Three Concepts of Self-Organization - Essay Example

Best Practice, Best Fit and Resource View of the firms - analysis for relevance The human beings suffer from herd mentality, especially those in the business organizations, though business organizations attract the best of the breed. One sees that within no time the whole of management world is abuzz with a new seemingly revolutionary concept, which is treated as cure for all problems and has the power to transform the business and make it more competitive, as claimed. The hype created in the beginning starts waning with time when people realize that despite extensive training and engagement of consultants in that concept, their business is around the same level, albeit a few thousand dollars have gone in the pockets of the consultants and trainers. But these new concepts definitely did one thing, forced the organizations to focus on a neglected area. Similar is the case with "Best Practice", "Best Fit" and "Resource View of the Firms". The three concepts led to awakening which provided insights into organizations themselves on practices, organizational variables and the organizational resources respectively. Best Practice Best Practice term arrived in the 1990s when the entire world of organizations were in a flux, the world became unipolar and the resources deployed hitherto for anticipated war between two poles of the world were suddenly available for better use, for business and the core of business is essentially the needs, desires of human beings and the ability to fulfill them. The geographical boundaries had suddenly collapsed and the resulting globalization created aggregation of these needs, desires and the abilities to fulfill them, unleashing a state of huge threats and huge opportunities. A plethora of business concepts arrived on the scene, quickly delivered by ICT elements across a wider spectrum of organizations. Best Practice concept was one of them. The search of reasons or factors behind a superlative performance led to a process-by-process analysis and its comparison with the more successful companies. Best practice is essentially knowing and capturing a particular way of doing things better than what is being done presently, the source may be at some other unit or department in large organizations or in different organizations. It is a quest for improvement through the use of experience behind creating a better practice by others. The comparison could be either through unstructured or structured mechanisms, documents, interactions. Benchmarking encompasses best practices and best practice results are the starting point in improvement through benchmarking partnerships. Normally two organizations enter into benchmarking partnerships and try to transfer the best practices from one context to another. It starts with regular comparison of performance measures in identified areas and when it is found that performance of some parameters is quite high, a detailed analysis is carried out to find out how it is done and what is the practice being adopted to achieve that superior result. Now the key is to understand and implement that practice, leading to closer people to people interactions, depending on the understanding and enthusiasm of the implementing organization. Another approach seen regarding best practice is industry or sector specific associations engaged in sharing and exchanging of data, experiences in seminars or workshops to facilitate the growth of the industry itself through capture of best practice and disseminating the same. The approach has definitely helped organizations to see the organizational activities in terms of a set of practices and look the process-wise comparison with others. The practice of comparison came down to the level of practices. Best Practice Blues There have been significant activities in the efforts to capture best practices from other sources and deploy in the own context. There are reasons to say that these efforts did not get a fair amount of success except the possible benefit of communicating a comparative message that someone else is doing better. This might have resulted into a trigger of thought process of the group or organizations on how to improve the process and leading to a new improved practice of their own. Best practice approach adopted in many organizations in early stages led to an effort of senseless copying of practice from one context to another context, the complexities of the context not being factored as a critical success factor. It did succeed in promoting excellence through the diffusion of the information about practices, a micro level of organizational activity and facilitated the raising of the bar of performance of the sector. But successful implementation of best practices eluded many organizations that failed to look deeper into various elements of the context behind the particular best practice. Best Practices cannot be copied (Szulanski, Winter) in a searching article in HBR have explained the reasons of general failure in successful replication of best practices. The authors say that implementing organizations assume that the people who are visibly running the best practice know everything or the documents describing that best practice tells it all. That has been a grossly erroneous approach. The researchers found that no single document could capture the intricate details of that best practice. Many details are inevitably invisible, tacit, learning without awareness. Placing too much trust in experts and documents is the first big mistake, they claim based on research. They further say that the key is to look to the ongoing activity itself, besides consulting experts. This gives a better chance of success. Implementing best practice is essentially knowledge transfer between two groups, one group is engaged in a complex operation achieving good results, the other trying to replicate that practice. One flip side of focusing too much on the best practice has been dilution of intensity on indigenous conditions / factors which lead to innovation. Essentially best practice harmed the cause of innovation in the organizations. KM framework has rescued Best Practices In the article "Identifying and sharing best practices" ( http://www.nelh.nhs.uk) the importance of Best Practice in KM has been detailed. It says that sharing of practices is the fist activity in KM. KM framework has brought clarity to the stumbling block of best practice by clearly articulating that "major part of best practice knowledge is tacit - held in people's heads and not always easy to document. Therefore most best practice programs combine two key elements: explicit knowledge such as a best practices database (connecting people with information), and methods for sharing tacit knowledge such as communities of practice (connecting people with people)" The article further quotes David Skymore's recommendation of a 6-step approach to identifying and sharing best practices. 1. Identify users' requirements 2. Discover good practices 3. Document good practices 4. Validate best practices 5. Disseminate and apply 6. Develop a supporting infrastructure The jigsaw puzzle is in place and best practice has come back with a lot of realistic potential riding on the back of KM framework. It is much to the credit of the proponents of the best practice concept which forced organizations to focus on practices but could not leverage it in absence of insight into the invisible part of best practice which has been resolved by KM. Best Fit The ever-improving organizations, the instrument to meet the needs and desires of people, realized the roadblocks in successful transfer of best practice from one context to a different context. It was observed that certain fields like mathematics used the concept of best fit in situations where when plotting a curve and data points are not showing a clear pattern and are scattered, the best fit concept helped in finding the most appropriate curve. It was a kind of taking the best decision among a host of possibilities keeping the variability in mind. The same concepts were used in the journey From "Best Practice" to "Best Fit". The concept is extensively used in HR for employee best fit, in the field of IT for resource allocation scheme, usually for memory allocation. Best Fit tries to determine the best place to put the new data. The decision of implementing best practice under the best-fit framework is taken through a learning process to decide the best fit. Best Fit, except for encouraging a detailed study before deploying a best practice did not achieve much. Such approach is a part of any good decision taking, the detailed study considering various factors before one starts the implementation. Resource Based View of a firm Though there are many notable pioneers of the Resource Based View of a firm Jay Barney seems to be one of the most influential contributors to the concept. Resource Based view of the firms earn higher or superior level of revenue due to their superior level of resources and returns can be sustainable based on the nature of resources, primarily they should have characteristics which prevent their imitation by others. . They should have certain attributes viz. Valuable, Rare, Imperfectly imitable, Non substitutability. As in other concept, this concept also had its share of confusion and subjective understanding. (Fahy) says that "The resource-based view of the firm (RBV) is an important, emerging theory of firm heterogeneity. It is well grounded in industrial economics and has benefited in its development from a multiplicity of contributions by management writers. But like any developing body of knowledge, it is not short of confusion, ambiguity and conceptual and empirical difficulties" A study by Danny Miller in Strategic Management Journal explains that how many firms built their strategic advantage on "asymmetries" rather than resources and capabilities, Asymmetries are "typically skills, processes, or assets a firm's competitors do not and cannot copy at a cost that affords economic rents. They are rare, inimitable and non-substitutable, although not connected to any engine of value creation, and, in fact, often act as liabilities." Resource Based view of firms did provide certain explanation to the success of some of the firms but could not give a framework of strategy which could be adopted by let us say a firm which is being started. It did give a fresh perspective and forced organizations to get a close feel of the resources under their control. It is very difficult to obtain resources which have VRIN characteristics. Especially in this world of ICT it is beyond any doubt that almost all resources are easily available to all the able organizations, be it money, machine, technology or labor. The reason for different level of performance is the soft or intangible assets, the culture, learning, social capital, social network, policies etc. This intangible resource is different at different organizations and resource based view has redeemed itself in the era of knowledge, till then it had some shortcoming. We can say that Resource Based View of the firms have been truly understood in the context of knowledge management framework. Conclusion The concepts of Best Practice, Best Fit and Resource View of the Firms gave a new perspective to get an insight into the organizational working and organizational improvement. They generated enough enthusiasm but the next step was lacking clarity i.e. successful implementation of Best Practices. Many important aspects but abstract in nature could not be understood correctly leading to a stage where firms did not have an exciting experience in implementation of best practices. Best Fit was an incremental improvement on the concept of Best Practice. The Resource View of the Firm did give an important too to the organization to view the resources as the differentiating factor in competitiveness. This probably helped the strategic planning to start right at the stage of nucleation of the final product and services. But the concept of resources with VRIN characteristics is difficult to find and thus the resources being the key dos not go far off. It is again the abstract and unique world of the mind of individuals, the interactions of these minds, culture, conditions for innovation, the psychological energy levels which are key to exploit the resources. And here the KM tools have come as the missing piece of zig-saw puzzle. The key differentiation lies in the "pathways" created by human minds in the organizations. Larry Prusak writes "Knowledge flows along existing pathways in organizations. If we want to understand how to improve the flow of knowledge, we need to understand those pathways." Best Practices and Resource View of the firm can be leveraged through these pathways. The influence of the process of doing the assignment on myself When I started this assignment I thought that these terms are familiar to me but the subsequent research had a very profound impact on me in many ways. I used to be of the opinion that best practice implementation is a cake walk and the key is identification of the best practice and subsequent implementation. The literature review mainly the content on the net had a different story about the best practice concept. It became clear that it is very difficult to truly capture all the elements of best practice because they are many a time unrecorded, unknown and invisible. This has helped to get a new perspective on practices around me and has provided me an insight to observe things/activities in terms of practices. I am able to see somewhat more clearly the invisible links between or among the activities. As regards the best fit concept it did not have much of impact in terms of learning as any good decision making process does the same, takes the best decision out of a matrix of variables. The internet also did not have much to offer in terms of articles, opinions or any other form of research on the subject. The subject of resource view of the firms was intriguing and fascinating. I could admire at once about the incisive abilities of the proponents of the concept who could see deeper in the organizations to find out the reason of heterogeneity in performance. The most fascinating influence was the moment I could see these concepts through the perspective of KM and felt the evolutionary process of knowledge accumulation by human beings. These concepts have become alive in the era of knowledge. References : 1. Gabriel Szulanski, Sidney Winter) Wharton School, Getting it right the second time, HBR, January 2003 2. http://www.business.mmu.ac.uk/ 3. http://www.ichnet.org/staff.html 4. Fahy, John , The resource-based view of the firm: some stumbling-blocks on the road to understanding sustainable competitive advantage, Source: Journal of European Industrial Training, Volume 24, Numbers 2-4, February 2000, pp. 94-104(11) Publisher: Emerald Group Publishing Limited 5. http://www.amchp.org/policy/bestpractice-definition.htm 6. http://www.aohc.org/Articles/Discussion_Paper_11.doc 7. http://www.nelh.nhs.uk/knowledge_management/km2/resourcesIdentifying and sharing best practices 8. Where did knowledge Mangement come from by L Prusak, IBM Systems Journal, Volume 40, Number 4, 2001 9. Danny Miller in Strategic Management Journal (Chichester: Oct 2003.Vol.24, Iss. 10; pg. 961) of a number of firms shows how Read More