Tài liệu Learning Networks as a Means for Work Organization Development pptx

Learning Networks
as a Means for Work Organization Development

Recent Finnish Experiences










Tuomo Alasoini
Finnish Workplace Development Programme
Ministry of Labour

Paper prepared for the Nordic R&D Conference on University and Society Cooperation,
Ronneby, 14-16 May 2003

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Introduction

Finland is now considered one of the most competitive industrial nations in international
comparison. Finland’s performance in innovation also enjoys a high reputation. According to
the EU Innovation Scoreboard 2002, Sweden and Finland are the two innovation leaders
among the EU Member States (www.trendchart.cordis.lu/Scoreboard2002/index.html). By a
closer look, however, Finland’s good performance is mainly based on achievements in the
area of technological development and innovation. This is one of the main conclusions of the
Science and Technology Policy Council of Finland (2003) in its newest triennial review. The
review examines the main challenges facing research and innovation funding and it contains a
list of policy recommendations for the future. It states, “Technological development and
technological innovations are generally considered the strongest area of Finnish innovation.
/…/ Well-deserved attention has begun to be paid to the relative weakness of social
innovation in the entity of innovation. Its development alongside technology is a major

challenge for society and for the economy. As yet Finland has no clear development strategy
for social innovation. The challenge concerns both the organizations responsible for social
development, the development of working life, and the safeguarding of individual
development and opportunities by means of research-based innovations.”

From the point of view of work organization development policy the unbalanced development
of technological and social innovation can be seen as follows:

(1) The relatively favourable overall growth of productivity in Finnish economy in recent
years conceals the fact that there are remarkable sectoral differences in productivity
development. The rapid productivity growth in sectors which produce information and
communications technologies (ICT), such as the electrical and electronics industry, is
contrasted with slackened growth in most other industries. Finnish companies’ overall record
in turning the new technological opportunities permitted by advanced ICT into gains in
productivity has been relatively poor. This indicates that many companies have not managed
to implement sufficient improvements in their work and human resource management (HRM)
practices to achieve synergistic effects of combined use of ICT and new forms of work
organization.

(2) There is no clear evidence indicating of a positive association between the extent of the
use of ICT and the improvement of the quality of working life (QWL) at company or
workplace level in Finland. The new technological opportunities have been so far
insufficiently utilized as a means to deliberately improve work processes, work organization
and work designs from the QWL point of view.

Finland is not alone among the industrial nations with these problems. Though industry- and
plant-level survey data from various sources indicate that superior productivity gains usually
are a combined effect of new technologies and supplementary management and work
organization innovations (e.g. Antila and Ylöstalo 1999; Breshanan et al. 2002; Gjerding
1999; Kumar 2000; Lewis et al. 2002), work organization development as such has so far

played only a minor role in public-policy decision-making, especially when compared to the
development of new product and production technologies. For instance, Brödner and Latniak
(2002) found out that only seven of the 15 EU Member States had ongoing public-supported
work organization development programmes in 2002.


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This paper outlines a fresh approach to work organization development which utilizes
learning networks as a means for disseminating and generating knowledge of new practices,
and examines opportunities for this approach in Finland by looking at university-industry
cooperation. University-industry cooperation in Finland is analysed with the help of
experiences of the Finnish Workplace Development Programme (1996-2003). The last part of
the paper examines learning networks as a model for interaction and cooperation at four
different levels.


Towards a New Approach in Work Organization Development

Bases for Innovation-Promoting Work Organization Development

Typical goals of the ‘first-generation’ of work organization development programmes dating
from the 1960s to the 1980s included improvements in job contents, working conditions,
work environments, employees’ opportunities for participation and labour-management
relations (Den Hertog and Schröder 1989). The two main weaknesses with these ‘first-
generation’ programmes were that the objects of development were often perceived as
abstract and unattached to strategic business goals by management and that the programmes
lacked effective means to communicate and disseminate project outcomes to other companies.
Their poor record in these two respects can be contrasted with the simultaneous success of the
Japanese quality movement in improving performance of Japanese companies (Cole 1993).

Maintaining and strengthening the social legitimacy of work organization development policy
in today’s globalizing and increasingly networked economy calls for an approach, which
explicitly focuses on the promotion of productivity-boosting organizational innovations.
Work organization development designed specifically to promote innovations differ by its
strategic goal-setting from its predecessors, which were designed specifically to promote
QWL and employee participation, but it can be linked to their value basis in two ways:

(1) Innovations provide a way to boost productivity and thus to improve the competitiveness
of companies and economic growth in general. Countries, regions and companies which are
unable to compete in the field of innovations are in danger of losing their strategic room for
manoeuvre in global competition. They will then be forced increasingly to seek their
competitive advantages in lowering the costs of traditional production factors such as labour.
On the corporate level, this has the long-term effect of undermining the job security of the
employees, making atypical employment more widespread and reducing companies’ interest
in developing the competence and skills of their employees. For society as a whole, the threat
lies in a weaker financial base for social expenditure and a growing economic and social gulf
between different population groups. The consequences could easily be a self-perpetuating
vicious circle which would be hard to break. Maintaining good QWL calls for a sound growth
of productivity which is based on organizational innovations.

(2) Promotion of innovation activity within companies makes them more interested in
improving employees’ opportunities to contribute to development work. In this respect, the
Japanese quality movement provides both a good and a bad example. It is good in the sense
that it became in effect a mass movement for quality improvement in Japanese companies. It
is, however, a bad example in the sense that it did not, in fact, break down the hierarchical
decision-making structures within companies and lead to industrial democracy, giving rise
instead to a development organization (e.g. quality circles) which existed parallel to the

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production organization (Lillrank 1995). By contrast, in the Nordic countries, where the

responsibility for planning and development activities has recently been delegated to
employees and teams within the production organization, work organization development
aimed at boosting innovation has much better chances of further speeding up this line of
development.


The Role of External Expert Knowledge in Work Organization Development

Attempts to develop work organization can take many forms. Figure 1 presents these different
means in a two-dimensional diagram. The x-axis illustrates the intensity of the role of external
expertise in the change process, while the y-axis illustrates the relationship between expertise
and practical knowledge (i.e. knowledge that management and employees possess) in
achieving change. Typical traditional methods of work organization development include the
ready-made expert solutions at one end of the x-axis (legislation, agreements between the
labour market organizations, norms, standards and blueprinted consultancy ‘change
packages’) and the dissemination of information at the other end (research reports, method
guidebooks, databases, etc.). What these two methods have in common is that the outside
expertise and in-house practical knowledge never meet during the actual process of change.


Figure 1. Different roles of external expertise in work organization development.

Dissemination
of information
Training
programmes
Advisory
services
Ready-made
expert

solutions
Company-
specific
expert
solutions
Expertise
directly guides
process of change
Expertise
indirectly guides
p
rocess of change
Expertise and
practical knowledge
in interaction
Expertise and
practical knowledge
unconnected
Participatory
development


The potential for influencing change processes using these methods alone has dwindled in
recent years. Meanwhile, the importance of the methods in the upper right-hand corner of
figure 1 has correspondingly grown. There are two reasons for this. Firstly, the pace of change
in the companies’ operating environment has accelerated and the issue of work organization is
increasingly becoming a reflexive topic, which is subject to continuous discussion and
redefinition. If external expertise is really to have any impact under these circumstances, it
must have a strong enough role in the actual process of change itself. This is the justification
for its position on the right-hand side of the figure. At the same time, companies’

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development challenges have become more complex as a result of globalized competition,
networked economy and the rapid advances in ICT. Their main focus of attention is no more
on renewal of individual business processes, but, increasingly, on continuous development of
the entire product and business concept (Virkkunen 2002). This has also reduced the potential
for solitary actors to find solutions to emerging problems, let alone to define the problems
themselves properly. In order to make proper definitions or to find successful solutions, it is
increasingly important that there is interaction between different types of knowledge. This, in
turn, justifies the position at the top of the figure.

The methods placed at the top right of the figure are company-specific expert solutions and
participatory development. These two methods also describe the typical role of expertise in
work organization development programmes. The division between these two methods
broadly corresponds with the division into a design-oriented and a process-oriented approach
(Naschold 1993). Design orientation applies here to cases where external expertise is mainly
used to explore the possible future states and features of the organization on the basis of
theories or models of ‘next-generation’ organizations or other good-practice design criteria
and diagnosis of the current state of affairs in the organization, whereas in process-oriented
approach external expertise is used to assist the organization to find proper ways to implement
participatory processes of change on the basis of theories or models of change and
intervention. In innovation-promoting work organization development, this division should be
bridged. Seeing work organization as a reflexive topic lays increased stress on process-
oriented approaches. Increased reflexivity does not mean, however, that the company’s room
for manoeuvre is no more bound by its current state of affairs and its own historical and other
contextual factors, i.e. also expertise in design issues is still highly important.

The methods placed at the top right of the figure also create better opportunities than the other
methods for mutual, interactive learning for both experts and practioners. Involvement of
experts in actual processes of change and their interaction with practioners promotes their

opportunities for reflective observation and abstract conceptualization of the change
processes, resulting into new models, methods and tools for development work. From the
point of view of companies, dialogue with experts helps them, in addition to solve practical
problems, improve their
capacity to solve future problems.


From Best Practices to Learning Networks

In traditional approaches of work organization development programmes, the aim is first to
identify ‘best practices’ through experimentation within a group of companies, and then to
transplant these to other companies. The problems of these approaches have been dealt with
by a number of writers (e.g. Fricke 1994; Gustavsen et al. 2001; Lillrank 1995; Wareham and
Gerrits 1999). For instance, the causal mechanisms through which the adoption of different
practices lead to improvements in company performance are complex and context-bound, and
the acquisition of these practices is not a case of a mechanical transfer of information; it is
always a creative learning process in the company in question.

One possible solution to the problem of accumulation of knowledge would be to abandon the
idea of ready-made best practices and that of disseminating these practices afterwards.
According to the new approach to work organization development, enough companies should
be included in programmes and projects from the very start and companies should be
networked together and also with expert organizations. A large enough number of companies

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and expert organizations might be termed
critical mass. Setting up solid channels for the
exchange of experiences and actual development cooperation within this critical mass can
facilitate the creation of
learning networks.

The term ‘learning network’ refers here to a cooperation forum between companies and expert
organizations based on equal participation and confidential exchange of information and
experiences which is intended to help companies define their development needs and find
solutions to their problems. The expert organizations involved in such networks are typically
research and educational institutions, consultancy companies and development agencies.
These networks may take many forms and may also include other participants, such as
customers, labour market organizations, intermediate-level organizations, etc. They may be
open or closed. They may have a reasonably permanent structure or a constantly changing
one. They may have both permanent members and loosely connected contributors. In many
countries, learning networks have been actively promoted in recent years through various
development programmes and projects (e.g. Alasoini 2001; Bessant and Tsekouras 2001;
Gustavsen et al. 2001; Tell 2001) with the aim (1) to improve the potential for individual
companies to carry out projects successfully (if critical mass has been achieved within
projects and programmes, it improves the chances of successful development and lasting
results); (2) to improve individual companies’ chances of receiving inspiration, ideas and
encouragement to develop (the more critical mass projects and programmes have, the better
the chances of companies using comparisons to understand their own situation better and thus
to support their own development); and (3) to boost the search for new, innovative solutions
(the more interaction there is between different points of view within projects and
programmes, the better the chances will be of finding fresh outlooks).

Also in work organization development according to this approach it is possible to talk of
good or best practices. The notion in this case, however, does not refer to ready-made,
transferable solutions; it refers to practices as generative ideas, which serve as sources of
inspiration for companies.


Universities as Partners of Companies

Different types of network can be effective in different situations. In cases of learning
involving the search for solutions to problems which are already fairly well defined, it is
useful if the network participants and their knowledge base are similar to each other. With the
help of
adaptive learning of this kind it is possible for the participants to find solutions
without needing to question norms and basic assumptions guiding their activity. In cases
where the focus is on defining the actual problems, differences in knowledge between the
participants can be a resource in itself. This calls the participants for the kind of
generative
learning which
does enforce them to critically assess their own norms and basic assumptions.
Since both types of learning are often needed, the best situation could be ‘just the right
difference’ between the network participants (Nahapiet and Ghoshal 1998; Schienstock and
Hämäläinen 2001; Tell 2001). This helps enrich the knowledge base of the network but still
leaves the participants able to understand each other’s fundamental issues, targets, language
and value judgements.

Figure 2 takes a closer look at this issue, from the point of view of adaptive and generative
learning separately. The underlying assumption here is that the opportunities for learning by
the different network participants are a function of the difference in their knowledge base.

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This has an effect on their learning opportunities through two components: the ease of
information exchange and the novelty of information exchanged. The ease of information
exchange decreases with the increase of difference in the knowledge base of the network
participants. The novelty of information exchanged, instead, increases with the growth of
difference in the knowledge base of the participants. The two inverse U-shaped curves in
figure 2 depict the joint effect of these two components. In adaptive learning the optimum
point of difference is probably to the left from the optimum point in generative learning.

Figure 2. Opportunities for learning and the difference in the knowledge base of the network
participants.

Adaptive
learning
Generative
learning
Difference in knowledge base
Opportunities
for learning



Innovations often call for posing entirely new questions or redefining old ones, i.e. generative
learning. This means that innovation-promoting work organization development should focus
on creating and supporting learning networks with actors with relatively wide differences in
their knowledge base. Innovation-promoting work organization development, therefore, is an
area in which researchers are supposed to have an advantage over consultants as development
partners of companies, owing to their basically critical scientific approach towards the
‘reality’.

It is an open question, however, whether scientific communities are ready and willing to
expand their role in an area in which they are forced in a constant search for a satisfying
balance between their own scientific norms and standards and the expectations of different
groups of practioners. Companies and universities constitute two different communities of
practice with two different logics of operation. Even in the Nordic countries with their high
reputation for well-functioning ‘national innovation systems’ and their long tradition of work
organization development programmes, university-industry cooperation in issues related to
the work organization is much of an unexplored area for many companies, let alone

universities (Gustavsen et al. 2001; Nieminen and Kaukonen 2001; Svensson et al. (Ed.)
2002; Tell 2001).



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University-Industry Cooperation in Finnish Work Organization
Development – the Case of FINWDP Network Projects

The Finnish Workplace Development Programme (FINWDP) is the first of its kind in Finland
in terms of its conceptual foundation and scale, i.e. it is a national initiative in which the focus
is on work organization development. FINWDP was launched at the beginning of 1996 as
part of the programme of Prime Minister Lipponen’s first administration, and will continue
until the end of 2003 under the programme of the second Lipponen Government. The aim of
the programme is to improve productivity and QWL by promoting new work and HRM
practices in Finnish workplaces. FINWDP is funded by the Finnish Government. The total
budget of the programme from 1996 to 1999 was EUR 16 million, and EUR 28 million for the
second programme phase from 2000 to 2003.

The programme can provide expert support to workplaces. Expert support is used mainly for
funding the use of researchers or consultants in the projects. 1,300 workplaces and 120,000
employees in 550 development projects have so far taken part in the programme. The main
goals of the projects include the development of work processes, establishment of teams and
groups, and improvements in leadership, personnel management, external networking and the
functioning of workplace communities.

About a third of the programme budget is earmarked for networks projects of a special kind.
This funding is intended for research and experimentation to support the creation and testing
of organizational innovations that have a potential for job creation. The projects must involve
a sufficient number of companies in close and open cooperation based on mutual trust.

Cooperation between companies can be based on vertical (production) or horizontal
(development) networks. Vertical networks can be further divided into principal- and
supplier-driven networks, and horizontal networks into topic-, region- and sector-based
networks. Most network projects are jointly funded by FINWDP and other R&D funding
sources such as the Technology Development Agency Tekes. The following takes a look at
network projects with regard to their potential to act as learning networks.


Network Projects as Learning Networks

So far FINWDP has supported 33 network projects, a half of which have been completed. 20
of the projects are horizontal networks, and most of them (N=17) are primarily topic-based.
Where vertical networks are concerned, there are more supplier-driven networks (N=7) than
principal-driven ones (N=5). The first type is typically a case of several small or medium-
sized supplier companies led by one or two ‘core’ companies in trying to create system
supplier capacity for their mutual production network through intensifying their cooperation.
There is one network project, which does not clearly belong to either of the two above groups.
This project aims to create technological and organizational infrastructure for networking
between a group of workplaces. There is only one project in which the primary justification is
that it is regionally based, but about ten projects have this as their secondary justification for
networking.

Metal and engineering industry companies have participated more actively than anyone else
in network projects. One third of the projects consist only of such companies, and they are
also involved in many other mixed projects. The other most active participants include the
mechanical wood-processing industry and the electronics industry. The total number of

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participating companies is from 250 to 300, depending on the precise definition of
‘participation’. Most of them are SMEs.

Table 1 shows how extensively different kind of actors take part in the network projects. In 15
projects, the development coalition comprises only a group of companies and an individual
expert organization. The other extreme is demonstrated by two projects in which one can find
as many as six different types of actors involved. Of all expert organizations, research
institutes (N=15), technical universities and faculties (N=14) and consultancy firms (N=11)
are the most active participants in the projects. The distribution of expert organizations in
Table 1 seems to correspond to the situation in Finland on the whole. Nieminen and
Kaukonen (2001) have conducted a survey of how important companies consider innovation-
related cooperation with different partners. Based on their material (374 companies in
manufacturing and knowledge-intensive business services), the companies considered
cooperation with their own client companies, equipment suppliers, material suppliers and
subcontractors fairly or very significant clearly more often than with any other partners. 31%
of the companies also considered cooperation with research institutes such as the Technical
Research Centre of Finland (VTT) to be important. Cooperation with private consultancy and
development agencies (28%) and technical universities and faculties (23%) was considered
more important than cooperation with polytechnics and other educational institutes (21%).
Meanwhile, the figure for universities was only 12% and for schools of business
administration only 3%.


Table 1. Development coalitions and different types of participants involved in FINWDP
network projects.

Number of different types of participants

2345 6 TOTAL
Companies 15772 2 33
Research institutes 4461 15
Technical universities and faculties 6232 1 14

Consultancy firms 2341 1 11
Educational institutes 2 2 1 1 6
Universities 2 2 1 5
Development agencies 1 2 1 1 5
Public-sector workplaces 1 1 1 2 5
Polytechnics 1 1 2
Residents 2 2
Schools of business administration 1 1
Rehabilitation institutes 1 1
Organizations of entrepreneurs 1 1


The number of different types of expert organizations involved, the number of companies
involved, their variation by factors such as industrial sector and size, and the project duration
are some of the most critical
structural characteristics depicting the ability of a project to
function as a learning network. In actual fact, a project’s ability to function as a learning
network depends on many other factors too, as for instance the forms of interaction between
different participants in the course of the project, how advanced the methods are that the
project applies and how committed the various participants are to the project.

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The following includes short descriptions of three network projects which demonstrate
aspects of learning networks. They also constitute examples of three different kinds of
networks, a horizontal (The Lohja Area Environmental Cluster), a vertical (The VAVE
Network) and an infrastructure-creating network (The TEL LAPLAND Network).


Case I – The Lohja Area Environmental Cluster

The Lohja area is an old industrial area in western Uusimaa province in southern Finland. The
Environmental Cluster comprises 18 local companies, the organization Entrepreneurs of
Lohja, the Lohja Hospital District and the City of Lohja itself. The companies involved are
among Finland’s leading corporations in the paper, wood processing, electronics and building
materials industries and in energy production. The University of Helsinki’s Länsi-Uusimaa
Institute for Continuing Education acted as coordinator in a project (1999-2002), which gave
rise to the establishment of the Cluster. Various subprojects have brought also many
consultancy firms into the Cluster.

The Environmental Cluster is intended to launch and implement projects that aim to improve
the state of the environment in the Lohja area, to create cooperation in environmental issues
between authorities, companies and local residents, and to increase and utilize environmental
know-how in the area. It is hoped that cooperation will help find solutions and operating
models that reduce environmental impacts arising from raw material acquisition, energy use
and the manufacture, transport, distribution, use, recycling and disposal of various products.
The Cluster was a consequence of a competitiveness analysis of the area, carried out by a
local partnership project in 1998. This showed that efficient handling of environmental issues
was an important factor for companies’ competitiveness and for that of the area as a whole.

The Cluster is an open learning network seeking to expand. Specific rules were set down right
at the outset, covering decision-making, the implementation of subprojects, funding,
agreements and internal and external provision of information. The companies have formed
clubs amongst themselves for the personnel in charge of environmental issues, logistics,
information and acquisitions, and for technical staff. The operations of the Cluster have been
aimed at both local residents and company personnel, and have taken the form of
environmental and company surveys, training seminars, visits, joint development projects and
various other events, such as a car-free day and a car-pool day. The companies’ joint
development projects focused on reducing the environmental impact of logistics chains, on
more effective waste recycling, on efforts to boost the user value of Lohja lake, on developing

environmental indicators and on working together on developing environmental management
systems. The Environmental Cluster is still operating even after its specific project funding
ran out in 2002, and it has made deliberate efforts to assess and develop its own capacity to
act as a learning network.


Case II – The VAVE Network

The VAVE Network is a cooperation forum for the Tampere unit of Sandvik Tamrock Oy,
which manufactures drill rigs, and eight of its suppliers. The Network seeks to develop the
competitiveness of the entire network through improved cost effectiveness, shortened
throughput times and better delivery accuracy. The acronym VAVE comes from ‘Value

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Analysis – Value Engineering’, a method originally developed in the automotive industry.
Value Analysis means continuous improvement and Value Engineering means cost awareness
in product development. The method is based on a continuous improvement programme for
supplier companies which is supported by the core company and includes training, all with
the ultimate aim of cutting out the ‘slack’ in the value chain. In the Finnish version of this
method, the cooperation between companies has been expanded from bilateral cooperation
between one core company and one supplier into multilateral cooperation between several
companies within a network. The VAVE Network is thus a unique opportunity for many of
the subcontracting and supplier companies in the network to access top-level expertise
tailored to their specific needs.

The Network has a vision, strategy and organization for its development work. Cooperation
within the Network is based on a framework of joint development seminars and multilateral
and bilateral development projects between the companies. The development projects have
focused on issues such as joint acquisition of paints, cost accounting and cost awareness,
demand forecasts and order procedures, electronic information exchange between the core

company and suppliers, involvement in the product development process of the core company
and cooperation among the suppliers. The joint projects have helped intensify cooperation
between the companies and boosted the competitiveness of the entire Network, for instance in
terms of better cost effectiveness in purchases and more reliable deliveries. The core company
has a special VAVE team and each supplier company has a VAVE coordinator.

External support for the Network’s discussions, training and development has been provided
by the Industrial Systems Unit of VTT Automation and Tampere University of Technology’s
Institute of Industrial Management, Institute of Machine Design and Centre for Continuing
Education. In addition to FINWDP and the companies involved, a special project that
contributed to the creation of the Network was funded by Tekes, the European Social Fund
and Pirkanmaa Employment and Economic Development Centre After the end of the VAVE
project itself in 2001, development cooperation between the companies continued within the
production chain using the companies’ own resources.


Case III – The TEL LAPLAND Network

The TEL LAPLAND Network is based on a project which started in 1997 with the aim of
creating Finland’s first overall system of telemedicine (video training and consultation,
radiology, primary care, ophthalmology, transfer of ultrasound and digital transfer of ECG)
in Lapland between the Sodankylä Health Care Centre, the Lapland Central Hospital and
Oulu University Hospital. The project started in the form of cooperation between the Lapland
Hospital District, the Development Centre for Telemedicine and the Work Science Unit at the
University of Oulu, the Rovaniemi Polytechnic and a group of equipment manufacturers. In
Lapland, which is sparsely inhabited, with great distances, there was a need for new methods
which could help create seamless service chains and improve access to health care services.
The Oulu region, meanwhile, has a strong concentration of expertise in ICT, one of whose
specializations over the past few years has been medical solutions.

From the very start, the project included a study of the introduction and usability of the
subsystems and equipment involved. The study focused on the impact of different alternative
solutions on patients’ experiences of care, the productivity of work, the working environment,
ergonomics and the wellbeing of personnel. The ultimate aim of the study was to develop new

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innovative working methods and services and produce feedback for the manufacturers of the
equipment and systems. Personnel training was also provided when each subsystem was
introduced.

In 2000, it was decided to expand the project to cover all 16 municipalities in the Lapland
Hospital District by the end of 2003, and in 2002 the Lapland University joined the Network
as the Network decided to launch an evaluation study to monitor and support the introduction
and establishment of new operating methods at the units involved. The project functions as a
learning network, in that each health centre has a multiprofessional project team which is
responsible for project implementation at its health centre and works on developing services
in cooperation with other health centres and project teams at the Central Hospital. The aim is
to productize the new ICT-based services created by different pilot units for general use
through joint planning and evaluation seminars.


Learning Networks – a Model for Interaction and Cooperation

Learning networks can be examined through the interactive relationships between the various
parties involved and their mutual cooperation. The main types of interaction and cooperation
occur within companies, between companies, between companies and expert organizations,
and between expert organizations (figure 3). In the following, the last two types will,
however, be examined as one entity.

Figure 3. Types of interaction and cooperation in learning networks.


Expert
organization A
Company A
Expert
organization B
Company B




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Interaction within the Company

Opportunities for different personnel and vocational groups to contribute to planning and
implementing processes of change in companies, and the impact of these changes on the
work, working conditions and terms of employment of these different groups have always
been key issues in work organization development programmes and projects. The different
approaches place different emphasis on the importance of democracy in the values and
principles which guide processes of change, on the one hand, and the work and HRM
practices which emerge as a result of these processes, on the other. One way of
conceptualizing this difference is to talk about values and principles which guide both the
company’s
production system and also its development system (Colbjørnsen & Falkum 1998).
These production and development systems are governed by different types of logic.
However, a company’s production and development systems could hardly operate for very
long governed by diametrically opposed values and principles – at least, not in a Nordic
workplace environment.

The pace of change in companies’ operating environment has accelerated, and the
development needs and challenges that companies face today have become increasingly
complex. This puts pressure on companies to ‘compress’ time in development operations.
Instead of individual, conservative and strictly limited experiments, progress now needs to be
made over a broad front, comprising several in-house functions and applying to a high
proportion of the whole organization. Meanwhile, normal production operations, development
measures and support functions such as personnel training also have to be compressed ever
closer in terms of time, and should ideally be simultaneous. This demand for the
‘compression’ of time means that the production system and the development system are
beginning to merge. This is evident in the organization of development measures, in that the
importance of production teams and various development and project groups which allow
direct worker participation is growing, at the expense of more representative forms of
participation (Gustavsen et al. 1996; 2001). As a consequence, representative arrangements in
development are increasingly taking on a role in which they define the rules governing
general employee participation in development and deal with the impact of development
action on terms and conditions of employment. This does not necessarily mean reducing the
significance of representative participation; it is more a case of redefining its role.

Following this trend, innovation-promoting work organization development can improve
employee opportunities to play a proactive part in creating solutions which have an impact on
their work, working conditions and terms of employment. One of the reasons why the
opportunity for direct participation in change processes is becoming more important for
employees in a knowledge-intensive and networked production environment is that tacit
knowledge is taking on increasing significance as a source of competitive edge and, by
extension, as part of employees’ required qualifications. Since tacit knowledge is accumulated
from doing, using and social interaction, with shared experiences as the core, opportunities to
participate directly in planning and implementing change are more critical than ever for the
preservation of individual employees’ own labour market status (Alasoini 2002).

Interaction between Companies

There can be many different obstacles and barriers to development cooperation between
companies. Those which are part of the same value chain usually find it easier to define a

13
shared target for their operations, but the road leading up from arm’s-length bargaining inside
the value chain to partnership in a learning network could be long and rocky. The VAVE
Network, described above, is an example of a development story of a group of companies
which succeeded here. Even in this case, however, success was not considered automatic from
the start, since some suppliers joined the project with low expectations or even doubts. An
important milestone in overcoming these reservations was the project’s success in the
companies’ first joint development project (joint acquisition of paints), a scheme which did
not yet require any particular mutual trust between the companies and which was furthermore
based on a clear win/win situation for all involved. The principles applied in implementing
the project helped create an open atmosphere based on mutual trust for the exchange of
information and cooperative action between the companies during the project. They were
(Anttila et al. 2002):

• The project was primarily implemented using the multilateral development method.
• The project was systematically implemented in stages, from defining the networking
strategy to concrete subprojects and evaluation of their implementation.
• The project created a multi-layered development organization and infrastructure for its
development operations (network seminars, development groups, contact persons on the
company level, research team).
• The general guidelines for the project and the vision and strategy of the network were
defined in a cooperative and participatory manner.
• On both the network and company level, the projects involved a number of concrete
subprojects aimed at improving operating methods, using a method based on cooperation

and learning by doing.

A natural factor which fosters cooperation among companies is if they operate in the same
geographical area. Horizontality and – as a horizontal criterion – this geographical proximity
are used as the main networking principle in the ‘module’ and ‘development coalition’
concepts of the latest Norwegian development programmes, Enterprise Development 2000
and Value Creation 2010 (Gustavsen 2001). Much the same fundamental principle has been
applied in recent work organization development in Sweden, where for instance the European
Social Fund’s Objective 4 programme in 1995-1999 was more of a work organization
development programme than a training programme (unlike the case in Finland), being based
on regional partnerships. In Sweden, the debate about the ‘third task’ of the universities has
also emphasized the significance of the regional dimension both in cooperation between
companies and between companies and universities (Eriksson (Ed.) 2002; Svensson et al.
(Ed.) 2002).

Learning networks can be built on many kinds of motives which unite companies. Due to the
uneven geographical distribution of both companies and expert organizations, purely
regionally based learning networks will probably be rare in countries with small populations
such as Finland. Experiences from FINWDP suggest that both vertical and horizontal
networks can be successful as learning networks. The ability of vertical networks to produce
generative learning (which is the aim of learning networks in the final analysis) can be
severely restricted if the value chain contains one company which is far stronger than the
others (a principal supplier, final assembly business, owner of the brand or the like), whose
interests give a one-sided slant to the development targets set for the whole network.
Meanwhile, a potential danger for generative learning in horizontal networks emerges if the
companies involved are too similar in terms of culture. The same problem may apply to
sectoral networks to some extent. Another general problem in setting up such a network in the

14
first place could be that companies in the same sector in a small country are quite likely to be

competitors.


Interaction between Companies and Expert Organizations and between Expert
Organizations

Cooperation between companies and various types of expert organization may also face
various questions and obstacles. In this respect, companies could be roughly divided into four
categories based on the research findings of Nieminen and Kaukonen (2001): (1) companies
which engage in development operations purely on their own, (2) companies which mainly
pursue development with their client companies, equipment suppliers, subcontractors and
materials suppliers, (3) companies which also do this with consultancy firms and development
agencies and with research units which offer readily applicable technological or other
expertise, and (4) companies which furthermore pursue development cooperation with
universities and other research and education institutions. The study indicated that the degree
of networking in development activities found at these companies shows a clear positive
correlation with their financial investments in R&D.

Nieminen and Kaukonen’s research found that the four most common obstacles to
cooperation with universities stated by companies were ‘lack of time’ (considered by 50% to
be a very big or fairly big obstacle), ‘not aware of cooperation potential’ (45%), ‘don’t have
resources to pay for services’ (36%) and ‘different time scope of operation’ (35%). The first
obstacle was thus very common and also difficult to interpret. The following two obstacles
can be solved with the help of information provision and financial support from work
organization development programmes. The fourth obstacle mainly derives from differences
in operational logic between researchers and practical actors. The same problem also emerged
in the evaluation report on the Enterprise Development 2000 programme (Oscarsson (Ed.)
1999). The challenge for programmatic work organization development aiming to promote
innovation is that development programmes specifically need to promote cooperation between
research units and companies, but many companies are very reluctant to enter into this type of

cooperation. It is not enough if research units simply begin to operate more like consultancy
firms vis-à-vis companies.

The evaluation report on the Enterprise Development 2000 programme came up with two
recommendations for strengthening development cooperation between companies and
research units: first of all, work organization development programmes and projects within
them should be able to use specialists with expertise from different areas flexibly, including
also engineering, systems design, business administration, etc. Similarly, it might prove useful
in many technology development programmes and projects to apply a networked approach
based on dialogue as in the Enterprise Development 2000 programme, and the expertise of
researchers with a background in social sciences. The second recommendation emphasized
the application of a problem-oriented interdisciplinary research approach in solving complex
problems. Both recommendations for strengthening the cooperation between companies and
research units thus also indirectly focused on strengthening the cooperation between research
units.

One possible solution would be to strive to strengthen cooperation between various expert
organizations such as universities, polytechnics or the like, consultancy firms and
development agencies, each of which have a different approach to the generation,

15
dissemination and application of scientific knowledge. In such a case, the different expert
organizations might play different roles in the network, and together they would be able to
offer participating companies a more multifaceted and versatile range of expertise than
models involving only one expert organization. Cooperation between universities,
polytechnics and consultants could then also support each of the expert organizations
involved in developing its own expertise. This type of coalition between expert organizations
has in fact already been formed in some FINWDP network projects, e.g. TEL LAPPI. In
future, forming such coalitions and studying how they work could become an increasingly
important aim and function of work organization development programmes.

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