The Antecedents to Knowledge Exchange in Organisations: A Psychological Contract Perspective
Ultan P. Sherman
School of Management & Marketing
University College Cork
Abstract
Purpose:Evidence suggests how knowledge is managed by organisations is an important source of competitive advantage. This theoretical paper makes the case for a psychological contract perspective to help explain knowledge exchange in organisations.Specifically, it examines two key areas of psychological contract theory and their prospective influence on knowledge exchange (knowledge seeking and knowledge sharing): (1) the psychological contract formed and; (2) psychological contract fulfilment or violation. Arising from this we offer a number of linked propositions to help direct future researchers along this line of enquiry.
Approach:The literature broadly categorises the antecedents to knowledge sharing and knowledge seeking as individual or organisational. To better understand how knowledge circulates in an organisation researchers need to consider different theoretical frameworks. With this in mind, by adopting psychological contract theory as an analytical framework to explore knowledge exchange, this paper seeks to harvest new insights into this domain area.
Research Implications:This paper seeks to provide a route-map for future researchers investigating knowledge exchange. By understanding the multi-faceted nature of the psychological contract researchers can better predict the likelihood of employees engaging with the exchange process.
Practical Implications:This paper suggests that by paying closer attention to the information communicated to new recruits at organisational entry, managers can help shape newcomers’ expectations of the importance of knowledge seeking and sharing. Similarly, delivering on promises made to employees can facilitate a deeper commitment to knowledge exchange amongst the workforce.
Originality/Value:This paper aims to open up new lines of enquiry into what is an underdeveloped area of research in the organisational development field.
Keywords:knowledge exchange; psychological contract; formation; fulfilment; violation
Introduction
Knowledge management is a growing research area in the organisational development field (Cabrera & Cabrera, 2005). Evidence suggests how organisations use knowledge is an important source of competitive advantage (Argote & Ingram, 2000).Accordingly, how knowledge is passed from employee to employee in the organisation and how management can shape this circulation process is an important research issue in the organisational development field. The challenges of knowledge management have received a deal of attention in the literature, with issues relating to structure (Kim & Lee, 2006), employee-supervisor relationships (King & Marks, 2008), and personality characteristics (Cabrera, Collins & Salgado, 2006) among significant factors found to influence this process. Nonetheless, given the central role of knowledge management in organisational development it is necessary to unearth new antecedents of knowledge exchange. Indeed, Wang & Noe(2010) call for an expanded view of knowledge exchange using different interpretive frameworks. Therefore, this theoretical paper explores how psychological contract theory can offer fresh insights into how knowledge is exchanged in organisations.
Knowledge Exchange: Sharing & Seeking
This paper examines two of the main processes identified in knowledge exchange research: knowledge sharing and knowledge seeking. Knowledge sharing refers to the provision of task information and know-how (tacit knowledge) to help others and to collaborate with others to solve problems, develop new ideas, or implement policies or procedures (Wang & Noe, 2010). Knowledge seeking refers to planned behaviour to acquire sufficient information so as to enable successful functioning in the organisation (Feldman, 1976).
A multitude of factors have been found to influence both knowledge seeking and knowledge sharing. In reviewing the literature on knowledge exchange, Wang & Noe (2010) broadly categorise its antecedents asorganisational and individual. That knowledge is exchanged ‘within’ an organisation it follows that various organisational factors are likely to influence how knowledge is shared and sought. Among the most prominent organisational forces is ‘culture’. Indeed, Ruppel & Harrington (2001) argue that firms who emphasise innovation tend to have cultures that facilitate the sharing and transfer of knowledge such cross-departmental teams. The structure of the organisation is likely to shape knowledge exchange too (Morley & Heraty, 2008). Kim & Lee (2006) found that a less centralised structure that awarded greater autonomy across units encouraged knowledge sharing. Organisations employing an open workspace see greater interaction among the workforce which facilitates knowledge exchange (Jones, 2005). It has also been suggested that a lack of incentives is a major challenge to knowledge exchange (Liebowitz & Megbolugbe, 2003; Hu & Randel, 2014). However, the evidence from the literature supporting this contention is mixed. For example, Kim & Lee (2006) found that performance-related pay contributed to knowledge sharing. However, Bock & Kim (2002) found that extrinsic rewards had a negative effect on levels of knowledge sharing. Much more work is needed in this area. The general point here is that the organisation itself influences knowledge exchange. By making necessary cultural, structural or design changes, knowledge can circulate more readily around the organisation.
Wang & Noe (2010) highlight the importance of understanding knowledge exchange at the individual level. Individuals are the fundamental repositories of tacit knowledge and dispositional characteristics influence knowledge exchange. Among the most significant individual factors is ‘personality’. Cabrera et al (2006) found that ‘openness’, an inherent welcoming of new experiences was positively associated with knowledge seeking and sharing. Similarly, Lin (2007) identified a relationship between perceived efficacy and knowledge sharing. A recent study by Wang, Noe & Wang (2014) found that conscientiousness and emotional stability also influenced knowledge sharing.Another prominent individual factor found to shape the knowledge exchange process is ‘willingness to share’. Indeed, Bock & Kim (2002) argue that employees are differentially motivated to share or guard knowledge and understanding underlying motivations can predict their behaviour around the exchange of knowledge. Given the importance of the ‘person’ to sharing and seeking knowledge in an organisation, much more research is required exploring the individual factors that shape the exchange process.
As explained, research demonstrates that individuals have different expectations and beliefs concerning their role in exchanging knowledge with their co-workers (Hu & Randel, 2014). This calls attention to how individual employees understand their relationship with the organisation. Researchers have explored this ‘understanding’ using a psychological contract lens. The psychological contract is an individual’s interpretation of the exchange agreement they have with another party, typically the organisation (Rousseau, 1995). The last quarter-century has seen significant research into the employment relationship around the concept of the psychological contract (e.g. Rousseau, 1990; Anderson & Schalk, 1998; Guest, 2004; Ng & Feldman, 2009). Psychological contract theory has provided useful explanations for important concepts in the management field such as organisational commitment (e.g. Sturges, Conway, Guest & Liefooghe, 2005), job satisfaction (Zhao, Wayne, Glibowski & Bravo, 2007) and intention to leave (Clinton & Guest, 2014). Very few researchers have examined knowledge exchange from a psychological contract perspective with the notable exception of O’ Neill & Adya (2007), O’ Donohue, Sheehan, Hecker & Holland (2007) and Bal, Chiaburu & Diaz (2011) among others. From a practical point of view, these studies highlight the importance of effectively managing the psychological contract as a means of ensuring knowledge is exchanged in the organisation. Despite these encouraging studies, considerable more research is required to better understand the relationship between the psychological contract and knowledge exchange. The remainder of this paper lays down a framework for future researchers investigating knowledge exchange from a psychological contract perspective. Specifically, we focus on two key areas within the literature: psychological contract formation and; psychological contract fulfilment/violation. Arising from this we advance a series of linked propositions to direct future research in thesedomain areas.
1: Psychological Contract Formation
Fully understanding the dynamics of the psychological contract is difficult without insight intohow it is created in the first instance. The antecedents of the psychological contract have received moderate attention from organisational researchers (e.g. Rousseau, 2001, Shore & Tetrick, 1994). Recent work by Sherman & Morley (2015) explore how expectations established early in the employment relationship act as a filter for future interactions with the employer. That is, once established, initial expectations have an enduring quality and are only changed at certain episodes in the employment relationship (Rousseau, 2001). Therefore, the early period of socialisation is a critical time for the new employee to create arealistic picture of organisational life but also for the employer in terms of communicating accurate and useful information to that employee (Feldman, 1976). The information used by the new employee to form a new psychological contract can be obtained from a variety of sources. The organisation is likely to communicate relatively consistent information to new recruits through formal processes such as the selection interview, the employment contract, and the induction for example. If an organisation has a culture of knowledge exchange and purposefully conveys this information to new recruits at organisational entry it follows that these expressions of organisational policy should all communicate the same message.
However, information used in the psychological contract creation process also comes from unofficial sources (Rousseau, 1995). Co-workers, work groups and supervisors also relay important contract-related information to new recruits. However, this information is likely to be inconsistent and subject stemming from the individual biases inherent in each information source (Sherman & Morley, 2015). It follows that members of the work group will each present a subjective view of organisational reality to the new recruit which is likely to differ with the official view presented by the organisation. For example, during induction a new recruit may be told that the organisation encourages newcomers to arrange meetings with more tenured colleagues as a means of acquiring important work-related knowledge. The workgroup on the other hand may tell the same recruit that such a practice rarely happens and will not be well received by the veteran employees. In this scenario, the new recruit is confronted with two contrasting views of the organisation’s approach to knowledge exchange. Research suggests that individuals are less likely to pay attention to confusing information (Sherman & Morley, 2015). Interpreting the above example from a psychological contract perspective, contributing to knowledge exchange is unlikely to be an element of the newly formed psychological contract as the information provided is not clear. Rousseau (2001) asserts that the provision of clear and unambiguous information helps the individual to create more accurate and realistic psychological contracts.Therefore, it follows that more closely aligning information from official organisation sources and informal sources such as the workgroup is more likely to result in a more accurate psychological contract. Indeed, communicating symmetrical informationis an integral part of early socialisation (Suazo, Martinez & Sandoval, 2009).
Proposition P1A:The provision of symmetrical information regarding knowledge exchangeat organisational entry will see new recruits explicating obligations concerning knowledge seeking and knowledge sharing
Exploring how the psychological contract is created is an important issue in the literature on the formation process. However, beyond understanding the formation process researchers need to explore the content of the newly formed psychological contract.The content of the psychological contract refers to the perceived obligations of the two parties to the agreement (Herriot, Manning & Kidd, 1997) and fulfilment of these obligations is the driving force of behaviour in the organisation (Conway & Briner, 2005).Due to its subjective nature, the psychological contract is influenced by a countless number of individual factors. Therefore, each psychological contract will contain idiosyncratic and personal content dimensions.In an attempt to bring clarity to what potentially is a complex field of research, Rousseau (1990) broadly asserts that there are two distinct types of psychological contracts: A ‘transactional psychological contract’ (employer obligations concerning high pay, rapid promotion and performance-based pay and employee obligations concerning advance notice, accepting transfers, no competitor support and protection of proprietary information); and a ‘relational psychological contract’ (employer obligations concerning training, long-term job security, career development and personal support and employee obligations concerning working overtime, loyalty and extra-role behaviour). The transactional-relational categorisation has been used in countless numbers of psychological contract studies (e.g. Millward & Hopkins, 1998; De Vos, De Stobbeleir, Meganck, 2009 etc.).
Those employees who hold a transactional psychological contract at the beginning of employmentview their relationship with the organisation in narrow terms. Often their relationship is founded on very specific terms. For example, this employee would only engage in extra role behaviours (working additional hours) as long as they were rewarded for it. Therefore, the performance-reward contingency for these employees is high. Within the context of knowledge exchange in organisations it is unlikely that a transactional psychological contract would contain employee obligations relating to knowledge sharing and knowledge seeking. Indeed, research suggests that development opportunities and the obligations of both parties relating to it are of little relevance to an employee with a transactional psychological contract (Robinson & Rousseau, 1994).
Proposition P1B: Employees holding a transactional psychological contract at organisational entry will be less likely to report obligations concerning knowledge seeking and knowledge sharing
Conversely, employees holding a relational psychological contract typically perceive a broader relationship with the organisation. These employees typically have an open-ended arrangement with the employer and are looking to increase their levels of employability throughout their stay with the organisation (Guest, 2004). To this end, they seek opportunities for development and are willing to contribute to effective team dynamics in return (Conway & Briner, 2005). Indeed, a relational psychological contract is often associated with pro-social employee behaviours (Coyle-Shapiro, Kessler & Purcell, 2000). We propose that employees with this type of arrangement with the organisation will be more willing to contribute to knowledge exchange in organisations.
Proposition P1C:Employees holding a relational psychological contract at organisational entry will be more likely to report obligations concerning knowledge seeking and knowledge sharing
Based on the contingent and reciprocal principles inherent in psychological contract theory (Rousseau, 1995) those employees who report obligations relating to knowledge sharing and knowledge seeking will expect something in return from the employer. Research suggests that in return for extra role behaviours employees often expect the organisation to provide opportunities for development and also to improve their employability (De Vos et al, 2009).
Proposition P1D: Employees who explicate obligations concerning knowledge seeking and knowledge sharing will expect opportunities for development and improved employability in return from the organisation
2: Psychological Contract Fulfilment/Violation
The vast majority of research on the psychological contract concerns evaluating the psychological contract (Rousseau & Tijoriwala, 1998). That is, most studies examine the ‘state’ of the psychological contract, the extent to which it has been fulfilled or violated. As the employment relationship develops over time the employee reflects on the psychological contract at certain episodes in the relationship (e.g. performance appraisal, contract renegotiation etc.).Violation refers to the belief that the other party has not upheld their side of the agreement. Fulfilment refers to the belief that the other party has upheld their side of the agreement (Rousseau, 1995).When the psychological contract is fulfilled, the employee perceives that the organisation is delivering on the inducements promised to the newcomer at the beginning of employment. When the psychological contract is in a ‘positive’ state the employee is obliged to ensure their side of the agreement is upheld, in line with the reciprocal nature of the theory.
Psychological contract fulfilment has been associated with a number of positive outcomes in previous psychological contract research (e.g. citizenship (Turnley, Bolino, Lester & Bloodgood, 2003); satisfaction (Coyle-Shapiro & Kessler, 2000)). These studies demonstrate that the employee is more likely to demonstrate prosocial behaviours in the organisation when the psychological contract is fulfilled (Coyle-Shapiro et al., 2000). Most contemporary organisations recognise the importance of knowledge exchange to organisational learning (Heraty & Morley, 2008). Addressing the antecedents of these behaviours is an important organisational issue.
Proposition P2A: Psychological contract fulfilment will be positively associated with knowledge seeking and knowledge sharing
Robinson & Rousseau (1994) argue that violations of the psychological contract are almost inevitable in exchange relationships. Indeed, considerable research on the psychological contract is concerned with the outcomes of violation. For example, reduced contributions (Tomprou & Rousseau, 2015), reduced loyalty (Turnley & Feldman, 1999), and less commitment (Cassar & Briner, 2011) have all been identified in the literature as negative behaviours in response to psychological contract violation. Within the context of organisational learning, it seems likely that employees would less likely to make the effort to seek out information from their colleagues or, indeed, share knowledge with their counterparts.
Proposition P2B: Psychological contract violation will be negatively associated with knowledge seeking and knowledge sharing
Summary
This theoretical paper advances a psychological contract theory perspective to better understand knowledge exchange in organisations. Exploring the antecedents of why knowledge is sought and shared are important research areas in the organisational development field. Specifically, this paper identifies two distinct areas for future researchers to explore. First, addressing the early stages of the psychological contract facilitates deeper insights into newcomers’ expectations of their role in the organisation (Sherman & Morley, 2015). Additionally, identifying the type of psychological contract formed in the first instance allows us to predict future behaviour in relation to knowledge exchange in the organisation. Second, the extent to which the psychological contract is fulfilled or violated is an important research issue given the associated outcomes with these variables. How the employees perceives the employers contributions to the exchange agreement is likely to shape their behaviour around knowledge seeking and sharing.