Steps to an Ecology of Recursive Multipolar Learning in Multinationals
By Peer Hull Kristensen and Maja Lotz
January 2016.
Abstract.
In this paper we are evaluating some of the dimensions involved in the experimentalist search for ways to organize and facilitate collaborative learning within multinationals and if and how these forms of collaborative learning mitigates opportunistic behavior and promotes reciprocity.
How to organize and facilitate collaborative learning across organizational units has become a crucial challenge, as we shall see, with recent changes in how financial institutions have changed the behavior of corporations, corporations have introduced new forms of competitive pressures on subsidiaries and suppliers and in turn with the change to team based forms of high performance organizations within subsidiaries and suppliers.
In many ways these changes or reforms of the corporate community constitute a new, comprehensive governance regime supposed to cope with opportunism, free-riders and shirking, and yet, as we shall also see, novel forms of micro-political and opportunistic games have emerged so that it becomes difficult to locate and harvest the potential for mutual learning among multiple units, each engaged in a competitive, innovative search for new or improved products and services and ways to improve performance on a multiplicity of dimensions.
It is our contention that the competitive rivalry among many units leads each to focus on opportunistic proof of financial performance improvements in order to protect or expand their mandates, while simultaneously each unit tries to keep secret how these improvements were achieved, so that less improving units within the multinational cannot learn from the fast improvers.
In short, a learning paradox emerges as the institutionalization of a competitive rivalry on the one hand establishes a pressure on each unit of a corporation to become increasingly better at innovating and doing continuous improvement and on the other hand induces each of the units to conceal how and what they are learning in terms of innovativeness and improvement in order to achieve comparative high scores and comparative advantages in negotiations over mandates and investments compatred to rivals within a MNC.
Everything else being equal, under the new governance regime this learning paradox applies to many levels of the new corporate architecture, from the interaction among work teams within a plant, among plants within a subsidiary or supplier, and among subsidiaries in different national contexts – and probably even within different product areas within a MNC headquarter.
We do not see a jiffy solution to this learning paradox in the form of a new constitutional ordering of the multinational. Today metrics on comparative performance among organizational units are to a high degree constituting a game on promotion and blame respectively; games that can be quite nasty and which socialize corporate members to become rather cynical opportunistic gamers than reciprocal learners. In many cases corporations have to undergo a civilization process of a magnitude that resembles the process that changed Europe from a landscape of rivalling princes to a court-society (Elias 2000). The “end in sight” however is a new constitution of the multinational that creates organizational and social spaces for multipolar learning among units, where each unit may be able to benefit from and contribute to the innovativeness and improvability of all others. As we shall see, such organizational spaces must also organize recursive processes in order to have the potential to tame opportunism and shirking. The spread of “short-termism” in many aspects of corporate life, from the interaction of MNC headquarters in relation to financial institutions, over the campaign like waves of re-engineering of subsidiaries and suppliers to live up to novel fashion-performances, to temporary multi-unit project-teams create spaces for opportunistic games, while recursiveness, where the contributions from the many players will become tested in future recursive cycles at least has the potential to tame short-term opportunism.
Over the years during fieldstudies of novel forms of work-organization and organizational reforms within multinationals, we have come across a number of experiments with organizing cross-unit collaborative learning. Many of these are functioning in a quite informal way, and they do not point towards a more systematic form of collaborative learning, whereas some seems to contain the seeds for a more systemic reform of corporate life. In the core sections of this paper we will discuss and compare diverse experiments at a number of organizational levels and try to evaluate their potential for solving the mentioned learning paradox. The empirical material we present is based on a whole series of different extensive and intensive field studies over the years, studies that have been reported individually in previous publications with a different focus. By bringing this material together and aiming at a new type of synthesis, we will refer the reader to these studies. We will start our inquiry at the factory floor, where the focus is on cross-team learning, then we move to cross-factory learning in the development of standard operational procedures and training, while our inquiry ends by a study of reforming cross-subsidiary organizing of R&D collaboration. By focusing on these three levels of collaboration within the multrinational, we think we are addressing core steps to an ecology of recursive multipolar learning, but simultaneously, we are also leaving out learning relations to a number of external stakeholders such as financial institutions, customers (customer driven innovation) and suppliers. Yet, we think this inquiry bring about a number of constitutive elements for a multipolar, recursive learning architecture and in a final section we will draw these elements together in a comprehensive scheme that may serve as a guide for future search for the constitutional ordering of multi-level, multi-unit (multipolar), repetitive (recursive) forms of collaborative learning.