In this presentation Professor Paul Gooderham presents findings from two recent research projects that both address the issue of employee motivation. The first project investigates the work-related values of graduating students at elite business schools in Scandinavia and North America. It addresses the issue of whether they are materialists or post-materialists. It also examines whether Americans are more materialistic than Scandinavians. The second paper asks the question, what governance mechanisms promote knowledge sharing in multinational companies? In particular it addresses the issue of whether bonuses are more motivating than collegial acknowledgment.

1. What Really Motivates Employees?
LESS 2011 Stockholm
Paul Gooderham NHH – The Norwegian School of Economics
November 1 2011
www.nhh.no

2. What Really Motivates Employees?
•Findings from two research projects:
– „GOLD‟-project - what motivates employees in
multinational companies (MNCs) to share
knowledge?
• Gooderham, P.N., Minbaeva, D, Pedersen, T. (2011) Journal
of Management Studies
–„ELITE-student‟ project – what are elite
business students seeking to obtain from their
employment?
• Work-in-progress
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3. „GOLD‟-project - what motivates employees in
multinational companies (MNCs) to share knowledge?
•Theoretical background (1): Changes to driving
forces behind MNCs.
•The traditional driving forces behind MNEs
•Access to cheap labor –
–subsidiaries are ”off-shores”
•Access to markets –
–subsidiaries are ”servers”
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4. HIGH
Assumed knowledge
contribution to the MNC
Servers
LOW
Off-shores
LOW Degree of knowledge in subsidiary
HIGH

5. The new driving force
•Increasingly firms are investing abroad to
enhance and augment their knowledge
•MNCs are trying to buy into foreign created
knowledge assets
•MNCs aim to increase their core competencies by
incorporating the knowledge of their subsidiaries.
•Subsidiaries are knowledge sources:
–“enhancers” & “centers of excellence”

6. HIGH
Centres of excellence
Assumed knowledge
contribution to the MNC
Enhancers
Servers
LOW
Off-shores
LOW Degree of knowledge in subsidiary
HIGH

7. Theoretical background (2): RBV
• Resource-based view (RBV) of the firm (Jay Barney; 1991)
• Competitive advantage is explained by resources that are
–V - Valuable,
–R - Rare,
–I - Imperfectly imitable,
–N - Non-Substitutable
– Externally available resources do not confer competitive advantage
(i.e. the “market”).
– Most RBV scholars argue that it is intangible resources - such as
firm-specific knowledge - that confer competitive advantage
(i.e. the “firm advantage”)
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8. The ”Firm Advantage” – The Knowledge
Based View (KBV) of the Firm
•Kogut and Zander (1993): MNCs as “social
communities”
–Qualitatively different to markets
• “Shared identities” and “established routines of
cooperation”
• Through transfer and sharing - new & unique knowledge
can be created
–BUT! declined to explore the finer details of the
organizational capabilities peculiar to the efficient transfer
and sharing of knowledge.
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9. Typical ”early” research questions
• Given that each business unit across the MNC has particular
knowledge strengths:
• Typical early research questions:
– Why is knowledge so difficult to transfer between units?
–Why are knowledge synergies - via “sharing” - that could
generate product innovation so difficult to create?
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10. Knowledge as a ”thing” that is transferred from one
person (the sender) to another (the receiver) through
”pipelines”
Potential barriers
Knowledge flow
Sender Receiver

11. Knowledge that confers competitive advantage is
”Collective” and therefore locally “Embedded”
Individual Social
Explicit Conscious Objectified
Implicit or Tacit Automatic Collective
Spender, 1996
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12. Collective knowledge can only be shared through the
dynamic interaction of groups of people
Valuable
knowledge?
No sender or receiver
Knowledge is shared between groups of people – through interaction
Barriers: lack of networks; lack of trust, lack of shared mindset.

13. Three dimensions of social capital
(Nahapiet & Ghoshal, 1998)
•Structural: linkages; networks
•Cognitive: shared understanding and shared
norms
•Relational: trust, identification, relationships

14. Enhanced
Enhanced Enhanced
Knowledge Sharing across
Social Capital across Performance for the
the MNC through
the MNC MNC
interaction

15. Social Capital
Where are we now?
• “We still don‟t know nearly enough about what processes
& practices are important for building & sustaining social
capital & in what contexts”
– Janine Nahapiet, GOLD Workshop, NHH, November 2008
• But what we do know is that because of:
–cultural, institutional and physical distance
• MNCs are particularly demanding contexts in which to
develop social capital - and facilitate knowledge transfer.

16. Our contribution
• We look into the black box of how social capital emerges
and is developed
• We propose knowledge governance mechanisms that
can be deployed to promote social capital and ultimately
intra-MNE knowledge transfer
• We conduct empirical testing of the developed model

17. Governance Mechanisms
• Three governance mechanisms are available to managers (cf. Adler
& Kwon, 2002).
• These will impact on social capital.
• Based on different exchange mechanisms:
– Market-based relations:
• The pecuniary exchange of products or services: mechanism e.g.
bonuses
– Hierarchical relations:
• The exchange of
Hierarchical
obedience to authority mechanisms
for security: mechanism e.g. rules
– Social relations: Social
Social
mechanisms
• Free exchange of favors: mechanism capital
e.g. acknowlegement
Market-based
mechanisms

18. The hypothesized model
Hierarchical
mechanisms
-
+ Social
+
Social capital
Knowledge
mechanisms sharing
Market- -
based
mechanisms

19. Data
• Two Danish MNCs operating in the same industry - food
ingredients
• (Internet-based) survey distributed via the respective firm‟s
internal email system
• Individual respondents
– Danisco: 77.94%; 219 respondents
– Chr. Hansen: 72.75%; 251 respondents
– Multiple respondents within the same unit
• I.e. we are measuring individuals‟ perceptions.

20. Knowledge sharing and social capital –
examples of items
•Knowledge sharing:
–To what extent have:
• You used knowledge from colleagues in other
departments?
• Colleagues in other departments used knowledge from
you
•Social capital:
–In my company:
• People cooperate across departments
• Sharing of knowledge is valued
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21. Governance mechanisms – examples of items
• Hierarchical mechanisms
– In my company, people are expected to stick to rules and
procedures even when there are better solutions.
• Social mechanisms
– To what extent are you currently rewarded for transferring
knowledge in your company…
• by acknowledgement of your contribution?
• Market mechanisms
– To what extent are you currently rewarded for transferring
knowledge in your company…
• by increments/bonuses?
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22. Results (LISREL)
Hierarchical
mechanisms
-0.16**
-0.23***
0.56*** Social
0.47***
Social capital
Knowledge
mechanisms sharing
0.53***
Market- -0.12*
based
mechanisms

23. Conclusions
• Social governance mechanisms - involving
acknowledgement practices - clearly promote social capital
• Excessive use of hierarchical control – “perfunctionary
compliance” - has the opposite effect
• The effect of market-based mechanisms – e.g. bonuses - is
more mixed
• Implications for management of knowledge-intensive
organizations
• Weakness: Cross-sectional data; Scandinavian MNCs

24. Cultural values
• In the 1970s Geert Hofstede identified 4 value dimensions along
which national cultures can be grouped.
– Power Distance
– Uncertainty avoidance
– Individualism-collectivism
– Masculinity-femininity

25. Masculinity-femininity
•Masculine societies value
assertiveness, competitiveness and
materialism.
–Organizations are task oriented.
•Feminine societies: harmonious relations
with a strong emphasis on social
partnership.
–Organizations are process-oriented.

26. Use of ‘calculative’ HRM
source: Cranet: 2009 survey of firms
USA Norway
Formal appraisal system for:
Management 92% 54%
Professional 96% 44%
Clerical 94% 44%
Manual 72% 42%
Performance related pay for:
Management 77% 32%
Professional 74% 20%
Clerical 67% 15%
Manual 52% 10%

27. Research strategy
• Matched samples for Norway and the USA.
• Preferably individuals
–that have not been socialized into any particular company
culture
–who can choose either to maximize materialistic-oriented
outcomes or socially oriented outcomes
–who will potentially engage in knowledge sharing
• ”Elite” business-school students
– NHH-The Norwegian School of Economics
– Equivalents in USA
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28. Business Students in Norway and the US:
Job-related Values and Preferences
Paul Gooderham, Odd Nordhaug, Olav Kvitastein
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www.nhh.no

29. The US and Norway samples: Schools
Degree program
School Bachelor Master Missing Total
Duquesne 59 3 4 66
Indiana 0 16 0 16
Michigan 39 3 3 45
NHH 264 13 3 280
TCU 30 23 3 56
Total 392 58 13 463
At NHH data was collected from 360 students in their final year of the bachelor degree program January 2009. In the
US, data was collected from approx. 290 students in either the final year of their BA program or year on or two of their
Masters programs. Thus, resp. rates of approx. 77% and 63% for NHH and the US schools respectively
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www.nhh.no

30. The US and Norway samples: Gender
Country
Gender US Norway
Female 33.0 31.3
Male 67.0 68.7
Total % 100.0 100.0
N= 182 278
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www.nhh.no

31. Job-related Values and Preferences
•On a scale from 1 (not important) to 10 (very
important)
–The importance of 25 job-related factors when
choosing one‟s first job after graduation
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32. Rotated factor matrix
Component Cronbach's
1 2 3 4 5 6 Alpha
Individual, performance-based bonuses 0.788
Stock options for managers 0.780
Employee stock ownership 0.769 Instrumental work orientation 0.873
Cost-sharing schemes 0.709
Performance-based team bonuses 0.687
Pay based on individual performance 0.629
There is a friendly culture 0.798
Employer cares about employees as individuals 0.735 Social orientation 0.784
Good personnel policy 0.630
Good social relations among colleagues 0.627
A lot of variety in work tasks 0.746
Interesting work 0.722 Expressive
A lot of freedom to work on your own initiative 0.598 work orientation 0.744
Scope for creativity in the job 0.558
Good opportunities to develop competence 0.545
Clearly defined annual targets to work towards 0.858
Clearly defined annual targets to be evaluated on Well-defined task 0.849 0.770
Frequent feedback on work performance 0.431
Opportunities to move around in the organization 0.707
Opportunities for long-term career progression 0.667 0.715
Systematic career planning Career opportunities 0.559
Opportunities for personal development 0.516
High annual earnings/salary 0.704
The position has a high status Fast-track orientation 0.685 0.744
Opportunities for getting fast promotion 0.630
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33. Factors expressed as summates, i.e., as means over items
involved, and sorted by magnitude:
Factor Label Mean Std. Dev.
f2 Social orientation 8.14 1.205
f3 Expressive work orientation 7.82 1.106
f5 Career opportunities 7.47 1.238
f4 Well-defined tasks 7.03 1.384
f6 Fast-track orientation 6.90 1.422
f1 Instrumental work orientation 5.96 1.620
N = 463
Note:10 = Very important, 1 = Not important
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34. Ranking of factors by country
USA Norway
• Social orientation 1 1
• Expressive work orientation 2 2
• Career opportunities 3 3*
• Well-defined tasks 5 4
• Fast track orientation 4 5*
• Instrumental work orientation 6 6*
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35. Conclusions
• Implications for management of employees who “ought” to
engage in knowledge-sharing
• Social governance mechanisms promote social capital and
knowledge sharing
–Socially oriented values are ranked highest
• Hierarchical control has the opposite effect
–Well-defined tasks are ranked low
• Market-based mechanisms also has a negative direct impact
on social capital and knowledge sharing
–Instrumental work orientation is ranked lowest.

36. Rotated factor matrix
Component Cronbach's
1 2 3 4 5 6 Alpha
Individual, performance-based bonuses 0.788
Stock options for managers 0.780
Employee stock ownership 0.769 Instrumental work orientation 0.873
Cost-sharing schemes 0.709
Performance-based team bonuses 0.687
Pay based on individual performance 0.629
There is a friendly culture 0.798
Employer cares about employees as individuals 0.735
Good personnel policy 0.630 Social orientation 0.792
Good social relations among colleagues 0.627
High job security 0.491
Employer has a dynamic approach to business 0.419
A lot of variety in work tasks 0.746
Interesting work 0.722 Expressive
A lot of freedom to work on your own initiative 0.598 work orientation 0.744
Scope for creativity in the job 0.558
Good opportunities to develop competence 0.545
Clearly defined annual targets to work towards 0.858
Clearly defined annual targets to be evaluated on Well-defined task 0.849 0.770
Frequent feedback on work performance 0.431
Opportunities to move around in the organization 0.707
Opportunities for long-term career progression 0.667 0.715
Systematic career planning Career opportunities 0.559
Opportunities for personal development 0.516
High annual earnings/salary 0.704
The position has a high status Fast-track orientation 0.685 0.744
Opportunities for getting fast promotion 0.630
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37. Factors expressed as summates, i.e., as means over items
involved, and sorted by magnitude:
Factor Label Mean Std. Dev.
f2 Social orientation 7.96 1.121
f3 Expressive work orientation 7.82 1.106
f5 Career opportunities 7.47 1.238
f4 Well-defined tasks 7.03 1.384
f6 Fast-track orientation 6.90 1.422
f1 Instrumental work orientation 5.96 1.620
N = 463
Note:10 = Very important, 1 = Not important
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