A Study of Managerial Learning Perspective in Finnish ICT SMEs- Shared knowledge and Absorptive Capacity

  • Bhatti, Khalid Mushtaq, (Project manager, academic)

Project: Externally funded project

Project Details


There have been numerous evaluations in recent years, assessing the Finnish ICT potential and its implications for sustainable social and economic development. According to the latest World Economic Forum’s Global Competitiveness Report 2002-2003 (TIEKE, 2003) Finland graded as among the top ICT manufacturer and exporters. However, to mature these trends as well as efficient utilization of ICT competence on national level is not without challenges. One such challenge is the sustainable emergence and growth of ICT-clusters of SMEs to support overall national capacity for innovation and export potential of the economy. Role of managerial learning behavior is seen as one important element for influencing the learning and innovation capacity of the firm. In organization theory literature, when organizational entities are treated as learners, role of individuals as agents have been studied in relation to organizational learning phenomena. Within agency theory an agent self-serving behavior is governed by the firm (principal) through implementing the performance measures and establishing the incentive structures, provided that the nature of contract between the principal and agent is outcome based, principle has information to verify agent behavior. However, there may be a high degree of outcome uncertainty, and it’s also unlikely to verify an agent behavior as when the job of a manger is to learn and that managerial learning should also contributes to organizational learning. Study identifies this perspective as a point of departure and represents the construct where managerial learning is primarily influenced by the firm existing absorptive capacity processes not only by incentive structures etc., as defined in the agency theory. However, the incentive structures are built on the basis of performance measures, where organizational specific rules are in place to evaluate the individuals’ performance. Thus establishing performance measures where individuals learn within the firm’s existing processes and how shared knowledge is accumulated signifies the concerns of the study. Principal (firm) likely to establish incentive structure through analyzing the teamwork behavior among organizational members for example, and how its also related to existing processes of information distribution and sharing within (absorptive capacity processes) and across the firm boundaries (firm boundaries or embedded environment includes three dimensions including customers, competitors, standard technology provider like Microsoft, IBM). In this way principal likely to have more information to verify the agent behavior although there is a behavioral nature of contract that is not clearly outcome base where certainly more risk is transferred towards principal. However, as a result of building shared cognitive models among organizational members, the individuals are likely to exploit organizational internal and external environment better. Managerial learning in gatekeepers’ roles may result in knowledge transfer that is not only readily understandable among organizational members but also diffusible within the firm. Thus the shared mental models among organizational members (shared knowledge) are likely to positively associate with the transfer of complementary knowledge/technology from the environment with the greater potential to be utilized and diffused for the firm value creation process.
Effective start/end date01.08.200130.09.2006