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The Weight of History: An Exploration of Resistance to Change in Vicars/Managers Jon Aarum Andersen What impact do managers have on successful implementation of organisational change? A model is suggested to assess the strength of managers to initiate and implement organisational change and development. The model rests on leadership theories and factors that describe and explain various change aspects of managers' behaviour. It is assumed that managers who have a change-centred leadership style, who are intuitive combined with power motivation and see urgent demands for change and development, have an optimal capacity for implementing major changes in their organisations. This model has been tested on a sample of 153 vicars, each facing a radically new situation. The Church of Sweden was disestablished this year breaking a structure, which has lasted for 500 years. As expected, very few of the vicars (as managers) exhibited change and development related behaviour described by the model. In fact, only one percent of the vicars appears to have maximum capacity to implement organisational changes. Whether the model can predict successful implementation of major organisational change remains to be tested.

Introduction

The Theoretical Model

T

The model presented here has been initially tested by using generally accepted methods and measurements. It taps into some of the most well established leadership research over the last four decades. What is new is the combination of the components. Arguments are given as to why the concepts may form a model of managerial strength to implement organisational change. The theoretical contributions that are included in the model aim at explaining the consequences of managerial actions and behaviours. The model consists of four theoretical concepts:

o understand how and why organisations need to change and develop is primarily a managerial challenge and responsibility. To initiate and implement change can hardly be accomplished without strong involvement by management. Burns (1996, p. xiii) points out that all change theories are partial. Some theories of change focus on the internal and external restrictions to and possibilities of accomplishing change. Another group focuses on the restrictions and options that managers face when trying to achieve change in their organisations. The model suggested here focuses on the change strength of managers in order to assess the possibilities of achieving change stemming from the managers themselves. Whether people in managerial positions actually work with change related issues, is another question. Farkas and Wetlaufer (1996) investigated five different approaches to management. They found that less than 20% of the CEOs investigated saw themselves as responsible for setting short- and long-term strategy. # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

(1) Leadership style which describes the behaviour of the leader by task orientation, relationship orientation and change orientation. (2) Managerial decision making style which describes the typical way in which managers solve problems and make decisions. Intuition is one factor here which affects the orientation towards future possibilities and prospects.

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(3) Power motivation, which aims at capturing the managers' desires, needs and strengths to initiate and carry through organisational policies and changes. The emphasis here is on the power motivated behaviour of managers.

A four-factor change model

(4) Operation demands, which focus on the managers' perception of what kinds of demands are most urgent in the organisation, being either relationship demands, task demands or development demands. The model consists of four change factors being change-centred leadership style, intuition, power motivation and perception of change and development operation demand. Two new concepts are introduced which are combinations of these four basic change factors. The change-centred leadership style, intuition as dominant decision-making style and power motivated behaviour are theoretically behavioural factors while the change and development operation demand is not. Assumedly, these factors tap into an important orientation and aspiration of managers, which probably leads to specific actions in order to achieve change. Table 1 gives an overview of the dimensions and factors of the model. Ford (1999) suggested another model to predict executives' creative performance by simultaneously considering their interpretative style, motivation, creative ability and work setting. This model, however, seeks to explain executives' impact on organisational change. The first factor of change is the changecentred leadership style. The model captures those managers for whom the change orientation is stronger than the other factors of task and relationship. Intuition as the dominant way of solving problems and making decisions is the second factor. Those managers

who have predominantly the change-centred style and are intuitive in the decision making at the same time are characterised as having change propensity. Those managers with change propensity and at the same time are power motivated are seen as having what is called change strength. Change propensity and change strength are the two new concepts in the model. It is assumed that managers who see urgent operation demands for development in their organisations are more likely to apply their change strength. The four basic factors are seen as variables explaining the outcome of the model. The outcome (dependent variable) is ``organisational change initiated and executed.'' The model implies that managers with a special combination of characteristics have maximum theoretical capacity for attaining real changes in their organisations. Ford (1999) also argues that performance studies will be more effective if they consider the joint influences of several leadership factors. The model has been tested on one sample of 153 managers. Extensive research has been undertaken and published on each of the four main variables. Pair-wise combinations between most of the variables have been investigated empirically (Andersen, 1994, 1999, 2000a; Ekvall & Arvonen, 1991; Arvonen & Ekvall, 1996). Figure 1 illustrates the model. The model is not intended for investigating the relationship between organisational change and organisational effectiveness. However, Ekvall and Arvonen (1991) and Arvonen and Ekvall (1996) found that managers with a distinct change-centred leadership style are seen by their subordinates to be more competent than other managers. Andersen (1994, 1999) found that several empirical investigations support the hypothesis that power motivated managers are more effective than others. There are also some

Table 1. Dimensions and factors of the change model. Dimensions Leadership style

F Production-centred a Change-centred style c t o Employee-centred r s

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Decision-making style Sensing Intuition Thinking Feeling

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Motivation profile

PROPENSITY

Achievement Power Affiliation

Operation demand

CHANGE STRENGTH

Structure demand Change demand Employee demand

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Figure 1. The Managerial change propensity model

indications that intuitive managers are more effective than managers with other decision making styles (Andersen, 2000a). The three factors in the model, which concern managerial behaviour, appear to be linked to effectiveness. This fact strengthens the assumption that these managerial change variables may cause real organisational changes.

Leadership Style The leadership style theories embrace a description of the behavioural pattern of leaders as well as the consequences of various styles in terms of effectiveness. More data is available on leadership style than on any other aspect of leadership. The Ohio State University Leadership Studies tentatively defined leadership as ``the behaviour of an individual when he is directing the activities of a group toward a shared goal'' (Hemphill & Coons, 1957, p. 7). Two behavioural factors were found to be fundamental in all leaders investigated namely, consideration and initiating structure (Fleishman & Harris, 1962). Concern for people, employee-centeredness, concern for production, production centeredness and task orientations are other terms used by researchers. These factors are found simultaneously in the behaviour of all leaders, but in varying degrees. This statement is the most theoretically and empirically established in all leadership research.

Change-centred Leadership Style Ekvall and Arvonen (1991) report investigations on leadership styles based on the

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concepts and methods of the Ohio State Studies. They found when analysing behavioural data from several hundred mangers in Sweden, Finland and USA that a third behavioural factor emerged. This factor was called changed-centred leadership style. The change-centred style depicts a supervisor who creates visions, accepts new ideas, makes quick decisions, encourages co-operation, who is not overcautious and who does not stress plans that must be followed. The third factor may have developed in today's companies as a consequence of the accelerating rate of change in many areas, which affect both products and processes (ibid.).

Motivation Profile McClelland (1961, 1990) has performed extensive research into the relationship between motivation related behaviour in managers and effectiveness. He claims that every individual has, to a varying degree, a need for achievement, power and affiliation. The term ``need profile'' denotes the relative strength of the three needs. Three motivation profiles are used in this research tradition based on which of the three needs that are the ``strongest,'' namely, achievement motivation profile, affiliation motivated profile, and power motivated profile. McClelland's conclusion from several studies is as follows: When the need for power in managers is stronger than the need for affiliation it is an indication of effectiveness. What is crucial is not the strength of any specific need but rather the relative strength of the needs ± the motive profile.

All leaders display both factors simultaneously

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Power Motivated Profile

Operation Demands

The need for power is defined as the desire to control other people, to influence their behaviour or to be responsible for other people and their work. McClelland explains why managers with a strong need for power behave in a way that causes effectiveness in organisations. A review of five investigations supports McClelland's thesis (Andersen, 1999). Power motivated leadership behaviour is regarded as a prerequisite for the propensity to change to result in change strength.

Arvonen and Ekvall (1996) introduced the concept of operation demands. They claim that new business environment will require new management abilities concerning development, creativity, and radical innovation. The concept of operation demands includes three indices, covering change/development requirements, structure requirements, and employee development and relations requirements (Arvonen & Ekvall, 1996, pp. 5±6). Operation demand is a cognitive variable capturing the attitudes of the managers. The assumption is that managers who perceive the demand for change and development in their own organisations to be more urgent than other demands, are more likely to act in order to initiate and implement changes.

Decision Making Style There is a change component in the problem solving and decision-making behaviour of managers. Jung's typology (1921/1971) has also influenced management research. Jung claimed that humans are guided by one of four functions when solving problems. These functions are: sensing which is a perception through our senses; thinking which gives us meaning and understanding: feeling which judges and assesses and intuition which tells us about the possibilities in the future (Jung, 1976, p. 203). All humans have one function which is applied the most ± the dominant one. The opposite of the dominant function (which is the strength of that person) is the inferior function (which is the weakness of that person). If, for instance, the dominant function is thinking the weakest function will be feeling. If the dominant function is intuition, the inferior function will be sensing. There are two ways in which we can perceive problems, namely by the use of sensing and intuition. There are only two ways to solve the problem, that is by use of the thinking and feeling functions. Keegan (1984) adopted the theory and made it available to professionals and managers. He claims that Jung's typology gives a genuine insight into the question as to why individuals succeed or fail in their decision-making (Keegan, 1984, p. 3).

Intuitive Decision-making Style Intuition as decision-making style clearly describes a change and development component in managers. Jung (1976, p. 145) defines the intuitive function as follows: ``The intuitive person concentrates on the possibilities and is less concerned with details. He often finds the solutions directly without basing them on facts.''

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Indicators of Managerial Propensity to Change The main indicators of the four factors of the model are listed below in order to provide a richer description of the behaviour and attitude of managers who are hypothesised to initiate and execute changes in their organisations. . Change-centred style (Arvonen & Ekvall,

1996, p. 5) Offers ideas about new and different ways of doing things; pushes for growth; initiates new projects; experiments with new ways of doing things; gives thoughts and plans about the future. . The intuitive decision making style (Jung, 1971, 1976) Seeks to exploit the possibilities; oriented towards the future; tries to discover new possibilities and find new solutions; uses imagination; gets carried away with new ideas and possibilities and ignore practical realities. . Power motivated behaviour (McClelland & Steele, 1972, pp. 33, 43) Desires to have impact; makes an impression on others or another; powerful actions; strong positive or negative emotions in others: concern for own reputation or position. . Perceived change/development operation demand (Arvonen & Ekvall, 1996, pp. 5±6) New ways of carrying out tasks are tested; employees contribute to radical changes in performing tasks; work is continuously reorganised: new products and services are developed; improvements are continuously carried out.

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Method Sample and data collection In 1999 there were 1,044 vicars (rectors) in the Church of Sweden of which 153 (15%) were women. The vicar position in the Church implies the responsibility for staffing and finance of the activities of the church in that parish. In that respect the vicars are managers as well as spiritual leaders. The sample investigated consisted of 240 vicars (23%) randomly drawn from the total population. The objective of the investigation was to assess the change potential of the vicars as the Church of Sweden, from the year 2000, has an independent relationship to the Swedish State implying an end to bond between the State and Church which has lasted for nearly 500 years. Since the vicars are no doubt a special kind of manager this investigation made it possible to test the model of managerial change propensity. The hypothesis was that the vicars would ± as a group ± show a very low degree of propensity to change due to several factors. These factors are the uniqueness of their position as spiritual leaders being responsible in an organisation with approximately 1000 years of history, the relatively high age of the vicars and the long period of service in that position for most of them. If the empirical study had shown a high degree of change propensity in this sample the value of the model would be seriously questioned. Data on the variables of leadership style, decision-making style, motivation profile and operation demands were collected by questionnaires developed and tested to measure the theoretical concepts as described in the previous section. During the spring of 1999 the 240 vicars drawn received a package of questionnaires. A description of each of the instruments follows with reference to their testing and scientific application.

The Instrument for Measuring Leadership Styles Ekvall and Arvonen (1991) developed and tested an instrument which captures the leadership style factors of the CPE-model being change-centered style, productioncentered style and employee-centered style. The instrument contains 30 items (10 items for each factor). The test results show that the CPE-questionnaire contains the qualities required by the research instrument (Ekvall and Arvonen, 1991). Skogstad and Einarsen

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(1999) found substantial support for a distinct change-centered leadership style. The instrument has been applied in research by Ekvall and Arvonen (1991, 1994), Arvonen (1995), Arvonen and Ekvall (1996, 1999), Arvonen and Pettersson (1999), Lindell and Arvonen (1996, 1997), Ekvall and Ryhammar (1998), Sverke, Arvonen and Lindell (1999), and Skogstad and Einarsen (1999). In previous research, the subordinates of the managers investigated have filled in the CPE-instrument. A version developed to be answered by the managers themselves has been applied in this study. The original questionnaire applies a Likert scale from 1 to 4 while the self-reporting version has a scale from 1 to 6. Some caution must be taken when comparing the results even though that is not the objective of this study.

Vicars were both managers and spiritual leaders

The Instrument for Measuring Decisionmaking Style Two different instruments were available to collect data on managerial decision making behavioural variables according to Jung's typology. The Myers-Briggs Type Indicator (MBTI)1 is a questionnaire developed to enable testing for Jung's theory and using it in practice (Briggs-Myers & McCaulley, 1985, p. 1). The MBTI has become so widespread that is has almost lost its roots in Jungian theory according to Stoknes (1992, p. 103). The other test is The Keegan Type Indicator Form B (Keegan, 1980,1982) which was chosen. For measuring the functions the Keegan Type Indicator (KTI) instrument contains 32 items (compared with 132 items in the MBTI). Of the 32 items 24 are bipolar statements and 8 items on statements to be ranked on a scale from 1 to 4. The instrument collects only variables relevant for the study. The instrument has acceptable face and content validity and is based explicitly on Jung's typology. It must be stressed that the BMTI is a general test of the typology while KTI is a test for managers measuring decision-making styles based on Jung's theory (Andersen, 2000a, p. 57).

The Instrument for Measuring Motivation Profile In his empirical research McClelland applied the Thematic Apperception Test (TAT) (McClelland & Steele, l972). A number of objections have been voiced against this method for measuring motivation (Gordon, 1991, p. 141; Maehr, 1974, p. 889). To test the validity of TAT has proven difficult while

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the reliability cannot be tested. A number of scholars (i.e. Litwin & Stringer, 1979) has therefore suggested that questionnaires would be an alternative in research. Murray (1938, pp. 530ff) used both TAT and a questionnaire. He concluded that TAT was probably a better method than the written instrument. Both measuring methods were acceptable. The questionnaire applied here ± The Andersen Motivation Profile Indicator (AMPI) ± is a forced-choice instrument with 24 pairs of questions with 8 pairs of items for each of the variables. It is explicitly developed to measure the motives according to McClelland's theory and definitions. The AMPI measures the relative strength of the three needs, that is, the motivation profiles. The instrument which is masked, is tested for reliability and validity (Andersen, 1991). The AMPI has been applied in research (Andersen, 1994, 1999).

The Instrument for Measuring Operation Demands

Few vicars were change centred

Arvonen and Ekvall (1996) introduced the concept of operation demands. The concept of operation demands includes three indices: change/development, structure, and employee /relations requirements (Arvonen & Ekvall, 1996, pp. 5±6). The instrument contains 30 items (10 for each demand) and is based on a Likert scale from 1±6 as with the CPEinstrument. The Operation demands instrument has been used in studies performed by Ekvall and Arvonen (1991, 1994) and Arvonen and Ekvall (1996, 1999).

Testing the Model The model has been tested in two different ways. The four factors in the model are not theoretically independent of each other. It can be argued that the four factors are complementary and that they may add something of value when trying to describe change oriented behaviour in managers. The first test aims at establishing to what degree the factors were dependent of each other empirically. Rank correlation coefficients were calculated to answer this question. How many of the managers investigated had the propensity to change? How many had change strength? Finally, how many managers had an optimal capability to initiate and implement major changes in their organisations? To establish the rate of change strength is the second test of the model.

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Correlation between the Factors of the Model The rank correlation between the variables change-centred style and intuition is .51 (p5.01) for all vicars investigated (N = 153). The correlation between change-centred style and power motivation is .06 (p4.10) and the correlation between change-centred style and change operation demand is .53 (p5.01). The correlation between intuition and power motivation is 7.02 (p4.10). The correlation between intuition and change operation demand is 7.02 (p4.10). Finally, the correlation between power motivation and change demand is 7.02 (p4.10). Only two of the correlation coefficients are significant, namely between change-centred style and intuition and between change-centred style and development demands. These results can be compared with previous investigations showing that the correlation between the variables intuition and power motivation for Swedish managers (N = 222) was 7.15 (p5.01) (Andersen, 1994, p. 316). The correlation between the variables changecentred style and operation demand of change and development for Swedish and US managers (N = 2,109) was .20 (p5.001 (Arvonen & Ekvall, 1996, p. 7). Table 2 gives the distribution of managers regarding the change factors.

The Empirical Degree of Change Strength It is hypothesised that the change strength would be very low in the sample. The objective of the investigation of Swedish vicars was to find out their change capacity. The change model was developed for that purpose. The conclusion and implication of that investigation is presented in Andersen and Hansson (2000). Only 14 vicars (9%) were change-centred and intuitive. They can consequently be characterised as having a propensity to change. Of the 153 vicars, only three (2%) had the combination of change propensity and power motivated behaviour called change strength. The investigation of the vicars' perception of operation demands show that 11 vicars (9%) regarded the operations demands of change and development to be most urgent and imperative. On theoretical grounds we may claim that maximum conditions for initiating and executing changes in organisations not only refers to their change-oriented style and intuition, but also has to do with their willpower to influence and manage changes. Maximum conditions to do so are present if the vicars also perceive an urgent demand for changes and development of the operation of the organisation. Vicars with

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Table 2. Dimensions and factors of the change model. Leadership style

Decision-making style

Motivation profile

Operation demand

Production-centred (5%) Change-centred style (34%) Employee-centred (61%)

Sensing (27%)

Achievement (13%) Power motivation (30%) Affiliation (57%)

Structure demand (12%) Change demand (9%) Employee demand (79%)

Intuition (17%) Thinking (14%) Feeling (42%)

change strength and perception of change demands will assumedly be able to initiate and execute changes. Only two (1%) of the vicars have maximal capabilities to manage their organisations in times of major changes. This can also be expressed by stating that 99% of the Swedish vicars lack capabilities to manage their own organisations through radical changes.

Conclusions The first test showed that the variables in the model did not correlate to a high degree in any direction. The significant and positive correlation between the change-centred style and intuition variables is theoretically interesting. The correlation is, however, not so strong to be able to conclude that the variables measure virtually the same thing.

Nor can we conclude that they do not both add to the model. The correlation between change-centred style and change operation demand is of the same magnitude and in line with previous research supporting the same conclusion. Correlations between the other variables of the model are insignificant and low indicating that the variables are more and less empirically independent of each other. It is evident from the items of the instruments that some degree of positive correlation will occur. All variables of the model give descriptive and probably predictive strength to the model. This conclusion supports the hypothesis that very few of the managers (vicars) investigated have the propensity strength to initiate and implement organisational change. Figure 2 shows the theoretical change model with the main empirical data and conclusion included.

Change

Figure 2. The change model with empirical results # Blackwell Publishers Ltd 2000

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How can we explain the result of low propensity and change strength in vicars? The leadership style and the operation demand preferences are due to attitude. Attitudes can change, but are seen as relatively stable factors. The decision-making functions are stable personality factors. Motivation factors (needs) are also seen as relatively stable factors. The following explanations are suggested. The low degree of change orientation in vicars is most likely due to strong orientation towards people and serving people by priests. This is evident in this investigation by the high scores on relationship oriented leadership style, the large number who are feeling types, the dominance of affiliation motivation profile and the high degree of relationship demand. It appears reasonable to suggest that the recruitment procedures and promotion criteria applied by the church favours those who are seen as people oriented in general both in regards to the worshippers as well as to the church staff in general. The nature of the church organisation, favouring stability and tradition, does not primarily encourage change initiatives.

Discussion The model presented here may be of value to managers as the notion capacity to change has been given a specific definition and meaning. It may be possible to use the model when an organisation is about to embark on major changes in order to assess the capability of the managers to initiate and implement planned changes. Since the model is an eclectic one drawing from various sources of leadership theory the model may revitalise the leadership style research as well as the research into the importance of leader motivation and decision making. Leadership styles, leader decisionmaking styles and leader motivation profiles are all concepts and theoretical contributions well established in leadership research (Andersen, 1999, 2000a, 2000b). The model has only been tested on one sample and that sample of Swedish vicars is no doubt quite unique. The theoretical limitations are many. The model does not include the behaviour and potential of the subordinates nor does it include the restrictions and options that managers face when trying to initiate and implement change in their organisations. No assessment is included in the model of the actual need for organisational change and development due to external conditions. By acknowledging the focus on change and development in organisations, management

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researchers are attempting to grasp the impact by management on the successful implementation of change. The research in this area needs to be strengthened. More data is needed in order to establish the relationship between the variables in the model to ensure that the variables are not strongly related to each other, and that they all contribute to the model. More research is needed to test the model on organisations by studying some organisations that have implemented major changes successfully and some that have not. In this way, we may be able to understand the relationship between successful organisational changes and the propensity to change by the managers of those organisations.

References Andersen, J. A. (1991). Managers and motivation ± Theory and test of the AMPI Instrument. (Lederes motivasjon ± teori og instrument). (Norwegian). Lund: Lund University. Andersen, J. A. (1994). Leadership and effectiveness (Ledelse og effektivitet). (Norwegian, summary in English). Lund: Lund University Press. Andersen, J. A. (1999). Are power motivated leaders more effective? A review of McClelland's theory. In M. A. Rahim, & R. T. Golembiewski (Eds.), Current Topics in Management (pp. 41±59). Volume 4. Stamford, CT: JAI Press. Andersen, J. A. (2000a) Intuition in managers. Are intuitive managers more effective? Journal of Managerial Psychology, 15, (1), 46±63. Andersen, J. A. (2000b). Leadership and leadership research. In S. B. Dahiya (Ed.), The Current State of Business Disciplines: Vol. 6. Management. (pp. 2267±2287). New Delhi: Spellbound Publications. Andersen, J. A., & Hansson, P. H. (2000). Kyrkoherdars foÈraÈndringsberedskap (The propensity to change. An investigation of Swedish vicars). Paper presented at the 8th Nordic Conference on Leadership and Organisation Research. VaÈxjoÈ, 27±28 April, 2000. Arvonen, J., & Ekvall, G. (1996). Effective leadership style ± both universal and contingent? Stockholm: Reports from the Department of Psychology, Stockholm University, No. 819. Arvonen, J., & Ekvall, G. (1999). Effective leadership style ± both universal and contingent? Creativity and Innovation management, 8, (4), 242± 250. Arvonen, J., & Pettersson, P. (1999). Leadership profiles, moderating factors, and coworker health in the context of downsizing. Stockholm: Reports from the Department of Psychology, Stockholm University, No. 862. Arvonen, J. (1995). Leadership behavior and coworker health ± A study in process industry. Stockholm: Reports from Department of Psychology, Stockholm University, No 801. Briggs-Myers, I., & McCaulley, M. H. (1985). Manual: A guide to the development and use of the

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Myers-Briggs Type Indicator. Palo Alto, CA: Consulting Psychologists Press. Burnes, B. (1996). Managing change. A strategic approach to organisational dynamics. London: Pitman. Ekvall, G., & Arvonen, J. (1991). Change-centered leadership: An extension of the two-dimensional model. Scandinavian Journal of Management, l7, (1), 17±26 Ekvall, G., & Arvonen, J. (1994). Leadership profiles, situation and effectiveness. Creativity and Innovation Management, 3, (3), 139±161. Ekvall, G., & Ryhammar, L. (1998). Leadership style, social climate and organisational outcomes: A study of a Swedish university college. Ceativity and Innovation Management, 7, (3), 126±130. Farkas, C. M., & Wetlaufer, S. (1996). The ways chief executives officers lead. Harvard Business Review, 74, (3), 110±121. Fleishman, E. A., & Harris, E. F. (1962). Patterns of leadership behaviour related to employee grievances and turnover. Personnel Psychology, 15, 43±56. Ford, C. M. (1999). Interpretive style, motivation, ability and context as predictors of executives' creative performance. Creativity and Innovation Management, 8, (3), 188±196. Gordon, J. R. (1991). A diagnostic approach to organisational behaviour. Boston: Allyn and Bacon. Hemphill, J. K., & Coons, A. E. (1957). Development of the leader behaviour description questionnaire. In R. M. Stogdill, & A. E. Coons (Eds.), Leader behaviour: Its description and measurement (pp. 6-38). Columbus, OH: Bureau of Business Research, Ohio State University. Jung, C. G. (1921/1971). Psychological types. The collected works of C.G. Jung, Vol. 6. Bollingen Series XX. Princeton, N.J.: Princeton University Press. Jung, C. G. (1976). TYPOLOGI. Till fraÊgan om de psykologiska typerna. (Typologie ± Zur Frage der psychologischen Typen. Olten: Walter- Verlag AG, 1972). (Translated from German). Stockholm: Berghs. Keegan, W. J. (1980). How to use the KeeganType Indicator (KTI) and the Keegan Information Processing Indicator (KIPI). New York: Warren Keegan Associates Press. Keegan, W. J. (1982). Keegan Type Indicator Form B. New York: Warren Keegan Associates Press.

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Keegan, W. J. (1984). Jugdements, choices, and decisions. New York: Wiley. Lindell, M., & Arvonen, J. (1996). The Nordic management style ± an investigation. In S. JoÈnsson (Ed.), Perspectives of Scandinavian Management. Gothenburg: GRI Gothenburg Research Institute. Lindell, M., & Arvonen, J. (1997). The Nordic management style in a European context. International Studies of Management and Organizations, 26, (3), 73±91. Litwin, G. H.& Stringer, R. A. (1979). Motivation and behaviour. In R. M. Steers & L. M. Porter (Eds.), Motivation and work behaviour (pp. 55±66). New York: McGraw-Hill. Maehr, M. L. (1974). Culture and achievement motivation. American Psychologist. December, pp. 887±896. McClelland, D. C. (1961). The achieving society. Princeton, NJ.: Van Nostrand. McClelland, D. C. (1990). Human motivation. Cambridge: Cambridge University Press. McClelland, D. C., & Steele, R. S. (1972). Motivation workshops. New York: General Learning Press. Murray, H. A. (l938). Explorations in personality. Oxford: Oxford University Press. Skogstad, A., & Einarsen, S. (1999). The importance of a change-centered leadership style in four organisational cultures. Scandinavian Journal of Management, 15, (3), 289±306. Stoknes, P. E. (1992). Hva er Myers-Briggs TypeIndikator? (What is the Myers-Briggs Type Indicator?) In D. Sharp (Ed.), Personlighetstyper (Personality types: Jung's model of typology). (pp 103±116). Oslo: Forlaget Paul Moxnes. Sverke, M., Arvonen. J., & Lindell, M. (1999). Assessing change-, production-, and employeeoriented leadership: Cross-cultural comparison of measurement properties. Stockholm: Reports from Department of Psychology, Stockholm University, No 861.

Dr. Jon Aarum Andersen is an Associate Professor at the School of Management and Economics, VaÈxjoÈ University, Sweden.

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Managing the Innovation of a Corporate IT-based Cable Design System Khaleel Malik Managing new Information Technology innovations requires an understanding of factors that influence organisational choice. When large firms invest in new IT applications such as Computer Aided Design, there is reason to doubt that they adequately understand user needs. Empirical investigation in a UK cables producing Multinational Company highlights the practical challenges faced by such designers, when designing bespoke systems technologies. In addition to understanding end market requirements, it is imperative to understand existing organisational practices and constraints. Evidence from this in-depth innovation study points to the need to develop integrative theoretical accounts, which include insights from the innovation adoption process as well as the innovation design process.

Introduction

I

nnovation process studies have traditionally tended to concentrate on technological innovations involving products and processes. However, just as important as the technological products and processes is their `implementation', which Rickards et al. (1996) emphasise as being an internal organisational innovation. This paper contributes empirical evidence of the importance of organisational factors by introducing an IT implementation account within the framework of managing the internal innovation process. The empirical evidence was gathered from the BICC plc group, where the author conducted semi-structured interviews with a range of staff from the BICC Cables Ltd. businesses and a BICC corporate IT centre. The interviews were conducted with technical/ commercial managers, directors, technologists and the documentary evidence was gathered from BICC company literature and annual reports. The research was carried out during 1998/99 as part of a wider technology management study, prior to the BICC Group selling its entire cables interests. By the late1990s BICC Cables had developed an international market presence mainly via the

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acquisition of European cable companies over the past decade. The BICC cable businesses had an annual turnover of approximately £1.3 billion and were employing about 10,000 people. The present case study deals with the process of managing the innovation of a knowledge-based IT system within BICC. The IT system was developed by BICC's corporate IT centre and delivered to a number of BICC Cables manufacturing businesses from the mid-1990s up until 1999, when the company was divested. The IT system is referred to as CDEPS (Cable Design & Enquiry Processing System). The case study particularly highlights the experiences of developing this IT hardware/software system for two UK based BICC Cables Ltd. businesses, who had differing fortunes with the implementation of the CDEPS technology.

Acquiring Knowledge for IT Design Projects As noted by Dumas (1994), companies must incorporate a wider range of knowledge contributions into design decisions than was previously the case. Companies need to make # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

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full use of their knowledge resources in the design process and according to Carlisle and Dean (1999), firms need to be alert to the risks of neglecting both technical and non-technical sources of knowledge in reaching design decisions. Of course the design decisions made can greatly influence the innovative activities of a firm. It is also important to remember that as well as incorporating internal sources of knowledge in the innovation process, firms must not ignore opportunities to acquire external knowledge. Indeed, it is now widely recognised that organisations are connected through networks and supply chains, which influence their behaviour (Pavitt, 1994). Most IT developments will involve purposive efforts to introduce technology into an organisational context, so as to support wider organisational goals. As such this can be represented as an example of institutional innovation (Rickards et al., 1996). New knowledge frequently originates in the context and activity of project teams ± e.g. R&D teams, design teams, re-engineering teams. To support the wider organisational goals in order to carry out their tasks, project teams frequently need to learn matters already known to other organisational units, where they must acquire and assimilate organisational knowledge (Huber, 1999). Acquiring and creatively integrating knowledge is a complex process (Tan, 1998). Good ideas can come from unexpected sources, but they can fail at the point of implementation if crucial perspectives, on manufacturing or marketing for instance, are not included (Carlisle and Dean, 1999).

Developing Systems Knowledge and Transferring Technology across the MNC For engineering designs, the design literature (Hubka, 1982; Pahl and Beitz, 1984) has emphasised that the engineer should consider the problem functions as much as possible before generating design solutions. This recommendation is equally applicable to IT systems design. Pahl and Beitz (1984) state that in its simplest form, design is an iterative activity comprising the following steps: specification, concept, preliminary layout and definitive layout. However, Layton (1974) takes design, being an adaption of means to some preconceived end, to be the central purpose of technology. Adding that emphasis on knowledge further serves to direct attention to innovators in technology: the ideas of technologists cannot be under-

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stood in isolation, as they must be seen in the context of a community of technologists and of the relations of this community to other social agents. In many companies if the development of a particular IT system is to be used to exploit competitive advantage, then the designers must consult the users that the IT system development is aimed at (Gunter and Butler, 1999). This stresses the need for having in place high performance learning systems, where the IT system designers can meet the challenge of technological acceleration for increased competitiveness, by learning faster and more effectively from the user groups. Meyers (1990) states that firms must create different ways of learning and of `learning how to learn' under unfamiliar conditions. Any IT-based system designed and developed within a large company raises a number of challenges that may have to be overcome in transferring the new knowledge associated with the systems technology from the transferring unit to the receiving unit(s). For instance, Szulanski (1996) indicates that there are a number of obstacles that can impede knowledge flows within a company. These include lack of motivation, lack of absorptive capacity, lack of retentive capacity of recipients, formalised structures and systems, lack of individual exchanges and an arduous relationship between the organisations involved. Internal transfer of technology and `best practice' can be viewed as a people-to-people process, where employees may be inventing, improvising and learning in their normal daily routines. To encourage sharing and transfer, leadership can help by promoting, recognising, and rewarding people who model sharing behaviour, as well as those who adopt best practices. It helps to design approaches that reward for collective improvement as well as individual contributions of time, talent, and expertise (EFQM Benchmarking Services, 1997).

Technology transfer is a peopleto-people process

The CDEPS Case Study As a BICC plc Group corporate centre of excellence, CAIT (BICC's Corporate Advanced IT Centre) based at Hemel Hempstead (UK) provided IT integration solutions to a wide range of BICC operating companies, which included cable and non-cable making companies in the group. The operating companies together with CAIT identified opportunities to provide manufacturing and business benefits through the application of leading edge IT. The project opportunities identified

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typically required large bespoke systems, the implementation of which would have to draw on skills and knowledge from disparate sources within the BICC Corporation.

Systems Development for Optical Fibre Cable Design Applications The original CDEPS concept had expanded out of discussion between CAIT and BICC's optical fibre cable producing business unit based at Whiston (Merseyside). Originally CDEPS was developed as an IT package for optical fibre cables design only. When a number of the non-optical fibre cable businesses in BICC showed interest in this IT system, CAIT had to develop a higher specification requirement system suitable for design of both `optical fibre' and `metallic' cables. This had the advantage that, in addition to offering a computer aided cable design facility, BICC businesses could drastically reduce the time taken to answer customer enquiries regarding bespoke cable design requirements. Previously, upon receiving a cable design enquiry, there was a delay in responding with a quotation to a customer, as the `enquiry' had to go through a number of departments to design and provide a cost estimate for the cable design required, a process that required technical and commercial input from BICC staff. The CDEPS ITbased system offered BICC business units the potential to significantly reduce the time taken to process customer enquiries (from days to minutes) and produced better cable designs on computer screen, which could be sent to customers as better quality quotation presentations. CDEPS could match end customer requirements against a database of existing cable designs, because the variety of cable designs is almost infinite. The unique feature of this powerful IT system was that a cable cross-section was displayed on the computer screen and the system also displayed a list of all the cable components, their dimensions, weight and other information required to manufacture the cable, therefore enabling it to calculate cable cost. CAIT had structured the design and development of the CDEPS project in a way that it structured most of its IT software developments. The project was structured so that CAIT generated a requirement specification, detailed technical specification, user documentation and a reference manual if required, dependent upon exact requirements of BICC internal customers. One of the first internal customers of the CDEPS project for nonoptical fibre cable applications was BICC Industrial Cables based at Leigh (Greater

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Manchester). This company manufactured and supplied a range of mainly metallic cables for the mining, rail, defence and petrochemical industries. As already mentioned, BICC's Whiston factory was the first company to have the CDEPS IT system installed in an optical fibre cable producing business. Once CAIT had developed and tested the CDEPS technology at Hemel Hempstead, the first phase of in-plant testing was undertaken at the BICC Cables Whiston site. This first version (a number of modified versions followed) of CDEPS had achieved its goal of saving time, in some cases by up to 80% over the time taken to manually cost and estimate cable design costs. During the early phase of CDEPS development, one of the two cable design personnel, who co-ordinated the project at Whiston, had previously worked on the early development of the project at CAIT. This key individual had both technical design and marketing experience gained within BICC. Therefore he was ideally placed to help implement CDEPS as a technology that could help both technical and commercial areas of the wider MNC. Although the transfer of CDEPS from CAIT (Hemel Hempstead) to BICC Cables Whiston was widely acknowledged as being successful in the wider BICC Corporation, one of the Whiston user staff had pointed out that this success was mainly in terms of final implementation and use. In fact, there had been some initial problems in the development of the earlier version that may need to be addressed in the future. It was mentioned that the Whiston site possessed a number of distinct `tacit knowledge' based technical and marketing capabilities (Chiesa and Manzini, 1997), which the CAIT software designers had failed to fully appreciate and understand. The lack of understanding, on the part of the CAIT staff, was with respect to gaining a better appreciation of Whiston's `operational requirements' and the business environment in which Whiston operated under. This led to some initial software development problems, as CDEPS was a technological tool that needed integration with existing manufacturing and business operation systems. In this respect, it was felt that although it had been beneficial for the Whiston engineers to have received some training from the CAIT software developers, if this had been a reciprocal arrangement whereby CAIT staff received some training in Whiston concerning the exact operating conditions in which CDEPS had to operate in, BICC would have benefited as a whole. As stated by Huber (1999), firms that can capture and leverage the knowledge learned and created by their project teams are

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more likely to have a competitive advantage over firms that capture and leverage less.

Some Key Lessons from Managing a Corporate Innovation Process

The Metallic Cables Experience at Leigh

One of the reasons for problems arising in terms of innovation implementation, cited by all BICC staff interviewed from CAIT, Whiston and Leigh, relates to a lack of systems designers from CAIT being in a position where they could spend a continuous length of time at user sites. As with most IT systems design there will be a certain amount of `tacit knowledge' that is embedded in the technology, so that unless the IT systems designers has personal contact with the system users, impediments to the innovation process are likely to arise. This is an issue that was of real concern to the Leigh user group and is summed up in the following comment received by one of their engineers:

The CDEPS technology implementation at BICC Industrial Cables (Leigh) site had been problematic from the start and further versions were introduced at Leigh up until 1998. The major problem cited with the implementation at Leigh was linked to the software design and development. One problem in designing an IT system for coping with a very high variety of metallic cable designs is that the IT system (CDEPS) is unable to handle such a wide complexity of designs1. Therefore the user group cannot fully use the system and must still have to rely on manual design and costing techniques. Here is an account provided by one of the engineering managers who was responsible for the implementation of CDEPS at Leigh, which summarises the type of difficulties encountered with the development and delivery of the CDEPS technology: We had lost a year's development work because Hemel Hempstead (CAIT) took on the goal of writing the software, for which they did not have a clear specification of what they wanted to do and they subsequently mismatched the delivery of the software that went to the metal cables unit at Leigh. We did not need a picture of the cable, text would have been sufficient. It's sometimes nice to have pictures, but not always necessary and that is where I suspect they (CAIT Software developers) spent the majority of their time working on this IT system. When designing metallic cables, the cable designer must take into account a number of different parameters that the cable would have to operate under, before the cable design could be accurately cost estimated. One of the initial drawbacks associated with CDEPS for metallic cables design was that the new IT system could not provide the cable designer with any information related to the physical cable properties required for a particular application. For example this may include: cable resistance under different operating conditions; condition of cable when it is buried underground; how much electrical load can cable withstand; how hot the cable will become when `x' amount of current passes through it etc. These types of what if scenarios could ultimately impact upon whether an end customer would be willing to place an order with BICC or go to a competitor, whom he may have more confidence in.

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Designers were disconnected from users

How can a group of people based 200 miles away from the source develop a software program to address our problems up here? They (CAIT) were too far away, too remote, not connected and we had difficult communications. Additionally, the project managers working on CDEPS had to be changed on three occasions in the early years of the technology's development. Hence there was a lack of consistency at the project management level with this project. This resulted in a lack of institutionalised sharing of the evolving knowledge associated with the IT innovation, which was not captured in such a medium as a `lessons learned' file at CAIT. A factor that was probably overlooked by senior BICC management was that there was likely to be differences in working background and knowledge held by organisational members across the national and international boundaries of the MNC. The CDEPS development also illustrated a number of problems associated with translating complex forms of localised human knowledge into computer software technology. An expert system such as CDEPS needs to be able to draw on the relatively codified knowledge of the human expert. One major problem here was that the tremendous range of practical cable design and engineering knowledge held by some user groups could not be written down theoretically by the software designers at Hemel Hempstead. This confirms that it can be difficult to codify expertise in a computer software system, because of the nature of the very nature of the expertise, which involves a much deeper understanding of the cable design activity. It has generally been recognised within BICC that the CDEPS technology had worked

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better at the optical fibre cable producing plants than at the metallic cable producing plants around the world. The main reason for this appears to be that the optical cable designs are generally less complex than metallic cable designs, which have a more diverse range of parameters that have to be taken into account. Hence CAIT had multiple parameters to deal with, which were seen to be thrust on the corporate IT centre. However with all the diversity thrust on CAIT, they provided a system that ultimately standardised many optical fibre cable designs across a range of BICC manufacturing sites. One of the incentives for BICC business units to have taken up CDEPS was cited as the impact it could have on the working routines of the `Cable Designer'. As some cable design work may be mundane in nature, CDEPS enabled Designers to eliminate some of the more mundane tasks and hence reduce boredom. The innovation was presumed to offer the Designer additional time to consider improvements to the design of the cable, due to time saved in producing the drawing, although there was some concern over the possibility of resultant job losses. There was widespread agreement throughout BICC that CDEPS had the potential to be further exploited as a front-end commercial tool. As an `enquiry processing system', this technology linked the end customer with the technologists inside BICC when a cable design had to be selected and cost estimated for customers. This had implications for the marketing people in BICC. However, as a reflection of the links between the marketing and technical functions within BICC being traditionally weak, marketing input into this project was fairly minimal and non-existent at times. Despite the likelihood that CDEPS could offer the marketing and sales staff in BICC an opportunity to improve their customer quotation presentations and to rapidly respond to new cable design requirements, marketing staff showed little interest. This was a lost opportunity in view of the potential benefits that the technology could offer the sales staff. CDEPS could have enabled sales staff to modify the cable design requirements instantly in front of the customer, without having to refer the enquiry back to the technical departments until final verification is required.

Theoretical Implications From a soft systems viewpoint (Checkland, 1981), the BICC example is typical of the way

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in which IT developers may disregard endusers, but more of a mismatch in user requirements in another sense. A general conclusion that can be drawn is that an IT software system will only work as well as its design and specification. What the project lacked was institutionalisation of sharing and explicating evolving knowledge within the team, and subjection of that knowledge to examination, critique and revision as it took form (Huber, 1999). The case study confirms that while business units may document tacit routines for internal use, they seldom go far enough in mapping processes so as to make them useful to other business units in the wider firm, so losing the benefit of experiencing the same process in the same context (Galunic and Rodan, 1998). In some instances, knowledge has resided in systems of interactions at one BICC site, so that moving such knowledge to another site cannot simply be achieved by transplanting an individual into the new setting, because the individual is only likely to bring with him a small part of the total systems of interactions. Additionally, besides the diverse modes of knowledge creation and transformation involved in managing an IT systems innovation like CDEPS, MNCs such as BICC face the challenge of mobilising and integrating fragmented forms of knowledge spread all over the world (Cohendet et al., 1999). Partner-specific adaptations in information exchange, such as delivering partial information about specifications prior to being given the complete specification for a prototype or subsystem, help to better co-ordinate and integrate one another's activities in new IT product development innovation processes (Littler et al., 1995). Therefore, adaptations are a form of long-term relationship (e.g. Wilson, 1995) that can be used as a crucial antecedent for internal customer involvement within MNCs. The use of `prototypes' could help transfer ideas in an effective way to demonstrate a new concept and help the IT systems developers to show their ideas to a wider group (Scholtz, 1996), which may enable people to be more prepared for implementing the ideas later in the innovation process. There was no CDESP prototype tested in this way within BICC.

Conclusion This case study illustrates the way in which innovation-oriented knowledge processing involving new IT systems design within a corporate centre requires the integration of explicit knowledge with unique and personal

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insights acquired through direct practical experience. Companies similar to BICC Cables are typically based on a particular and sometimes unique knowledge set, which needs to be understood as part of any innovation process. For example this knowledge set could comprise knowledge related to: different types of cable end products; different range of properties used in their raw materials or production processes; different levels of understanding with respect to high level IT systems held in different business units; differences in unique product characteristics that are demanded by end customers in different national markets, etc. In the CDEPS case, the IT systems developers believed that the use of computing technology would mean a reduction in uncertainty with the cable design process and subsequently lead to many more benefits for the IT systems users. However, the study demonstrates that the computer software was a source of uncertainty for some length of time, before the cable designers became more familiar and developed expertise in using the technology. The major success for CDEPS had been in the optical fibre cable design areas of BICC, after some initial difficulties were resolved, and tangible benefits had been realised in terms of offering end customers more rapid responses with any cable design enquiries received. However the marketing input was slow in coming, and the major benefits that CDEPS could have offered in terms of high quality quotations presented to customers and instant design modifications facility offered to customers were perhaps never realised during the time BICC Cables operated as a company.

Acknowledgements The author gratefully acknowledges the support of the UK Economic & Social Research Council and BICC Cables Ltd. who jointly funded the research on which this paper is based. Thanks extended to Grace McCarthy, Malcolm Barnett and other former BICC staff and to Professor Stan Metcalfe (University of Manchester) and Dr. Paul Upham (MMU) for comments received on an earlier draft of this manuscript.

Note 1. The wide complexity of cable designs is referring to new cables where the design parameters of a new cable have not been produced in one particular combination within

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the company before. To put this into some proportion the new cable designs produced at Leigh could normally account for about 40% of the total output at any given time in this factory. Hence the remaining 60% of the total output was composed of standard cable designs, or design combinations that had been previously engineered and existed in the cables design department.

References Carlisle, Y. and Dean, A. (1999) Design As Knowledge Integration Capability. Creativity and Innovation Management, 8, 2, 112±123. Checkland, P.B. (1981) Systems Thinking, Systems Practice. Wiley, UK. Chiesa, V. and Manzini, R. (1997) CompetenceBased Diversification. Long Range Planning, 30, 2, 209±217. Dumas, A. (1994) Building Totems: Metaphor Making in Product Development. Design Management Journal, Winter, 71±79. EFQM (European Foundation of Quality Management) Benchmarking Services (1997) Creating the Environment for Transfer (Best Practices White Paper). Knowledge and Skills ManagementInformation Search, pp. 17±24. Galunic, D.C. and Rodan, S. (1998) Resource Recombinations in the Firm: Knowledge Structures and the Potential for Schumpeterian Innovation. Strategic Management Journal, 19, 1193±1201. Guntler, K. and Butler, P. (1999) A comparison of two case studies illustrating the use of a collaborative information system to support competitive advantage. Int. J. Technology Management, 18, 5±8, 549±561. Huber, G.P. (1999) Facilitating Project Team Learning and Contributions to Organizational Knowledge. Creativity and Innovation Management, Vol. 8, No. 2, 70±76. Hubka, V. (1982) Principles of Engineering Design. Butterworth, London. Layton, E.T. (1974) Technology as Knowledge. Technology and Culture, 15, 1 (Jan), 31±41. Littler, D., Leverick, F. and Bruce, M. (1995) Factors Affecting the Process of Collaborative Product Development: A Study of UK Manufacturers of Information and Communication Technology Products. Journal of Product Innovation Management, 12, 16±32. Meyers, P.W. (1990) Non-linear Learning in Large Technological Firms: Period Four Implies Chaos. Research Policy, 19, 2. Pahl, G. and Beitz, W. (1984) Engineering Design. Springer-Verlag, London. Pavitt, K. (1994) What we know about strategic management of technology. In Rhodes, E. and Wield, D. (eds.), Implementing New Technologies: Innovation and the Management of Technology. Basil Blackwell, Oxford, pp. 176±186. Rickards, T., De Cock, D., Moger, S., Pearson, A.W., Roberts, H. and Salt, H. (1996) Process:Implementation as a Form of Institutional Innovation.

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Creativity and Innovation Management, 4, 4, 252± 261. Scholtz, J. (1996) Technology Transfer Through Prototypes. Communications of the ACM, ISSN: 0001-0782, 39, 9, 26±27. Szulanski, G. (1996) Exploring Internal Stickiness: Impediments to the Transfer of Best Practice Within the Firm. Strategic Management Journal, 17, 27±43. Tan, G. (1998) Managing Creativity in Organizations: a Total Systems Approach. Creativity and Innovation Management, 7, 1, 23±31.

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Wilson, D.T. (1995) An Integrated Model of BuyerSeller Relationships. Journal of the Academy of Marketing Science, 23, 335±345.

Dr. Khaleel Malik is a Research Associate with PREST (Policy Research in Engineering, Science & Technology) at the University of Manchester, United Kingdom.

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Knowledge Systems and Global Advertising Services Joanne Roberts This paper explores the contribution of global advertising services to the creation and dissemination of knowledge through an examination of their role in knowledge systems at a national and international level. The aim is not only to gain an understanding of global advertising services as bridges between national knowledge systems but also to examine how such services shape the institutions that constitute a knowledge system. In this way, an appreciation of the contribution of advertising services, and knowledge intensive services (KIBS) more generally, to the knowledge creation and distribution process will be developed.

Introduction

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nowledge intensive business services (KIBS) have a key role facilitating innovation and knowledge transfer in the knowledge-based economy (Andersen et al. 2000; Miles et al. 1995; Antonelli 1999). Furthermore, in an international context they act as bridging agents connecting national knowledge systems (Howells & Roberts 1999). The increasing international scope of KIBS firms is particularly evident in the advertising sector where rapid internationalisation over the past 30 years has led to the development of a number of global advertising groups such as WPP plc, Omnicom Group, and Interpublic Group. The purpose of this paper is to explore the role of global advertising services in knowledge systems both in a national and international context. The aim is not only to gain an understanding of global advertising services as bridges between national knowledge systems but also to examine how such services shape the institutions that constitute a knowledge system. In this way, an appreciation of the contribution of advertising services, and KIBS more generally, to the knowledge creation and distribution process will be developed which will be of interest to business managers, policy-makers and academics. The paper begins with an examination of knowledge systems, following which the role of KIBS in the knowledge-based economy is considered. Attention then turns to global # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

advertising services and their impact on knowledge systems both in a national and international context before final conclusions are drawn.

Knowledge Systems Within the literature on the knowledge-based economy, the notion of knowledge systems has developed from the concept of national systems of innovation. Freeman (1987, p. 1) was the first to use the term national systems of innovation in his study of innovation in Japan. He defines a system of innovation as `the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies'. Subsequently, there have been many contributions to the literature on systems of innovation, primarily at the level of the nation (Lundvall, 1992; Nelson, 1993; Edquist, 1997; inter alia), though also at the sector level (Carlsson and Stankiewicz, 1991), the international level (Niosi and Bellon, 1994; Caravcostas and Soete, 1997) and the regional level (Baraczyk, Cooke and Heidenreich, 1995; Howells, 1999). The notion of systems of innovation has also stimulated discussions about systems of knowledge creation and dissemination (Foray, 1997; Howells and Roberts, 1999, 2000). For example, Foray (1997, p. 64) defines a knowledge system `as a network of actors or entities that assume specific functions for the generation, transformation, transmission, and storing of knowledge'. A

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Knowledge firms facilitate economic activity

knowledge system is the broader context within which a system of innovation functions. Both innovation and knowledge systems are essential frameworks promoting knowledge and innovation in knowledgebased economies. Howells and Roberts (2000) argue that a knowledge system represents an underlying knowledge and learning framework in which education and learning are central. Defining a knowledge system, they (2000, pp. 21±25) draw a distinction between individually centred knowledge and quasi knowledge. For them a knowledge system consists of two sub-system. The first is the knowledge sub-system where knowledge circulates within and between individuals through social interaction. In this sub-system, knowledge, especially tacit, is shared and created in a social context, so consequently the relevant institutional structures are socio-cultural. The second is the quasi knowledge sub-system where knowledge is shared in codified form, and the full range of institutional factors are relevant from socio-cultural and legal to political and economic factors. Importantly, though the two sub-systems are inter-linked and indeed, interdependent. However, whereas the knowledge sub-system depends on co-location and co-presence for the sharing of tacit knowledge, the quasi knowledge system is not restricted in this way. Consequently, when examining knowledge systems in an international context, Howells and Roberts (2000) note that we might expect to find that the quasi knowledge sub-system has a dominant role whereas in the local context the knowledge sub-system is more significant. Clearly, the institutional structures that make up a knowledge system will influence, and may be influenced by the activities of KIBS including advertising services. Knowledge-intensive business service providers are increasingly viewed as key components in systems of innovation and knowledge creation whatever the spatial scale of analysis.

Knowledge Intensive Business Services and the Knowledge Economy In the context of the growing role of knowledge in the economy, KIBS take on an increased importance both as creators and distributors of knowledge. In particular, they play an important role encouraging the development of network relations between economic agents. In doing so, they are important actors facilitating the transfer of

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knowledge, especially tacit knowledge, between economic agents. When knowledge is embedded in a social context the sharing of such knowledge requires the establishment of social relations. KIBS firms are able to achieve this through their, often long-term, relations with clients. In a sense they act as bridging agents allowing the transfer of knowledge between otherwise unconnected firms in the regional, national and international context (Den Hertog and Bilderbeek, 1998; Howells and Roberts, 1999). In a knowledge-based economy KIBS take on an important role facilitating the efficient operation of economic activity. Miles et al. (1995) identify two types of KIBS. The first consists of traditional professional services, like advertising, accountancy and legal services, based upon specialised knowledge of administrative systems and social affairs. Such services typically help users to negotiate complex social, physical, psychological and biological systems. The second group of KIBS consists of new services connected with technology, and with the production and transfer of knowledge about new technology. Technology-based KIBS (t-KIBS) include for example computer-related services and technical engineering services. The rapidly changing technological environment and increased complexity account for the growing demand for KIBS. However, more importantly KIBS derive their significance in the emerging economy from the centrality of knowledge and innovation. According to Antonelli (1999, p. 5) the KIBS sector appears to exert a key role as an interactive agent between tacit and codified knowledge components, intensifying the connectivity and receptivity of firms perceived as learning agents. He goes on to note (1999, p. 173) that KIBS firms perform two important functions in the economic system: firstly as containers of proprietary `quasi-generic' knowledge, extracted by means of repeated interactions with customers and the scientific community; and secondly, as an interface between that knowledge and the tacit knowledge buried in the routines of firms. Moreover, Antonelli (1999) argues that communications and business services industries are the new strategic sector of the emerging knowledge-based economy, and that much of the innovative capability of an economy can be explained by the spread of communications and business services. Indeed, his empirical analysis confirms a correlation between the diffusion of communications and business services and the growth of total factor productivity in the European economy in the late 1980s.

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KIBS play an important role in the creation and distribution of knowledge in a regional, national and international context. The role of KIBS is summarised in Figure 1, which illustrated the interactions of knowledge between and within knowledge systems. Importantly, when KIBS are international in scope they facilitate the transfer of tacit knowledge from one knowledge system to another by enabling co-location and co-presence between themselves and client firms in a number of locations. To explore the role of KIBS in more depth it is necessary to examine a specific KIBS activity, and consequently it is to global advertising services that attention now turns.

Global Advertising Services Advertising is a tool of communication used to deliver a message from one party to another. A number of detailed histories of advertising have been produced (Nevett, 1982; Elliot, 1962; Turner, 1952), which trace the origins of the advertising agency to the 1820s. However, it was not until the 1880s that advertising agencies came into their own as a consequence of the development of mass consumption goods, brand names, and, popular newspapers that gained much of

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their revenue from advertising (Fraser, 1981). Originally media brokers selling advertising space for newspapers and magazines in return for commission, advertising agencies became buyers of space, creators of advertising, and advisers as to where advertising should appear to ensure maximum impact. Advertising agencies have grown in line the demand for their services, which results from the production of consumer goods, together with rising levels of concentration and competition in such markets. Innovations in the field of mass communication, such as the introduction of television and transistor radios, and more recently the commercial development of the Internet have influenced the development of advertising services. Although, the internationalisation of advertising firms dates from the early 1900s (West, 1987), the pace of internationalisation has developed rapidly since the 1970s giving rise to a number of multinational advertising agencies. Consequently, there has been much academic interest in the international development of advertising firms (Weinstein, 1974, 1977; Anderson, 1984; Mattelart, 1991; Terpstra and Yu, 1988; Kim, 1995; Leslie 1995; inter alia.). It is useful to review briefly the internationalisation of advertising firms in

Figure 1. The role of knowledge intensive business services in connecting knowledge systems # Blackwell Publishers Ltd 2000

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order to provide the background to the discussion of the impact of global advertising services on knowledge systems. The internationalisation of advertising firms occurs through a variety of mechanisms, including trade, foreign direct investment (FDI), and related means. European Union international trade credits arising from advertising, market research and public opinion polling rose from US $ 3,658 million in 1987 to US $ 8,632 in 1996 (OECD/EUROSTAT 1998, p. 401) indicating a substantial growth in international activity in the sector. However, the expansion of exports does not reflect the true degree of internationalisation because the dominant form of cross-border supply is through the establishment of a presence in the overseas market usually through FDI, often achieved through mergers and acquisitions. Although data on the level of FDI in the sector is unavailable, the establishment of extensive international networks of majority and/or wholly owned subsidiaries is much in evidence among the large internationally active advertising service providers. The rise of global advertising groups such as Saatchi and Saatchi plc and WPP plc in the 1970s and 1980s led the growth of the multinational advertising sector over this period. A sense of the size of global advertising service providers can be gained from Table 1 in which the world's top 10 advertising organisations in 1998 are given together with their worldwide gross income and advertising billings. The internationalisation of advertising firms began in the 1920s as US agencies followed their manufacturing sector clients

into overseas markets (Weinstein, 1974). In 1927, for instance, McCann Erickson opened offices in Paris, London and Berlin at the request of its principal client Standard Oil of New Jersey (UNCTC 1979). The globalisation of production since the Second World War has given rise to global markets and the idea of global marketing (Levitt, 1983). New ICTs, low cost travel, and, education, are encouraging these developments. Moreover, to reduce costs and increase competitiveness multinational firms have been developing globally standardised products with a uniform brand image, centralising their advertising decisions and reducing the number of agencies they employ worldwide (Kaynak 1989). The success of a number of global brands, (for example, Coca Cola and Sony), and the handling of brands on a global scale by a single advertising agency, (for example, British Airways by Saatchi & Saatchi in the 1980s), stimulated interest in global products and advertising agencies (Rosen et al. 1988)1. Empirical evidence, however, indicates that the use of globally standardised advertising campaigns is somewhat limited (Hite and Fraser 1988). In search of the ability to service multinational client firms in all of their markets, advertising agencies have been engaged in an eager pursuit of subsidiaries, affiliates and partnerships abroad. In host countries, the agencies do not concentrate solely on the overseas clients but they are their most important source of income (Perry 1990). Peebles and Ryan (1984) highlight the point that an important consideration for a multi-

Table 1. The World's Top 10 Advertising Organisations 1998 Rank

Group

1998

1997

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 7 6 8 9 12

Omnicom Group Interpublic Group of Cos. WPP Group Dentsu Young & Rubicam Havas Advertising True North Communications Grey Advertising Leo Burnett Co. Publicis

Worldwide gross income $ million

Billings $ million

4,812.0 4,304.5 4,156.8 1,786.0 1,659.9 1,297.9 1,242.3 1,240.4 949.8 930.0

37,310.6 37,705.2 29,540.3 13,032.9 14,665.9 11,903.8 11,585.4 8,301.7 6,815.0 6,349.0

Source: Compiled from the Advertising Statistics Year Book 1999 (Table 21.1).

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national firm when selecting an overseas agency is evidence of its ability to communicate to the local consumer as indicated by their local client base. Once an advertising firm has expanded overseas the market for its services widens to include a growing number of medium and small size business customers, and supply driven forces increasingly influence further overseas expansion. The development of widespread geographical networks of offices has been a significant strategy in the expansion of internationally active advertising firms. Extensive international coverage emerges as a major source of competitive advantage for such firms whilst also acting as a major barrier to entry for potential competitors (Roberts, 1998). Furthermore, new Information and Communications Technologies (ICTs) have been influential factors enabling advertising service firms to achieve economies of scale and scope in the use of organisational and informational networks and client banks at a global level. KIBS lend themselves to the application of computer and telecommunications technologies that facilitate the rapid collection, analysis and dissemination of information. For advertising services this has implications for media buying, market sector analysis, and the targeting of advertising. Additionally, new technological developments such as satellite and cable TV, and the Internet, which collectively increase media choice and diversity, have implications for advertising production, methods and organisational strategies. The globalisation of advertising services is increasing. However, we may still enquire what is the place of such services in national knowledge systems and how do they facilitate knowledge interactions within and between national knowledge systems? How do advertising firms create and disseminate knowledge? What is the nature of their relations with client firms? Clearly, many of the institutional factors outlined earlier are relevant to the advertising sector. In particular as a cultural industry socio-cultural factors are highly important. These questions are now considered through an examination of the role of global advertising services in knowledge systems.

Global Advertising Services and Knowledge Systems Advertising firms are involved in the development of ideas, brands and marketing strategies. Knowledge and experience gained

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through serving one client may be used in the production and delivery of services to other clients. Hence knowledge is created and transferred between clients, and indeed between countries. For example in the 1950s and 1960s internationally active US advertising agencies introduced new advertising and marketing techniques developed in the US to European markets through their subsidiary agencies. Knowledge is disseminated within national boundaries and beyond through various mechanisms including the movement of personnel. Other mechanisms for the transfer of knowledge include trade associations such as the UK's Advertising Association, and Institute of Practitioners of Advertising and the International Advertising Association as well as the trade press, such as Campaign. In addition, advertising awards are important mechanisms through which advertising service providers and client firms learn about new advertising techniques. Once new knowledge and techniques become widely known, they are incorporated into formal educational programmes, within both higher education, and professional organisations. The creation of advertising services often involves the participation of the client firm in the creative process. Consequently, advertising service suppliers are involved in the absorption of knowledge from as well as the transfer of knowledge to the client firm. In gaining an appreciation of the role of advertising services in knowledge systems, it is essential to note the way in which providers of these services interact with clients, and also, with the customers of client firms. Advertising agencies are in a sense intermediaries between firms producing goods and services for mass markets and their customers. Hence, when exploring the knowledge interactions in which advertising firms are engaged a distinction should be drawn between those that arise between the firm and its clients and those that arise between the firm and its clients' customers. Knowledge from customers, gathered through focus groups and other market research intelligence devices, will be channelled through the advertising firm to the client firm. In terms of the knowledge system elaborated by Howells and Roberts (2000), outlined earlier, advertising firms engage in knowledge transfer through their interaction with client firms at the level of both the knowledge and quasi knowledge sub-system. In terms of the knowledge sub-system this is achieved through close co-operation with individuals and teams within the client firm. Such interaction takes the form of regular face-toface contact with individuals, and it is within

Co-creation processes occur in advertising

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this social context that a two-way exchange of tacit knowledge can occur through the development of mutual understanding and a process of learning. In this way advertising firms absorb tacit knowledge from one knowledge system and distribute it to another. Similarly, advertising firms absorb and distribute codified knowledge. Furthermore, they play an important role assisting the transfer of tacit knowledge into codified form, whether in the client firm or within the advertising firm itself. For example, as a result of contact with many clients an advertising firm may engage in innovative activity that results in the codification of knowledge previously embedded in the teams and routines of a group of client firms. By providing this newly codified knowledge to new, and existing, clients, advertising firms engage not only in the transfer of knowledge between firms but also in innovative activity. Advertising firms assist the circulation of knowledge concerning regulatory structures both within and between national and regional knowledge systems. This is particularly important in this sector since the level and type of regulation varies considerably from country to country (WTO 1998). Advertising firms may collaborate with client firms to lobby for regulatory reform thereby seeking to influence the institutional context. Additionally, advertising firms play an important role transferring region and nation specific cultural and social knowledge to their clients. They may also, through advertising campaigns, shape cultural and social knowledge on behalf of their clients. Global advertising

firms, in a sense, provided bridges connecting different national and regional knowledge systems. Such firms provided this role for both national and multinational firms. National firms can access a wide international pool of knowledge through their links with global advertising firms. Similarly, national based advertising firms enable multinational clients to tap into national and regional knowledge systems that are not served by global advertising firms, perhaps because they are newly emerging or simply not profitable for the attention of large advertising firms. Indeed, global advertising firms themselves may employ smaller advertising firms in order to gain access to locationally specific knowledge. In addition to their interactions with client firms and the customers of client firms, advertising agencies also interact with the providers of media, whether they are producers of, for example, newspapers, television channels, radio stations, or Internet services. Advertising service providers are engaged in a complex network of knowledge interactions both in the national and international context (Figure 2). Consequently, they are involved in the creation and dissemination of knowledge in a manner that impacts on the wider economic environment through their effect on client firms' performance. Importantly, advertising firms have a dual role in knowledge systems. Not only do they engage in the transfer of knowledge within the system, in relation both to clients and to client's consumers, but they also have a role shaping the system. As a cultural industry, advertising influences the wider socio-cultur-

Figure 2. Advertising Services: A Network of Knowledge Interactions

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al institutions, which constitute part of the knowledge system. The impact of advertising is most visible in this respect on other cultural industries such as film making. For instance, many of the UK's successful film makers began their careers in the advertising sector (Lash and Urry 1994). The influence of the advertising sector on both the business world and cultural landscape is far reaching.

Conclusion The role of KIBS in the process of knowledge creation and dissemination is complex, and, as yet, poorly appreciated. Given the increasing importance placed on knowledge and innovation as sources of economic prosperity, the significance of KIBS is set to increase. This paper has presented an analysis of the contribution of global advertising services to the creation and dissemination of knowledge. In particular, the role of advertising services in knowledge systems has been considered. This has highlighted the important and widespread role of global advertising services in terms of both connecting different national knowledge systems and indeed shaping these systems particularly through their influence on socio-cultural institutions. To secure competitive advantage business managers must exploit opportunities for their firms to engage in knowledge creation and transfer, whether this is internal to the firm or through interaction with suppliers and customers. This paper has underlined the significance of KIBS, which, through their interactions with client firms, facilitate the creation and transfer of knowledge within and between firms and knowledge systems. For example, as discussed earlier, global advertising service providers engage in the dissemination of new advertising and marketing techniques both within and between national knowledge systems, thereby improving the competitive advantage of client firms through improved marketing campaigns. Consequently, an appreciation of the role of KIBS and knowledge systems is essential for business managers seeking to develop and sustain sources of competitive advantage. Furthermore, an understanding of knowledge systems will benefit policy-makers concerned with the promotion of innovative activity. Deliberations over policy measures must not neglect the role played by advertising services, and KIBS more generally, both in terms of facilitating the transfer of knowledge and shaping knowledge systems. Although services have traditionally been viewed as laggards, following rather than leading in-

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novation (Miles, 1996), this paper illustrates that KIBS are at the forefront of innovative activity, assisting their clients in the development of new products, processes and network relationships. Measures to promote innovation must recognise the contribution of KIBS to the creation and dissemination of knowledge. Consequently, business strategies and government policies to promote innovation should take full account of the relevant knowledge systems and the role of KIBS within them. Academic interest in knowledge systems is developing, however, much of the research conducted in this area is conceptual in nature. Empirical research is required to develop our understanding further. Additionally, such research will provide deeper insights into the role of KIBS, including advertising services, in the process of knowledge creation and dissemination. The successful conduct of empirical research in this field requires a partnership between academics, policy-makers and business managers. Through a concerted effort it will be possible to develop a comprehensive appreciation of knowledge systems and KIBS.

Note 1. Campaigns to produce world brands are not necessarily identical around the world, but they are similar from market to market and in most cases create economies of scale worldwide.

Bibliography Advertising Association The (1999), Advertising Statistics Yearbook 1999, The Advertising Association in association with NTC Publications Ltd. Andersen, B., Howells, J., Hull, R., Miles, I., and Roberts, J. (2000) Knowledge and Innovation in the New Service Economy, Edward Elgar: Cheltenham. Anderson, M. H. (1984), Madison Avenue in Asia: Politics and Transnational Advertising, Associated University Press: New York. Antonelli, C. (1999), The Microdynamics of Technological Change, Routledge: London and New York. Baraczyk, H., P. Cooke and R. Heidenreich (eds.) (1995), Regional Innovation Systems, University College London Press: London. Caravcostas, P. and Soete, L. (1997), `The Building of Cross-border Institutions in Europe: Towards a European System of Innovation?' in Charles Edquist (ed.), Systems of Innovation: Technologies, Institutions and Organizations, Pinter: London, pp. 395±419. Carlsson, B. and Stankiewicz, R. (1991), `On the nature, function and composition of technological systems', Journal of Evolutionary Economics, 1 (2) 93±118.

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Den Hertog, P. and Bilderbeek, R. (1998), The New Knowledge Infrastructure: The Role of TechnologyBased Knowledge Intensive Business Services in National Innovation Systems, SI4S Topical Paper, No. 14. Edquist, C. (1997), `Systems of innovation approaches ± their emergence and characteristics', in Charles Edquist (ed.), Systems of Innovation: Technologies, Institutions and Organizations, Pinter: London, pp. 1±35. Elliott, B.B. (1962), A History of English Advertising, Business Publications Ltd.: London. Foray, D. (1997) `Generation and distribution of technological knowledge: incentives, norms and institutions', in Charles Edquist (ed.) Systems of Innovation: Technologies, Institutions and Organizations, Pinter: London, pp. 64±85. Fraser, W.H. (1981), The Coming of the Mass Market 1985±1914, Macmillan: London. Freeman, C. (1987), Technology Policy and Economic Performance: Lessons from Japan, Frances Pinter: London. Hite, R. and Fraser, C. (1988), `International advertising strategies of multinational companies', Journal of Advertising Research, 28, 9±17. Howells, J. (1999), `Regional systems of innovation?' in D. Archibugi, J. Howells and J. Michie, Innovation Policy in a Global Economy, Cambridge University Press: Cambridge. Howells, J. and Roberts, J (1999), `Connecting Knowledge Systems: Exploring the Role of Global Business Services', Proceedings of the European International Business Academy 25th Annual Conference, 12±14 December, University of Manchester, UK. Howells, J. and Roberts, J (2000), `From Innovation Systems to Knowledge Systems', Prometheus, 18 (1), 17±31. Kaynak, E. (1989), The Management of International Advertising: A handbook and guide for professionals, Quorum Books: New York. Kim, K.K. (1995), `Spreading the net: the consolidation process of large transnational advertising agencies in the 1980s and 1990s', International Journal of Advertising, 14 (3), 195±217. Lash, S. and Urry, J. (1994), Economies of Signs and Space, Sage: London. Leslie, D. A. (1995), `Global Scan: The Globalization of Advertising Agencies, Concepts and Campaigns', Economic Geography, 71 (4), 402±26. Levitt, T. (1983), `The Globalization of Markets', Harvard Business Review, 61 (3), May±June, 92± 102. Ê ke (1992), `Introduction', in Lundvall, Bengt-A Ê Bengt-Ake Lundvall (ed.), National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning, Pinter: London, 1±19. Mattelart, A. (1992), Internationalisation of Advertising, Routledge: London. Miles, I. (1996), Innovation in Services: Services in Innovation, Manchester: Manchester Statistical Society, 20 February, ISBN 0 85336 134 7. Miles, I., Kastrinos, N., Flanagan, K., Bilderbeek, R., Hertog, P., Huntink, W. and Bouman, M. (1995),

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Knowledge-Intensive Business Services: Users, Carriers and Sources of Innovation, EIMS Publication No. 15, Innovation Programme, Directorate General for Telecommunications, Information Market and Exploitation of Research, Commission of the European Communities, Luxembourg. Nelson, R. R. (1993), `A retrospective', in Richard R. Nelson (ed.), National Innovation Systems: A Comparative Analysis, Oxford University Press: New York, pp. 505±23. Nevett, T.R. (1982), Advertising in Britain: A History, Heinemann: London. Niosi, J. and Bellon, B. (1994), `The global interdependence of National Innovation Systems: evidence, limits and implications', Technology in Society, 16, 173±197. OECD/EUROSTAT (1999), Services Statistics on International Transactions 1987±1996, OECD: Paris. Peebles, D and Ryans, J. (1984), Management of International Advertising, Allyn & Bacon: Boston, M.A. Perry, M. (1990), `The internationalization of advertising', Geoforum, 21, 35±50. Roberts, J. (1998), Multinational Business Service Firms: The Development of Multinational Organisational Structures in the UK Business Services Sector, Ashgate Publishing Company: Aldershot. Rosen, B.N., Boddewyn J.J. and Louis E.A. (1988), `Participation By U.S. Agencies in International Brand Advertising: An Empirical Study', Journal of Advertising, 17 (4), 14±22. Terpstra, V. and Yu, C. (1988), `Determinants of foreign investment of US advertising agencies', Journal of International Business Studies, 19, 33±46. Turner, E.S. (1952), The Shocking History of Advertising! , Michael Joseph: London UNCTC (1979), Transnational Corporations in Advertising, United Nations: New York. Weinstein, A. K. (1977), `Foreign Investment By Service Firms: The Case Of Multinational Advertising Agencies', Journal of International Business Studies, 8, Spring/Summer, 83±91. Weinstein, A.K. (1974), `The International Expansion of US Multinational Advertising Agencies', MSU Business Topics, Summer, 29±35. West, D. (1987), `From T-Square to T-Plan: The London Office of the J.Walter Thompson Advertising Agency 1919±70'. Business History, 29 (2), 199±217 WTO (1998), Advertising Services, Background Note by the Secretariat, Council for Trade in Services, S/C/W/47, 9 July 1998, (98-2748).

Dr Joanne Roberts is lecturer in International Business at the University of Durham Business School, Durham, United Kingdom.

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Creating New Services Based on the Formation of a Strategic Community with Customers: A Case Study of Innovation Involving IT and Multimedia Technology in the Field of Veterinary Medicine M. Kodama This paper discusses the management processes for forming strategic communities by means of strategic partnerships between businesses and customers. It considers the introduction into these strategic communities of the knowledge and core competence of customers with a high degree of learning experience with respect to the products and services provided by the businesses. This creates new products and services and at the same time extends the results of the strategic communities to many other associated customers. The innovation of a telemedicine system in the field of veterinary medicine in Japan is taken as a case study. Here a strategic community of business and innovative customers developed new systems using IT and multimedia technology. The results from the strategic community were extended to many other related customers in a chain of community creation, and the new systems were widely proliferated throughout the whole of Japan.

1. Introduction

U

p until now, the typical style of business strategy of the second half of the 20th Century has been to focus on the active introduction of extra-mural knowledge and core competence through strategic cooperation between businesses centered mainly on business partners, suppliers, distributors, etc. In the automotive industry, typified by Ford and Toyota, for example, there is the establishment of long-term partnerships with parts suppliers. In the fields of IT and multimedia, strategic business cooperation with different types of industries such as the household appliances and communications industries with the software and entertainment industries are instances of this type of business partnership. Until recently, many businesses have come to understand and accept the strategy of this sort of business style as a necessary condition for a business to expand existing markets or to open up new markets. # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

The great majority of customers, although they had the right to make up their own minds with respect to purchasing products and services being offered by many businesses, took a passive stance and came to understand that it is only natural for them to accept the products and services. The more discerning customers made purchasing decisions after a comprehensive consideration of the quality and cost of the goods and services being offered unilaterally by businesses, and were interested in after-sales service, maintenance, support, and so on. Now, however, in a background of rising interest among customers in personal computers and multimedia technology as well as the acquisition of sophisticated information with respect to products and services, made available by gathering information through the Internet, customers themselves seem to be becoming keen to learn more about the details of the products and services being offered by businesses. For this reason, before they make

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up their minds about products and services that are being offered by several businesses, wise, well-educated and experienced customers are now capable of sending positive messages and proposals to businesses regarding demands for improvements to their products and services. Consequently, the critical appraisal and new values of products and services perceived by such sophisticated, well-educated and experienced customers hold the potential for exerting a major influence on expediting the proliferation of the products and services offered by businesses. As Prahalad et al. (2000) point out, coopting customer competence to develop and market goods and services of the businesses of the 21st Century is likely to become an increasingly important factor at the core of business strategy. In this paper we draw attention to the importance of the process of including customer knowledge and core competence in the process of product development. We argue that this is a strategic process, aimed at creating a strategic partnership with a core of highly educated and experienced customers [referred to as innovative customers). Then, in addition, we discuss the management processes by which a business will expand the proliferation of its products and services as a result of creating a strategic community with innovative customers. This happens by strategically and consciously planning a chain of community creation with other related customers. The innovation of a telemedicine system in the field of veterinary medicine in Japan is taken as a case study. The strategic formation of a community by the business and innovative customers, and the close collaboration between the business and innovative customers, has designed the innovation of knowledge and core competence within the community and spread new systems throughout Japan, providing many customers with new values.

2. Innovation in the Field of Veterinary Medicine due to IT and Multimedia Technology 2.1 Current Status and Issues in the Field of Veterinary Medicine in Japan In Japan at present, there are 27,000 veterinarians, about thirty percent of whom are working in practice and research related to public health inspection such as the inspection of food items. Recently new fatal infectious diseases such as the Ebola hemorrhagic fever are appearing on a global scale,

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and zoonotic infections (communicable to man and animals) contracted from animals and pathogenic microbes such as O-157 are crossing national boundaries so that the role of the veterinarian is expanding.1 Several years later, health veterinary medicine departments in Japan were reorganized in several research institutes. It has been pointed out that teaching staff numbers at universities were about half those in Europe and the United States so that research and education levels were falling behind. The European Union completed the standardization of common teaching criteria and qualifications for veterinarians in 1999. The United States and Canada are also close to internationalization by standardizing their national veterinary examinations and qualifications. It has been recognized in Japan also that ``bringing veterinary medicine teaching levels close to international levels is a matter of urgency,'' therefore the ``internationalization of veteriarians' qualifications'' is making progress. Unless the levels of education and research in veterinary medicine are brought into line with European and American standards, there is serious concern that Japan's veterinary medicine will be excluded from international veterinary medicine. Under these conditions, international cooperation and international exchange of information between veterinarians in the future is absolutely essential. This important issue is an issue common to industry, academia and government, an issue that must be solved jointly. In January 1996, Dr. Hirose2, Professor Emeritus of Obihiro University of Agriculture and Veterinary Medicine, built the ``Animal Medical Information and Science Development Research Institute'' (situated in Obihiro, Hokkaido, hereafter called the Institute) as a joint venture of industry and academia. The research staff who constitute the Institute consist of people from different working backgrounds such as university instructors, practicing veterinarians, group veterinarians, businessmen, dairy proprietors, and general citizens. ``Giving greater significance to veterinary medicine in the community not only requires the gathering of the opinions of us veterinarians who are specializing in veterinary medicine; we must also prevent the narrow fixing of ideas by creating the opportunity to open up experience and ideas by inviting the participation of many people in different industries. In particular, when it comes to the prevention of disease to minimize economic losses with respect to production livestock, we can never expect true results without a practical plan that involves the participation

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of the producers, the agriculturalists. In other words, it is not enough to have a veterinarian with abundant knowledge. Several veterinarians who can pool their knowledge will be required in order to dig up the true values. Now is the time when our eyes must be turned towards what the producers are earnestly hoping for, the activities of veterinarians with such flexible ideas as this. It is very important to exercise free thinking in order to overcome n inflexible professionals. If the conventional framework is not demolished when it needs to be, there will be no new ideas or new personnel. For interdisciplinary research, it is certainly necessary to step out a framework in the area of modern clinical veterinary medicine and to create an interdisciplinary organization from previously non-existent collective bodies (collective bodies of different industries). There should be collaboration in creating together within the collective body, with each veterinarian developing their own original ideas.''3 The aim of the Institute was to construct a virtual organization with 54 research members scattered throughout Japan, ``a concept that gives full rein to independence in towns and villages, that makes manifest local expectations and characteristics and is not centralized in Tokyo, the capital of Japan.'' An additional objective, from the international viewpoint, was that it would serve as a base for the transmission of information. Meanwhile, the preparation of a new media environment in the area of clinical veterinary medicine has not progressed. Utilizing new media for education and research in veterinary medicine and from the activation of local communities was one of the key points of the initiative. Specifically, by exchanging information using an ISDN-based video phone4 face-toface as in an itemized explanation while sharing veterinary medicine information greatly broadens communication among veterinarians and facilitates the expansion of the interactive telemedicine network.

2.2. Creation of Innovation by Merging Different Business Areas For some time past, X-rays, CT, MRI, and so on have been used in veterinary medicine on both large animals (such as cattle and horses) and small animals (such as dogs and cats). They are still being used for the imaging diagnosis of various types of disease with great success in early treatment and prevention. In particular, the latest trends, in ``efforts to reduce the cost of animal production as agricultural competition is intensified inter-

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nationally'' and ``the enhancement of the status of companion animals in a household as people age and have fewer children,'' are creating a major flow, in veterinary medicine as in the human world, ``from treatment to prevention'' and the weight of imaging diagnosis is growing. Amongst these moves, research workers such as Dr. Hirose, a central figure as an innovative customer, have introduced the first X-ray diagnostic vehicle in Japan dedicated to large animals to all universities in Japan. They have been conducting a great number of pioneering trials (Hirose et al, 1985). Nevertheless, the current picture is that the introduction of imaging diagnosis in veterinary medicine is still scarce and there are few specialists. For that reason, in the process of developing and expanding imaging diagnosis such as this, it has become necessary for distant veterinarians to collaborate in education, diagnosis and instructions for treatment. On the other hand, lately the distinction between the diseases of animals such as pets and humans is low and, therefore for the veterinarian, the time has arrived when quick action by imaging diagnosis is demanded. Therefore, the demand for bi-directional remote treatment by imagery is growing stronger, not only simply between veterinarians but also in areas of clinical veterinary medicine such as ``between veterinarian and large animal producer'' and ``between veterinarian and small animal breeder.'' On this basis, at the start of 1996, the research group centered on Dr. Hirose and the NTT project group began research into the development of remote diagnosis in veterinary medicine. The NTT project group was faced with the immediate problem of how to popularize ``Phoenix,'' a desktop video conferencing system they had started to market in March 1996 (Kodama, 1999a). One of the project targets was to develop the use of an application using the video conferencing system in the field of medical treatment. The NTT project leader's problem was how to approach customers with the new system that had been developed and to have them appreciate its commercial value. However, in 1996 there were few customers in Japan who needed video conferencing with personal computers. The necessity to use a video conferencing system was not deeply rooted in the culture of the entire community. However, the vision and idea of the NTT project leader was that the concept of ``creating a new interactive video communication culture in Japan'' should definitely be achieved. Expediting its use in the fields of welfare of the elderly and education, and especially in all

A virtual organisation was planned

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medical care including the field of veterinary medicine, was an important issue. I thought that the key to popularizing the video conferencing system, which is a tool for interactive video communication, was a hint to research on the form of usage by customers. Video conferencing systems are generally used for virtual conferencing in business, but in analyzing the future market, he inferred that the demand in telemedicine and distance learning would grow. However, we are a telecoms carrier, and when it comes to medicine and education, we had not built up any knowledge, we had absolutely no know-how, and we had much to learn from wellversed doctors and teachers in these areas. We believed it was quite possible that the field of medical treatment, from the medical care of humans to that of animals, would be a potential area for the application of video conferencing systems and that a partnership with Dr. Hirose, who is an authority in the area of clinical veterinary medicine using radiology, would be an important business opportunity. At the same time, from the viewpoint of animal protection, we thought that the fact that the Phoenix which we had developed could contribute to the development of clinical veterinary medicine was a matter of very deep significance.5 Dr. Hirose's research group planned to construct their own information exchange system using ISDN in the area of veterinary clinical medicine. This system was constructed on the basis of summarizing the opinions of the Institute's 54 participating research members. The main objective for all of them was to be able to exchange clinical image information easily on the same level. Specifically, it was a system structure to suit the mutual exchange of information with a uniform method, in which all research members would have the same equipment. For us veterinarians to develop our own telemedicine system in the area of clinical veterinary medicine would not be possible with only our own knowledge and knowhow. A tie-up with NTT, with their many years of knowledge and know-how in communication network technology and image communication technology, was a splendid opportunity to produce new innovation through collaboration that concentrated the experts of industry and academia in partnership.6 In this way, the visions and values of both the NTT project leader and Dr. Hirose, who

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was a customer, coincided, and a partnership for reaching the one single objective was established. The enterprise and customers formed a strategic community consisting of a virtual team with about seven project members from NTT, and the innovative customers were the veterinarians group of 54 (scattered geographically throughout Japan) with Dr. Hirose at the center. All members who formed the community shared values based on the same vision and concept. They became as one body fired with enthusiasm for creating fresh innovation in the area of clinical veterinarian medicine. Furthermore, in order that the strategic community that they had formed would be maintained continuously, it was important for Dr. Hirose and the NTT project leader to envisage empowerment and motivation within the community members. NTT proceeded to develop a new method of use for the video conferencing system by incorporating into their own company product the knowledge and core competence possessed by Dr. Hirose and his group, which was rooted in their many years of experience. Then, thanks to innovation from the knowledge and core competence within the strategic community, over a period of about one and a half years they developed a new telemedicine system and its popularity proceeded to spread throughout Japan. In this paper, the leader of the business that becomes the core, playing the central role within the strategic community of business and customers (in this case, the NTT project leader) is called the community leader)7.

2.3. Innovation in Community Knowledge The biggest issue the strategic community faced was that of deciding what would be the ideal telemedicine system for veterinarians. The assessment of the system would be based not only on performance and cost, but, from the human aspect, it was necessary to create a system that many veterinarians would find easy to use. Now, one of the basic requirements for continued development of a created community consists in innovation of community knowledge in terms of information, knowledge, skills, know-how, experience, and so on. Within the community these will follow the steps of sharing, inspiration through contact, creation and accumulation (Kodama, 2000a) (See Figure 1). This process may be described, if in somewhat simplified terms, as follows: The first process of sharing involves a step consisting of sufficient dialog and resulting

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Figure 1. Process of Innovating Community Knowledge. understanding among the parties concerned regarding the vision and objectives pursued by different organizations toward understanding and sharing of each other's knowledge. The second process of inspiration through contact involves a step of inspiring and multiplying within the circle of organizations various aspects of community knowledge in support of identifying problems, challenges and solutions. This means that the vision and concept can be realized on the basis of the community knowledge shared by the different organizations concerned. The third process of creation involves a step of creating new community knowledge on the basis of the community knowledge inspired and multiplied within the circle of organizations concerned. The fourth process of accumulation involves a step of methodically, accumulating within the community, the various aspects of the community knowledge harvested through the processes of sharing, inspiration and creation. The issue for the community at the time of starting up was the conception and design of the telemedicine system. The information and knowledge possessed by community members from different industries was shared. The constructive dialog between the many community members towards the design of the ideal telemedicine system triggered mutual knowledge within the community. The factor that bonded each member in the community was the common value with respect to their vision and concept of ``innovation in the field of veterinary medicine.'' In order to create and provide new values for many veterinarians, while bearing in mind what is meant by ``the application known as interactive video communication,'' com-

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munity knowledge was triggered and created by both the physical and intangible aspects of the telemedicine system, including its conception, design, construction and method of utilization. However, a major problem occurred at the initial startup stage. The problem was the use of personal computers by veterinarians. There was no doubt that a personal computer is an extremely convenient device, but this did not necessarily mean that a personal computer was immediately an excellent data system. In other words, a device with a high gradeprocessing capacity and a device that is easy for a person to use are two separate issues. Instead of matching the person to the personal computer, since the informationallyhandicapped would not come forward, it would be necessary to construct a system equipped with the ideas and characteristics of the community and having functions for the exchange of information that anyone (including veterinarians of various ages) could use in a similar way to the household telephone. Therefore, the community had no alternative but to abandon the idea of applying the ``Phoenix'' video conferencing system, which uses a personal computer, as a telemedicine system. The next hurdle for the community was to consider how to enable each of the veterinarians to participate without feeling any difference in capacity to operate the device. Bearing in mind the design concept of ``ability for easy operation by any veterinarian'' in order to overcome the problem of information literacy, the community developed a simple, high-quality, low-cost video phone in September 1997 and customized it for the telemedicine system.

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Innovation occurred through trial and error

The system that was developed is connected to ISDN and, by transmitting and receiving voice and video, enables face-toface discussion while providing various imagery (X-ray, CT, MRI, pathological photography). Since the research workers have the same equipment installed, which are all completely interchangeable, the ability for the mutual interchange of information between all research workers is an important feature. The functions of the video phone itself can be greatly extended by connecting peripheral devices such as an external camera and external monitor (see Figure 2). Costwise, one complete set was able to be kept at around the 400,000 yen price range. Moreover, a system that can be accessed by all veterinarians throughout the country has been developed for successively storing the various types of image data, such as cases and instances that are transmitted in real-time, in video-on-demand (VOD)8. In this way, comparatively low-cost technology has been established that can transmit high-definition images of various case types to facilitate remote diagnosis and can also be used in the field of veterinary medicine. As we have shown, the most suitable telemedicine system was achieved through a process of trial and error over about one and a half years in the start-up period. In this process, community knowledge, including a variety of knowledge, know-how and skills,

was created and built up within the community (see Figure 3-a). The stage since start-up time is the step that proceeded to popularize and spread the developed system among veterinarians who are customers across the entire country. Within the community, the establishment of a strategy to extend throughout the country was debated by community members. The framework of the strategy was the following two points. One was to introduce this system to a core of veterinarians (doctors practicing in clinics and so on) in each region of Japan's 48 prefectures and to form a virtual community by networking these base facilities through video phones with the Obihiro Center in Hokkaido. The second point was that the base facility, as the core in each of the 48 areas, would become the center for that region, and clusters of communities are formed by connecting other new veterinarians in each area (see Figure 4). By forming these virtual communities, the base facility of each area was able to select topics for study that are characteristic of that area, as well as strengths (or weaknesses) as research topics for the interchange of discussion. At fixed intervals, each base facility was connected at the same time for a virtual ``nationwide remote area multi-point video phone veterinary conference'' (Tokachi Mainichi News, 1999b). Moreover, diagnoses, treatment instructions, and so on were conducted

Figure 2. Telemedicine System that was Developed and its Manner of Use.

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Figure 3. Process of Innovating Community Knowledge. among veterinarians in remote areas and data such as X-rays, CT, MRI, and so on for many cases was built up in VOD. Then, the system has been modified and improved through questionnaires and hearings from many veterinarians concerning the details gained by providing the system, through which problems with the system were extracted and which reflected customer opinions and demands. In retaining the veterinarians who are customers by networking and clustering the

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community in this way, and planning a chain of community creation, there is a recurrent innovation cycle in which new community knowledge is shared, triggered, created and accumulated. As of March 1999, the community has already expanded to include several hundreds of bases. This stage was the growth period of the community (Figure 3-b). ``Image transfer technology for remote diagnosis and treatment technology,'' which is a series of research activities for this community, has been adopted by the ``Fiscal 1998 new project

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Figure 4. Nationwide Expansion of Communities. creative research and development system'' of the Telecommunications Advancement Organization of Japan (hereafter TAO)9, which is a corporation approved by the Ministry of Posts and Telecommunications, and eligible for the investment of research and development funds by the Japanese government (Tokachi Mainichi News, 1999a). This result of community innovation was acknowledged by government organizations and has further heightened the motivation of the community members towards greater expansion of the community. Next, in the period of development of community knowledge came the step of challenging new technology and services (Figure 3-c). The community introduced the developed system to veterinarians all over Japan and while the communities expanded one by one, they began to develop a new system that introduced newer technology. In the growth period up to this point, the system that had been introduced successively all over the country was the basis of a telecommunications network using ISDN. The reason for this is that with the technology at that time, ISDN had the most stable circuit quality and

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was the best solution to achieve high-quality interactive video communication. However, high-capacity telecommunications network technology has been greatly developed over the past few years (at the start of the 21st Century) and the community thought that it was absolutely essential for these new telecommunications infrastructures to form the base for the new telemedicine system. In 1998, TAO constructed a super-fast optical fiber communications network for research and development (commonly known as the gigabit network) to be compatible with the nextgeneration Internet and intended for use by academic research organizations all over Japan. TAO launched an appeal to the public, including research organizations throughout Japan, in connection with ``Using the gigabit network for research and development.'' In this connection, ``Image transmission experiments for a telemedicine system in the areas of animal care treatment and stockbreeding'' that was proposed by the community was selected by competitive tender in 1999 (Tokachi Mainichi News, 1999c). As with the selection matter on the previous occasion, the community obtained research funds from

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the Japanese government and began to develop the new telemedicine system on the gigabit network. New knowledge concerning the development of the telemedicine system using new technology, and the development of methods for using it, was shared among community members. The community searched for the optimum telemedicine system using the highspeed gigabit network. NTT members were planning to acquire new image transmission technology in order to achieve high quality interactive video communication on the gigabit network. At the same time, Dr. Hirose was aiming at research on the nature of its usage. As a specific field trial, the community thought of connecting the Obihiro Center in Hokkaido and a meat processor in the Kansai region with the gigabit network and conducting a remote pathological examination of a large meat animal (beef cattle, for instance). If this research and development is successful, it will make it possible to conduct a reliable virtual form of prior examination by a specialist veterinarian with respect to various communicable diseases (such as mad cow disease and O-157) before processing a large animal for meat.

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In the space of about six months, the community succeeded in the trial manufacture of the latest type of web-based video phone10 and gateway system11 compatible with the Internet protocol (TCP/IP) and began to experiment from April 1999. The community used a web-based video phone and an ISDN-based video phone and conducted various image transmission experiments by connecting with the gateway system to four types of networks: the gigabit network, an ISDN circuit, the Internet and a mobile network, and proved the potential practicality of the new telemedicine system in the area of veterinary medicine. Then, with the aim of making the ``telemedicine system,'' (which was potentially usable on all of these networks) fit for practical use and of establishing the use of this new system in fields that should be called ``remote radiology'' and ``remote pathology,'' Dr. Hirose's team promoted research aimed at pioneering the form of the next generation of medical treatment. Meanwhile, the NTT team was aiming at a practical integrated video transmission service that would connect seamlessly between ISDN circuits, the Internet, the gigabit net-

Figure 5. Integrated Video Transmission Services and Expected Markets. # Blackwell Publishers Ltd 2000

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work and the mobile network (the network that is the base for mobile phones and personal handy phones). Within this experiment, they decided on a strategy of virtual business using video phones in the fields of distance learning, telemedicine, welfare and remote relay (see Figure 5) (Nikkei Communication, 1999; Nippon Kogyo News, 2000). As of January 2000, having already had success with seamless image transmission experiments between the Gigabit, ISDN, the Internet and the mobile network, our target was to make the new telemedicine system practical. What we can expect after this is that by interconnecting with the nextgeneration mobile network (IMT-2000)12, which is scheduled to start services from March 2001, and ISDN and the Internet, customers anywhere, can have seamless interactive video communication at any time with anyone without being aware of the type of communications network. Then I believe that video phones will be used not only for business but their use will be extended to various fields such as education, medical treatment and welfare as well.13 Thus, toward an innovative creation of new technology and services, a sharing and inspiring of new and never-before acquired knowledge occurred while new know-how and skills were accumulated through the creation and practice of new technology and services. Having passed through each of the above stages, the community embarked on selfassessment directed towards the proliferation of telemedicine systems in the field of veterinary medicine. Innovation was achieved through the spiraling-up of community knowledge. This innovation then created added value for the many veterinarians who were the customers.

2.3. Community Competence Sophistication Process In the sustenance of continuous innovation by a community, the heightening of core competence within the community (referred to as ``community competence'' in this paper) becomes an important factor (Kodama, 1999a, 1999e). As shown in Figure 6, while innovation (start-up phase ?growth phase ?development phase) realized through the spiralingup of community knowledge creates new values for the customers, the process of community competence sophistication (sharing ? creation ?renewal) also becomes indispens-

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able for ongoing strategic community formation. In the process of developing community competence sharing, the core competences possessed by NTT and the veterinarians become mutually understood within the community organisation. This is the step that triggers the phase of mutual merging of core competences. For instance, NTT's core competence with ISDN technology, video terminal technology, and so on, and the veterinarians' core competence with diagnosis, etc. are shared mutually among the organizations. It is by triggering and merging these core competences that the community competence that gives rise to the telemedicine system is born. Furthermore, the merging of the shared core competences is the step that gives rise to new creations (products, services, etc.) In this step, the telemedicine system field of veterinary medicine was born as a result of development by trial and error. At the same time as it was proliferated to many veterinarians throughout the whole of Japan, a better quality system was created by trying improvements and modifications. This means that the core competence is being generated within the community. The process of renewal mode is the step that further innovates the community competence that was upgraded in the sharing and creation modes. The seamless telemedicine system that integrated the gigabit network, the Internet, ISDN and the next-generation mobile network is a new innovation that is a complete change from other systems up to now and is a result born from the renewal of community competence. Thus we see that in order to enhance the performance of an entire community, to provide new values for its customers and to attain the community's business objectives, it becomes crucial to implement continually in a spiraling fashion the above-mentioned process of community knowledge innovation. In addition one must promote within the community increasing sophistication of, understanding of the community competence.

3. Discussion 3.1. Strategic Community Creation with Customers There are four points about strategic thinking and behavior that are of importance to the community leader within the organization. The first point is that the community leader, who belongs to an organization of

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Figure 6. Advanced Process of Community Competence. which he is a member (a top-echelon manager or middle-tier manager in a corporate setting, or an independent business operator with entrepreneurial prowess) must have an ability to comprehend quickly and interactively the exterior environment in which his organization is placed, technological speeds, market composition and customer needs. The second point is that the vision upheld must be complete with thoughts and beliefs integrated and that the leader must be equipped with the power to create networks of person-to-person contacts in terms of stated concepts, both within and outside his organization. It will be by dint of this human networking power that contacts and constructive dialog with innovative customers become possible. The third point relates to the importance of creating an arena of sympathy and resonance for value perspectives that respect visions and concepts through constructive dialog with innovative customers. This, in turn, will make it possible to create a platform for harmonizing the value outlooks of community leaders, creating room for the birth of a strategic partnership with innovative customers. The fourth point is the continuous birth of innovation by the creation of an organizationally strategic community with innovative customers. For these things to happen, it becomes important to create a value-harmonized

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platform at the level of an organized body within a strategic community, with the participation of many community members. The community members have individually to strive for self-improvement and selfinnovation through constructive dialogues promoted within the community, based on the value-harmonized platform, so as to make possible the acquisition of new knowledge, and hence competence. It will then become important for innovative leadership comprising the community leader and innovative customers, based on this solid value-harmonized platform, to deploy in a spiraling fashion the process of sharing, contact-triggered inspiration, creation and accumulation of community knowledge, discussed in the foregoing section. This spiraling process of community knowledge would correspond, in general corporate activity terms, to the development and marketing of products and services that meet consumer needs and the implementation of reported product quality improvements. At the same time, community competence, that is to say, the core competence of a community, will end up the more sophisticated for it. This string of innovation processes of community knowledge and community competence will in the end provide continual value creation for the customers and so attain the business objective of the strategic community (See Figure 7).

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Figure 7. Strategic Community Management with Customers.

3.2. A Chain of Spiraling, Strategic Community Creation with customers

Innovation success spirals on

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A mechanism under which success with one strategic community with an innovative customer leads to the formation of a next, new strategic community to fulfill business requirements will translate into a relevant process in the attainment of ongoing innovation in a corporate setting of activity. A case in point would be one in which success with a large-scale joint project operated with a customer for the purpose of deploying a strategic line of products or services served as a model for spawning a spiraling management system to support a similar deployment vis-a-vis another customer. In this case study, the results of the strategic community of the research group centered on Dr. Hirose, who are innovative customers, and the NTT project group were proliferated to veterinarians throughout Japan. In order to do this, the community was deliberately and strategically extended in a chain of strategic communities by networking and clustering of the community as shown in Figure 4. The research group centered on Dr. Hirose aimed at having the telemedicine system which they had themselves developed become the de facto standard in Japan by

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progressively expanding it to veterinarians throughout the country. Meanwhile, the NTT community leader proceeded to make best possible use of the IT and multimedia technology that is NTT's core competence by establishing the efficiency of the video phone in telemedicine and at the same time establishing the technical competitive predominance of the telemedicine system in the area of veterinary medicine.

4. Conclusion In this paper we have pointed out the importance of the process of creating new products and services by a company, in developing its own products and services, deliberately and strategically taking in the knowledge and core competence of customers and creating a strategic community based on a strategic partnership with innovative customers who become a core having a high degree of academic experience. In addition, we have discussed the management process of expanding the proliferation of products and services by strategically planning the creation of a chain of communities with other related customers as the result of creating a strategic community with innovative customers.

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An important message of this paper relates to the creation of organized strategic communities on the basis of harmonizing values, working with innovative customers under the farseeing, innovative leadership of community leaders who come with new visions and concepts. It will become possible in such strategic communities to promote community innovation by deploying the innovation process of community knowledge and community competence. This is the framework for strategic community management with customers. It will be required of community leaders, whose task it will be to promote strategic community management with customers, to project both inside and outside their corporate organizations the persona of a new leader of a hitherto unknown breed. It will become crucial for corporate organizations to strategically spawn and nurture good community leaders to take charge of corporate innovation, a mirror of the new age, the 21st century, against the backdrop of the future multimedia- and cyberspace-based society. Increasing relevance is bound to accrue to continued attention to business innovation through strategic community creation.

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3. 4.

5. 6. 7.

Notes 1. In recent years, veterinary medicine is in the process of advancing towards the prevention of various diseases with organ transplants and at gene level and explaining the phenomenon of life. These days, when veterinary medical treatment is being questioned on the basis of life ethics, from a wide-ranging viewpoint that integrates medicine, engineering and science, ``the education of talented personnel and the establishment of research and development having the characteristics of veterinary medicine in the chemical view of data related to animal medicine'' is essential for the mastering of veterinary medicine. The place where veterinary medicine differs from other natural sciences is that having discovered the meaning and value of the existence of all animals, it helps them to survive. With respect to the existence of industrial animals and companion animals, because of the existence of social meanings and values in each case, clinical veterinarians carry the burden of fulfilling that duty every day with a great sense of mission. (Interview with Dr. Hirose) 2. Dr. Hirose is the Director of the Animal Medical Information and Science Development Research Institute and Professor Emeritus of Obihiro University of Agriculture and Veterinary Medicine. He specializes in clinical veterinary radiology. Using Japan's first imaging diagnostic terminology, he is a world pioneer in contributing to the development of

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8.

9.

10. 11.

imaging diagnosis by developing and introducing large animal X-ray diagnostic vehicles and industrial animal general imaging diagnostic vehicles, which even now he is active in bringing into the farmyard. He was awarded the Japan Veterinary Association President's prize in 1972. He is a director of the International Veterinary Radiology Association and sits on the review board of the Veterinary Radiology and Ultrasound Journal. He is the chair of the organizing committee for the 12th International Veterinary Radiology Association (IVRA) to be held in Obihiro, Hokkaido, in August 2000. See http://www.obhiro.ac.jp/~ivra/ Interview with Dr. Hirose A digital network service (Integrated Services Digital Network) established by the telecommunications standardization sector of the International Telecommunications Union (ITU-T). Additional information on ISDN is available at , and ITU-T recommendations are also available at . ISDN-based video phones are standardized by the ITU-T. (See Kodama, 1999c, 1999d, 2000b) Interview with NTT project leader Interview with Dr. Hirose A particularly important element in innovative leadership lies in psychological qualities of the community leader. In order to make the community members' thoughts, ideas, beliefs, work attitudes, and other values resonate with his or her behavior and ideas, the leader must have the ability to produce, be skilled in conceptualization and interpersonal relationships, and possess political sense and leadership ability both within and outside of the company. The community leader must use his or her superior leadership ability to continually create and innovate with regard to the community competencies accumulated in the community, and to leverage the sympathy and cooperation between community leaders to smoothly promote the primary target of success in the overall business. See Kodama (1999b,1999c) The system sends stored video data when a request is sent from a remote location. It is generally used for delivering entertainment such as movies and television programs to homes, but recently is being utilized at universities for distance learning and at companies as a training tool. The Telecommunications Advancement Organization of Japan is a corporation approved by the Ministry of Posts and Telecommunications that provides various types of assistance in respect of research and development and telecommunications advancement projects in the field of data communication. See http:// www.shiba.tao.go.jp/ A movable video phone that uses the Internet communication protocol TCP/IP and is capable of accessing the Web. An image protocol conversion system that interconnects an ISDN-based video phone

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and a Web-based video phone. NTT plans to develop a practical integrated video transmission service using this system. 12. Current mobile phones and portable terminals are capable of high-speed transmission, but these are next-generation mobile, portable video terminals that can transmit video, and not just voice and text, interactively. W-CDMA and cdma2000 are next-generation mobile telephone systems proposed by the Swedish company Ericsson and the U.S. company Qualcomm, respectively. 13. With respect to an integrated video transmission service that reflects research and development using the gigabit network and the results of associated experiments, including the results of developing a telemedicine system in the field of veterinary medicine, we intend to publish at the 12th International Veterinary Radiology Association (IVRA) (An interview with the NTT project leader)

References Kodama, M. (1999a) ``Strategic innovation at large companies through strategic community management ± an NTT multimedia revolution case study'', European Journal of Innovation Management, 2, 3, 95±108. Kodama, M. (1999b) ``Customer value creation through community-based information networks ± the whole picture'', International Journal of Information Management, 19, 6, 495±508. Kodama, M. (1999c), ``Community Management Support through Community-Based Information Network'', Information Management & Computer Security, 7, 3, 140±150. Kodama, M. (1999d), ``Strategic business applications and new virtual knowledge-based busi-

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nesses through community-based information network'', Information Management & Computer Security, 7, 4, 186±199. Kodama, M. (1999e) ``Business Innovation through Community Management ± A Case Study of a Virtual Education in Japan'', Team Performance Management, 5, 8, 225±237. Kodama, M. (2000a) ``Business Innovation through Customer-Value Creation ± Case Study of a Virtual Education Business in Japan'', Journal of Management Development, 19, 1, 49±70. Kodama, M. (2000b) ``New multimedia services in the education, medical and welfare sectors'', Technovation, 20, (To be published). Tokachi Mainichi News (1999a) ``Bi-directional data networks in veterinary medicine (construction of remote medical treatment system)'', Jan. 1. Tokachi Mainichi News (1999b) ``Animal Medical Information and Science Development Research Institute (25 points nation-wide connected to video phone net conference)'', Feb. 1. Tokachi Mainichi News (1999c) ``Gigabit network practical research ± project adopted from Obihiro'', Dec. 4. Nippon Kogyo News (2000) ``Imaging protocol conversion system ± NTT development'', Feb. 4. Nikkei Communication (1999) ``Potential of portable video phone'', No. 298, pp. 99±96 Hirose, T. (1985) ``Veterinary medicine ± results and research prospects'', Japan Veterinary Association, 233±237. Prahalad, C.K. and Ramaswamy, V(2000) ``Coopting Customer Competence'', Harvard Business Review, 78, 1, 79-87.

Dr Mitsuru Kodama is Executive Director, the Community Laboratory, Tokyo, Japan.

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Goals, Creativity and Achievement: Commitment in Contemporary Organizations Stephen Swailes This paper questions the nature of organizational commitment in the light of contemporary competitive environments, the emergence of human resource management practices and reshaped employee-organization linkages. Qualitative research among organizational professionals suggests that the classical view of organizational commitment as a positive attitudinal state has been overtaken by a more complex view that embraces task-related goal congruence, energies directed at achieving outcomes and creative and innovative behaviours in the workplace. Stepwise regression analysis was used to examine the predictors of goal congruence, achievement and innovative behaviours in a sample of over 600 chemists and accountants.

Introduction and Background

T

heory development in organization studies involves the use of constructs to explain organizational behaviour. The number of constructs created by researchers is at least several hundred and among the most commonly studied are motivation, job satisfaction and commitment. Some constructs have fairly static definitions whereas others change over time as internal organizational climates and external competitive conditions change. The past 20±30 years have seen the end of a mass-production, industrial society and the advent of a post-industrial era (Kumar, 1995; Lash and Urry, 1987). These changes are rooted firmly in two primary factors, the proliferation of information-based technologies and the rise of global-scale competition. There has been extensive restructuring of business enterprises and public organizations in the form of delayering, downsizing and changes to job roles. In terms of the business environment, the key features of the post-industrial era are the strength and scope of competition, excess capacity, lower barriers to international trade, and decreased state support for industries. Working practices now emphasise team work in flatter structures, heavy reliance upon individuallevel creativity and innovation, and a strong focus on the individual to maintain their # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

employability in external rather than internal labour markets (Harvey, 1990, Hatch, 1997). These changes provided the rationale for this study which examined how macro-level changes have influenced the core relationship between employees and employers with particular reference to organizational commitment. The research assumed that restructuring has reshaped classical employee-organization linkages (see Mowday et al., 1982) and one mechanism for understanding how linkages have changed is through the psychological contract (Herriot et al., 1997; Hiltrop, 1995; Shore and Tetrick, 1994). Key differences between the contracts typical of the industrial and post-industrial periods are illustrated in Table 1 and it should be noted that the table contains a strongly Anglo-American view of the employment relationship ± such views may not be shared in other work cultures. The reshaped psychological contract is exemplified by the notion of a `jobbing' professional with the responsibility for career development lying firmly with individuals rather than employers. Pay and benefits are heavily based on the contribution that employees make rather than on time served. The risk of involuntary job loss is high and continued tenure is highly dependent upon the extent of the value-adding activities that individuals bring to the organization. Internally, organizations are largely heterogenous

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Table 1. Psychological contracts in Industrial and Post-industrial Society Industrial

Post-industrial

Job security

`Jobbing' professional

Career ladder (a `carrot' of promotion)

Career development, responsibility rests with the individual Pay and other exchanges heavily contribution based (eg. training)

Predictable remuneration package Predictable non-pay benefits Hierarchical organization structures Predictable workload and expectations

Fewer points of authority and position power Load and expectations contingent upon organizational priorities and goals

Development in a job context Narrow role definitions

Development in a career context Broad role definitions (role adapts to meet priorities)

Limited involvement in corporate information ('need to know basis') Full(ish) employment therefore scope for voluntary job change

Access to more information so employees can select that which is useful Not so full employment therefore more involuntary job change

Tenure not solely linked to individual performance and contribution Homogenous identity

Tenure more dependent upon contribution (added value) Heterogeneous identity, fractional organizations (profit centres, service units)

Source: Adapted from Hiltrop (1995)

rather than homogenous following the creation of profit centres and service units. The practices and rhetoric of human resource management (HRM) have developed alongside these changes to provide a framework for managing employees with the key aim of developing favourable attitudes and behaviours directed at the goals of the organization (Guest, 1995; Hartley and Stephenson, 1992; Keenoy and Anthony, 1992). Given that classical definitions of organizational commitment centre around attachment to goals, then commitment lies at the heart of HRM. Following the onset of the `new industrial relations' (Beardwell, 1992; Kelly and Kelly, 1991), it is worthwhile for the organization studies community to reassess the meaning and nature of organizational commitment in order to ensure that the usefulness of research has maximum relevance to HRM practitioners. However, even though the evidence for a change from industrial to post-industrial work environments is strong, and the size, scope and conviction of the management literature on HRM and industrial relations leave little doubt that major changes have

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taken place in the management of enterprises, there is less certainty about the real impact of these changes upon individuals at work. The issue is whether changes to managerial practice have brought about real change to the way employees feel and behave at work, or whether this is largely an illusion based upon an image of an ideal type of employee created by management as an ideal solution to the ambient competitive situations that organizations encounter (see Legge, 1995a, 1995b; Poole and Mansfield, 1992). It would be foolish to uncritically accept that all employees have responded to a new employee relations climate and that the climate has uniformly reconfigured orientations towards work and organizations. This is an important caveat given that the purpose of this paper is to re-examine organizational commitment. Nevertheless, proceeding on the grounds that employee-organization linkages have changed, the re-assessment has two related parts; first, a return to first principles to ask the core question, `what is commitment?' and, second, a consideration of how commitment can be measured in quantitative organization studies.

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GOALS, CREATIVITY AND ACHIEVEMENT

The Study Sample and Method To date, quantitative researchers have assumed that organizational commitment has a uniform meaning across occupations. There is, however, no evidence that this is true and so it was necessary to avoid any confounding effects that a highly diverse sample might create. To provide the necessary focus, the meaning of commitment was first re-examined among a sample of organizational professionals. This occupational group provides the most complex arena for reconceptualising commitment because of the competing influence of the professionals' commitment to their professions (see Morrow and Wirth, 1989). Furthermore, the proportion of professionals and semi-professionals in the UK workforce is rising and there is a large literature dealing with the threat to professional values brought about by managerialism threatening the classic autonomy of professionals at work (e.g. Exworthy and Halford, 1998). Professionals in the private sector have also witnessed turbulent times, via corporate restructuring and the contracting-out of research and development (Jones, 1996) with presumed impacts on the labour process and the psychological contract (e.g. see Pemberton and Herriot, 1993; Randle, 1996). Semi-structured exploratory interviews were held with managers in ten public organizations and private technology-based organizations. Questions focused upon the characteristics of committed and uncommitted professionals and interviews were recorded and transcribed. Transcripts were repeatedly `cycled through' and extracts were allocated to categories in an iterative process with categories being created and merged until the researcher felt that saturation had been reached, that is, until no further reduction of the qualitative data was possible (King, 1994). Three themes were identified as a result of this approach.

Findings Table 2 summarises illustrative comments taken from interview transcripts. The first theme that emerged concerns achieving objectives through effort, for example, working until a task was completed on time and to agreed standards. Commitment, however, is not simply about putting in long hours although this was often mentioned as a borough council manager commented, Your commitment to keeping things together and to not giving lower levels of

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service is that you just take work home all the time. This theme represents achievement although it would be too simple to consider that high levels of effort and achievement are always indicative of high commitment as they could result from other, negative or undesirable, aspects of the work place that put employees under pressure. To be counted as part of commitment there needs to be positive rationale behind the effort expended. The second theme present in the qualitative data was called innovation since it represents a form of job involvement that centres upon making suggestions for developing the business, using initiative and challenging the status quo for the good of the organization. Showing creativity and innovation in systems, products and services was a critical indicator of commitment to the organization as illustrated by a manager in an aerospace company A committed person in our organization is someone who is looking to innovate, create, satisfy customer needs . . . and for looking at ways of improvement in the ways the business operates. So it's the extra bit. Professionals who are not creative, who do not innovate and deliver agreed objectives over a period of time were not seen as showing commitment to the organization. Another point emerges here since, for organizational professionals, commitment to service innovation requires a commitment to updating expertise in their discipline suggesting that professional and organizational commitment have to co-exist for organizational commitment to be demonstrated. Another issue is whether the description of commitment portrayed here as embracing achievement and innovation properly describes commitment itself, or whether these two themes are better seen as outcomes of commitment. Classic commitment theory sees commitment as a largely attitudinal construct that is an antecedent to favourable behaviours such as these. However, this study suggested that professionals who are properly resourced have to display achievement-oriented and innovation-oriented behaviours if they are to be seen as committed by managers. Attitudinal commitment alone without concomitant actions was not seen as sufficient to signify high commitment professionals. Positive behaviours were seen as being part of organizational commitment whereas outcomes of the commitment could be, for example, targets being met or creative

Commitment implies creativity

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improvements to products or services being proposed or instigated. The third theme identified concerned the employees' orientation towards goals and in this regard there is a similarity to classic definitions of commitment. However, the organization was not directly seen as the main focus of a professional's commitment although the organization is the beneficiary of commitments directed at other foci such as creativity in service development. While a desire to stay with an organization (loyalty) is in itself a virtuous state of mind, it was, for professionals, not seen as a core component of their organizational commitment. In order to fuel the organization's competitive advantage, technical professionals were expected to operate at the leading edge of their discipline and staff turnover was seen as a necessary consequence of the need for flux and renewal. Professionals who moved-on were not seen as being uncommitted to the organization as illustrated by the Chief Executive of a research and technology organization. Provided they are developing the job, the role, the activity, then I think they are correctly committed. But I think you accept that there is a limit to how far, particularly if it's a discipline they don't want to move out of ± they say, well, there's not much more I can do for this organization ± there's no other opportunity for developing my skills, I don't want to go into general management ± so I have to go where I can develop my career further. Furthermore, in a climate of unpredictable job security, a strong attitudinal attachment to an organization could be unhelpful if employees become faced with the possibility of job loss but feel unable to move out. Commitment no longer appears to be largely about belief in corporate goals and, in place of this, it seems more appropriate for descriptions of commitment to centre around acceptance of specific goals that are agreed with individual employees since they will be judged against them as noted by this NHS manager. While our overall mission is relevant to everyone, everybody feels that is part of the commitment, the corporate goals are a bit business planning and out of the realms of many of our staff. It [commitment] is an attitude or belief that what they are doing fits in with that person's set of values. Thus, in a new view of commitment as it relates to organizational professionals, it seems appropriate to replace a general allegiance to corporate goals with belief in, and understanding of, goals agreed with individuals

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together with a new component reflecting creativity and innovative behaviours, and a modification of the general effort-related component in favour of a more focused achievement-oriented component.

Reconceptualising Organizational Commitment The most widely used definition of organizational commitment derives from Mowday et al., (1982, p. 27) who saw it as `the relative strength of an individual's identification with and involvement in a particular organization'. This definition still lies at the core of human resource management approaches to commitment (Guest, 1999, p. 183). Mowday et el. created three factors to operationalise their definition: a strong belief in and acceptance of organizational goals; a willingness to exert effort for the organization; and, a strong desire to remain with the organization. These three dimensions were embodied in the 15item Organizational Commitment Questionnaire (OCQ) which has probably been the most widely used measure of commitment in quantitative organization studies. Other common measures of organizational commitment include the Affective, Continuance and Normative scales (e.g. see Meyer and Allen, 1997) and the British Organizational Commitment Scale (Cook and Wall, 1980). Of these, the OCQ, the Affective Commitment Scale and the British scale are similar in terms of item content and also in the use of Likert scale response formats. As such, the new view of commitment is contrasted primarily with the OCQ. The themes identified above concerning innovation and achievement relate to the effort component of the OCQ although effort as measured in a general, unspecified sense appears no longer to reflect the perceptions of professional managers. Effort has to produce results and this finding casts doubt over the continued relevance of the OCQ as a measure of commitment among professionals. A difference is also suggested by the OCQ's requirement that committed employees believe in corporate goals in preference to assessing the extent that employees perceive congruence between the goals they agree to and their personal goals. Greater mismatch between the OCQ and managers' views occurred in regard to the `desire to stay' element which was not identified as being a part of commitment in this study. The need for individuals to develop and manage their own employability and the inability of employers to offer long term job security have made desire to stay a doubtful component of

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Table 2. Illustrative comments for the dimensions of organizational commitment Comments about achievement ``. . . the committed person probably is seen to be actively seeking things that need to be done.'' (NHS manager). ``I still think of commitment as not just being what people say they've signed up to but as action related. Committed people are those who once they have agreed on objectives discharge them to an acceptable standard within whatever code of good practice applies . . . and deliver . . . on time.'' (Private hospital manager). [Committed employees are] ``well motivated and hard working and who stay and see the job done''. (Defence contractor). Comments about creativity and innovation ``It's not all about hours. I think it is perhaps an extra involvement in the work. Coming up with the extra idea or getting involved because they believe in it . . .'' (NHS manager). ``We regard it as a high degree of commitment if somebody challenges the status quo. Not being bolshy but from the point of view of saying why do you do it this way, are there better ways of doing it? Provided it meets the overall mission of the company.'' (Aerospace manager). Comments about goal congruence ``For a long time we haven't had a clear vision..because we are very large with lots of different businesses . . . each has their own culture, their own budgets''. (County Council manager). ``It's about being committed to the client and the product first, and through the client and the product to the organization.'' (Private hospital manager). ``An individual that is totally committed is committed for the company as a whole, not just their own area and interest ± their concern is for the company as well as individuals in their department.'' (Electronics research company). Comments about desire to stay ``So I think that while they are here and they can see some benefit for their own personal development and can do a good job they will give the commitment but they have to take a longer term view. People will make decisions to move around and that's to be expected.'' (Borough Council manager).

the commitment definition. In light of these findings and consideration of the revised psychological contract, a new definition of commitment for use with organizational professionals is offered which can be used to lay a foundation for the creation of a new commitment measurement scale for use in organizational research. The organizational commitment of professionals is defined as the internalisation of agreed, taskrelated goals concurrent with the continuing display of behaviours directed at goal achievement and other positive outcomes that benefit the organization. The next stage in the reconceptualisation was to consider how this definition can be operationalised for subsequent research purposes. To examine this, the three dimensions of achievement, innovation and personal goal

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congruence were incorporated into a new, 12item Behavioural Commitment Scale (BCS). Achievement and innovation were expressed as self-reported behaviours whereas goal congruence was expressed attitudinally and a construct validation study was conducted using samples of scientists and accountants in public and private sectors (Swailes, 1999). Example items are, for the innovation scale, `I suggest improvements to efficiency and quality', for the achievement scale, `I see jobs through to the end even if it sometimes means affecting my social and home life', and for the goals scale, `Working here allows me to meet my own personal goals'. The achievement and innovation scales were 6-point, verballyanchored scales ranging from `never' to `continually' and the goals scale was a 7-point verbally anchored Likert scale ranging from `strongly disagree' to `strongly agree'.

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ational support did not predict innovative behaviours. Achievement-related behaviours were predicted only by professional autonomy and perceived organizational support although only 8.1 % of the variance in achievement was explained. Commitment to task-related goals was positively predicted by perceived organizational support, professional commitment, age, and professional autonomy. Social exchange ideology, professional self-regulation and perceived job insecurity were all negative predictors. These variables accounted for 58.6 % of total variance.

Antecedents of Behavioural Commitment A quantitative study designed to provide evidence for the construct validity of the Behavioural Commitment Scale is summarised in Appendix 1 and key results concerning the predictors of the new model of commitment are summarised in Tables 3 to 5. Innovation was predicted by professional autonomy and professional commitment. Continuance commitment and sex (male = 0, female = 1) were negative predictors of innovative behaviours. However, only 12.9% of the variance in innovation was explained and, contrary to expectations, perceived organiz-

Table 3. Predictors of the Innovation subscale of the BCS Variable Professional autonomy Professional commitment Continuance commitment Sex

R2

DR2

F eqn

sig. F

beta

t

sig. t

.087 .113 .1256 .1346

.087 .026 .0126 .009

54.2 36.6 27.3 22.1

.000 .000 .000 .000

.24 .14 7.13 7.096

6.0 3.43 73.09 72.44

.000 .000 .002 .015

Equation adjusted R2 = .129. df 4, 569. Other variables noted in Appendix 1 were not significant predictors (p5.05). Stepwise entry.

Table 4. Predictors of the Achievement subscale of the BCS Variable Professional autonomy Perceived organizational support

R2

DR2

F eqn

sig. F

beta

t

sig. t

.069 .084

.069 .015

41.9 26.1

.000 .000

.229 .138

5.54 3.1

.000 .002

Equation adjusted R2 = .081. df 2, 569. Other variables noted in Appendix 1 were not significant predictors (p5.05). Stepwise entry.

Table 5. Predictors of the Goals subscale of the BCS Variable Perceived organizational support Professional commitment Age Professional autonomy Social exchange ideology Belief in self-regulation Perceived job insecurity

R2

DR2

F eqn

sig. F

beta

t

sig. t

.525 .559 .571 .580 .584 .588 .591

.525 .034 .012 .009 .004 .004 .003

626.3 359.0 251.5 194.6 158.2 133.5 115.7

.000 .000 .000 .000 .000 .000 .000

.610 .184 .121 .082 7.071 7.060 7.061

19.0 6.14 4.36 2.83 72.60 72.10 72.06

.000 .000 .000 .005 .010 .036 .040

Equation adjusted R2 = .586. df 7, 561. Other variables noted in Appendix 1 were not significant predictors (p5.05). Stepwise entry.

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Discussion The BCS responds to the literature on organizational performance that is grounded in the management of individual creativity rather than the exploitation of physical assets (see Handy, 1989; Peters, 1988; Porter, 1985). The BCS represents a radical shift in the meaning of commitment when compared to the popular measures that were developed during the industrial era and which are still commonly used in quantitative organizational research. These, by and large, see organizational commitment as an attitudinal construct and yet a literature exists that has treated organizational commitment as a more complex construct involving both attitudes and behaviours (e.g. see Kuhn and Geis, 1988; Randall et al., 1990; Wiener and Gechman, 1977). In particular, there are conceptual similarities to Benkhoff's work on commitment which she saw as involving `taking the initiative for suggesting improvement' and `acceptance of organizational policies' (Benkhoff, 1997, p. 706). The HRM literature is also receptive to commitment as involving, rather than leading to, behaviours (Guest, 1991, p. 42; Storey and Sisson, 1991, p. 168) and the new view is consistent with views of commitment that also stem from qualitative research among organizational professionals (Coffey, 1994; Grey, 1994). Finally, the new scale's focus upon outcomes that benefit the organization is consistent with recent career revisionist literature which holds that individuals need to display the characteristics of enterprise and innovation in the management of their careers (Adamson et al., 1998; Arnold, 1997 p. 33; Dopson and Neumann, 1998). This paper suggests that the classic view of commitment as being substantially or wholly a positive attitudinal state concerning organizational goals, regardless of the occupational group in question, gained acceptance during times of stable and predictable business environments. The onset of fast-paced events which cause organizations to cope continually with unpredictable and large-scale changes and an accompanying rhetoric of managerialism have, for professionals at least, acted as forces influencing the meaning of commitment. Furthermore, it is suggested that commitment has evolved in response to these forces to keep pace with the reshaped relationships that are now required between employees and organizations. Commitment's evolution process, however, has been extensive and far-reaching such that it has evolved into a far more complex animal to cope with life in post-industrial organizations. In reshaping itself, organizational commitment

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assimilated concepts that already existed in their own right, namely energies directed at achieving results and innovating in the work place. The three dimensions have differential predictors. Perceived organizational support had a large influence on commitment to goals and a much smaller influence on achievement. Feelings of professional autonomy were the most powerful predictors of both innovation and achievement but did not predict commitment to goals. While this study offers a new way of looking at commitment, several limitations are present. It is difficult to say decisively how far the qualitative survey tapped into `true' experiences of working with people who were, by any consensus, viewed as being highly committed even though interviewees were asked to bring examples of highly committed colleagues to mind. This issue impinges upon the validity of the interview findings which could be regarded as vulnerable to from managerial stereotyping. The quantitative survey was cross-sectional in design and so no causal relationships between the variables studied can be confirmed. Data were self-reported although there were no indications of strong method variance effects present. What then are the implications from this study? Commitment, broadly defined, remains a central variable in the development of organizational theory. Classical measures of commitment continue to measure useful constructs (such as the extent of belief in organizational goals) but a strong case is made here that this no longer properly represents organizational commitment among organizational professionals. There is a clear implication for researchers employing quantitative techniques to think very carefully about the continued validity and relevance of generic measurement instruments purporting to measure commitment, such as the OCQ, the ACS and the BOCS, in studies that aim to understand the antecedents of creativity and innovation among others. Second, if the view of commitment proposed here for professionals is accepted, then more research is necessary to understand how commitment differs across diverse occupational and perhaps organizational contexts if its links to creativity and innovation are to be unravelled. More customised measures of commitment appear to be required if we are to push forward innovation theory using quantitative approaches. Third, given that most of the variation in the innovation and achievement components of behavioural commitment was explained by unmeasured variables, further work is needed to understand their determinants. The important

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Commitment proved different from what was required

role of developing support mechanisms meaningful to individuals is emphasised for goal congruence and achievement-related behaviours and it would seem beneficial for organizations to develop feelings of professionalism among the workforce as there was no evidence that high professionalism detracts from commitment to the organization as the classical local versus cosmopolitan view of professionals in organizations maintains (see Gouldner, 1958). Fourth, continuance commitment (more easily thought of as perceived barriers to exit) had a weak negative association with self-reported innovation and so strategies to counter perceptions of exit barriers among employees seem advisable. In closing, it is necessary to revisit the introductory comments about the rhetoric of human resource management. No grand claim is made here that the definitive form of organizational commitment has been found ± all that can be claimed is that the views expressed about commitment contrasted markedly with the content of widely used commitment measurement scales. Whether this represents reality or rhetoric remains unresolved and it would be useful to contrast the views developed here with those of organizational professionals in nonmanagerial roles. This could either reinforce or cast aside doubts over whether this research simply echoed the vocabulary of managerialism or whether it has captured a deeper, real change in the attitudes and behaviours of employees.

Conclusions The BCS is at the early stages of development and more research is necessary to develop the scale psychometrically and to examine its relationships with classical measures of commitment. However, this paper suggests a new way of looking at commitment, one that could help to take an important research field further forward. More work is necessary to see how the new form of commitment relates to similar but distinct scales, for instance, scales that measure employees' perceptions of the organizational climate for innovation (e.g. Amabile and Gryskiewicz, 1989; Ekvall, 1997; Jones, 1993). Further work is necessary to examine the potential for integration of theoretical domains such as job involvement, creativity and commitment in order to understand how distinctive they are as a prerequisite to understanding the determinants and effects of commitment in a post-industrial professional workforce. This point is perhaps the most important as some culling and/or

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integration of the many different constructs that have been invoked by the organizational research community in order to model organizational life could be a way of bringing clarity to an overcrowded domain. With a more accurate and representative measure of organizational commitment in the `toolkit', scholars and managers will be able to develop a better understanding of actual relationships among variables such as commitment, creativity and innovation.

Appendix 1. Summary of Construct Validation Study The BCS and other variables were incorporated into a postal questionnaire sent to three independent samples comprising 1000 pharmaceutical chemists, about 500 management accountants also employed in the UK pharmaceutical sector and about 500 accountants employed in local government in the UK. All respondents were members of a professional body; the Royal Society of Chemistry or a chartered accountancy institute. The response rate from each sample group was about 30% leading to 633 usable returns. In a context of organizational restructuring in pharmaceuticals and the public sector, the validity of the Behavioural Commitment Scale was examined in relation to a set of highly salient variables. These included, perceived organizational support and social exchange ideology (Eisenberger et al., 1986), job insecurity (Deery et al., 1994), professionalism (Snizek, 1972), professional commitment (Blau, 1989). Affective commitment and continuance commitment (Meyer and Allen, 1997) were also included for comparative purposes. (The professionalism scale contains sub-scales measuring autonomy, use of the profession as a major referent, belief in public service, and belief in self-regulation). Other variables related to the prediction of commitment were age, tenure, sex, union membership, and perceived scope for advancement. This approach was similar to that adopted by Amabile et al. (1996) in assessing the predictors of creativity. The sample obtained was predominantly male, 79%, with an average age of 40 years. Average organizational tenure was 11 years and 18% of respondents reported that they had involuntarily lost a job at some time in their career suggesting that most respondents had experienced relative job security. Diagnostic tests indicated that the survey data met the assumptions of linear regression (Norusis, 1993) and tests for multi-collinearity indicated that this was not a problem in the regression equations tested.

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Internal consistency reliability (Cronbach's alpha) for the independent variables was good with alphas in the range .7 to .93 except for the job security scale at .61. For the three BCS scales alphas were, after item deletion: Achievement 3 items .90; Innovation 4 items .87; and, Commitment to Goals 5 items .85. Alpha for the combined 12-item scale was .85. Exploratory factor analysis (Principal Axis Factoring with oblique rotation) yielded a factor structure in which the several variables loaded onto distinct factors indicating that common method variance was not a problem in this survey. Confirmatory factor analysis on the BCS showed that a three factor structure gave the best fit to the data and the overall level of fit was good: Chi square 181.5, p=.000, df=51, Comparative Fit Index .97, Normed Fit Index .96. Correlations between the three BCS factors were: Innovation-Achievement .39; Innovation-Goals .27; and, Achievement-Goals .29. These moderate levels of factor intercorrelation leave some doubt about the utility of summing the factor scores but, with this in mind, correlations between the summed 12item BCS and other variables were: perceived organizational support .55; job insecurity 7.27; professional commitment .41; professionalism .51; social exchange ideology 7.14; affective commitment .60; and continuance commitment 7.24. (All significant at p5.05). The magnitude and sign (positive or negative) of these correlations are theoretically consistent and provide support for the validity of the BCS.

References Adamson, S.J., Doherty, N. and Viney, C. (1998). The Meanings of Career Revisited: Implications for Theory and Practice. British Journal of Management, 9, 4, 251±259. Amabile, T.M., Conti, R., Coon, H., Lazenby, J. and Herron, M. (1996). Assessing the Work Environment for Creativity. Academy of Management Journal, 39, 5, 1154±1185. Amabile, T.M. and Gryskiewicz, N. (1989). The Creative Environment Scales: Work Environment Inventory. Creativity Research Journal, 2, 231±253. Arnold, J. (1997). Managing Careers into the 21st Century. London:Paul Chapman Publishing. Beardwell, I. (1992). The `New Industrial Relations'? A Review of the Debate. HRM Journal, 2, 2, 1±7. Benkhoff, B. (1997). Ignoring Commitment is Costly: New Approaches Establish the Missing Link between Commitment and Performance, Human Relations, 50, 6, 701±726. Blau, G. (1989). Testing the generalizability of a career commitment measure and its impact on turnover. Journal of Vocational Behavior, 35, 88±103.

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Coffey, A.J. (1994). Timing is Everything: Graduate Accountants, Time and Organizational Commitment. Sociology, 28, 4, 943±956. Cook, J., and Wall, T. (1980). New work attitude measures of trust, organizational commitment and personal need non-fulfilment Journal of Occupational Psychology, 53, 39±52. Deery, S.J., Iverson, R.D. and Erwin, P.J. (1994). Predicting Organizational and Union Commitment: The Effect of IR Climate. British Journal of Industrial Relations, 32, 4, 581±597. Dopson, S. and Neumann, J.E. (1998). Uncertainty, Contrariness and the Double-bind: Middle Managers' Reactions to Changing Contracts. British Journal of Management, 9, Special Issue, S53±S70. Eisenberger, R., Huntington, R., Hutchinson, S. and Sowa, D. (1986). Perceived Organizational Support, Journal of Applied Psychology, 71, 3, 500±507. Ekvall, G. (1997). Organizational Conditions and Levels of Creativity. Creativity and Innovation Management Journal, 6, 4, 195±205. Exworthy, M. and Halford, S. (1998). Professionals and the new managerialism in the public sector. Open University Press, Buckingham. Gouldner, A. W. (1958). Cosmopolitans and Locals: towards an analysis of latent social roles ± II. Administrative Science Quarterly, 2, 444±480. Grey, C. (1994). Career as a Project of Self and Labour Process Discipline. Sociology, 28, 2, 479±497. Guest, D.E. (1991). Human Resource Management: its implications for industrial relations and trade unions. In, J. Storey (Ed.) New Perspectives on HRM, Routledge, pp. 41±55. Guest, D.E. (1995). Human resource management, trade unions and industrial relations. In, J. Storey (ed.) Human Resource Management: a critical text,, Routledge, pp. 110±141. Guest, D.E. (1999). Human Resource Management and Performance: A Review and Research Agenda. In, Schuler, S. and Jackson, S. (eds.), Strategic Human Resource Management, Blackwell, Oxford, pp. 177±190. Handy, C. (1989). The Age of Unreason, Business Books, London. Hartley, J. and Stephenson, G.M. (1992). The Psychology of Employment Relations. In J. Hartley and G.M. Stephenson (Eds.) Employment Relations, Blackwell, Oxford, pp. 1±16. Harvey, D. (1990). The Condition of Postmodernity. Blackwell, Oxford. Hatch, M.J. (1997). Organization Theory: modern, symbolic and postmodern perspectives. Oxford University Press, Oxford. Herriot, P., Manning, W. and Kidd, J. (1997). The Context of the Psychological Contract, British Journal of Management, 8, 2, 151±162. Hiltrop, J-M. (1995). The Changing Psychological Contract: The Human Resource Challenge of the 1990s. European Management Journal, 13, 3, 286±294. Jones, O.E. (1993). Creating Innovatory Climate: R+D Scientists in High-Technology Organizations. Creativity and Innovation Management 2, 4, 252±259. Jones, O.E. (1996). Strategic HRM: Implications for Pharmaceutical R+D. Technovation, 16, 1, 21±32. Keenoy, T. and Anthony, P. (1992). HRM: Metaphor, Meaning and Morality. In Blyton, P. and

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Turnbull. P. (eds.) Reassessing Human Resource Management. SAGE, pp. 233±255. Kelly, J. and Kelly, C. (1991). `Them and Us': Social Psychology and the New Industrial Relations. British Journal of Industrial Relations, 29, 1, 25±48. King, N. (1994) The Qualitative Research Interview. In Cassell, C. and Symon. G. (eds.) Qualitative Methods in Organizational Research: A Practical Guide. SAGE Kuhn, R.L. and Geis, G. T. (1988). Building and Breaking Creativity: What Religion teaches Business about Commitment. In Kuhn, R. L. (ed.) Handbook for Creative and Innovative Managers, McGraw Hill, New York, pp. 155±172. Kumar, K. (1978). Prophecy and Progress: the sociology of industrial and post-industrial society. Allen Lane, Harmondsworth. Lash, S. and Urry, J. (1987). The End of Organized Capitalism. Polity Press, London. Legge, K. (1995a). HRM: rhetorics, reality and hidden agendas. In. Storey, J. (ed.) Human Resource Management: A Critical Text, Routledge, pp. 33±59. Legge, K. (1995b). Human Resource Management: Rhetorics and Realities. Macmillan. Meyer, J.P. and Allen, N.J. (1997). Commitment in the Workplace. SAGE. Morrow, P.C. and Wirth, R.E. (1989). Work Commitment among Salaried Professionals. Journal of Vocational Behavior, 34, 40±56. Mowday, R.T., Porter, L.W., and Steers, R.M. (1982). Employee Organization Linkages: The Psychology of Commitment, Absenteeism and Turnover. Academic Press. Norusis, M.J. (1993). SPSS for Windows: Base System User's Guide Release 6.0. SPSS Inc., Chicago. Pemberton, C. and Herriot, P. (1993). Can purity damage your health? The fate of technical professionals in the 1990s. Recruitment, Selection and Retention, 2, 2, 17±27. Peters, T.J. (1988). Thriving on Chaos. Macmillan, London.

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Poole, M. and Mansfield, R. (1992). Managers' Attitudes to Human Resource Management: Rhetoric and Reality. In Blyton, P. and Turnbull, P. (eds.) Reassessing Human Resource Management, SAGE, pp. 200±214. Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, New York. Randall, D.M., Fedor, D.B. and Longnecker, C. (1990). The Behavioural Expression of Organizational Commitment, Journal of Vocational Behavior, 36, 210±224. Randle, K. (1996). The white-coated worker: professional autonomy in a period of change. Work, Employment and Society, 10, 4, 737±754. Shore, L.M. and Tetrick, L.E. (1994). The Psychological Contract as an Explanatory Framework in the Employment Relationship. In Cooper, C.L. and Rousseau, D. (Eds.) Trends in Organizational Behaviour, Vol. 1, John Wiley, Chichester, pp. 91±109. Snizek, W.E. (1972). Hall's Professionalism Scale: an empirical reassessment. American Sociological Review, 37, 109±114. Storey, J. and Sisson, K. (1991). Looking to the Future. In, J. Storey (Ed.) New Perspectives on HRM, Routledge, London, pp. 167±183. Swailes, S. (1999). Organisational Commitment of Professional Employees: Measurement and Interaction Effects. Unpublished Ph.D thesis, University of Leicester. Wiener, Y. and Gechman, A.S. (1977). Commitment: A Behavioural Approach to Job Involvement. Journal of Vocational Behaviour, 10, 47±52.

Dr Stephen Swailes is Assistant Head of School, School of Business and Management, University College Northampton, United Kingdom.

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Creativity and Innovativeness through Reflective Project Leadership Susanne Ollila The potential contribution of reflection to leadership at the project level is explored by building upon theories of reflection, and by presenting a case describing reflective leadership in practice. Reflective leadership refers to the process by which leaders reflect on their own leader behaviour in order to understand how it affects the behaviour of others. A means of facilitating leaders in their development of reflective skills is described. The evidence supports the proposition that reflective leadership can be enhanced to the benefit of innovative climate in projects.

Introduction

R

esearchers and practitioners alike have long argued for reflection as an important component in organisational learning and development (Argyris and SchoÈn 1974; Busby, 1999; Holland, 1999; Tsoukas, 1994). Reflection, as a key component of learning, has received little attention in the project management and leadership literature. Moreover, learning has recently been identified as a critical performance indicator for successful R&D projects (Adams et al, 1998; De Meyer, 1991; KyleÂn, 1999; Nonaka & Takeuchi, 1995). The complexity of project management demands a better understanding of the optimal leadership behaviour when it comes to supporting the success of projects that consist of highly skilled people with autonomous but interconnected work. Different situations require different types of leadership. Substantial research has been conducted on leadership, with some focusing on leadership and innovativeness (Arvonen, 1995; Bass, 1985; Bass and Avolio, 1994; Burns and Stalker, 1994; Ekvall and Arvonen, 1994; Moss Kanter, 1989; Waldman, 1994). Ekvall and Arvonen (1994) find different leadership profiles expressed through three leadership dimensions. One of these profiles is labelled the gardener. This type of leader creates a climate where the subordinates' creativity can grow. The gardener leadership style is connected to development of people, as well as products and processes. The transformational leader (Burns, 1978; Bass, 1985; Bass & Avolio, 1994) is in many ways similar to the gardener. # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

What is it that makes these two leadership styles favourable for creativity and innovativeness? This paper suggests that reflection, as a dimension of project leadership, might be one explanatory variable. Furthermore, the paper discusses how leaders can become more reflective through training and, thus, support innovativeness in their projects. Researchers and practitioners alike have long argued for reflection as an important component in organisational learning and development (Argyris and SchoÈn, 1974; Busby, 1999; Holland, 1999; Tsoukas, 1994). However, reflection has received little attention in project management and leadership literature even though learning has recently been identified as a key component for successful R&D projects (Adams et al, 1998; De Meyer, 1991; KyleÂn, 1999; Nonaka & Takeuchi, 1995). Leading product development projects is about suppporting highly skilled people with autonomous but interconnected work. What kind of leadership is needed to support the success of this kind of projects and what kind of support might the leaders need to manage to execute their assignment? Reflection in the context of leadership is often mentioned as a desirable qualification, but there has been little effort put into describing the meaning and process of reflection. Argyris (1986) advances the notion that, due to defensive routines, leaders seem to prevent learning and development. Argyris (1986) finds that leaders have a tendency to get stuck in incompetent behaviour (behaviour that is counterproductive) because they have problems with defensive routines;

Different leadership styles required

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i.e. actions to avoid surprise, embarrassment, or threat. He claims that one way to overcome defensive routines is by recognising what one is saying to avoid embarrassing situations by means of separating feelings and thoughts from what actually is said. Discussing this left-hand/right-hand column method Argyris (1986) does not mention reflection, but his theory implies that there is a need for reflection to get away from behaviour that prevents learning and development. In light of the above, this paper highlights the potential contribution of reflection to leadership at the project level by presenting theories of reflection and a case describing reflective leadership. The aim is to add to the understanding of how reflective leadership can be supported and sustained. We also reveal how reflection can serve as a leader development method and can contribute to improving the innovative climate in projects. Reflective leadership refers to leaders reflecting on their own leader behaviour in order to understand how it affects the behaviour of others. This becomes a source to understanding why others behave as they do. Reflective leadership is more than just changing the leader behaviour. It is a cognitive process that attempts to bring a change in what leaders think about their behaviour.

Reflection Reflection is a common term, but what does it mean? Weick (1979) states that all understanding originates in reflection and therefore through looking backwards. Individuals first enact their environment, which they subsequently seek to understand through reflection. Reflection is about compartmentalizing experiences into meaningful parts, labelling them and constructing connections between them. Weick (1979) also discusses reflection as an important part of retrospective sense making. Reflection removes equivocality from individuals' interactions, which leads them to form a relatively homogenous view of their task and how it ought to be carried out. Postman (1986) remarks that humans live in two worlds ± the world of events and things, i.e., the territory; and the world of words about events and things, i.e. the map. How do individuals map their territory? If one takes Postman's position, actions can be viewed as the map and by reflecting, one can get in touch with the territory, i.e. get an understanding of what actually happened and why. The understanding of one's own actions then becomes a new map of one's own personality

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and behaviour. This map is used to understand experiences and reflection up-dates it. The picture of oneself as an interacting, influential individual is, by this means, constructed and reconstructed. One can argue that reflection can be conducted on many levels, and that not all reflection influences or changes personality. There are well-established theories claiming that personality is hard to change: for example, Freud's (1986) psychoanalysis maintains that our personality develops during childhood when behaviour is determined. Reflection, in this context, is about questioning one's own behaviour, attitudes, and values. To further explore the notion of reflection, SchoÈn's (1991) theory of reflection is discussed shortly. Following Weick (1979) and Postman (1986), it can be argued that individuals act spontaneously according to their own local knowledge without a guiding roadmap. Thus, action takes place before we know what the situation is all about. Reflection is a way to construct logic for actions that have occurred and a way to regain a feeling of being in control of a situation. In the context of project leadership, this would imply that leaders are not fully aware of how they behave as leaders if they do not continuously reflect on their actions. Leading R&D projects usually means managing ongoing tensions of tight time frames, tough budgets, and high quality requirements. Thus, projects are characterised by multiple activities and actions, while reflection is not emphasised appreciably. The consequence could be that the project is likely to produce more of the same behaviour and results, which could be counterproductive to the completion of the project. For most projects, this may be too risky.

Reflection-in-action If one agrees that actions are unforeseeable and that individuals' interpretations of situations are seldom the same, one could argue that it is important that leaders take others' perspectives into account. The role of leaders becomes primarily to support co-workers in making sense of situations. SchoÈn (1991) mentions the architect and the therapist both who use what he calls reflection-in-action to obtain an understanding of the perspective of others. SchoÈ n (1991) emphasises the need to change the view of practical work from Technical Rationality to Reflection-in-Action. According to Technical Rationality, profes-

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sional practice, e.g. leadership, is a process of problem solving where decisions are made through selection from available means to reach a selected end. SchoÈn points to the very fact that ends are often confusing and conflicting. There is no clear problem to solve; rather, the practitioner has to make sense of the uncertain situation to construct the problem. Reflection-in-action is one way of doing this. Technical problem solving occupies a limited place within the inquirer's reflective conversation with the situation. Thus, technical rationality seems incomplete. SchoÈn (1991) emphasises that reflectionin-action is not to look for cues to a standard solution. Rather, it is to discover the particular features of the specific situation, and from this discovery, gradually design an intervention. He makes clear that Reflection-in-action is about selectively managing a large amount of information, spinning out long lines of invention and inference and having the capacity to hold several ways of looking at things at once without disrupting the flow of inquiry. By means of reflection-in-action, the uniqueness and uncertainty of situations is handled. What happens is that we use earlier experiences to understand a unique situation without using it as a rule to classify the new situation with other familiar things. Earlier experiences should be used as a repertoire of examples and understandings. SchoÈn (1991) describes it as follows: When a practitioner makes sense of a situation he perceives to be unique, he sees it as something already present in his repertoire. To see this site as that one is not to subsume the first under a familiar category or rule. It is, rather, to see the unfamiliar, unique situation as both similar to and different from the familiar one, without at first being able to say similar and different with respect to what. Weick (1979) and Postman (1986) differentiate between action and words about action. They argue that action comes first, and reflection is a way to make sense of the experience of that action. SchoÈn (1991) stresses that action and knowledge are inseparable. He also emphasises the importance of reflection as a way to use earlier experiences to understand (make sense of) a new unique situation. We can summarise that reflection promotes the project leader to make sense of her/his own and others' behaviour. This constitutes an important facilitator for her/ him to learn about and develop one's own leadership.

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Learning Requires Reflection Reflection for project leaders facilitates recognition and sense-making of new situations, but is it enough for the leaders to learn and change? As mentioned earlier, learning is an important component in the creation of organisational effectiveness and innovation. Learning is not a part of everyday work. It seems to be a problem in many R&D projects (Adams et al, 1998; KyleÂn, 1999). The trouble is not in the way new theories and actions are. It is, rather, existing theories that determine action and block learning (Argyris, 1991). Changing the way one behaves becomes problematic since most people assume that they are doing what they explain they are doing. Argyris and SchoÈn (1974) make a distinction between espoused theories and theories-inuse. They claim that it is the old theories-inuse that block learning. Single-loop learning contributes to the preservation of actions. This generates more of the same behaviour. It creates sealed processes of thought that obstruct learning and development, and results in resistance towards renewal. Double-loop learning, on the other hand, questions governing settings and puts one's whole system of theories-in-use in question by searching for knowledge and reflection. When people are not stuck in presumptions and values like the ones connected to single-loop learning, development and innovation are enabled. Reflection, besides being considered as making sense of actions and situations, can be viewed as the questioning of the process. Accordingly, reflective leadership can be viewed as a way to bring about leadership development. Leader development programs such as coaching, mentoring, and 360-degree feedback aim at changing the behaviour of the leader as well as influencing her/his selfawareness (Bloch, 1996; Crossley and Taylor, 1995). These types of programs should include reflection training, as we have learnt from the above discussion and will explore further. Leadership without reflection can reinforce unsuccessful leader behaviour and, in the long run, this behaviour can be institutionalised as organisational incompetence.

Action and knowledge

Reflective Leadership ± A Case Illustration Reflection is important for project leaders since it helps them make sense of uncertainties, understand the behaviour of others, and improve as leaders. This argument has been suggested earlier. But the question as to how

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reflective leadership might be practised is still to be explored. How can project leaders make sense of their own and others' behaviour, become aware of the difference between what they think they are doing and actually do, and change from single to double-loop learning? A case illustration will help explain how reflection, in general, and reflective leadership, in particular, can be practised. This case describes a situation where the author of this paper is a researcher acting as a reflecting partner for a leader (John) who works in the development of management systems in a large Swedish company. Approximately once a week during a sixmonth period, I observed John's interaction with his colleagues in different meetings related to developing the management systems in the product development process at their company. At first, I was only observing John to recognise his style of acting and interacting. Following two separate observations, it was time to add the reflection session to the meetings that were to be observed in the future. During this hour of reflection labelled ``the reflection session'', I asked John a series of questions that made him reflect on his actions during the meeting. At first, John had difficulty talking about what he had been saying and doing. His focus was on the behaviour of others rather than his own. My initial questions were surface level questions: What did you say? What did you want to say? In Argyris' (1991) terms this would be the espoused theory, and what I saw happening earlier on at the meeting would be the theory-in-use. As the conversation continued, I gradually changed the focus to why things happened: Why did Mr X answer the way he did? Could there be any other explanation to why he said what he did? How did you affect Mr X to say what he said? John now had to reflect on the situation with this kind of questioning. In the beginning, John was confident of his answers. He, later, became doubtful and unsure. John asked me what he should have done. Instead of answering, I told him to listen carefully to the questions and his own answers, and he would learn new ways of thinking and acting. My questions emanated from what I had seen. The difference between what John thought he was doing and actually did became clear. After four reflection sessions, I did not need to take John to the deeper level of reflection since he already started questioning his own behaviour when answering the first surface level questions. I also observed that John used a more inquiring approach when talking to colleagues at the

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meetings I observed. He had begun to internalise and use some of the skills from our reflection sessions. The reflection sessions seemed to have helped him become a reflective leader, understand how he affected others, and how others affected him. During our exploration, it seemed like John learnt that questioning is not a sign of mistrust or an invasion of privacy, but rather a valuable opportunity for learning. He said that reflection was difficult in the beginning and asked why I questioned his answers. He did not know where the reflection sessions were going and waited for me to reveal the right answer to how he should have behaved. However, this did not happen. John began to perceive the difference between what he said he had done and what he noticed while reflecting on what he actually had been doing. Learning can be painful and learning to be reflective even more so, but the payoff of recognising one's ineffective behaviour can make the investment worthwhile. Reflection might be a way to reduce time-consuming misunderstandings and contribute to the creation of a working climate distinguished by questions and mutual understanding. For project leadership, this kind of reflective leadership would imply a project environment where asking is a sign of interest rather than incompetence. This would reduce the strain on the autonomous working project member. Reflective leadership could also help to uncover misunderstandings before damage has been done. In this case, reflective leadership was not an obvious part of leadership at first. John thought the questions were unnecessary and strange before it became clear to him that they taught him a lot about his own behaviour. The case also presents one way to conduct reflective leadership. It would have been an alternative for someone within the organisation to have acted as facilitator. That would, however, have brought about concerns about the consequences of embarrassment and organisational politics. The case points to the importance of inquiry, serving to remind even highly successful leaders that nobody is perfect. The questions serve a very important purpose in making the leader's unreflected knowledge about his leadership perceptible, reflected and changeable ± reflective leadership might be a way to bring about double-loop learning. Asking questions to expose and find knowledge that is tacit is an old method. Socrates has become a symbol for the uncompromising search for truth by constantly being critical and questioning. The Socratic

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dialog aims at revealing knowledge and understanding that individuals already have by means of questions, answers, and reflection (Molander, 1993). The objective is to gain practical and theoretical knowledge about what human reason is and how to live reasonably. Socrates is acting as if he does not know much about what he is asking and turns to a person who thinks he knows. Socrates emphasises that all he wants is to learn. The dialog procedure makes the dialog partner discover his own insufficient knowledge, which is essential. But the most important part is to uncover, understand, and gain insight into what is unknown for the person. The Socratic dialog is similar to the method I followed during the reflection sessions, although, as I interpret it, Socrates had not observed the individuals he talked to and therefore might have ended up having a dialog about the individuals' espoused theories. Action seems not to have been in focus. Today, action does count; action is in many businesses seen as the only thing that really counts. In the world of projects, actions seem to make us memorable, and the ``right'' actions can even make us famous. Reflection, in most cases, seems to be considered undesirable, because it is time consuming, ``passive'' and inefficient.

Reflection and Project Leadership Why should leaders have the need to reflect more than others in the organisation? As Argyris (1986) argues, leaders often have a hard time learning. They are often the biggest obstacles to continuous learning even if they are the most enthusiastic about it. If this is the case, we should not accept that leaders prevent learning and development. Over the last few decades, there is an emphasis, both among researchers and practitioners, on viewing leadership as a process of leaders and followers engaging in reciprocal influence (Bass, 1985; Bass and Avolio, 1994). One theory ± Transformational Leadership ± goes beyond seeing leadership as an exchange or an agreement between the followers and the leader. Bass and Avolio (1994) advance the argument that the transformational leader is the one who encourages her/his followers' efforts to be innovative and creative by questioning assumptions, reframing problems, and approaching old situations in new ways. Projects gain from this type of leadership and, in fact, Waldman (1994) focuses on transformational leadership of innovative

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cross-functional teams. According to Waldman, the team needs to break new ground, which in turn requires that the leader facilitate a culture that encourages team members to continually test basic assumptions, try out alternative viewpoints, procedures, and develop new perspectives. Waldman (1994) contends that this approach to leadership is transformational because it enables the leader to be skilful in dealing with different values and perspectives. This description of transformational leader behaviour is similar to what has been discussed here about reflection. The reflective leader is an inquirer who constructs a meaning of the complex and the problematic by using earlier experiences as his or her repertoire. However, while these approaches highlight the characteristics of transformational leadership, they provide few insights as to the methods that leaders can employ to achieve this approach. One can argue that reflective leadership is one way to accomplish transformational leadership. In order for a project leader to act as a transformational leader, i.e. questioning followers' assumptions, reframe problems, and approach old situations in new ways, the leader has to reflect on her or his own leader behaviours. What is the project leader doing that is hampering the followers from thinking and acting differently? Attempts to address these issues contribute to a project culture that encourages participants to test basic assumptions and to consider new perspectives and actions. If we assume that it is not ``natural'' for leaders to reflect on their own leader behaviour, it is important to ask how reflective leadership should come about. One cannot force individuals to double loop around their own behaviour. Moreover, scrutinising oneself is often connected to some kind of embarrassment. Leaders, in particular, may think of it as a failure in their role as a leader. There is also a possibility that leaders do not reflect on their leadership because they do not want to be aware of what effects their behaviour is causing. It is important to know that leadership is a relationship between the leader and the followers, and that action is a result of the interplay between them, and therefore, cannot be linked back to the leader's behaviour alone. Reflection helps one to be aware of what is occurring in this interplay. Our case presents reflective leadership as it appears by means of an external reflection partner. Having someone from outside the organisation supporting reflective leadership might be an effective way to get even the most non-reflective leader to test other thoughts

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and assumptions. With this, reflective leadership might be viewed as leader development. The questions asked helped the leader not only identify her or his own contribution to the leadership, but also come up with ideas about what should have been said and done differently. Thus, reflective leadership can be viewed as continuous improvement of leadership without off-site training programs.

Conclusions The fundamental message of this paper is that in order to promote innovativeness at the project level, project leaders need to consider how their leadership is influencing the behaviour of the project members. This paper argues that reflection; i.e. questioning one's own leader behaviour, is one method that can be employed by the project leader to achieve this end. For such a leadership model to be successful, it needs to be based on a number of simple principles or routines that encourage open-ended thinking and foster risk taking, while at the same time, keep in focus the more routinised aspects of project work. The paper also points to reflection as an important part in leadership development, since it fosters self-awareness and leader learning and development. [Moger & Rickards reported a model with similar characteristics, in CAIM Vol 8, No 3 : Ed.]

References Adams, M., Day, George, S. and Dougherty D. (1998) Enhancing new product development performance: an organizational learning perspective. Journal of Product Innovation Management, 15, 403±422. Argyris, C. and SchoÈn, D. (1974) Theory in Practice: Increasing Professional Effectiveness. Jossey-Bass Inc. Publishers, San Francisco, USA. Argyris, C. (1986) Skilled incompetence. Harvard Business Review, September-October; 74±79. Argyris, C. (1991) Teaching smart people how to learn. Harvard Business Review, May±June, 99±109. Bass, B. (1985) Leadership and Performance Beyond Expectations. Free Press, New York, USA. Bass, B. and Avolio, B. (1994) Improving Organizational Effectiveness Through Transformational Leadership. SAGE publications Inc, Thousand Oaks, USA. Bloch, S. (1996) Coaching tomorrow's top managers. Employee Counselling Today: The Journal of Workplace Learning, 8, 30±32. Burns, T. and Stalker, G.M. (1994) The Management of Innovation. Oxford University Press Inc, New York, USA.

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Busby, J. (1999) The effectiveness of collective retrospection as a mechanism of organizational learning. The Journal of Applied Behavioural Science, 35, 109±129. Crossley, T. and Taylor, I. (1995) Developing competitive advantage through 360-degree feedback. American Journal of Management Development, 1, 11±15. De Meyer, A. (1991) Tech talk: how managers are stimulating global R&D communication. Sloan Management Review, Spring, 49±59. Ekvall, G. and Arvonen, J. (1994) `Leadership Profiles, Situation and Effectiveness,' Creativity and Innovation Management, 3 (3), 139±161. Freud, S. (1986) Jaget och detet och tre andra skrifter om jagpsykologins framvaÈxt. Natur och kultur, Stockholm, Sweden. Holland, R. (1999) Reflexivity. Human Relations, 52, 463±483. KyleÂn, S. (1999) InteraktionsmoÈnster i arbetsgrupper ± offensiva och defensiva handlingsrutiner (Doctors dissertation). Fenix Forskningsprogram, Psykologiska Institutionen GoÈteborgs Universitet, GoÈteborg, Sweden. Molander, B. (1993) Kunskap i handling. BokfoÈrlaget Daidalos AB, GoÈteborg, Sweden. Moss Kanter, R. (1989) When Giants Learn to Dance: mastering the challenge of strategy, management and careers in the 1990s. Simon and Schuster, New York, USA. Nonaka, I and Takeuchi, H. (1995) The KnowledgeCreating Company: How Japanese Companies Create the Dynamics of Innovation. Oxford University Press, New York, USA. Postman, N. (1986) The limits of language. ETC, 43, 227±233. SchoÈn, D. (1991) The Reflective Practitioner: How Professionals Think in Action. Ashgate Publishing Limited, Aldershot, UK. Tsoukas, H. (1994) New Thinking in Organizational Behaviour: From social engineering to reflective action. Butterworth-Heinemann Ltd, Oxford, UK. Waldman, D. (1994) Transformational leadership in multifunctional teams. In: Bass, B. and Avolio, B. (ed.) Improving Organizational Effectiveness Through Transformational Leadership. SAGE publications Inc, Thousand Oaks, USA, pp. 84±103. Weick, K. (1979) The Social Psychology of Organizing (2nd edition). McGraw-Hill Inc, New York, USA.

Susanne Ollila is a researcher with the Fenix Programme, Chalmers University of Technology, the Institute for Management of Innovation and Technology, and the Center for Research on Organizational Renewal. She can be contacted at the Fenix Programme, Stockholm School of Economics, Stockholm, Sweden.

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Book Reviews K. Pavitt, (1999) Technology, management and systems of innovation, Edward Elgar, Cheltenham, Glos, UK, 250pp, no index, hardback, ISBN 1 85898 874 8

I

approached this book with some interest, aware of the reputation of the Science Policy Research Unit (SPRU) with which the author has had a long term association. My interest was in part due to a feeling that I should have got closer to the work of the SPRU group for its insights into Science Policy, and innovation management. The book does offer some enlightenment of the first of these issues, and (in a more indirect way) on the second. The book is a collection of published academic papers of reasonably recent vintage (1980s and 1990s). Before commenting on the content, I feel compelled to note some publishing layout and production decisions. Each paper is reproduced from the original source. As most journals have a larger print area than the typical textbook, the result tends to be a format that is difficult to read easily. Furthermore, the decision not to include a general index is surely a mistake for a text that is likely to be of most interest as a reference source for serious researchers. Professor Pavitt provides an introductory overview, in which he acknowledges that the papers do not constitute a coherent project. Nevertheless, there does seem to be a strong central theme. From the earliest to the latest papers, he is constant in his basic beliefs in the power of empirical evidence, rigorously collected and examined, in throwing light on issues of economic importance. He has selected one central concern from a wider range of conceptual interests: `. . . to improve understanding of the nature and sources of the technological knowledge that underlies the continuous technical change in contemporary society, and of the implications for public policy and corporate management' (p. ix). The above quotation is a reasonable indication of the level of textual density in the work. It will be seen that the author is not exactly writing for the general innovation practitioner. The same is roughly the case for co-authored papers. A different style emerges when the author addresses a group of scientists on the # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

case for public funding of `pure' scientific research. The benign influence of good journal editing is also evident in a few of the papers. Typically, though, the most `respectable' writing is the most difficult to disseminate to a wider audience. I suspect that Pavitt, like most academics when writing in `serious' mode, conforms to a style that does not travel well beyond paradigmatic boundaries. The empirical evidence reported derives from careful studies of largely publicly available information such as patenting practices within organisations. The data serve as indicators of technological activity, and the location of that activity. Assorted statistical manipulations can offer interesting propositions regarding the sources of the technology acquired. Repeated data collection over time can provide indications of directions of technological change. Such longitudinal studies address the issue of technological `trajectory', the well-worn notion that future technical developments are largely determined by historical ones. It has become a Mantra for management researchers to utter support for the view that `more longitudinal data is needed', while acknowledging the difficulties. In general, the longitudinal efforts here are rather limited ± for example, a crosssectional studies, repeated once across a single time interval, is offered as the contribution to the debate of time-dependence of technological competencies in firms. I will have more to say later on the methodology. Turning to the content, I can report that I found considerable valuable nuggets of information scattered though the pages of this book. For example, I now have a clearer understanding of the `technological trajectory' of the SPRU work. It claims a heritage from Adam Smith and Karl Marx, the natural philosophers who shaped the classical school of economics. Of more recent writers, Schumpeter, has been an influence, for his rejection of `neo-classical' economics, as have Nelson and Winter, for their seminal work on evolutionary economics.

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A typical empirical study collected data on patent ownership among major multinational firms. The data were taken as a measure of the firm's success in capturing (or `appropriating') technology. Although unsurprising, the findings add value in confirming the expected. Firms do develop their technological know how along `trajectories' strongly determined by prior traditions and expertise in the firm. Furthermore, industry can be divided into a small number of clusters. Firms within a cluster have `more' shared know how; each cluster has a different pattern of knowledge competencies. One cluster is of chemical, pharmaceuticals, and textile groupings; another is of machinery and vehicle grouping; and a third is electrical and computer groupings.1 Anyone considering benchmarking studies would do well to consider whether they should benchmark within industry clusters of the kind identified. As is pointed out in a chapter by Patel & Pavitt, a common-sense classification of firms as `high tech' can overlook significant differences within such a classification. One consequence of such a heritage is tendency to fight against the economic orthodoxy using the weapons of that orthodoxy.2 In the economic (and managerial) orthodoxy, analysis of empirical data is treated as the ultimate means of resolving theoretical questions. This approach goes hand in hand with a concern for accurate means of measuring whatever can be measured.

Critique This is in many ways a report of an admirable research project over an extended time-frame. The material is intelligently analyzed. The findings contribute to issues of knowledge management, and for this reason alone, make them of contemporary interest to management researchers. If we accept its basic premises, the book stands as a thoughtful contribution towards our understanding of technology acquisition and deployment in organisations. We might consider that the author has achieved his stated objective: `. . . to improve understanding of the nature and sources of the technological knowledge that underlies the continuous technical change in contemporary society, and of the implications for public policy and corporate management' Nor need there be any concern that the improved understanding is modest, as the goal is ambitious. The spirit of science, however, demands that we subject any project to a critique at the level of its implicit as well as explicit

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assumptions. This permits us to become aware of bits of the jigsaw that do not quite fit, and enable us to form new insights into how we might make progress in arriving at a more complete jigsaw. I do not think I misrepresent the author, if I summarize one of his beliefs as follows: `We do not know enough of the nature of technological knowledge, its sources, and its organisational impacts to make bold claims for corporate recipes or strategies. Our ignorance is partly due to the complexities of organisations and their environments. However, the way to make progress is through redoubling our research efforts thus attaining more reliable measures, and inferences from that data'. The position brings us to a parting of the ways. The view undoubtedly has its serious and respected advocates. It captures a view of science studies as being essentially a branch of natural science, open to the same investigating processes, and indeed sharing beliefs about knowledge and reality. In short, the view captures a philosophic position regarding the relationship between theory and the natural world known as positivism.3 I remain unconvinced. The opponents of positivism argue that scientific progress has its bounds, and that social science knowledge is of a different kind. There is a point that takes on particular relevance when the phenomena of interest are both highly socially shaped and socially interpreted. Knowledge would be a good example, particularly if it is then addressed, as it is in this book, at times, in terms of its tacit and contextual nature. To progress, I believe there is a need for theorybuilding that connects more strongly with `empirical data'. However, such theory building will not necessarily be best supported by ever-more sophisticated measuring exercises. That is one of the points of difference between positivistic and more interpretative perspectives of research. Positivism offers little to explain why the bits of the innovation jigsaw are still very difficult to fit together. We are told of the difficulties of modelling the `ever changing' procedures within an innovating organisation. We are told of the difficulties of clarifying the `fuzziness' of important constructs such as variety. Indeed, the book deals rather uneasily with the definitions of basic and applied research, and the distinctions between research and development.4 What then can we say in terms of policy making for enhanced innovation? What can we say to industrial managers hungry for advice on initiating and enacting innovation processes? And, to be consistent, what can we derive from the enormous quantities of data col-

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lected, in myriad research studies? Can it be that the problems arise primarily though faulty measurement methods? There is more than one `non-positivist' position. They share a view that the gap between theory and evidence is wide, and unlikely to be narrowed easily by a `business as usual' continuation of the methods outlined. Thereafter, approaches may diverge on the nature of the gap, and how to progress. One view considers that the `gap' between data and theory is not one that can be adequately closed. Theory and practice are mutually shaping, a property of open systems. This sort of reasoning may appear `mere' academic philosophizing. However, it offers practical alternatives to the positive call for `more and better measurements'. For example, it suggests that advances in understanding of innovation derive from conceptual modelling backed up by empirical evidence (not driven by data collection). To provide a healthy intellectual context for technological growth, science requires public funding that is not overwhelmed by considerations of modelled economic gains. `Space' for creative people to explore `interesting' scientific areas will still be needed.

Summary This is a book for specialist researchers into science policy. Its strengths reside in its careful analysis of carefully collected data. It offers a view of knowledge that is not without theoretical difficulties. A careful reading may be worthwhile for serious researchers looking for well-constructed theoretical ideas, as platform of understanding for testing, or for building upon. However, its implicit assump-

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tions are those of a world that can be studied and understood primarily by refined data collection and analysis. The debate on the nature of the social organisational world continues. Tudor Rickards 1. The industry groupings reflect the researchers' decalered interest in technological innovations. 2. This is the well-known idea of the impact of a dominant paradigm on counter-paradigmatic views. I have developed the general idea, for innovation, creativity and other paradigmatic domains, in Creativity and the Management of Change, Blackwells, (1999). 3. There is a good deal of unhelpful name-calling between social science researchers who give prime position to empirical data in their work, and those who reject the notion of `pure' data uncontaminated with social beliefs and assumptions. More often than not, the extreme positions dissolve when intelligent researchers confront practical issues. However, reason does not always hold sway, and so I have tried to indicate the schism in ways that would be acceptable to both sets of protagonists. Those who would seek the views of a self-declared positivist should read Lex Donaldson, perhaps starting with For positivist organization theory, London: Sage, 1996. 4. These distinctions may not matter ± unless the intention is to demonstrate the split between some kind of University-located knowledge discovery and a second kind of technological knowledge incorporated into products. However, getting precise and indisputable definitions are critical if you hope to discover valuable progress knowledge through data-driven analyses. My own experience as an industrial R&D manager confirms the difficulties in neatly sorting out `pure' from `applied' research, `from the inside' of an R&D laboratory. Mostly, we got on with it, and the results were not influenced by our failing to sort out the epistemology underpinning our work.

S.A. Deetz, S.J. Tracy & J.L. Simpson, (2000) Leading organizations through transition: Corporate communication and cultural change, Sage, Thousand Oaks, Ca., ISBN 0 7619 2096/ 2097-8

The book derives from an executive master's course on organizational culture and culture change. Interestingly, the authors suggest that the material has been simplified for `a somewhat less sophisticated student and professional audience'. It is grounded in a few core beliefs regarding the nature of organisational culture, and its management. Culture is recognized as one

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of those high-level constructs that defy simple definition, yet one around which there is general consensus (not unlike creativity, or innovation). The authors trace the consensus through Peters and Waterman, and Deal and Kennedy, and particularly though Ed Schein. The consensus uses the term culture to capture `the way we do things around here'. The term is needed to capture the less

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tangible aspects of corporate life ± the `microsoftness of microsoft' or the `Disneyness' of Disney. Perhaps the first important point of the consensus is a belief that there is `something' important that for want of a better term, we describe as culture. In more romantic times the `something special might be talked of as the spirit of an organisation. The second belief is that culture has a persistence. `Microsoftness' does not change suddenly (a point of some significance at the time of writing). This persistence is widely associated with persistence of values and beliefs, and also with behaviours. The authors suggest that there are two world-views, one giving primacy to the former `deeper' factors, and the other on the more tangible and observable aspects. They further suggest that an integrated view provides a more promising through which culture persists. In other words they see values and beliefs one side, and behaviours and routines on the other mutually interacting and sustaining one another. Overall, the platform of understanding is consistent with the established notions of symbolic events such as story-telling, visions, and corporate myths as `carriers' of culture. I find myself very much able to share these beliefs with the authors. There is one further step, however, which is for me a step too far. They seem too comfortable with the assumption that culture can be controlled and changed through managerial planning and action. Change the carriers of culture, and you change the culture itself. There are echoes of books offering ways of understanding and influencing creativity. Within the so-called creativity paradigm, there are those who propose that creativity can be directly en-

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hanced and those who argue that creativity can at best be supported. To be fair, the authors indicate the possibilities of multiple levels at which culture reveals itself, and the complexities involved in understanding their inter-relationships. They even build into their own model the well-known differentiation between espoused theories and theories in use. Yet, the vocabulary of the book seems to espouse a theory that assumes a rather straightforward link between symbolic action and cultural change. This leads to the attribution of a direct causal power of visions and corporate story telling for influencing behaviours. At times, this results in examples that appear unconvincing. Perhaps this itself is a matter of culture, and the treatment may work better within a North American culture. Or perhaps it is a matter of the `simplifications' made to reach a wider and less sophisticated audience. Yet it would have been quite consistent with their accounts of culture management for the authors to suggest that understanding the nature of culture and culture carriers such as visions can provide guidelines to planning change programmes. The difference in the offers is, however, profound. Offering guidelines in attempting transformation is less exciting than offering the promise of direct control over transformation efforts. Notwithstanding the designed simplification for readers with inexperience of change processes, the book provides a sound platform of understanding of contemporary ideas on the management of change, from the dominant North American perspective. Tudor Rickards

# Blackwell Publishers Ltd 2000

BOOK OF THE QUARTER

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Book of the Quarter Reviewed by Tudor Rickards S.S. Gryskiewicz (1999) Positive Turbulence: Developing climates for creativity, innovation and renewal, Jossey-Bass Publishers, San Francisco, 195pp, ISBN 0 7879 1008 2

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uthor Stan Gryskiewicz is one of the bestknown authorities on creative leadership, and a tireless global networker in supporting and stimulating ideas on creativity and innovation. The book is the more welcome because Stan has resisted the temptation to publish a proliferation of books. As a consequence he is able to draw on his experiences and anecdotes in a fresh way. His starting point is that the world of management has become increasingly complex and unclear. Change is inevitable, yet impossible to predict in advance. His second point is that the creative management of change is both possible and worth attempting. He suggests that well-defined groups characterize the traditional organisation and departments which deal primarily with information related to their prevailing set of tasks and experiences. The structure is reinforced at the corporate boundaries by limited points of access for external information, guarded by gatekeepers who select and control information flow. In contrast, there are `turbulence-driven' organisations, which have less rigidly defined internal groupings, and more permeability at the boundaries. Thew culture is `purposely engineered by leaders who recognize the need to create an environment compatible with change . . . a culture of improvisation, gleefully inviting in the unexpected.' Four key elements are offered in effective and positive management of turbulence. These are difference (from the status quo), multiple perspectives, intensity and receptivity. These elements are explored in chapters on strategies for enhancing positive turbulence. The first of these chapters offers advice at the level of the team. Like many other innovation practitioners and researchers, Gryskiewicz believes that teams are necessary means of integrating individual capabilities into organisational actions. His conclusions # Blackwell Publishers Ltd 2000. 108 Cowley Road, Oxford OX4 1JF and 350 Main St, Malden, MA 02148, USA.

are unsurprisingly in accord with other leading researchers. He supports a diverse team membership. As differences can lead to conflict, the members also require means of dealing with individual differences, an illustration of the need for team development and learning. To avoid team stagnation, he advocates the introduction of a new member, at least one every six months. A related source of new ideas is exposing the team to experts from outside the team's competence zones. Another strategy is for leaders to set challenges that give the team's effort `bite'. This intensity can come from targets, deadlines and focus on clear goals. One interesting section discusses how a positive innovative team can survive and succeed within a generally less innovative corporate climate. The illustrations are convincing, and may be of particular value to innovative team leaders in such situations (the majority, perhaps?). It is perhaps understanding in what is essentially an inspirational book, that the author leaves such leaders with hope for their ventures. I would offer an additional observation. Several wonderful examples of such circumstances can be found in case accounts of introducing change. One of my favourites is in the book by Ketchum and Trist, All teams are not created equal: (Sage, 1992). The evidence seems to be that the high intensity innovation team in a more negative environment risks attack and dismantlement, due to the vested interests of powerful forces outside its periphery. It is not clear whether the situation will resolve itself in an uneasy tension between two opposing cultures, or whether the `big guns' at corporate headquarters will eventually win, or whether there will be a culture shift towards more dynamism throughout the organisation. I am with Gryskiewicz that the battle is worth fighting. I would add, that even if the innovation group loses out, the experience will

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stand the leader and members in good stead for future ventures under more favourable climatic conditions, in another organisation. In a chapter on strategies for positive turbulence, several thoughtful suggestions are made. The examples (from American firms) confirm the basic principles outlined in earlier chapters. Finally, I found a delight-

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ful and thoughtful piece of writing at the very end of the book. Indeed, it almost leads me to suggest that the book should be read from the back to the front! The author concludes with a quite inspired piece of writing on `if I were in charge of introducing positive turbulence to an organisation'. It has an authenticity that is rare, and worth the price of the book of itself.

# Blackwell Publishers Ltd 2000