Knowledge Sharing and Organisational Commitment in the Context of Downsizing

This article looks at the benefits of organisational knowledge sharing and commitment in the context of downsizing.  Knowledge sharing activities have the potential to enhance organisational effectiveness by bringing employees together and fostering the development of communities of practice, with subsequent positive impacts on organisational commitment.

Since the late 1980s downsizing has become a widespread organisational reaction to global competition, lower productivity and increasing labour costs (Tonks and Nelson, 2008, Gandolfi, 2009).  Research, however, has generally failed to reveal a strong link between downsizing and future profitability. In fact, the opposite is not uncommon (Drew 1994, Harrell-Cook & Ferris 1999).  What is more, downsizing consistently results in employees having lower levels of commitment (Noer 1993, Downs & Stogner 1995), which is often reflected in an unwillingness to accept change, increased secrecy and competitiveness (Newell & Lloyd 2002), more transactional perceptions of the psychological contract, greater focus on extrinsic motivators (Ebadan & Winstanley 1997, Martin, Staines & Pate 1998), and a general display of behaviours associated with ‘survivor syndrome’ (Brockner 1988, Boroson & Burgess 1992).

As organisations become leaner, they necessarily rely more heavily on those who remain to achieve their goals and objectives.  Under these conditions employees are more likely to expect greater responsibility and more discretion in managing their own behaviour (Bergquist, 1993; Limerick, Cunnington, & Crowther, 1998). Traditional managerial conceptions of work that view human resources as a cost to the organisation are counterproductive.  Commitment is not just a state of attachment where individuals internalise the goals and values of the organisation and become ‘good corporate citizens’ – nor is it a one way street.  Commitment is a reciprocal process that requires investment in a culture based on trust, collaboration and work practices that encourage quality human interactions and knowledge sharing.  Moreover, employee commitment is likely to be influenced by the way change is implemented (Meyer, 1997).

When organisational change occurs, employees are unlikely to adapt or change their own strongly held beliefs in response to a change in an organisation’s strategic direction, particularly when that change is perceived as unfair or unjust (Meyer, 1997).  When organisational change is perceived negatively, employees will more likely withdraw their commitment altogether, which may be why some organisations experience difficulty in retaining their most valued employees.

Maintaining organisational knowledge is an important factor in achieving positive organisational outcomes after downsizing and restructuring.  Sitlington (2011) highlights the importance of ensuring that plans and strategies to retain organisational knowledge, in both tacit (people, culture symbols, artefacts) and explicit forms (records, systems, procedures, libraries, databases), are in place prior to and during downsizing and restructuring activities. Such findings support Iverson and Zatzick’s (2011) advice regarding the importance of investment in communication, training and openness in order to support high performance work systems, which primarily rely on individual and collective knowledge of all employees, and avoid negative downsizing outcomes.

Strategies for formal and informal knowledge sharing require a culture of trust and are unlikely to be effective if implemented as part of downsizing or restructuring activities where trust may not be prevalent (Tourish et al. 2004). Therefore, HRM practitioners need to ensure that senior management are aware of the importance of early attention to organisational structure, climate and culture in order to strengthen the mechanisms used for formal and informal sharing of knowledge within the organisation (Widen-Wulff and Ginman 2004). Considering the findings regarding the relationship between formal knowledge sharing and organisational effectiveness, formal knowledge sharing activities may also provide an opportunity for informal networking. By bringing employees together, these activities may foster development of communities of practice, with subsequent positive impact on organisational outcomes including commitment.

In summary, communication, trust, openness, participation and involvement are the building blocks of knowledge sharing and commitment.  A lack of communication or opportunity for participation and interaction among employees during a downsizing exercise will likely result in significant loss of both organisational knowledge and commitment.

 

Reference List

Bergquist, W. (1993). The Post Modern Organisation: Mastering the Art of Irreversible Change. San Francisco: Jossey-Bass Publishers.

Boroson, W., & Burgess, L. (1992). Survivor’s syndrome. Across the Board, 29(11), 41-45.

Brockner, J., (1988). “The effects of work layoffs in survivors: research, theory and practice”, Research in Organizational Behavior, 10, 213-255

Drew, S.A.W., (1994). “Downsizing to improve strategic position”, MCB Management Decision, 32, 1.

Downs, A., & Stogner, C. (1995). Corporate executions: The ugly truth about layoffs – how corporate greed is shattering lives, companies, and communities. New York: American Management Association.

Ebadan, G., & Winstanley, D. (1997). Downsizing, delayering and careers – the survivors perspective. Human Relations Journal, 7(1), 79-91.

Gandolfi, F., (2009). Unravelling Downsizing – What do we know about the Phenomenon? Review of International Comparative Management. Volume 10, Issue 3, 414-426.

Harrell-Cook, G., & Ferris, G. R. (1999). Competing pressures for human resource investment. In R. S. Schuler & S.E. Jackson (Eds.), Strategic human resource management (242-263). Oxford: Blackwell.

Iverson RD and CD Zatzick (2011) The effect of downsizing on labour productivity: The value of showing consideration for employees’ morale and welfare in high performance work systems. HRM 50(1), 29-44.

Limerick, D. C., Cunnington, B., & Crowther, F. (1998). Managing the New Organisation: Collaboration and Sustainability in the Postcorporate World. (2 ed.). Chatswood, N.S.W.: Business and Professional Publishing.

Martin, G., Staines, H., & Pate, J. (1998). Linking job security and career development in a new psychological contract. Human Resource Management Journal, 8(3), 20-40.

Meyer, J. P. (1997). Organisational commitment. In C. L. Cooper & I. T. Robertson (Eds.), International Review of Industrial and Organisational Psychology (Vol. 12, pp. 175-228). New York: Wiley.

Newell, H., & Lloyd, C. (2002). Pharmco: Organisation restructuring and job insecurity. In H. Newell & H. Scarborough (Eds.), HRM in context: A case study approach (177-192). Basingstoke UK: Palgave.

Noer, D. M. (1993). Healing the wounds. Overcoming the trauma of layoffs and revitalizing downsized organizations. San Francisco: Jossey-Bass.

Sitlington, H.  (2011). Knowledge sharing: implications for downsizing and restructuring outcomes in Australian organisations Asia Pacific Journal of Human Resources (2012) 50, 110–127.

Tonks, G. R. & Nelson, L. G., 2008. HRM: a contributor to employee alienation? Research and Practice in Human Resource Management Volume16 Issue 1.

Tourish D, N Paulsen, E Hobman and P Bordia (2004) The downsides of downsizing: Communication processes and information needs in the aftermath of a workforce reduction strategy. Management Communication Quarterly 17(4), 485–516.

Widen-Wulff G. & Ginman, M., (2004) Explaining knowledge sharing in organizations through the dimensions of social capital. Journal of Information Science 30(5), 448–458.

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About Lyn Cundy

Lyn has been a Consultant with Merit Solutions since 1997. She was previously employed as an Associate Lecturer in the School of Organisational Behaviour and Human Resource Management, Griffith University (5 years). This role involved program and course development, and included course convening, lecturing and tutoring and the setting and grading of student assessment. Lyn also has a good knowledge of the vocational education and training (VET) sector and has managed the development of new courses for accreditation in Queensland. Her early background is in office administration and small business management.