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.