Complementary Role of Organizational Learning Capability in New Service Development Process - Research Paper Example

Understanding Complementary role of organizational learning capability in New Service Development (NSD) process. The article was written by Tharinee Limpibunterng of Corporate Strategy Development Department, TOT Public Company limited, Bangkok, Thailand and Lalit M. Johri of SAID Business School, Executive Education Centre, Oxford University, Oxford, UK in 2009. The article aims at investigating the role of organizational learning capability in relation to leadership tasks performed by executives and organizational performance in new service development process. It used the context of a state telecom monopoly in Thailand as a case study. For the deregulation and privatization of the telecom sector, the monopoly power of the state enterprise was threatened by the newly introduced private telecom companies into Thai market. These companies have financial strength, variety of value added service offerings, aggressive and robust marketing strategies with the latest technologies and sound customer and employee relationship. Though the state telecom tried to struggle with their previous hold on the market but for good plan but poor implementation or misplaced priority it could not stand. This article used both qualitative and quantitative research methodologies to answer questions asked. It launched a pilot survey among 12 experts from seven leading telecom service providers to validate the findings of previous similar literatures on the subject. This is moving from general to specific. He was able to pass across his message in a clear terms by making use of tables (which is the simplest form of data structure) Its intention was to find out why in a competitive and changing market, private telecom service industry tends to outperform their public telecom service provider counterparts. For proper understanding of the content of the questionnaire, experts were consulted to translate and re-translate the content into Thai and English languages, for clarity and to avoid ambiguity. This work came up with the following assumptions: 1) to be competitive in today’s business environment, executives in public sector companies in particular are suggested to manage the NSD process as a dynamic learning process and not as a bureaucratic process. That the NSD process should be fast and flexible so that it is more responsive to changes and uncertainty. 2) in managing a dynamic learning NSD process, it is very important that all organizational executives should understand how they can perform their leadership tasks to facilitate the development of the organizational learning capability. They should plan proactively to realize NSD objectives that serve organizational targets. The integration of leadership tasks among executives at all organizational levels should be considered as one of the key success factors. 3) That executives have to provide clear communication and organizational vision and develop growth strategy through NSD programs in line with the organization’s direction which will help in organizational resources. 4) That the HR executives and NSD executives should identify and continuously update knowledge and skills to develop employees and executives in each specific area of their function. Article within its context Literature review of many previous studies on the subject was mentioned by the authors such as: 1) Organizational learning by Senge (1990), Huber (1991), Crossan et al (1990), Lopez et al (2005) etc. The authors gave their own definition of organizational learning “as a dynamic process across the length and the breadth of the organization in which organizational knowledge is exploited to stimulate the adaptiveness and the responsiveness of the organization to the changing environment”. 2) Organizational learning capability and organizational performance by Jamali et al (2006), De Geus (1988), Jashapara (2003), Prieto and Revilla (2006) etc were mentioned to have worked on the above topics. This work also defined organizational learning capability “as an intrinsic ability of an organization because of which the organization creates, enriches, and utilizes knowledge to outperform its competitors in terms of its competitiveness and performance”. 3) Leadership, learning, and organizational performance. research on this was done by people like Amity et al (2995), Jerez-Gomez et al (2005), Llyod (1994), McCauley and Van Velsor (2004), Nielsen (2004) etc. All the above definitions have slight modification from the previous definition given by the various literatures reviewed. Suggesting that the topic is not totally new to established or evolving organizations. They are challenges faced by executives of any organization to keep it alive and on hold of its niche in market. It is clear from the bibliography of 45 previous works that Tharinee and Lalit had studied in depth existing literature on the subject. However the works seem to have been chosen to fit in with their own idea that this paper is talking about the subject from a new angle. Of a truth, this work can not be assumed to be of a worthless effort as it identified additional variables of leadership tasks, organizational capability and performance criteria that were not covered in previous findings (literature review). Even by this it cannot be given the total uniqueness that the authors seem to suggest. Critique Looking carefully into the article one would like to question why the researchers did not tell us the total number of telecom service providers in Thailand, since the research work was not carried out in more than just one country among several countries in the world, it should be very easy to tell the total number of such company in Thailand alone. What are the criteria used for chosen the seven telecoms? What makes them to be the leading seven telecom service providers? Even among the seven companies, pilot interview survey was among just 12 experts. One cannot but conclude that this is largely based on the assumption of the researchers which in turn has negative effect on the out come of the work. Since the distribution of the questionnaire was by personal network among these experts one can not rule out personal bias on the part of the respondents. To have limited the research to Thailand only may not be acceptable. The question is can does factors be applied to non-telecom companies within or outside Thailand and produce the same result? Even the researchers pointed out that “validation and generalization of these tools and results are still limited”. Even the researchers pointed out that “the validation and generalization of the results are still limited to the context of NSD processes of telecom service providers in Thailand and that the analyses used is based on second-order factors and perceptual data”. Samples were not selected randomly to allow for even distribution of samples but it was based on a quota basis. This will surely bring about bias due to lack of control on some of the respondents’ characteristics and will largely affect the accuracy of the data gathered. All data collected for measurement of leadership tasks, organizational learning capability, and organizational performance are qualitative, and so all the data collected are subjected to the respondents’ understanding and experiences. Although the perceived measures can be used as proxies for the objective measures, the development of the objective measures are still recommended for more reliable results and conclusions in future research (Lo´pez et al., 2005). The constructs of leadership tasks, organizational learning capability and organizational performance were not comprehensive enough. It is not certain where exactly the literature review were chosen from. Were they researchers based in Thailand or other countries. This also brings further criticism of the research work. Suggestions for improvement For the mailing method not to have worked in the Thai culture is an advantage in a way for the distribution of the questionnaires, because not all posted questionnaires will be returned even some may not get to the targeted respondents. Using personal network with senior management and key man involved in the new service development process for 497 participants will be rather slower than the mailing method but will eventually get to the targeted respondents. And that was why 428 questionnaires were returned which is a great success, though only 417 were actually completed and were used for data analysis. If the total number of telecom service providers in Thailand had been mentioned it would have been possible to suggest increment from seven to an upward increment for better validation and generalization even within Thailand as a country. The researchers even clearly stated four limitations observed in the work such as sample bias which may exist due to lack of control in some of the respondents’ characteristics and affect the accuracy of the data gathered. It will be better to use a more reliable means to distribute the questionnaires instead of using personal networks. It will be good if the result obtained can be used to validate and generalize in other non-telecom companies within and outside Thailand. It shows the proportion of respondents from private companies, public sector companies and non-disclosed companies which were 47.24, 42.93, and 9.83 percent, respectively. It also shows “other employees” such as technical, marketing and sales, finance and accounts staff (54.43 percent), followed by junior executives (25.42 percent), middle executives (9.35 percent), and top executives (0.96 percent). Out of 417, 39.33 percent were working for NSD department and 19.18 percent were for business development department. I consider this to be a very nice way of carrying out a non-bias questionnaire From the measurement model of the authors it is clear that they have a well thought-out direction to achieve their aim knowing fully well that most of the items were newly developed, hence, “the exploratory factor analysis (EFA) was conducted by applying the common factor analysis using maximum likelihood extraction procedure. By this, they came out with six extracted factors of leadership tasks performed by top executives, which are 1) providing clear direction, 2) cohesive teaming with commitment to common goals 3) empowering people, 4) coaching, 5) promoting performance improvement, and 6) providing proper incentives; They went further to state five factors performed by NSD executives: 1) doing alignment, 2) cohesive teaming with commitment to common goals, 3) empowering people, 4) encouraging learning through mistakes, and 5) resourcefulness. For organizational learning capability, nine extracted factors were listed: 1) consisted of shared understanding about company direction, 2) fostering aspiration, 3) team-working, 4) early customer involvement, 5) flexibility, 6) envisioning, 7) planning for handling impacts, 8) testing new services, and 9) testing feed-backing channels. Lastly, five factors of organizational performance included 1) financial performance, 2) customer perception on new services, 3) organizational reputation, 4) innovation, and 5) market standing. Realistically, both in practice and in theory these factors are the brain behind every successful business. Yet it is still assumption that each construct was the higher-order factor and multi-dimensional, Validity & Reliability Adams et al (2007) defined validity as the strength of the conclusions reached. The authors confirmed factors extracted from the Exploratory Factor Analysis (EFA) with second-order factor analysis or Confirmatory Factor Analysis (CFA) by testing the construct validity and model fit. “The results showed that, for the model fit, models obtained significant x 2, CFI greater than 0.9, RMSEA and RMR less than 0.07; therefore the data fits with the model. For the construct validity, in all constructs, items’ standardized loading estimates and T-scores were greater than 0.5 and 1.96 ( p # 0.05), respectively. Variance extracted for convergent validity of each factor and of each construct was greater than 0.5, therefore the convergent validity was supported”. It also went further to support and confirm the convergent validity and the discriminant validity. Also Adams et al (2007) stated that reliability measures the degree to which an instrument measures the same way each time it is used under the same conditions with the same subjects. “For the internal consistency or measurement reliability, each factor and each construct obtained Cronbach’s a greater than 0.7, therefore the instrument was considered reliable”. And the authors were able to confirm from the results that the construct was found to be valid and the measurement theory was supported according to Hair et al (2006). But all these are subject to interference of the respondents’ behavior or mood at the time of answering the questions. More so, that it was through personal network the questionnaires were distributed make reliability and validity a serious issue. What were the questions asked? Though, the authors also clearly stated that “the research was mounted in two phases, in the first phase a pilot interview survey and literature review were conducted” this is to show the scientific way of conducting the research i.e moving from known to the unknown. The research work identified two groups of executives who intervene in the New Service Development processes, which are: “top executives” responsible for corporate and business strategy and the “NSD executives” directly involved in NSD projects. This clearly distinguished the tasks of both levels exclusively. Literature review of such as Senge (1990), Huber (1991), Crossan et al (1999), Hamel (1991), Lopez et al (2005), Argyris and Schon (1978, 1996), Feurer et al (1995) etc were mentioned by the authors. One of the areas that need to be critically looked at is how do we measure to what extent an individual, among the top and the NSD executives, has been able to contribute to the organizational learning capability, leadership task and organizational performance. There was a complete silent by the researchers on this aspect. If this has been done it will be obvious to identify who and who is really contributing what. Then it will be easy to advice the company on what to do. This might also gear up other executives to do better than before. Conclusion The ability of the company in learning better than their competitors will have Subsequent effects on the improvement of its performance. Undoubtedly, for the superior performance of a firm, leadership tasks performed by top and NSD executives and organizational learning capability should be mutually supported. Read More