Improvement of Organizational Knowledge Transfer through Integration of Functional Silos in Smart Network: Case Study of Public Enterprises

Abstract

Purpose - The purpose of this paper is to propose improvement of inter-organizational knowledge transfer through organizational change of public sector in one of European capitals. Structure of public and communal enterprises is often fragmented in group of specialized companies (Longo and Cristofoli, 2008). Internal organizational model of particular companies is most often functional organizational structure model (Szabo, 2008). Functional organizations are characterized by formation of organizational silos, where knowledge, power and information can often be trapped and secluded from other parts of organization, among other structural weaknesses (Daft, 2009). Further on, isolated structures exist not only on level of functions within single organization, but also between different public companies in the same municipality, in spite of common ownership (Todorovic, Komazec and Jevtic, 2012). Thus, knowledge transfer is restrained, not just among functions in individual organizations, but also, on even higher level, among different companies. This paper will describe how introduction of smarter, networked organizational forms can reduce these barriers and enable knowledge transfer. Design/methodology/approach - We propose an approach based on standard management consulting practice. Quantitative and qualitative data was gathered through content analysis based on formal reports and documentation, interviews with employees at different hierarchical levels and direct observation. Systematization documentation, with existing organizational structure, job classifications, job descriptions, salary reports and quality management system documentation were analyzed in detail. Interviews, observation and content analysis form data background for case analysis of each public company. Our sample covers more than 20 public and public communal companies, with more than 20.000 employees. Originality/value - This methodology puts in evidence structure with more fit between employee specialization and knowledge sharing. Quantitative and qualitative analysis of job descriptions and departmentalization shows more fit in grouping of common jobs, as well as reduced number of different job descriptions. Originality of our results is derived from consistence of other restructuring goals approach with reduction of structural and hierarchical barriers to knowledge transfer between departments in organizational Practical implications - In many cities worldwide different kinds of network models were used in order to improve the organization of public sector (Todorovic, Komazec and Cudanov, 2012). This paper aims to show how introducing network model to public sector, among many other benefits (Hall, 1998), significantly improves knowledge transfer. The outcomes of the application can be used to improve performance of public enterprises, a persistent topic in organizational analysis (Aharoni, 2000).