(KM) on dynamic capabilities

Examining the influence of modularity and knowledge management (KM) on dynamic capabilities: Insights from a call center M.N. Ravishankar and Shan L. Pan Abstract Modularity in organizations can facilitate the creation and development of dynamic capabilities. Paradoxically, however, modular management can also stifle the strategic potential of such capabilities by conflicting with the horizontal integration of units. We address these issues through an examination of how modular management of information technology (IT), project teams and front-line personnel in concert with knowledge management (KM) interventions influence the creation and development of dynamic capabilities at a large Asia-based call center. Our findings suggest that a full capitalization of the efficiencies created by modularity may be closely linked to the strategic sense making abilities of senior managers to assess the long-term business value of the dominant designs available in the market. Drawing on our analysis we build a modular management-KM-dynamic capabilities model, which highlights the evolution of three different levels of dynamic capabilities and also suggests an inherent complementarity between modular and integrated approaches. Keywords: Asia; Call center; Case study; Knowledge management; Modularity, Dynamic capabilities

1. INTRODUCTION The modular design of systems, technologies and processes are now a preferred option for an increasing number of organizations (Hoetker, 2006; Salvador, 2007; Sanchez & Mahoney, 1996; Sinha & Van de Ven, 2005). According to Schilling and Steensma (2001) “systems are said to have a high degree of modularity when their components can be disaggregated and recombined into new configurations – possibly with new components – with little loss of functionality.” Modularity offers a number of benefits such as strategic flexibility (Sanchez, 1997), cycle time reduction (Ulrich & Eppinger 1999; Peters & Saidin, 2000), opportunities for outsourcing (Baldwin & Clark, 1997) and product innovation (Ethiraj & Levinthal, 2004). Modularity also makes it easier for resources to be more easily integrated, built and reconfigured. In short, it is believed that modular management of resources (or modularity) can facilitate the creation and development of unique sets of dynamic capabilities and ultimately deliver a sustainable competitive advantage to organizations (see Langlois, 2002; Worren, Moore, & Cardona, 2002). When examining modular systems and dynamic capabilities, it is also important to note that the obvious benefits of modular designs and systems often come with a cost (Brusoni, 2005; Fleming & Sorenson, 2001). In a significant way, modularity may also have a negative impact on strategies to build dynamic capabilities since modular approaches can create significant hurdles for ‘horizontal integration’ of business units. Horizontal integration is of special interest to senior managers since such it helps organizations reap the strategic benefits of co-ordination and knowledge sharing (Ndlela, & du Toit, 2000). A critical component of horizontal integration, which may be affected, is ‘intellectual integration’ or the ‘goal of knowledge management (KM)’ (Ghoshal & Gratton, 2002). Indeed, many organizations have implemented organization-wide 1

KM strategies in order to achieve a horizontally integrated organization (Ravishankar, Pan, & Leidner, 2011). Disaggregated and dispersed modular resources and systems clearly pose an important challenge for KM since they tend to operate as isolated entities making it difficult for the larger organization to integrate disparate pockets of knowledge (Ghoshal & Gratton, 2002; Ravishankar & Pan, 2008). The wider IS literature clearly recognizes that effective KM strategies can contribute significantly to the development of dynamic capabilities (see Garud & Kumaraswamy, 2005; Massey, Montoya-Weiss, & O’Driscoll, 2002). Yet as noted above, by posing structural and social barriers to the integration of dispersed knowledge modular designs may indirectly create bottle necks for the development of dynamic capabilities. In other words, modularity may facilitate dynamic capabilities and paradoxically, also stifle their creation by visibly counteracting at least some of the aims of organizational KM strategies (see Brusoni, 2005). For most organizations, a resolution of these difficulties is of course not possible by choosing modularity over KM or vice-versa, since in practice both are critical strategies underpinning the creation of dynamic capabilities. Drawing on these points of tension, we address two main research questions in our paper: (1) How does a modular approach to managing information technology (IT) and operations facilitate the creation and development of dynamic capabilities? (2) How can an effective organizational KM strategy counter the limitations of modularity? We address these questions through an in-depth qualitative case study of ASIASPEAK, a call center with operations in three Asian cities. The rest of the paper is organized as follows: The next section offers a brief review of the academic literature on modularity and its benefits, and organizational KM. This is

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followed by a description of the research methods and an analysis of modular management at ASIASPEAK. We conclude with a discussion of the key implications of our study.

2. MODULARITY Modularity is the efficient organization of complex products and processes through a partitioning of information into “visible design rules” and “hidden design parameters” (Baldwin & Clark, 1997; Richard & Devinney, 2005). Visible design rules (“visible information”) refer to structural decisions of design relating to the architecture, interfaces and standards, which affect subsequent modifications. Hidden design parameters (“hidden information”) on the other hand, do not affect design decisions and can be changed without informing those outside the modular design (Baldwin & Clark, 1997). “A complex system is said to exhibit modularity in design if its parts can be designed independently but will work together to support the whole” (Baldwin & Clark, 2006). Empirical studies have investigated modular designs, systems and approaches in a variety of new product development settings such as consumer electronics (Park, Fujimoto & Hong, 2012), computer hardware (Quinn, 2000), aircraft manufacturing (Sosa, Eppinger, & Rowles, 2004), software products (MacCormack, Rusnak, & Baldwin, 2006) and car manufacturing (Cusumano & Nobeoka, 1998). Further, the benefits of integrating IT and modular designs in the development of new products has also been highlighted in recent empirical studies (for e.g., Liang & Huang, 2002, Park et al., 2012). 2.1. Modular management and dynamic capabilities Dynamic capabilities refer to the organizational and strategic processes by which managers manipulate resources into new productive assets in changing markets (Galunic & Eisenhardt, 2001; McKelvie & Davidsson, 2009). Given the hypercompetitive business environments of today, dynamic capabilities are particularly crucial since resources that 3

previously served as sources of competitive advantage can fast end up becoming liabilities (Johnson, Scholes, & Whittington, 2006; Newey & Zahra, 2009; Teece, Pisano, & Shuen, 1997). In response to the challenges of changing markets, organizations need to continuously create the capabilities of acquiring, developing and deploying relevant resources so that these capabilities may provide distinctive sources of advantage (Barney, 1991; Heracleous & Witz, 2010). Put differently, only organizations possessing such dynamic capabilities will be able to adapt and thrive in hypercompetitive environments (Conner & Prahalad, 1996; Karim, 2006). Eisenhardt and Martin (2000) argue that dynamic capabilities’ are particularly valuable because they alter the resource base: they create, integrate, recombine, and release resources. Dynamic capabilities are therefore seen to contribute to the competitive advantage of organizations by helping them to reconfigure their strategic resources and to develop certain unique capabilities faster (Pandza & Thorpe, 2009; Teece, Pisano, & Shuen, 1997). Modularity can potentially facilitate the creation and development of dynamic capabilities in a number of ways. Modularity improves strategic flexibility or “the condition of having strategic options that are created through the combined effects of an organization’s coordination flexibility in acquiring and using flexible resources” (Sanchez, 1997; Worren et al., 2002). In other words, modularity gives a system greater flexibility and makes it possible for its components to be recombined in different ways to provide different functions in organizational units (Sanchez, 1995; Shah, 2006). Modularity can help accelerate processes of organizational learning in relation to two distinct levels of organizational design and work: (1) the component level and (2) the architecture level (Garud & Kumaraswamy, 1995; Popadiuk & Choo, 2006; Sanchez & Mahoney, 1996). First, at the component level modularity allows localized adaptations to take place within hidden modules often leading to reduced design and

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development times (Ulrich & Eppinger, 1999). The specifications of the interface with other organizational modules and processes shields business units and teams from dramatic changes taking place in the organizational architecture, thereby allowing component-level learning mechanisms to retain their value and relevance (Richard & Devinney, 2005). Well-endowed modular university departments, whose internal processes and learning mechanisms remain relatively shielded from design changes taking place in the broader organizational architecture, are a good illustration. Ensuring that the interface to the architecture stays constant also makes it possible to accelerate learning processes by assigning several teams within a unit to work on different variations of the same component (Langlois, 2002). Second, the loose coupling between the architectural and component learning processes helps accelerate learning at the broader architectural level as well (Sinha & Van de Ven, 2005). In short, a modular approach makes a clear distinction between organizational learning processes at the component and architectural levels. In doing so, it removes obstacles to innovation and leads to enhanced learning outcomes. Modularity also allows organizations to better adapt to changing market opportunities through patching, a “strategic process by which corporate executives routinely remap businesses to changing market opportunities” through “adding, splitting transferring, exiting, or combining chunks of businesses” (Campbell, Eisenhardt & Brown, 1999). For instance, reuse of existing tools may be facilitated in a big way by recombining or/and substituting one modular business with another (Ethiraj & Levinthal, 2004). Modular designs give organizations the strategic option of outsourcing modules, which can help managers focus more on core value-creating activities (Miozzo & Grimshaw, 2005; Quinn, 2000). For many organizations, modularity makes information hiding (Parnas, 1972) possible since detailed knowledge about the inner workings of one component need not be shared with the makers of other components. A well-known

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consequence of information hiding in service industries (e.g., banks) is the ubiquitous frustrated customer who has to explain everything all over again on finding his/her phone call abruptly transferred to a customer service representative in a different department. 2.2. Modularity and the knowledge management (KM) problem Clearly, although modular management brings many advantages, it can also introduce some difficulties. A review of the literature suggests that that over using modularity can lead to a lack of true breakthrough innovations (Fleming & Sorenson, 2003) with only incremental improvements occurring at the component level. An often-cited example in the popular media is that of IT vendor organizations in developing countries, whose modular systems are thought to facilitate small improvements in service offerings, while at the same time also stifling major innovations. Perhaps the most important concern raised about modular systems and processes is that they often cause knowledge resources to be distributed across the various organizational units with relatively fewer opportunities for their integration (see Brusoni, 2005). As noted earlier, modularity can thus lead to silos and also block the development of dynamic capabilities in the long run. This concern draws attention to the effectiveness of KM strategies in integrating disparate knowledge stocks and facilitating knowledge sharing and transfer. While some organizational KM strategies have tended to revolve around the implementation of an IT-based system to manage organizational knowledge (see du Plessis & Boon, 2004; Ravishankar & Pan, 2008), others have emphasized a combination of IT and non-IT based arrangements (e.g., LópezNicolás and Merono-Cerdán, 2011; Massey, Montoya-Weiss, & O’Driscoll, 2002) to promote sharing and integration of knowledge between and across business units of an organization. Here, we take a broader and more inclusive view of KM and view them as a class of organizationally mandated initiatives, which aim to facilitate integration, sharing and transfer of knowledge across different parts of an organization (see Ravishankar et.al, 2011). Empirical 6

research over the last two decades has demonstrated how a carefully crafted KM strategy can improve organizational performance in a number of important ways. Effective KM can improve operational efficiencies (Ravishankar et al., 2011), build positive relationships with customers (du Plessis & Boon, 2004), foster innovation (López-Nicolás & Merono-Cerdán, 2011) and help organizations achieve a sustained competitive advantage in the market place (Ndlela & du Toit, 2001). One approach that can help better understand the strategic success of organizations on both the modularity front and on the KM front involves analyzing the cognitive capabilities of key managers. Choo (1996) argues that organizational actors’ abilities to sense changes in the environment, to enact the perceived changes, to select particular interpretive frames and to retain the results in memory help them to navigate through difficult phases of strategic decision making. Thus, as we will argue in our data and discussion sections, the managerial sense-making structures that make strategic choices can create organizations that are epistemically different with superior knowledge cultures (Choo, 2013). In summary, a review of the literature shows that adopting a modular design of resources, systems and processes can lead to benefits such as strategic flexibility (Sanchez, 1997), accelerated learning (Sanchez & Mahoney, 1996) and improved adaptation to changing market opportunities (Eisenhardt & Brown, 1999), all of which suggest a positive influence on the creation and development of dynamic capabilities. At the same time, modular management can create significant stumbling blocks for the creation and development of dynamic capabilities by remaining structurally ill-equipped to accommodate KM interventions. In this case study of a leading Asia-based call center, we aim to explore these issues in greater detail by (1) examining how a modular approach may facilitate the creation and development of dynamic capabilities and

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by (2) investigating how an effectively designed KM strategy may counter the challenges created by modular technologies and operations.

3. RESEARCH METHODS Our study uses a qualitative case study approach (Eisenhardt, 1989), which is underpinned by a research orientation known as soft positivism (Madill, Jordan, & Shirley, 2000). Soft-positivism provides a structured, but flexible approach to qualitative research since it helps conduct the data analysis with certain expectations based on prior theory, while at the same time allowing for unexpected findings and explanations to emerge from the data, as is more typical of interpretivist approaches (Ravishankar et al., 2011). In this study, based on our synthesis of the background literature, we expected to see a largely positive impact of modularity on the creation and development of dynamic capabilities. In a more interpretivist frame, we also intended to examine the features of an organization-wide KM strategy, which may effectively address the barriers created by modular management. Our adoption of soft positivism, thus involves the design of a positivist case with important contributions from an interpretivist analysis (see Mingers, 2001). 3.1. Research setting ASIASPEAK is a leading call center1, with customer support operations in three large Asian cities. Generally, a call center can be categorized by the type of traffic it handles. Inbound call centers handle incoming calls initiated by customers calling in to a center and typically provide functions such as customer support, help-desk services, order-taking or reservation and sales support. Conversely, outbound call centers handle outgoing calls initiated from within the call center, usually for the purpose of telemarketing or conducting surveys. For outbound call 1

Third-party call centers such as ASIASPEAK are part of the Business Process Outsourcing (BPO) services sector

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centers, the key performance and profitability metrics are typically quantitative and can be easily measured (for instance, number of units sold through telemarketing or number of surveys conducted). Inbound call centers incorporate both quantitative and qualitative measures to assess the service delivered by its customer-service representatives (CRs). ASIASPEAK employs more than 4000 CRs and provides voice-based customer support services to organizations in a range of industries. ASIASPEAK was initially a business unit within a large Asian telecommunications organization, but in 2008 was spun-off as an independent company with an aim to expand its customer base beyond those served by its former parent organization. For the new company, existing independently has proved challenging since it is not perceived anymore as a support unit in a large organization and is under pressure to grow as a profit-centric company. Although it is still in its initial stages as a separate organization, ASIASPEAK has seen impressive growth and has won numerous awards for its excellent and high quality service standards. It is organized into five autonomous business units (see Table 1 below). BU1, BU2 and BU3 offer inbound services to clients in the telecom, banking and insurance sector respectively and account for close to 90% of the organization’s revenue. BU4 offers outbound services to customers in a range of industries. A number of internal departments such as finance, law, public relations, sales and systems support the business units in their operations are (see Appendix A). Requests for service by customers are normally organized into projects. Several departments work together in the initialization stage of the project, and then hand it over to one of the operational BUs for execution. Each BU consists of a service development (SD) division and frontline operations (FO) team. While the processes for handling customers are planned and designed by the SD division, the FO team is responsible for executing these processes through its CRs.

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Business

Industry

Major customers

BU1

Telecom (inbound service)

Leading Asian telecom companies

BU2

Banking (inbound service)

Leading banks

BU3

Insurance (inbound service)

Global insurance providers

BU4

Business development

N/A

BU5

Covers a wide range of industries

Leading companies in the

(outbound service/sales)

automobile, airline, banking and IT

Unit

industries

Table 1: ASIASPEAK’s business units and customers ASIASPEAK makes fairly extensive use of information and communications technology (ICT) to facilitate the work of CRs. These include automatic call distributors, customer relationship management (CRM) systems, interactive voice response units, which allow callers to self-serve and computer-telephone integration (CTI), which links the information and telephone systems to facilitate call-routing. 3.2. Case access and data collection Access was negotiated by one of the authors and it emerged during the initial interactions with senior managers that ASIASPEAK had implemented a modular approach to managing its resources and capabilities and that it had also recently implemented an organization-wide KM strategy. Our choice of ASIASPEAK as the focus of the study thus can be viewed as a carefully selected instance (see Starbuck, 2010), which facilitated an in-depth study of modular management, dynamic capabilities and KM. Between August and December 2010, we conducted 32 face-to-face interviews in three cities, with employees from different units and at different levels in the organizational hierarchy to find out more about the modular management and KM at 10

ASIASPEAK. In August 2011, we re-entered ASIASPEAK to collect further information regarding the effectiveness of the KM implementation. During this time, we interviewed 12 interviewees that included senior and middle managers and CRs. All the interviews were taperecorded and transcribed. Interviews were open-ended, but based on an illustrative list of questions (see Appendix B). This interview data formed the main focus of our data analysis. Secondary data included information from the media coverage of ASIASPEAK’s strategies, the corporate website and trade magazines highlighting ASIASPEAK’s achievements. We were also given access to minutes of some internal reports, which provided further insights into some of the key decisions taken by senior managers. 3.3. Data analysis We first open coded the transcripts to identify the key dimensions of modular management initiated at ASIASPEAK (Miles & Huberman, 1994). Second, to assess the impact of each of these dimensions on the creation and development of dynamic capabilities, we read through the interview transcripts and field notes and came up with several broad themes. For instance, ‘senior managers’ cognitive skills’, ‘rapid application development capabilities’ and ‘flexibility of operations’ were prominent themes in the context of modular management of technology resources. Each author then separately conducted a line-by-line analysis of the data contributing to the themes with a view to identify any strong relationships within the themes. This process drew our attention to the senior managers’ role in shaping dynamic capabilities. In the next stage of data analysis, we identified a series of ‘problem’ themes, which were closely associated with modularity. Permeating this stage of analysis were themes such as ‘hoarding’ and selfish behaviour’ of employees. In the last stage of our analysis, we revisited and reassessed the strength of the problem themes in the light of the primary and secondary data associated with the KM strategy implementation. We continued with this last stage of analysis in an iterative 11

manner, until the emerging modular management-KM-dynamic capabilities model was fully supported by both data and theory and no further refinements seemed valuable (Pan & Tan, 2011). We thus developed our final model and also ensured a reasonable degree of theory-datamodel fit.

4. ANALYSIS: MANAGING MODULARITY AT ASIASPEAK Our analysis examines key issues related to modular management at ASIASPEAK. First, we focus on the modular management of technology resources, call teams and CRs and its role in the creation and development of dynamic capabilities. We then consider ASIASPEAK’s experience of the limitations of modular approaches and the attempts of senior managers to overcome them. 4.1. Modular management of technology resources As noted earlier, ASIASPEAK makes extensive use of ICT to enhance its operational efficiency. The systems department is responsible for developing and maintaining the company’s ICT infrastructure. The hardware equipment used by ASIASPEAK is mainly purchased off-theshelf. A manager at BU2 observed: “Since the design of call centers is now a routine and mature process, there are many equipment suppliers competing for business in this space. This has made it possible for us to achieve lower costs by purchasing rather than building hardware.” Most of the purchased hardware equipment plays an important role in organizing and delivering services to customers. For instance, Interactive Voice Response (IVR) systems and web servers provide self-serve options to customers. More complex services are achieved through automatic call distributors (ACD), which direct customers to the most appropriate CR. Computer-

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Telephone Integration (CTI) servers enable customer records to be automatically retrieved from the company’s database servers, legacy systems or data warehouse, providing seamless information feed to the CSR. Additional technology components such as fax servers, automatic diallers, monitoring servers and wireless network equipment play supporting roles in facilitating smooth operations. Backup systems complete with uninterruptible power supplies and generators are on standby at all three ASIASPEAK locations. A senior manager in BU1 explained further: “Our systems basically follow a modular design. We thought long and hard about the kind of design framework we wanted. We chose a modular design because it allows pieces of equipment to be swapped in and out easily should they become faulty or obsolete. This has twin advantages of increasing the fault tolerance of the systems and allowing new technology to be introduced into the system in a piece-meal manner.” ASIASPEAK’s modular technological framework and use of equipment is illustrated in Figure 1 below. The CEO explained further: There have been situations when we have had to ramp up our operations to add 25 new customers in a span of few days. I now see that we have become more agile in adding technology equipment quickly in a piece-meal manner without disrupting other critical operations. We have developed this capability because of the things we can do with a modular framework.”

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Customer

Connecting Network

Front-end

Providing Customer Service IVR

Agents/Supervisor

Work Supervision Monitoring Services

Information Systems Data Warehouse

PBX/AC Telephone netwrok Trunk

CTI Tracking Servers

Legacy Systems

Fax Wireless network Recorders Application servers Internet

Dialer

DB Server

Firewall

Webserver

Figure 1. ASIASPEAK’S Modular Systems Framework However, despite the modular design lending itself easily to sourcing of both hardware and software, ASIASPEAK only purchases non-core software and hardware from the open market; the design and coding of core systems are done entirely in-house. Senior managers believe that the capability of the in-house systems to align the overarching modular design with business requirements of customers is central to ASIASPEAK’s success. This allows the tailoring of systems to fit business processes of customers, rather than having to struggle to make processes work with an externally developed system. As a manager in BU 2 put it: “If you look around you will see that we are one of the few call centres, which still maintains an in-house systems department. We are very keen on developing further competencies in this area because this has given us the flexibility to adapt our systems to business processes of new customers without any trouble. We believe this will continue to give us a competitive advantage over our rivals.”

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A number of interviewees noted that the in-house development of its core IS has offered ASIASPEAK several advantages over other call centres such as the ability to quickly respond to customers’ requests for changes. According to a manager who worked at another call centre previously: “At ASIASPEAK, I don’t have to negotiate with vendors and coordinate multiple parties whenever a (systems) problem arises. In my previous workplace, it was so troublesome. I had to deal with so many parties just to introduce a small change in the system. It is so much easier to get things done here and customers trust us because they know that we are on top of our game.” Interviewees also observed that senior managers at ASIASPEAK were the driving force behind this decision to develop core systems internally. In the words of a CR in BU4: “This was an unusual decision to say the least. Every other call center was jumping on the bandwagon of external sourcing. But our senior managers were extremely insistent on the in-house idea because they saw ‘systems’ as a key differentiator. They believed that in the long run, we would get kudos from our customers if we develop a strong systems department. I would say that they showed tremendous foresight to say ‘no’ to external sourcing when it was so easy and logical to go down that route.” A middle-manager in BU1 agreed: “Yes, it was a great decision. I was having a chat with some of my colleagues about this the other day and we felt that our Asian culture was perhaps a blessing in disguise at that time. Although many of us had serious doubts about the overhead costs of a systems department and the resource commitments, we kept quiet because it is hard for us to question our senior managers’ decision. We just accepted this decision you know”

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4.1.1. Modular platform strategy In order to reduce the costs involved in software development and maintenance, ASIASPEAK has adopted what informants referred to as a modular platform strategy, which involves building all software applications on a common technology platform. By plugging in the right mix of application and industry-specific components to the platform in a modular fashion, the same software can be used to serve the needs of customers in different industries. Additionally, the resulting applications can be tailored to the needs of individual customers with minimal effort. The deputy director of the systems department elaborated: “A major benefit of the modular platform strategy is that components can be plugged in or removed easily without requiring system-wide changes. Changes to an application can be performed locally, at most requiring slight modifications to its interface with the platform. This strategy also makes it possible to reuse components to build applications for a new customer by just changing the interface.” In the words of a call-team supervisor at BU3: With our ability to create new applications faster, we have also learnt to anticipate the systems related needs of potential customers and we feed this information to the frontline sales team periodically. So I would say that our modular designs help us a great deal in getting new customers on board.” Informants also explained that when designing work processes or systems for a new project, CRs are encouraged to reuse existing processes and application components wherever possible, in order to reduce development time. This reuse is made possible mainly because the modular

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platform simplifies operational processes which come into play for different customers. A manager at BU2 illustrated: “When the application interface, data format, etc are very similar, we’ll just copy it, change the logo of the customer and voila, we have a new application created in record time!” Thus, following a modular management strategy with respect to its technology resources has allowed ASIASPEAK to respond to customers quicker and to create customer-specific applications faster. The modular design of the systems framework has equipped employees with the capability to dynamically reconfigure hardware resources and easily integrate new technologies into the existing system. The availability of a basket of pre-developed application components has also given managers the freedom to deploy them dynamically in response to customer demand. 4.2. Modular management of call teams and CRs Each project taken up by ASIASPEAK is handled by a single BU from start to finish, which gives customers a single point of contact throughout the relationship. Informants also noted that keeping most communications related to a project within a BU insulated the other units from unnecessary “noise” and improved the capability to manage complexity in a structured manner. According to a manager at BU2: “Very often in call center environments, customers suffer as a result of having to deal with coordination difficulties between multiple vendor departments. But in providing one contact for all customer queries, we have eliminated the hassle of customers having to contact multiple parties in ASIASPEAK for different issues. Many customers have appreciated this aspect in the formal feedback they give us.”

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The basic unit of operation within each BU is the ‘call team’ and typically, each BU comprises of a number of call teams. Each call team operates as a module, which is led by a supervisor and consists of a number of CRs. One of the supervisors at BU4 explained: “Each call team operates as a more-or-less self-contained “black-box” which serves customers. These black-boxes plug into the organizational architecture through the team supervisor, who serves as the interface. Information such as instructions or feedback flows through the supervisor. This modular structure greatly reduces coordination efforts since instructions can be relayed through fewer supervisors instead of directly contacting the large number of CRs. The CRs are firmly embedded in their modules and don’t have to think about the goings-on elsewhere.” The extensive re-use of existing processes such as the “welcome call”, used to greet customers with little or no modification not only helps faster roll-out of projects, but also makes the CRs appear more versatile. A CR in one of the call teams at BU1 noted: “When the layouts of application screens remain similar across industries, it makes it simpler for us to use the system, even when we get in to areas we are not familiar with or when we serve a customer from a different industry.” Managers suggested that in many other similar call-centers, the skill-levels of individual CRs had to be closely matched with the requirements of different projects. At ASIASPEAK on the other hand, they felt that the carefully designed modular systems have made it possible for any CR, irrespective of his/her current skill levels, to serve customers effectively in different project environments. According to a supervisor in BU3: “Potentially, we can move CRs across call teams when required without worrying about the costs of imparting additional training. The modular set-up ensures that CRs are ready 18

to take on assignments from customers in different industries since from an individual CR’s point of view he/she is always interacting with known modules on the screen.” A modular approach has also been adopted to ease verbal interactions with customers over the phone, which are usually a source of great anxiety to many CRs. As noted earlier, CRs are first assigned to a call team in one of the BUs under the charge of a supervisor. When interacting with customers on the phone, they are normally required to complete the call in the shortest time possible, while maintaining a high level of service quality. This involves an obvious trade-off between efficiency (completing a call in the shortest time possible) and effectiveness (ensuring a high level of service quality in resolving the issue). Given the absence of hard-and-fast rules to help achieve this trade-off, ASIASPEAK has outsourced the development of standard speech modules to a well-known UK-based company, which specializes in providing speech support to call center agents. These modules contain specific sentences, which CRs use when interacting with customers. A manager explained further: “The speech modules contain more than 4000 standard sentences CRs can use when responding to specific customer queries. The design is flow-chart based, which means that depending on the issue requiring resolution, the CR is guided to a specific speech module. It is a great help, because none of the CRs speak English as their first language. So the modules not only make them feel less self-conscious when speaking with customers, but also serve to help us control the interaction process better.” In other words, these modules serve to ensure a certain level of standardization in the process while also allowing sufficient leeway for the CRs to vary the script according to the situation. According to a CR at BU3:

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“The modules have saved me because I can just use the sentences I need depending on how the conversation with the customer flows. The modules also help new CRs to learn quickly and to anticipate possible responses by the customer at each juncture. Of course, for really complex queries we have to think on our feet and improvise, but in reality such complex queries are rare.” In short, the modular management of call teams and CRs has helped ASIASPEAK to manage projects better, to deliver efficient and effective customer service, to reduce over-reliance on individual CRs and to establish greater control over processes of verbal interaction with customers. These modular structures can be seen to enhance what Sanchez (1997) refers to as the strategic flexibility to reconfigure and move resources to different parts of the organization, thereby creating many alternative uses for them. 4.3. Limitations of modularity The modular management of the IT infrastructure, call teams and CRs made it possible for ASIASPEAK to attract many new customers. The capability to anticipate and respond fast to customer needs further enhanced its reputation in the market. However, this period also saw the emergence of some important challenges. A senior manager explained: “You see, the modular approaches have worked really well for us. But at the same time it also led to some negative consequences. Many CRs started to develop only a ‘modular vision’ of things by which I mean they simply could not comprehend the bigger picture and so tended to act quite selfishly in favour of their own call teams.” The proliferation of modular call teams had had the effect of isolating CRs and call teams leading to unhealthy competition. In the words of a manager at BU3:

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“A particularly vital challenge resulted from the habit of CRs and managers to withhold information or knowledge of best practices from their colleagues in other call teams so as to outperform them.” Similar views were voiced by other managers. For instance: “It was clear that CRs and their supervisors held allegiance more to their own teams than to the organization. They believed that their call team was the best and they just could not stand anyone else in the organization. In a nut shell, senior managers could see that the growth of modular structures had hindered knowledge sharing since employees preferred to hoard rather than share their knowhow with the rest of the organization. The tendency among employees to define themselves only in terms of their immediate contexts rather than that of the entire organization came in the way of developing synergies between individual call teams and identifying opportunities to innovate. In a way, these difficulties appeared to be a manifestation of the emotional dis-identification of employees with the strategic aims of the organization as a result of being pigeon-holed into modular teams (Ravishankar & Pan, 2008). In response, the senior management introduced a series of measures to encourage members to share knowledge with others and to improve knowledge flows across call teams. These measures were brought in through an organizationwide knowledge management (KM) strategy. The CIO outlined the aims of the KM strategy: “Our KM strategy was basically a plan to improve communication and sharing within and between call teams. The strategy focused on three areas: refining reward systems, implementing an electronic knowledge warehouse and introducing job rotations.” 4.3.1. Refining reward systems 21

Before the initiation of the KM strategy, CRs were evaluated solely on their interactions with customers. With the implementation of the KM strategy, they also came to be assessed based on how well they shared information and helped colleagues. A portion of the CRs’ and supervisors’ salaries was linked to the performance of the call team, BU and the organization as a whole. Linking individuals’ remuneration to the performance of the team ensured that the more experienced CRs did not hoard information and leave newcomers in the lurch. According to a supervisor at BU2: “The refined rewards system, which was based more on collective success helped moderate the sometimes steep learning curve faced by new CRs and enhanced the productivity of call teams throughout ASIASPEAK.” It was evident to managers that the new reward systems encouraged greater peer support and helped foster a spirit of camaraderie, which in turn reduced variations in service quality and improved customer satisfaction. 4.3.2. Electronic knowledge warehouse (EKW) The in-house systems department also developed an IT-based knowledge portal called electronic knowledge warehouse (EKW) which in the words of a senior IT manager aimed “…to preserve frontline operators’ operational knowledge and to store knowledge of industry-specific processes.” Call teams used the EKW to document the key problem areas in their interactions with customers as well as their approaches to handling these issues. The EKW also guided CRs to industry-specific databases, reports and brochures. Further, the systems department developed the capability to upload and store audio-visual data on the EKW, which turned out to be a popular method for knowledge transfer. For instance, a manager with BU5 noted: “We videotaped the entire automobile maintenance process of one of our biggest automobile clients. This video is now used to impart background knowledge to all 22

CRs serving the automobile industry…very useful to show them what goes on in the industry. So this part of EKW is a kind of knowledge conduit, which facilitates the flow of knowledge across ASIASPEAK.” The introduction of an online discussion forum linked to the EKW further improved knowledge sharing between call teams. A CR in one of the call teams at BU1 observed: “The discussion form has had a big impact. It has coaxed people, who were usually ‘insulated’ in their own call teams and BUs to come together and share ideas, thus helping to break the me and my team mindset.” In addition to the organizational EKW, allocations were made in the budget to help implement local EKWs at the BU level as well. In the words of a supervisor at BU3: “We received administrative and IT supports to maintain a knowledge portal at the BU level. It became a great way of consolidating and making better sense of the customer-specific knowledge we work on, especially since some of it cannot be shared with BU5, which may be serving a competing customer.” 4.3.3. Work-role rotations Finally, as part of the KM strategy mandatory work-role rotations were introduced to help enhance the capabilities of CRs and their supervisors to perform different kinds of service tasks and to acquire domain-specific knowledge related to other industries. A senior manager at BU3 explained the reasoning behind the move to initiate job rotations: “We felt that CRs and their supervisors were becoming too entrenched in their call teams. They not only needed to upgrade their skills but also needed to know more about our inbound/outbound services and sales processes. We were keen that they broaden their vision a little bit and pick up expertise to serve multiple 23

industries. This way, they could be called upon to provide backup manpower in the area of their secondary skills, if the need arose.” Job rotations also helped relieve monotony and boosted employee morale. According to a CR at BU2: “I feel excited when my supervisor assigns me to work on other hotlines. Occasionally switching to different tasks does make life more interesting. Always doing the same thing is boring. With rotation, I see how things are done in other areas and I pick up new ideas. I also feel a bit guilty now when I think about how before rotations, I used to be engrossed in the activities of my own call team. ”

5. DISCUSSION The above analysis documents the modular approaches as well as the KM strategy initiated by senior managers at ASIASPEAK to overcome the limitations of modularity management. It also shows how the modular systems and structures contributed to the capability to dynamically reconfigure, recombine and deploy resources and to anticipate customer needs. Clearly, the development of such dynamic capabilities also significantly enhanced the resource base and knowledge base of ASIASPEAK and helped sustain its competitive advantage over other call centers. This analysis is summarized in Table 2 below. Drawing on our analysis, we next build a modular management-KM-dynamic capabilities model, which depicts how modular processes and systems in tandem with strategic KM interventions influence the creation and development of different levels of dynamic capabilities. No.

Dimensions of

Strategic benefits to ASIASPEAK

Modular management and KM 24

1

Modular management of  Helped technology resources

scale

up

operations

rapidly

without

disruptions  New technologies were introduced in a piece-meal manner. This improved efficiencies  Internal development of core systems helped better align customers’ business processes  Helped reconfigure hardware resources dynamically

2

Modular management of  Improved ability to handle complex customer call teams and CRs

processes in a structured manner  Improved service quality capabilities by offering structured support mechanisms for CRs  Developed the ability to seamlessly reconfigure and redeploy human resources

3

Organizational KM strategy

 Improved

service

quality

through

restructured

reward mechanisms  The EKW had a positive impact on cross-team knowledge flows  Work-role rotations helped develop employees develop domain knowledge across a range of industries Table 2: Summary of Analysis

5.1. The ability of senior managers to avoid the traps of dominant designs ASIASPEAK’s experiences documented and analyzed above suggest that modular management does not always directly lead to the development of dynamic capabilities and a sustained competitive advantage for organizations. For instance, commoditization and standardization of IT hardware and software in has meant that competitors, more often than not, also implement modular plug and play components thereby neutralizing any possibilities of strategic advantages (Carr, 2003). However, our data shows how modular management of

25

technology, teams and personnel, in combination with strategies that resist the pressures of dominant designs and capitalize on core areas of strength have a more significant impact on the development of dynamic capabilities. The strategic decision taken by senior managers to opt out of the dominant and popular outsourcing-based designs for IT systems gave ASIASPEAK an important edge over competing firms. Specifically, the influential roles played by senior managers in ensuring that the design and coding of core systems stayed in-house provided a greater strategic agility and several distinct advantages over other call centers (Doz & Kosonen, 2008). This draws our attention to the crucial ability of senior managers to strategically resist the systemic pressures of standard designs available in the market and to thereby shape the development of dynamic capabilities (Day & Schoemaker, 2006). Indeed, many strategic failures are linked to decisions wherein the organization blindly chose to move along well-known paths that were ratified in the business environment as safe risk-mitigation approaches (see Wagner & Newell, 2004). In a recent article, Pandza and Thorpe (2009) observed that dynamic capabilities often involves moving away from known paths in the quest for new knowledge trajectories. At ASIASPEAK that senior managers moved away from the popular strategy of sourcing the design and development of core systems from vendors since they sensed that an in-house systems department could provide better value to customers. Clearly, this was a strategy that helped ASIASPEAK to develop an intimate understanding of customer needs and to respond with agility to demands for customized services. The strategy shows how senior managers’ sensemaking abilities have a direct impact on the creation and long-term development of dynamic capabilities (Pandza & Thorpe, 2009; Thomas, Sussman, & Henderson, 2001). Thus, while modularity may create important efficiencies in operations, dynamic capabilities are often 26

crucially shaped by senior managers’ cognitive ability to sense, identify and act upon key components that create high value for customers (Narayanan, Colwell, & Douglas, 2009).

Modular Management



Technology



Multi-level Dynamic Capabilities Incremental

Teams

Renewing

Front-line personnel

Regenerative

Overcomes traps of dominant designs

Strategic Sense making abilities

Overcomes temporal limits of modularity

Strategic KM interventions Technologies spanning modular boundaries Effective talent and rewards’ management

Figure 2. A modular management-KM-dynamic capabilities model The identification of the in-house systems department as one such component helped ASIASPEAK to differentiate itself from competitors and the resulting enhanced services also saw a positive effect on customer loyalty. This experience of ASIASPEAK indicates that greater

27

vigilance and focus on identifying and controlling the components that create the most value for customers help senior managers to develop the ability to avoid the traps of dominant designs. Thus, an insightful awareness of the competitive strengths of the internal operating environment allows managers to effectively reconfigure the organizational resource base to complement modular resources and systems (Ambrosini, Bowman, & Collier, 2009). In line with the above points, we would argue that for many organizations efficiencies of modularity in concert with the strategic sense making abilities of senior managers to resist and overcome the traps of dominant designs contribute to the creation and development of dynamic capabilities. This is depicted pictorially in the model (Figure 2) above. As we see in Figure 2, sense making abilities have a bi-directional relationship with modularity in that managerial sense-making drives the implementation of modular management and is also informed by the workings of modular options. Further, strategic sense making competences clearly feed into the structuring of the KM interventions. 5.2. The development of multi-level dynamic capabilities through modularity and KM ASIASPEAK’s modular management approach points to the creation and development of different levels of dynamic capabilities. First, the introduction of modular elements of operations (e.g., carefully designed speech modules) improved the ability of employees to interact with customers. They also provided clear structural guidelines and content, which were dynamically ported into different types of customer interactions. Similarly, modular IT platform strategies led to improvements in efficiencies through processes of reuse of existing components when developing new software applications. These continuous, but basic improvements in an organization’s stock of resources can be seen as the first level of dynamic capabilities or what Ambrosini, Bowman, and Collier (2009) called incremental dynamic capabilities.

28

Second, some capabilities arising out of the implementation of modular technology platforms tended to be broader and more strategic than simple operational-level competencies (see Newey & Zahra, 2009). For instance, modular technology platforms helped in the creation and development of ASIASPEAK’s capability to deploy new applications faster and to respond proactively to customer needs. Such capabilities demonstrate not only the competence to make incremental improvements in the resource base, but also illustrate the organization’s strategic ability to modify, adapt and strengthen the core areas of business in anticipation of emerging customer needs. Given their contribution to renewing and advancing the strategic capital of the organization, such capabilities can be termed renewing dynamic capabilities (Ambrosini et al., 2009). It is clear that such ‘renewing dynamic capabilities’ can give a significant push to the organization’s competitive position in the market and can therefore be viewed as a second level of dynamic capabilities. Unlike hard assets, which competitors can easily buy in the open market, dynamic capabilities developed through modular technology platform strategies are often hard to replicate as they are linked to the differentiating elements of the core systems developed by the internal organization (see Heracleous & Wirtz, 2010). In ASIASPEAK’s case, since these capabilities delivered a distinct competitive advantage and were mostly derived out of senior managers’ strategic evaluation and sensing of the business environment, we may consider them as a class of meta-capabilities that spanned the entire organization (Amit & Schoemaker, 1993; Day & Schoemaker, 2006). Third, effective KM interventions which countered some of the barriers of modularity also fundamentally transformed the ways in which the organization changed and upgraded its resource base (see McKelvie & Davidsson, 2009; Schiuma, 2012). For instance, ASIASPEAK’s 29

electronic knowledge warehouse (EKW) created a novel set of dynamic capabilities in areas of knowledge transfer and sharing, which caused fundamental shifts in how the organization managed its resource infrastructure and human capital (see Andreeva & Kianto, 2012; LópezNicolás & Merono-Cerdán, 2011). Such an emerging set of capabilities, which drive the replenishment and dynamic regeneration of the organizational resource base, can be seen as a third level of dynamic capabilities, sometimes also called regenerative dynamic capabilities (Ambrosini et al., 2009). We would argue that these capabilities eventually build a culture of collaboration, which facilitates continuous innovation and organizational learning (see Ambrosini, Bowman, & Collier, 2009; Eisenhardt & Martin, 2000; Massey et al. 2002; Miozzo & Grimshaw, 2005).

5.3. Temporal limits of modularity Although modularity clearly helps create and develop dynamic capabilities, there is an important temporal dimension to its overall impact, which also underscores the limitations of modular approaches (Easterby-Smith, Lyles, & Peteraf, 2009; Madapusi & D’Souza, 2012). ASIASPEAK’s experience demonstrates effective deployment of modular techniques, systems and processes can help trigger a period of rapid growth in organizations. However, over time, as modular management reaches a certain level of maturity it can perpetuate the development of isolated units with relatively weak links to the larger organization. This isolation can also lead to potentially vital pieces of knowledge being locked and hoarded within sub-units and teams of the organization. Knowledge hoarding behaviours can take centre-stage as employees may attempt to further their career interests within the over-arching guiding principles of modular team management (see Michailova & Husted, 2003). Such behaviours can constrain severely organization learning and destabilize strategic integration efforts (see Garud & Kumaraswamy, 30

2006; Ravishankar & Pan, 2008). In other words, while modularity can lead organizations into a period of distinctive competitive advantages, it can also eventually stifle the strategic sustainment of such advantages. The successful attempt of ASIASPEAK managers to overcome the barriers created by modular management suggests that an appropriate organizational response in the form of a KM intervention can help overcome the limitations of modularity in two ways. First, the effective design and implementation of a technological apparatus that spans modular boundaries can improve knowledge flows across the organization (see Teo, Nishant, Goh, & Aggarwal, 2011). Increasingly, organizations can employ open source solutions, crowd sourcing designs and web 2.0 tools for this purpose (see Ashurst, Freer, Ekdahl, & Gibbons, 2012). It is also crucial that the commitment of resources to the design, implementation and marketing of the technology solution reflect a strong managerial commitment, which was evident in the case of the electronic knowledge warehouse (EKW) at ASIASPEAK. Research suggests that a lack of senior manager commitment and continuous support underlie most of the failures of such technology interventions (Luftman & Brier, 1999). In cases where the organizational unit driving the KM strategy does not enjoy a high enough status in the organization, business units may refuse to utilize the IT-based KM systems (Ravishankar & Pan, 2008). Second, a restructuring of reward mechanisms and talent management strategies can promote knowledge sharing behaviours among employees and improve the organization’s competitiveness (see Howell & Annansingh, 2012) An effective KM strategy can thus play a key role in overcoming the long-term challenges created by modular management. 5.4. The complementarity between modular and integrated approaches Evidence from our analysis emphasizes the need to focus on developing appropriate mechanisms to consolidate and coordinate the strategic benefits arising out of modular 31

approaches. Within hyper-competitive environments, modularity led dynamic capabilities can be fragile and needs to be complemented by robust integration strategies (Hoetker, 2006; Naryanan et al., 2009). As Ambrosini, Bowman, and Collier (2009) note, integration refers to the “ability of the firm to integrate and co-ordinate its assets and resources, resulting in the emergence of a new resource base.” Particularly, in areas of key skills and knowledge, an integrated approach can significantly build on the inherent strengths of modularity and also overcome its most noticeable weaknesses. For instance, although IT management followed a highly modular structure, ASIASPEAK integrated all IT capabilities into one systems department (see Appendix A), which facilitated the development of core competences in IT. Core competences are enhanced the more they are used (Prahalad & Hamel, 1990) and the centrality of the systems department to its operations made it possible for ASIASPEAK to develop a formidable competence in IT. Similarly, the integration of the business development function through BU4 provided important cost efficiencies, since that unit was a focal point for sourcing clients and for marketing ASIASPEAK’s services. Integration of the sales and business development function also helped sales-personnel to develop an organization-centric rather than a business unit-centric approach to selling ASIASPEAK’s services. Integration strategies can also be viewed as an investment in deliberate learning efforts through which codification of important knowledge can take place and facilitate the creation of dynamic capabilities (see Galunic & Eisenhardt, 2001; Karim, 2006). Put differently, while a modular approach clearly facilitates the capability to learn at a component level (or project team level), integrated approaches for managing knowledge can aid the development of dynamic capabilities at the architectural or system level (Richard & Devinney, 2005). Integration strategies help integrate the best practices developed by project teams and business units with the

32

rest of the organization (Narayanan et al., 2009). ASIASPEAK’s experience shows that in addition to facilitating technology-driven learning, integration-seeking organizational KM strategies also need to incorporate innovative ‘people’ processes for effectively managing the human capital base (see McKelvie & Davidsson, 2009). For instance, service efficiencies and effectiveness can be improved by helping front-line personnel develop relevant secondary skills. This may allow organizations to call on employees with the relevant secondary skills to bolster service capacity in the event of unexpected spikes in customer demand. More broadly, it can offer managers the flexibility to reshuffle and reconfigure the human resource base. Further, as our analysis suggests, including work-role rotations as a part of the KM strategy design may help reduce the narrow-mindedness and silo mentality, which will inevitably accompany team-centric modular systems. By exposing front-line personnel to different service areas and industries, a web of informal social networks can be developed, which further facilitates knowledge sharing and learning. In short, our analysis of ASIASPEAK’s strategies demonstrates how integrated approaches complement modular management and have a positive impact on the dynamic reconfiguration of the resource base (see Ethiraj & Levinthal, 2004; Hoetker, 2006).

6. THEORETICAL AND PRACTICAL IMPLICATIONS Whereas empirical research on modular systems and processes emphasize the inherent strengths of the modular architecture in creating and sustaining a competitive advantage, our findings suggest that modular management needs to be understood in concert with the decisive roles played by managerial agency in guiding business strategy (Newey & Zahra, 2009; Pandza & Thorpe, 2009). In particular, the strategic sense-making ability of senior managers can help organizations deploy modular technology resources in ways that lead to new dynamic capabilities and advantages. For organizations to reap the full benefits of modular management, 33

it needs to be complemented by effective integration strategies in several core areas of strength (see Brusoni, 2005). An over-emphasis on modularity often leads to the creation of disparate and disconnected business units, which may threaten the idea of a strong integrated organizational identity. Understandably, the tension between modular and integrated views of organizational strategies has parallels with classic decentralization-centralization debates in organizational research. As with decentralization, once modular strategies reach their limits, they run the risk of creating instability in the organizational architecture and can harm further development of dynamic capabilities. Our findings suggest that effective KM interventions, which invest significantly in organizational learning mechanisms can better harness the core features of modular designs and also overcome their shortcomings. Further, implementation of innovative HR processes can bolster the potential of KM strategies to refresh existing knowledge stocks and to build new dimensions of dynamic capabilities.

As noted earlier, our study throws light on an important temporal dimension, which underpins modular management and organizational KM (see Easterby-Smith et al., 2009). When organizations first introduce modular management, managers may not feel a compelling need for serious organizational KM interventions. However, as modular approaches mature and begin contributing significantly to organizational growth, their ability to stymie the creation of dynamic capabilities may also become apparent at the same time. Our analysis of ASIASPEAK shows that as managers become sensitive to this emerging situation, they may respond with formal interventions for managing knowledge. Theoretically, we would therefore suggest that in the initial phases of organizational growth, the strategic imperatives for modular management and organization-wide KM can be clearly distinguished in chronological time. However, with growth, organizations face the challenge of simultaneously managing compelling rationales for 34

modularity and KM. Organizations in the initial stages of growth may therefore benefit from ‘temporal sequencing’ of their modularity and KM strategies. In other words, senior managers can commit greater organizational resources to modular management systems first and subsequently focus on enabling effective KM implementations. Lastly, our study indicates that the development of dynamic capabilities is clearly linked to the ways in which functional capabilities such as IT capabilities are deployed by organizations to support core areas of business. This suggests the need for IT sourcing decision-makers to develop the strategic ability to choose a judicious mix of outsourcing and internal IT development strategies. In conclusion, in this paper we considered modularity as a means of strategically building on organizational resources and capabilities. In particular, we examined how modular approaches to the management of technology and operations facilitate the creation and development of dynamic capabilities. We also explored the ways in which effective KM interventions may be designed to counter the barriers created by modular management. We acknowledge two important limitations of our case study. First, we studied only one Asian organization in the BPO services sector. While we have generalized from a single case to theory, the extent to which the ASIASPEAK case can be generalized to other settings will vary. Second, our study clearly does not account for all the important mechanisms that influence the creation and development dynamic capabilities in hyper-competitive environments. We recognize that there could be other equally influential forces (e.g., cultural) at play. For instance, as the empirical data showed, senior-managers decisions’ were fully accepted by the employees and at least a part of this acceptance may be linked to the conforming organizational culture of ASIASPEAK. As a middle manager in BU1 put it: “...we kept quiet because it is hard for us to question our senior managers’ decision.” More research is needed to examine the role of such

35

forces in shaping specific types of dynamic capabilities. Future research also needs to fully explore and evaluate the cognitive dimensions of managerial abilities’ to simultaneously control the trajectories of modular systems and integrative strategies. Overall, this case study provides a rich account of how modular systems in tandem with effective KM strategies can help organizations create and sustain different levels of dynamic capabilities.

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Appendix A. ASIASPEAK’S Organizational Structure

Appendix B: Illustrative list of interview questions 1. What are the areas in which modularity has worked for ASIASPEAK? Why? 2. How is the IT-support function organized at ASIASPEAK? 3. Who championed the cause of modular management? Why? 4. How are CRs trained at ASIASPEAK? 41

5. What is the impact of modularity on customer relationship management? 6. Can you elaborate on the specific advantages your business unit has derived from the implementation of modular systems? 7. Do call teams face any language related difficulties in dealing with clients? How do they handle such concerns? 8. How did you incorporate modularity in the call center design? 9. How does the design of core systems take place at ASIASPEAK? 10. What is the rationale for developing core IS in-house? 11. What strategic advantages have resulted from not opting for an outsourcing based core-IS design? 12. How do plug and play systems work at ASIASPEAK? 13. What is the structure of a call team? 14. How do speech routines work for CRs? 15. How do CRs react to the mainly modular approach to operations? What are the associated challenges? 16. How does knowledge hoarding affect the long-term organizational performance of ASIASPEAK? 17. Can you elaborate on the reasons for opting to implement an organization-wide KM strategy? 18. How did you design reward systems as part of the KM strategy? 19. What IT-systems are deployed to better utilize front-line personnel’s operational knowledge? 20. How do you assess the overall impact of ASIASPEAK’s KM strategy?

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