Social Organisation of Knowledge Production in Software Work: A Qualitative Study of Two Different Firms in Chennai,India

Abstract

Based on a qualitative study, the present article examines the social organisation of knowledge production in the software work in India. The two sample firms located in Chennai city, India representing contrasting images about nature of software work were studied: a branch of a large domestic software services company—low-end programming/Fordist production model; and an Indian subsidy of a multinational software product firm—high-end software product development/flexible production model. The social organisation of software production in the two software firms are hierarchically organised, but demonstrated differential flexibility to meet the emerging market or client demands, and exhibited autonomy at the employees’ level to use craft and technological knowledge through organisational procedures and routines, mediated through the project managers. It appears that prolonged engagement with the same technologies or projects works as impediment to the learning process or new knowledge production. The self-interest of the programmers motivates to engage in new knowledge production despite being directed by the organisations. The accumulated knowledge is kept within the organisations by retaining the employees through periodic pecuniary and non-pecuniary rewards, and possibilities of career leaps through technological breakthroughs. The external agents are brought in for new knowledge acquisition either through informal learning by doing or through upgradation of technological skills through training.

Using an Empirical qualitative study of two software firms located in Chennai city, India, the present article attempts to explore the social organisation of knowledge production in the Indian information technology (IT) industry. Indian IT industry is a story of exports of software services, with software and services revenues (excluding hardware), making nearly 87 per cent of the total industry revenues, estimated US$ 87.6 billion in FY2012 (NASSCOM, 2013). The story has two sides—dominance of low value software export services and presence of high value software product development work as part of services. These contrasting views, repetitive low-end programming work and high-end innovative product development work present an opportunity to examine the nature of work and how it is organised, as the scholarly work elicits that the respective organisations are fundamentally different. As to be explained later, the high-end work seems to be driven by the multinationals located in India and low-end work is present among the larger domestic firms. Nevertheless, the extant literature treats programming as a knowledge work. The development of software or programming is ‘a knowledge intensive work wherein firms’ competitive advantage emerges from their unique ability to recombine individual and organizational knowledge’ (Gopal and Gosain, 2010, p. 963).

The extant studies of Indian IT industry, albeit slowly decreasing, can be categorised into two camps: the Indian software industry is of low-end services, which follows the Taylorist strategies (Prasad, 1998) and highlights various associated factors that constrain innovations and possible outcomes on the labour force (for instance, Prasad, 1998; Upadhya and Vasavi, 2006); and the industry is beyond Taylorist paradigms and the industry has enhanced productivity and undertake innovation centric work, despite being non-credited, thus inferring flexible production perspective (for instance, Malik and Ilavarasan, 2008; Parthasarathy and Aoyoma, 2006).

Following the Tayloristic traditions, it is said that the availability of low-cost science and technology resources, especially trained engineers contributed to the growth of Indian IT industry, rather than the high-end services. Some of the barriers affect the overall growth and transition into an innovation centric industry are: lock-in with the low-end work process and export-led growth orientation (Parthasarathy and Joseph, 2002); over dependence on exports that hamper the accumulation of domain knowledge and reduce the scope of indigenous innovations (D’Costa, 2002); lack of domestic market and subsequent firm strategies resulting in no new product development (Bhatnagar, 2006; Krishna and Prabhu, 2002); lack of the firm strategies and policy framework for innovations (Sridharan, 2002); poor R&D investments to move up in the value chain and creation (Kumar, 2001) and lack of social interaction between academia and industry and inter-firm collaborations (D’Costa, 2006; Taganas and Kaul, 2006). Some recent studies (for instance, Upadhya, 2009) also suggest that despite the globalised nature of work, neo Tayloristic management strategies are present in the software service firms located in India.

Compilation by independent academic researchers shows that R&D expenditure by the Indian firms is very low. To quote, Nollen (2004):

Only 12 or 4.3% of all listed software firms in India had lab or R&D equipment expense. The median expense for firms with this expense was 0.4% of sales revenue and the average was 3.8%. Less than 1% of the revenue generated by the Indian software industry is spent on R&D. 63% of Indian and foreign IT firms (computer hardware & software, telecom equipment & services, industrial electronics) operating in India reported R&D expense in 1999/2000 but only 9.6% of these firms reported innovative rather than adaptive R&D. (p. 11)

Another indicator of R&D levels in the Indian ICT sector is patent data. Analysis by independent researchers and trade press reports show that more patents were awarded to multinational firms than to Indian firms (Mani, 2009). To illustrate this point further, a recent trade press report shows that 1,216 patents in 2004 emerged out of Indian R&D centres of the multinationals, but not in the names of the Indian offices, whereas Indian firms filed only 104 patents (Ashok, 2004). The recent study by Krishna et al. (2012) acknowledges this claim by quoting that out of 9,622 patents granted to Indian innovators, during the period of 1991–2011, 6,580 patents were granted to foreign entities by UPSTO from their R&D work undertaken in India. Another study by Nollen (2004) showed that in the year 2001–2003, only four US software patents awarded to Indian firms compared 118 patents awarded to the US and other foreign firms operating in India. The above studies have collectively suggested that the industry needs to move up in the value chain through innovations or new knowledge productions.

On the other side, industry representatives (for instance, Mahalingam, 2003) argue that innovations in service firm are not reflected in the conventional indicators such as patents. The innovation is happening at the level of activities in the firms, especially in the realm of service efficiency, capability enhancement and predominantly used for internal consumption (Athreye, 2005). The industry is in transition from low-end to high-end services ably supported by flexible systems of work organisation in the firms. A private consulting firm, for instance, reports that there are around 594 R&D centres in India (Zinnov, 2008). Out of the existing R&D centres, 66 per cent are in the software product development domain, 15 per cent in the engineering services and 20 per cent in the embedded system’s area. This transition is augmented by increasing in number of incoming FDI investments in terms of foreign R&D centres and gradual increase in participation of Indian domestic software firms in R&D activities with the multinationals (Nayyar, 2008; Sauvant et al., 2010). Some of other factors that enabled this transition are: government investments in building technology intensive and development of skills contributed to the growth of the sector (Kumar and Joseph, 2005); emergence of knowledge intensive cluster with easy accessibility to academia–industry linkages (Krishna et al., 2012); improvement in quality and productivity with appropriate skills at low cost (Parthasarathy and Ranganathan, 2011); organisational learning within the firms (Mehra and Dhawan, 2003); organisational training strategies in improving technological capabilities of human capital (Bhatnagar, 2006) and reciprocity between firms and flexible specialisation in facilitating knowledge production in the IT clusters (Dayasindhu, 2002).

It is possible that there are two sets of players who are performing R&D activities in India—larger domestic players and subsidiaries of multinationals. Larger domestic players undertake two kinds of innovative activities (Malik and Ilavarasan, 2008): internal and external. Internal ones are those that help in service delivery process improvement and are consumed by the firms themselves. Investment made on these activities is not shown by the firms and it is difficult to assess the innovativeness. Second set of activities are performed for the external clients who outsource their product development activities. In industry terms these are called as ‘engineering services & R&D and software products’ and is mentioned as high-end work. In this case, Indian firms may or may not be credited for their contribution to the product development work.

Given these contrasting views about the nature of work, it is expected that social organisation of software work or production of knowledge work in large domestic firms and local centres of multinationals in the Indian IT industry should be different. The extant literature, populated by policy studies and technological management perspectives, does not highlight these differences while examining the nature of work in the industry. The present paper makes a modest attempt.

New Knowledge Production and Organisational Dynamics

Earlier sociological studies of organisation showcased the organisations as a system that controls produce and reproduce inequality in terms of power, authority and domination. The culture of organisation is seen as a method of controlling workers, work process and technical environment and, thus alienates the worker from the process of production (Blauner, 1964). Braverman (1974) argued that technologically dominated production systems deskill and degrade labour force, which in turn curtailed creative work and new knowledge production. This paradigm, Taylorist/Fordist mode of production (McLoughlin, 1999) separated the production into two: conception (mental labour of planning and decision making) and execution (exercise of manual labour).

The next level thinking pointed out that with the birth of knowledge/ post-industrial economy, Fordism is declining and there is an emergence of new forms of organisational structure, practice and routines (Smith, 1997; Vallas, 2006). Subsequently, different forms of organisational practices that facilitate or curtail knowledge production were unearthed. The culture that stimulates innovation in organisation is associated with flat structure in contrast to the hierarchical structure. The resultant two cultures are fundamentally dissimilar in their values and norms and the management styles. Now, organisations are theorised radically different from the earlier view and are seen as place of cooperation and coercion. Piore and Sabel (1984) pointed out that the contrasts exist between the structure, culture and organisation of production, skill levels of human resources and the culture of innovation between the manufacturing industry, engaged in mass production and the service industry that employs flexible specialisation. Das and Panayiotopoulos (1996) argued that hierarchical structure is associated with the concept of ‘mass production’—a low road strategy . . . (that) will create demand for unskilled and causal labour, whereas the decentralised work practice is associated with the concept of ‘flexible specialization’—‘a high road strategy’ . . . (that) will require skilled and semi-skilled labour.

The flexibility in organisations can be observed in two domains: labour or employees and production process (Smith, 1997; Webster, 1993). The former is about the adaptability of employees, with multi-tasking skills, ready to learn and accept lifetime training and therefore, flexible to meet the demand as it requires. Subsequently, it also involves other forms of flexibilities—wage flexibility is about payments for what they do, labour flexibility is about job rotation and time flexibility is about flexi-time in work and to work in shifts, etc. The flexible production refers to the vertical disintegration to meet the customer and market demand ‘just in time’. With these flexibilities, the requirement of knowledge workers and the increased interactions with greatly differentiated units leads to the creation of new organisational structure, culture and practice in production. Organisation as system produces greater interdependence among actors as well as it creates greater individualisation. McLoughlin (1999) calls this as matrix organisation where the roles of individuals and technology are changed as per the requirement of the market or customer demand. This transformed organisation also provides a conducive ambience for knowledge production (Nonaka, 1994) that involves interaction between the people and technology (Garud et al., 2011; Heath et al., 2000). The productivity is also increased by the democratic practices (Gopal and Gosain, 2010) and investment on technology within the organisations (Powell and Snellman, 2004). Organisations also benefit from the interactions among different sets of actors such as other firms both competitive and complimentary, university and sometimes the public actors as well. In the light of above theoretical discussion, the study will undertake the empirical enquiry.

Methodology

The field work was conducted in two software organisations¹—Pro Tech and Ser Tech. Pro Tech is involved in software product development, and it is a subsidiary of a US firm located in Virginia. It started its operations in 2001 and predominantly operates in the technology domain such as Dot Net, Active Server Page, Oracle, Java and ERP Solutions. Demand for these domains is not present in India. Most of the revenues generated by the Pro Tech come from countries such as the US, Brazil, Philippines, Mexico and India. In 2008, it had revenue of the US$ 1.6 billion. In Chennai unit, there are around 45 programmers are employed. The branch was led and managed by the Indians.

Ser Tech is a branch of a domestic top ten software service exporter. It was founded in late 1970s, and generated revenues to the tune of the US$ 4.4 billion in 2008 and US$ 6 billion in 2011. About 6 per cent of the total revenues are invested in the creation of new products and service development. Although Ser Tech operates in almost all the technology domains, exports software services, the branch in which the study was conducted, technology domain software as service (Saas), engineering R&D services, ERP solutions, SAP, Enterprises Application Service and Web2.0, are undertaken. Furthermore, Ser Tech has employs around 5,30,000 around the world, and the sample site has employees around 1,200 in the year 2007–2008.

Both the organisations are located in Chennai, which is one of the established software clusters in India. In both the organisations, the first author spent 1 month each. Access to Pro Tech was gained through one of the first author’s cousin who is a programmer in the same organisation. The management was cooperative in conducting the study but did not permit him to use the work floor space and technology for carrying out the study. The management also declined to answer the question on the registration of patents under the Indian subsidiary firm or parent firm. The researcher went to the office during working hours and waited at the lounge to meet the respondents. All employees were interviewed, except five who declined to participate in the study resulting in forty interviews. Access to Ser Tech was gained through reference by a senior management from another branch of Ser Tech. Twenty programmers were selected, by the random sampling method, out of fifty who work in the same project. Interviews were conducted in the office premises.

In both the firms, managements acted as gatekeepers to the information flow and kept soft surveillance over the study. During the interview, the first author was not allowed to take any instruments such as the camera, mobile and the audio recorders. Management checked with each respondent after the interviews, whether sessions were over. The semi-structured questions were submitted to both organisations, before conducting the study. The management checked the questions and asked to explain the purpose of the study, before providing access to both the organisations.

Data were collected through in-depth semi-structured interviews with the subjects. Interviews lasted in the range of 45–60 minutes. The notes were taken during the interviews and were elaborated at the end of the day by hand. Hand written notes were fed into the computer after the fieldwork and were analysed. The interviews were organised in the lines of the objectives of study. Using a semi-structured questionnaire, three major areas were focused during the interviews; first, the social process of knowledge production in the development of new software such as tools, process and product. It covered various aspects of the project management such as process of work allocation (deals with conceptualisation and execution), team work and coordination, autonomy and authority of software professionals in decision making, their relationship with senior employees and higher authorities and work environment.

Second, the study collected the information on interactions, collaborations in new initiatives on technology development. The study attempted to understand the nature of interaction among various institutions such as inter-firm relations, academia–industry relations, mergers, acquisitions, etc., and in what context these initiatives take place. However, both the firms were reluctant to provide in-depth information on this aspect of the study, but provided overall understanding of how the firm takes initiatives on collaboration and interactions in new technology development and collective learning process in new software development. Third, the study attempted to understand the social factors contributed to the employees’ new knowledge creations inside the firms such as incentives, reward structure, career and promotions, training, etc.

Findings

The findings of the article are broadly presented under three themes: how software work is undertaken or distributed across the members in the organisation, whether external actors like other firms or organisations are linked to acquire new knowledge and how, and what are the workers’ motives and organisational incentives that enable innovation or new knowledge production in the two sample firms.

Social Organisation of Software Work

Software production in the two organisations is organised typically in the form of projects. It is divided into two stages: conceptualisation and execution. The programmers are hierarchically organised as: project manager, project leader, team leader and developers. This referred as ‘project engineering teams’ in both the organisations. The size of the teams varies with the quantum of work and the requirement of the technical expertise such as tools, domain knowledge and communication skills required for the project. The nature of the work is dependent on the stages of product development in Pro Tech, whereas in Ser Tech work arose out of projects outsourced by the external clients. In both the organisations, at the time of study, waterfall method of software development, also called as system development life cycle model, which involves various stages like system requirement, analysis of the requirement, preliminary design, detailed design, code and testing and integration (Davis et al., 1988) was followed. Ser Tech also follows rapid application development model which skips the earlier stages and customises an already developed prototype software application for specific usage as per the customer requirements in a short period of time. In the case of Pro Tech, the prototype software is a precursor for a large product for both development and launching in the market.

In Pro Tech organisation, formal meetings of the teams are presided over by the vice president and include all the project managers, project leaders and team members. Since the product development is an ongoing activity, all the team members participate in the meetings. Organisational routines and practices are transmitted to the team by the project managers and project leaders. The work process is divided and delegated across the members of the team. In this sense, the work is divided as per the project plan, which deals with various types of knowledge production such as concept design, application based work, enhancing the existing software, etc. Once the project plan is over, the formal teams are organised as per the requirement of the work. There is less job rotation, as each professional is trained as a specialist in a particular technological domain. Sometimes, the project team is restructured as per the demand of work like new concept designing and the number of persons required for the work etc. However, the frequencies of interaction between the software workers at the level of conception and execution are more. Although the technologically mediated communication exist, face-to-face interactions dominate as each team consists of, on an average, five members—one junior analyst, two senior technician, one team leader and one senior team leader. Each team members meets once in a week to discuss the pertinent issues involved in the knowledge production. Majority of the members have autonomy to share his\her view regarding the nature of work, what is the present situation, upcoming challenges, etc. Also, without any appointments, lower rank project members are allowed to interact with project managers and leaders. It usually happens informally rather than in a formal situation. As the number of members in a project is less, informal relationship exists within a team.

In Ser Tech, a different picture emerges with a clear division, and hierarchy exists between the conception and execution stages of the software development. Ser Tech receives projects from the external clients who are most likely from the industrialised countries. When the projects arrive at the Ser Tech, the first two stages of the software development, requirements gathering and designing, are almost frozen by the clients. The vice president, senior project managers, project managers and project leaders are involved in the conception stage of software development along with the customers. The senior members of the team are involved in different projects at a given point of time when compared to low level software developers who are involved in only one project, especially during the execution part of the project. However, as per the work requirement of project, role of the team members vary since the experience and depth of the knowledge determines the role and position in a project. The number of software workers employed in a project is more and have formal relations among them.

The bureaucratic structure prevails in the work environment due to large-scale participation of employees. The work process is highly centralised and delegated across the teams through the project management. The frequencies of interaction between the software workers at the level of conception and execution are minimal. Project-related routines and practices are transmitted to the team by the project managers and project leaders. In this structure, the technology-mediated communication is preferred than face-to-face interactions. Due to large number of professionals in a project and more the formal relations exist among the teams. The interaction within a team is more compared to across the teams. Each team meets periodically and often guided by team leader. The project leaders and managers rarely participate in such interaction. The role of team leader is to disseminate the information about the present status of the work and follows deadline to complete the delegated work. It is expected that the professional has to complete the work within the stipulated time. It appears that the majority of the workers take more than 8–10 hours a day to complete the work.

In both the sample firms, project managers create the awareness about the business activities, goals, strategies, product/service development and reported business decisions to the project members in formal meetings. The organisational practices of instruction of work included two orientations, one, procedural knowledge and another, ‘technological orientation’. Former indicates what the programmers have to do, whereas, the latter indicates use of technologies, different computer languages and methods to develop product/services. This sets the goals of a project that is to be accomplished by each professional in a team. Organisational routines and practices had not only provided guidance and guidelines, but also conveyed to the programmers that knowledge sharing and learning were important factors in resolving technical problems and generating ideas. These routines and practices not only provided guidance and guidelines, but also exercised authority over programmers to share the knowledge and ideas which are important for the development of new ideas or to resolve the technical problems.

Davenport and Prusak (1998) contend that ‘in organization, knowledge is embedded not only in document and reports, but also in routines, practices, process and norms’ (p. 5) which are social in nature. Members of the organisation need to function as a ‘community of practitioner’ (Kirk, 2005) with required mutual understanding to share common language of normative assumptions, procedure, tools and tests. The function as a ‘community of practitioner’ is to share knowledge for development of new ideas and understanding of ‘technological’ and ‘craft’ knowledge in software development. The process of knowledge sharing enables software professionals not only to get clarification over technological and craft knowledge, but also new ideas. Software professionals have new ideas (knowledge) and may not know how to convert them into developing a program, designing or coding. The technological and craft knowledge and new ideas of the members are evaluated by the group. The way conflicting ideas are encouraged and discussed, level of freedom given, equality of opportunity to try new ideas, and rise of constructive team culture is also dependent on the person who guides the team. In both the organisations almost all the teams have freedom to deliver not only technological and craft knowledge, but also new ideas. The routines and practices of knowledge sharing enrich ‘craft knowledge’ in particular as well as technological knowledge in general, in turn, it stimulates professionals to develop new ideas and, hence this culture produces creative work.

External Actors in New Knowledge Acquisition

The acquisition of external knowledge refers to the process of hiring external resources person from local universities, R&D research institutions, higher education institutions and other Indian firms. In Pro Tech, the US-based parent firm delegates the work structure in the form of project requirement that acts as a frame of reference for the concept designing and further development. It is a detailed description of work specifications, such as, conceptualisation, programming, coding and data structuring. The higher management takes a stock of extant knowledge base such as domain and technological knowledge to meet the project requirements and mobilises its resources: acquisitions of technologies and people. The acquisition of technologies indicates the purchase of new licensed software, hardware, technological equipments, etc. Although the new technological acquisitions based on purchasing new patents is relatively absent during the study period, the parent firm decides the need for external technological acquisition for the project. The acquisitions of external technologies are usually based on the informal alliances with other firms located outside India especially in the US. It occurs between the parent firm and any other firms specialised in the particular technological domain. The knowledge sharing between the firms is always based on the relations that exist between the two firms and there is no specific formal contract is made for this type of transfer. The firm focuses on the technological collaborations on joint learning activities that foster ‘learning by doing’ and ‘doing by learning’ on particular software programming. These activities are always at the informal levels based on the professional relations that exist between the Pro Tech and other firms specialised in particular technology and domain knowledge. The employees from the two firms are engaged to learn the new technologies and its knowledge. Mostly, the project managers and leaders are employed to train and learn the new skills and knowledge of the technologies that adds to the existing stock of knowledge base.

Although it appears that the rest of the employees are socially excluded from this process of learning and training, the organisation encourages the lower level software employees to learn new technological knowledge so that they could contribute to the process of new knowledge development. On the other hand, the organisation also employs various internal consultants to gain access to the market demands and needs. These consultants periodically inform the organisation to upgrade the domain and technological knowledge at the level of the organisation. These aspects frequently influence the organisation to upgrade the knowledge base (technological and domain knowledge) through the process of training, which leads to the creations of new stock of knowledge for software development.

The organisation hires external consultants from local higher educational institutions and such interactions with local academia, but is always based on the problem solving activities that requires domain and technological knowledge to improve the product software. The organisation perceives such interactions transfer knowledge and information from academia that bridge the knowledge gap that exists between them.

On the other hand, the possibilities of scientific collaboration with academia and other firms on developing a new process and product software are rare. The parent organisation declines to invest money on activities related to new technology development that demand academia–industry and inter-firm collaborations. This is partly due to the functionality of the subsidiary firm that dedicates its workforce to the development and maintenance of product software. Consequently, the existing modes of knowledge productions are invariably constant in the Pro Tech organisation. The parent organisation constantly encourages the subsidiary organisation to upgrade the existing processes and software products, rather than introducing new radical innovations into the products. One of the project managers said:

The organization is the dedicated unit involves in the process of development and maintenance of product software. It is a subsidiary concern for the MNC located in US and consequently, the scope of large-scale market oriented innovations is almost negligible.

The subsidiary upgrades the existing process and product software as per the new developments in software programming and hardware. For example, Pro Tech earlier used Active Sever Page for product development and later converted into Dot Net technology as per the change in the new area of programming and hardware. The organisation perceives that the social interaction with academia and investments in upgrading technologies provide competitive edge in the fast changing product market in IT industry.

Ser Tech, the domestic firm provides various ranges of R&D engineering services that deal with engineering design, IT applications and manufacturing design, end-to-end design, development of tools, etc. The nature of work is determined and organised as per the client requirements or demands. It dictates the formation of teams, nature of work process and the role structure of the programmers. These factors of production determine the technological structure of the project demand. The important inputs such as domain and technological knowledge vary from project to project. Therefore, to meet the changing nature of knowledge production, the Ser Tech organisation creates IP blocks or prototype software design that could be applied to various projects in creating new process and product software. These conditions influence the internal organisation of the work pattern that rotates the jobs and roles of the programmers based on the requirement of the domain and technological knowledge. The employees training and learning programme is also based on the changing nature of project that requires different domain and technological knowledge. At the same time, the acquisition of technologies and knowledge (people) varies with the technological demand structure of the project.

For a project, the Ser Tech team had to acquire domain knowledge related to aircraft system and its communication among various parts. This made the firm to enter a technological agreement with a leading domain specialist in the area of aerospace. Also, the firm has inaugurated a dedicated centre, also called as Indian Development Centre (IDC) with a multinational to work jointly on the areas of aerospace research and technological development. One of the team leaders reinforces this:

The firm has several tie ups and joint ventures with the foreign firms in new technology developments. Those firms are the leaders in particular technology and domain knowledge. But the overall R&D investments focus on new areas of learning and infrastructural development.

The external R&D investments are focused on building infrastructural facilities, increasing technological capabilities, learning and information sharing that increase the capabilities of R&D work. The firm has several strategic alliances with other firms that are mostly located outside India. It is based on the formal relations in terms of joint ventures and tie ups to develop new technologies or provide new services. The firm has a joint venture with an electronic firm called XXX Electronics Inc to develop and provide fully integrated product life cycle solutions to original equipment manufacturers. In specific cases, the firm acquires shares of the leading technological firms to get holding of the technological knowledge that could be applied to various projects or contribute to the development and maintenance of software. The firm has invested money on acquiring 51 per cent stake in XXXX Software Ltd. which has high growth potential on software development and engineering services. These partnerships with other firms are highly focused on upgrading its business domain and technological knowledge bases, in addition to focusing on reducing cost while working for external clients.

Apart from this, the firm has several linkages with higher education institutions, such as, Birla Institute of Technology and Science, Pilani and Indian Institutes of Technology, to bridge the gap in the availability of skilled employees for R&D and engineering services in India. The firm has also a memorandum of understanding with six National Institutes of Technology on setting up of technological labs to provide training on new technological skills and development to Indian workforce at the level of academia. This creates the interface between academia and industry on bridging the industrial requirement from the academic settings.

New Knowledge Production: Workers’ Motives and Organisational Incentives

Pro Tech does not have any specific organisational policies on intramural research and experimental R&D on new software tools and applications. As a dedicated unit, it helps in developing and maintaining the products of parent firms that require constant up gradation to meet the new technological developments in the market. This creates a need for developing new tools or processes for Pro Tech, which in turn results in employees’ creative work and to the process of collective learning. At the local level, the management is reluctant to invest huge money on experimental R&D and intramural research that requires manpower and additional investments in technology, training and knowledge acquisition. Subsequently, the possibilities of learning new software languages, skills and programmes and developing new technological applications are relatively absent at the time of study. Working in the same technology and domain curtails the creative work and stops the process of learning, subsequently, the knowledge production in software becomes a mundane activity. To quote programmer in Pro Tech:

There is no specific policy for experimental development. The organization primarily concentrates on product development, and the management provides scope to develop new software tools and applications, if the new software tool can minimize the work process and time.

Despite this condition, there are exceptions wherein the self-interest of the programmers aided by accumulated technological and domain knowledge and an understanding of the core problems results in new knowledge productions. Although project work is delegated to the programmers, they have the use codified and craft knowledge. One of the team leaders expressed his experience in developing new tool:

Explore the domain area (experiences, understanding, collecting information), get the knowledge out of this and use one’s own creative ideas with permutation and combination. It needs a lot of practice and hard work. Changes and checks are required, then find how much time it takes in the process of optimization and also keep in touch with subjects every time and gathered knowledge through various resources, which helped me to arrive at new software tool. Apart from this, self interest helped to develop such tool. For illustration, a query optimized tool was developed to check the database. Initially data base tool used to take 45 minutes to check all the data, later I developed tool which takes only 7–8 minutes to check all the data.

The organisation provides awards and incentives to the employees, who contribute to the development of new tools and applications. Krishnan and Prabhu (2002) observe that rewards and incentives have to be attractive to get the best developers involved in product development activity. These practices cover various pecuniary and non-pecuniary aspects such as on-site work and learning exposures, financial incentives, higher salaries, car, holidays with half month salary, retaining employees as permanent, job security, etc. As the cost of training and inducting of new employees is relatively high, organisations try to retain the same employees so that it can meet the market demand as quickly as possible. As Pro Tech is a MNC affiliate and the capital structure of this firm is very small and parent firm runs this organisation as cost advantage for developing and maintain software with high quality work. The management attempts to maintain an equitable incentive structure and ensures every professional gets award and monetary benefits at regular intervals. These efforts help to retain the experienced employees. Although the rewards create competitiveness and motivate every employee to learn the new skills and technologies, but employees’ self-interest play predominant role in learning the skills and knowledge as mentioned earlier.

In Ser Tech, there is a separate cell called XXX that concentrates on market-oriented innovations related to new tools and applications and is guided by a separate organisational policy. The separate cell avoids large bureaucratic structure and reduces the process timing of an innovation from idea generation to implementation stage. This enables the programmers to forward the idea for further development. The management is willing to invest in internal R&D on new technological development, if the new technologies have high market potentials and application benefits. The firm also provides space to develop new tools and applications. For instance, a new tool called XXXX was developed out of a customer requirement which also contributed to establishment of new technological services called XXX services. One of the team members in Ser Tech mentioned that:

In our organization, management gives award for the best performance of the year. My senior tells that it is very difficult to get the XXXX award. It will be awarded for those who bring new ideas on technology development. ‘We should achieve such awards in our career’ this is what my friends tell to me. The awards and rewards create competitive environment, in turn, produce more the individuality, sometimes, stabbing at back and so on.

To foster new knowledge production, Ser Tech has a rewarding system that differentiates technical innovation and improvements in organisational routines. The former is about introduction of new technological breakthrough which can be exploited by Ser Tech to generate more revenues by selling it to the external clients. The latter is about improvement in the internal processes which will enhance the overall project delivery efficiency for the Ser Tech by which indirect benefits can be accrued. The former entails direct provides pecuniary and non-pecuniary incentives to the employees. The latter is reciprocated with recognising individual performance in a team, team outing, refreshments, etc. However, both play a predominant role in new knowledge creations and technology development, but the former contributes to the employees’ career development. Rewards and awards play a major role in determining the basic pay in organisations and also, career mobility. For instance, the organisational structure appears more flexible till the stage of the project manager, but the career mobility comes to the stage of pause when the developer attains the stage of project manager. A significant new knowledge production helps an employee to leap over this pause. To quote, a Human Resources Manager in Ser Tech:

One of the employees of the organization joined in 1980s through campus interview. He made a proposal regarding XXX Network. Ser Tech is the first company in India to venture into that new area. It deals with control system to maintain stock exchange, bank, and so many other areas where network system need to be controlled. This was wholly funded by the Ser Tech. Now, it is a subsidiary firm within the larger concern of Ser Tech. It has its own rules and regulation. And also it holds the number one in that area of working. Now the employee who proposed the product has made significant contribution to the product over the years and in recognition of his contribution the management of Ser Tech elevated him to the position of one of the corporate directors of the company and made him in charge of XXX.

A programmer at Ser Tech has reached the position of the corporate director through his ideas that were exploited by the firm. The concerned person is identified as an innovator and a role model for other employees to emulate the faster career progression. A superlative and creative performance of a professional role helps the employees to be recognised as innovator in the midst of ‘community of programmers’. This social identity helps to achieve the higher social position in the organisational structure. By recognising the contributions of the entrepreneurial employees, the firm creates a culture of innovation by attaching positive meanings to intramural research and experimental development. The cultural of social recognition for technical innovations help software employees to fasten the career mobility. Also, the firm provides employees stock options to retain the software professionals, who contribute to the process of technical innovation. These factors create competitiveness among the employees and motivate everyone to achieve the same in due course of career mobility. In turn, it brings new knowledge within the team.

Awards, incentives and appreciations are stimulating competition among the programmers to produce novel work in the organisations. Although lower level software employees are socially excluded from the process of training and learning but the career mobility forces them to learn new technological knowledge and skills to remain competitive not only within the firm, but also in the open market. Every intramural research and experimental development is evaluated and faces conflicting interests that needs to be defended against colleagues’ resistance, competing ideas and other organisational impediments such as power imbalances. This social process of knowledge production produces individuality among the employees in the software firms as well.

The development of new tools and applications are limited in nature, unless the project demands a new mode of applications. The team work creates conditions for cross fertilisation of ideas and generation of new ideas, which tend to fragment with the process of repetition. The repetition is two types: employing the same technology for different projects and deployment of knowledge developed in one project in other projects. The new Knowledge production and knowledge sharing depends on the nature of work and its content. The employees’ learning and knowing of new knowledge, in Ser Tech, is constrained by repetition of work that seems to affect the creative work among the software workers. One of the team members in Ser Tech pointed out that:

If there is no variation in terms of the project we handled earlier and the project we handle now then it limits the knowledge sharing activities between us. I know what to do by seeing the manifesto of customer requirements. I am being employed in the same work for the past one and half years. Really, it is a saturation point for me in terms of learning the knowledge and knowing the new knowledge.

Conclusion

From the perspective of sociology of organisations, the article examined the internal organisational arrangements and practices that facilitate new knowledge production and the context that contributes to the external knowledge flows in the Indian IT industry. Two sample firms were studied. One is assumed to be representative of mass production systems, a large software service firms and other one is of flexible production systems, product development company. The study found that there are differences across the two firms, though not fundamentally different.

The social organisation of software production in two software firms are hierarchically organised, but permitted differential flexibility to meet the differential demand either from parental organisation of clients or market. The work is organised as per the product requirement in Pro Tech compared to service based in Ser Tech. All the categories of employees participate in the conception and execution stage at product software production. The project managers, project leaders and client involve at the stage of conception rather low level employees’ participation at the stage of execution in service software innovation. Project managers and leaders handle more than one project at the given point of time in service organisation. The technologically mediated communications are more in Ser Tech compared with Pro Tech, which indicates the existence of centralised structure in Ser Tech compared to decentralised structure in Pro Tech. The organisation routines and practices play a pivotal role in assigning the work to all the workers in software production process. There is autonomy to use craft and technological knowledge through organisational procedures and routines, mediated through the project managers.

The study observed that the technology and market changes influence the product and service organisation to improve the quality of the output, software, which in turn influences the workers to enhance their creative work and the organisations to enable the collective learning. But there are impediments to the learning process or new knowledge production. The accumulation of new knowledge declines when there is repetition in the work undertaken by the organisations for a longer duration of time. This does not freeze the process of learning, but affects the craft and technological knowledge as a source of new knowledge production and also conjures the process of individualisation in both the organisations. The delegated nature of work, derived by the external market or client demand fosters directed labour, which could possibly affect the new knowledge production within the workplace of two software firms. The self-interest of the programmers help in overcoming this directed labour and attempting production of new knowledge.

Both the organisations provide various incentives to retain the professionals, thus retaining the knowledge accumulated and providing opportunities to explore avenues for new learning. In the case of Pro Tech, the professionals are given incentives and other forms of non-pecuniary benefits periodically and if possible, circulated among various technological domains. In Ser Tech, new organisation subunit is created to recognise and nurture new ideas. The employees deploy the professional knowledge as a career capital to move up in the ladder of the large organisational structure.

The demand of the projects in terms of technology determines the nature of knowledge acquisition in Pro Tech and Ser Tech. In Pro Tech, the informal inter-firm alliance is witnessed on techno-scientific collaboration that contributes to collective learning process. This is based on learning by doing and doing by leaning and interactions mostly happen with the firms located in the US. The higher order professionals are participating in the technological and collective learning process, and other professionals are socially enforced to learn the skills on their own. On the other hand, Ser Tech hires consultant from academia to get technological skill up gradation to meet the demands of the global technological innovations.

Footnotes

Acknowledgements

We are grateful to two anonymous referees of the journal for their valuable comments. Many thanks to Prof. E. Haribabu and Prof. V.V. Krishna for their suggestions and directions in developing the ideas expressed in the article.

Note

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