Effects of Organizational Design Dimensions on Inter-unit Knowledge sharing

The literature on knowledge sharing is extensive but organization design received little attention in this literature. A few useful exceptions are Birkinshaw e.a. (2002), Hansen (2002) and Tsai (2002). However, these attempts are yet too limited to fully understand the relationship between organization design choices and knowledge sharing. To contribute in filling this gap, we look at the fundamental organization design dimensions, specialization centralization, formalization, and coordination, in their relationship to the concepts of knowledge and knowledge sharing. While specialization creates firm-specific boundaries to knowledge sharing, coordination is the firm-specific mechanism to overcome these boundaries (Grant, 1996). A multiple case study approach was followed to collect our data, using a questionnaire in the Belgian divisions of two European companies active in the energy and finance sector. Based on a reassessment of the classic organization design literature, we assumed more inter-unit knowledge sharing when: decentralized and informal coordination is used, interdependency between units is low and specialization, reflected in knowledge complexity and unit differences, is low. Our findings indicated that interdependency and knowledge complexity, apart from having a strong direct effect on knowledge sharing, also had an important interacting effect in the relationship between coordination and knowledge sharing; suggesting a contingency view on organization design and knowledge transferability. Other expected relationships were not found, such as the negative effect of hierarchy or the positive effect of lower formalization. We made a comparison between the two cases and put the findings in their context. Apparently, the context in which the coordination is applied affects the potential of this coordination for knowledge sharing. Especially the role of formalization differed. Hence, context-specificity questions again the contingency view.