers. However, in qualitative data, there is no discernable difference across levels. Plausible explanations could be that middle-level managers have grown with the organization (spending more tenure), and perhaps they are more in tune with the founder’s values. One more reason could be that people who have come from outside feel that the founder’s ideas are treated as a final verdict without even discussion and hence they may feel less empowered. Moreover, 50 per cent of the senior-level managers are from outside.
It emerged during the course of data collection through unstructured interviews that sometimes the founder tended to discuss team discussion matters with team members in advance. One of the senior-level respondents said ‘It is still an individual centric organization...but now moving towards institutional building organization. There is a long way to go.’
Based on both sets of data, discrepancy was observed only in the dimension of empowerment, especially among junior-level employees.
Founder as the Focal Point of the Organization
During this study, it became obvious that there was a prominent role of the founder in IRM’s success. He is the epicentre of his firm because of his reserve of knowledge, experience and ability. The founder was the one who set the initial structure, strategy and culture of the organization through early decisions, including many that occurred pre-start-up. His experience was seen to provide the organization with explicit and tacit knowledge about rural markets, technologies and social networks as well as experience with new opportunity identification and evaluation, resource acquisition, management and marketing. He has attempted to influence the employees through this experience, but data suggest that it has not been a very effective process.
Study findings can be explained with an indigenous framework of leadership, which highlights personalized relationship and familial orientation of the leader as a basis of managing organizations in India. Sinha’s (1984) nurturant task (NT) leadership style seems to best explain the leader’s style in IRM. Leader extends personal, social and work support. Dependency proneness is high among Indian subordinates (Sinha, 1980, 2008); hence, they look up to their leader for directions and guidance. Second, familial culture at IRM seems to be influencing learning at IRM. Researchers like Hofstede (2001), Gupta (1999) and Sinha (2001) have pointed out familial orientation as one of the prominent characteristic in Indian organizations. The following section is looks at issues pertaining to sustain IRM as an LO.
Emerging Issues
It has emerged prominently through qualitative data that after receiving acclaim for their knowledge in the rural domain, the organization’s vision is to now be a global player. Employees feel that in the current economic and competitive scenario, IRM needs greater external orientation in terms of dedicated business development activity and greater client satisfaction. In the past couple of years, ‘bottom of the pyramid’ (Prahalad, 2005) is becoming the corporate focus across all sectors and hence a lot of local and global players are entering into this arena. The phenomenon is of interest to IRM because they are working in the domain of rural marketing. They feel the need to expand the knowledge base for different sectors and work with a diverse spectrum of clients.
Overall, the status of learning orientation in IRM is fairly high. The organization is at a juncture to expand, but with changing times, there is a need for a change in some aspects: empowerment, team building, learning and development, grooming the second-level leadership, effective operational management systems and business development. However, the case highlights the need for context-specific attributes which will facilitate LO in Indian PSFs.
The following section discusses issues pertaining to PSFs, especially in management consultancy firms.
Implications of the Study
The current study suggests that ground experiences are a major source of learning, even in the absence of effective systems and processes to assimilate and disseminate knowledge. Another way of looking at this case study could be that even if the organization is good as an LO, it still finds it difficult to grow. Literature indicates that many organizations have difficulty in growing in size (Greiner, 1998). According to Greiner, when a small organization wants to grow, it faces two types of challenges: leadership and systems. The same holds true for IRM.
This article argues that LO efforts should be instrumental in developing competencies and capabilities which are required for growth. Senge (1999) pointed out the importance of learning and change going hand in hand. The PSFs need to be in a constant mode of learning and change, considering the new task demands and client expectations. It seems that DLOQ instrument is not able to address challenges for growth in the organization.
Our understanding based on the current study is of importance for both people and structural aspects in developing an LO and sustaining it. Further, to sustain the momentum in the current chaos of the highly competitive world, especially for PSFs, change readiness has emerged as the necessary condition for a sustaining LO.
As discussed earlier in this article, people working in IRM have mainly relied on their leader’s learning and experiences and this acts as a hindrance in the learning of people in organization. It emerges that the leader adopts NT leadership style (Sinha, 1984).
In addition, the culture of the organization plays a vital role in enhancing the learning orientation of the organization. Familial culture has been instrumental in accumulation and utilization of tacit knowledge (Polanyi, 2002 [1958]) in IRM. However, creation of tacit knowledge remains mainly with the founder and hence other people have not been that active in creating new knowledge (Nonaka, 1991).
This study may be useful to senior managers and leaders of PSFs who are concerned about improving learning orientation of their organization because the findings provide some tentative evidence linking the characteristic of an LO and performance improvement. These findings also encourage human resource development (HRD) professionals to use DLOQ as a diagnostic tool to identify appropriate leverage points for implementing change interventions to start the LO journey in their organization.
Last but not the least, PSFs, which are highly knowledge intensive, can be made great organizations with ordinary people. An organization’s commitment towards the nurturance and development of human capital would lead to an LO. If required, attention should also be paid to structure and systems.
Future Research
It has the limitation of being a single-case study. However, Yin (2009) highlighted that although one must be cautious in generalizing from single-case accounts, they also provide rich resources bridging empirical evidence and theory building (Eisenhardt & Graebner, 2007; Siggelkow, 2007). A potential limitation of the study is that it is based on the data collected from one organization. Further research should be carried out in the domain of PSFs on a larger sample. It will be useful to explore relationships among dimensions of LO to study how action imperatives influence each other, such as the impact of empowerment on continuous learning, inquiry and dialogue. The current study relies on respondents’ perception of financial performance. Future studies should include objective criteria as well. The study findings raise the issue of whether the seven dimensions of the Watkins and Marsick framework capture the LO essence fully or not. Change readiness could be examined as an additional dimension to the other seven dimensions of an LO. The issue needs to be further researched and debated.
Future studies should examine the relationship between the leadership and an LO. More specifically, it should be examined whether NT style of leadership is more suitable in PSFs for enhancing the learning orientation. The impact of organizational culture on an LO also deserves further research.
Footnotes
Acknowledgements
I am grateful to the Centre for Management of Innovation and Technology (CMIT), Department of Information Technology, Government of India and International Management Institute, New Delhi, India, for their financial support. I am thankful to Professor Rajen K. Gupta (MDI, Gurgaon) for his comments on an earlier draft of this article.