developing local government performance by optimizing organizational learning (haris faozan)
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Developing Local Government Performance by Optimizing
Organizational Learning: A Challenge in Current Era
of Decentralization
Haris Faozan
Center for Innovation of Institution and Government Human Capital
The National Institute of Public Administration, Jakarta,
Jl. Veteran 10 Jakarta, Indonesia,
E-mail: faozan_haris@lan.go.id and faozan_haris@yahoo.co.id
Pengembangan Kinerja Pemerintah Daerah melalui Optimasi
Pembelajaran Organisasi: Sebuah tantangan di Era
Desentralisasi saat ini
Eksistensi dan peranan aparatur pemerintah daerah ke depan
akan semakin penting dan dibutuhkan, sejalan dengan era
otonomi yang tengah digalakkan. Agar pemerintah daerah
mampu melakukan antisipasi signifikan, maka mutlak bahwa
perilaku pemerintah daerah harus mengarah dan sejalan dengan
tuntutan lingkungan yang berkembang. Dalam konteks ini
terobosan pembelajaran organisasi merupakan langkah relevan
dan masuk akal. Paper ini memaparkan peranan penting
pembelajaran organisasi dalam meningktkan kinerja organisasi
pemerintah daerah. Pembelajaran organisasi adalah suatu proses
pemilikan dan aplikasi pengetahuan, baik yang diperoleh dari
dalam maupun dari luar organisasi yang dioptimalkan secara
terpadu untuk mengembangkan perilaku organisasi. Perilaku baru
tersebut diorientasikan pada kepemilikan keunggulan daya saing
organisasi. Keunggulan daya saing dapat dimiliki oleh pemerintah
daerah manakala organisasi pemerintah daerah mampu
mengembangkan pengetahuan secara sistematis dan terpadu.
Pengembangan pengetahuan tersebut sangat mendasar bagi
proses pengembangan kinerja pemerintah daerah, baik itu dalam
inovasi produk, pelayanan, proses, maupun kelembagaannya.
Melalui pengembangan pengetahuan secara sistematis dan
terpadu, tujuan desentralisasi dapat dicapai sesuai dengan yang
direncanakan.
Keywords: organizational learning, local government
performance, competitive advantage
Developing Local Government Performance by Optimizing Organizational Learning | 2
Introduction
Although local autonomy is not a new terminology in Indonesia, it remains
to give warm nuances until today. Even though the term: local autonomy
is stipulated in Law Number 5 Year 1974, the implementation phase began
to be increasingly strongly felt since the enactment of the Law Number 22
Year 1999. The autonomy has been implemented more than 10 years –that
is, since the Law Number 22 Year 1999 was enacted and amended with the
Law Number 32 Year 2004-- however the local autonomy performance
remains to spread dissatisfaction for the majority of local population.
Finally it is necessary to realize that the success to local autonomy does
not come automatically. In fact, it requires toil and commitment.
The autonomy is a big job that requires big resources, earnest efforts and
strong commitments from all levels of management of the local
government. Apart from that, it has to be done consistently,
simultaneously, and continuously, the local autonomy has to be managed
accordingly by examining the roots of the issues that are later proceeded
with regulations through policies that are consistent, harmonious, and
accommodating the majority of stakeholders’ aspirations. It is, therefore,
normal if all levels of local government management are demanded to be
innovators of change if they wish to realize the autonomy as expected.
As stated above that the wide decentralization orientation is to accellerate
the manifestation of people’s welfare through increasing services,
society’s empowerment and society’s and business community’s
participation.
On top of that the wide decentralization is expected to be able to increase
local competitiveness. The principle of the wide autonomy means that the
region is devolved the authority to take care of and manage all
governmental affairs except those stated otherwise in the Law. The region
possesses authority to make local policies to provide services, increase
participation, initiatives and society’s empowement with the aim at
increasing society’s welfare.
The principle of the wide autonomy in practice must be accompanied with
the concrete and accountable principle. Concrete autonomy principle is a
principle that defines that to handle the governmental affairs it must be
done based on concretely available tasks, authorities and duties and
potential to grow and develop in accordance with local potency and
characteristics. Whereas, the accountable autonomy principle means that
the management must be truly in line with the aim and the intention of
autonomy devolution, that is, to empower the region including increasing
the society’s welfare.
Developing Local Government Performance by Optimizing Organizational Learning | 3
Within the last 10 years, all local governments in Indonesia have
undergone significant changes from the impacts of their external
environment. The structure of the local government institutions have
changed, the composition and proportion of the structural (managerial)
positions of the local governments have increased fantastically, and there
are many more. In the midst of significant changes there is one thing that
has not experienced significant changes, yet its existence is very significant
and becomes “the unsolved problem” until today, that is, the function of
local government.
The main function of the local government is to serve (public service
function) and to protect the society (protective function), and to
implement development (development function). The outputs of the local
government are”goods and regulations” for the best interest of the public
in the region. Goods, here, refers to materials or public facilities that result
from the local governments such as hospitals, roads, and bridges; whereas
in the regulation category the local government produces generally
regulators to regulate such as Domicile Identity Card, Family Card, and
Birth Certificate.
On the other end, the local community also experiences changes both in
terms of mindset, behaviour, and action. These took place in congruence
with the growing up of a nation in line with the fast global changes and in
line with the fast flow of the unavoidable information that continuously
provokes members of the society to obtain meaningful services from the
local government functionaries. The various demands of the society should
be seen as a strategic opportunity that will take the local government the
lead to the competitiveness.
With the enactment of the Law Number 32 Year 2004 and the Law Number
33 Year 2004 the local governments have an opportunity and at the same
time a challenge to conduct the functions of their governments. In such
situation the local governments both provincial and regency as well as
municipality are mandated to be able to encourage the society
empowerment, to nurture initiatives and creativity as well as to increase
society participation in order to be able to achieve the goals of autonomy.
As a general knowledge, the basis to establish a local government --- in a
state with a large territory --- is due to the fact that it is very unlikely that
the effective and efficient management of government can be done if it is
done solely by the central government. This justification is used as a basic
consideration to establish a local government with the decentralization
policy.
In relation to that, the existence of the local government institutions is
very important. The institutions of local government in the management
context of local government are one of the crucial factors whose existence
cannot be ignored in the framework of fulfilling the intended mandate.
Developing Local Government Performance by Optimizing Organizational Learning | 4
The presence of the local government institutions nowadays is solely
intended to be able to support the implementation of local autonomy
optimally. Local government apparatus as a frontline of the optimum
implementation of local autonomy in Indonesia today is obviously very
important. Even though within the last decade the presence of
government apparatus in Indonesia – both central and local – is demanded
to downsize, but that does not mean to lessen the level of importance of
the functions of the government apparatus itself. Similar thing is aired by
Prof. Awaloedin Djamin (1998:53) as follows:
“The roles of state apparatus, particularly, the roles of government
apparatus all over the world show a tendency to lessen and to
change. However, this does not mean that the roles of the
government apparatus will be less important and become easy. With
particular reference to the countries that implement national
development plan such as Indonesia, the function of the government
apparatus will be more complex considering the development of
global, regional and national strategic environment,”.
In relation to the above statement the existence and the roles of the local
government apparatus in the future will, in fact, be more important and
necessary. This is, of course, relevant with the autonomy era that is being
encouraged where the gradual shift of the roles of the central government
is taking place1
. This condition signals that, wheteher they like it or not,
the local government must be ready to manage the devolution of
authority or governmental affairs from the central government2
.
Looking at the fast changing environment in various aspects lately, it is
quite obvious that such matters require adequate anticipation from the
side of government bureaucracy in Indonesia. To be able to conduct
significant anticipation, of course, the behavior of government
bureaucracy must lead to and be in line with the demands of the
progressive environment. The concepts, formula, and old policies are, of
course, obsolete to be applied today. Therefore, this is the time to build a
grand design of managing the bureaucratic government behaviors
comprehensively and integratedly. Of course, it is not exaggerating
because it is an absolute demand to lead the behaviors of the local
government bureaucracy to high performance as demanded by the
society, stakeholders and state goals.
1 Devolution of Affairs– in the past it is known as authority— is an absolute matter that
must be done in the horizon of local autonomy. Although the devolution of affairs seems
to be ”simple”, however, in practice it is not easy to implement. The tug of war of
authority remains to take place until today.
2 From the the results of interview with several local government officials in Indonesia it
was found out that there were considerably plenty of the local government officials
found it hard to implement their tasks and functions of various affairs that have been
devolved. In relation to that, constructive and adequate intervention from the central
government remains necessary.
Developing Local Government Performance by Optimizing Organizational Learning | 5
The behaviors of the government bureaucracy in the context of fulfilling
the demands of the society, stakeholders and state goals are not merely
the bureaucratic behaviors that are against the behaviors and the acts of
corruption, collusion and nepotism. The behaviors must also lead to
continuous innovation and increase the lead of competitiveness.
In his paper entitled “Key Leverage Points for Improving Competitive
Performance”, Nadler (1992) believes that there are 4 (four) critical
success factors for an organization to be able to compete effectively, that
is strategy, quality, organizational design, and organizational learning. In
relation to that the fourth critical success factor, Nadler (1992: 261) states
that:
“Even those companies with great strategies, total quality
management, and innovative organizational architectures do not
always get it right the first time. They make mistakes. The best
competitors have the unique capacity to reflect on and understand
those mistakes quickly and turn insight into action; they are learning-
efficient organization. They learn from customers, competitors, and
suppliers. They learn from success and they learn from failure.”
In relation with the performance development of the local government, of
course, Nadler statement is interesting to be further discussed with the
intention that organizational learning is truly able to be manifested and
nurtured within the local governments all over Indonesia. This is not
exaggerating because the changing environment in various aspects
nowadays obviously requires adequate anticipation from the side of local
government bureaucracy in this state. In order to enable the local
government to be able to conduct significant anticipation, it is absolute
that the local government behavior must lead to and be in line with the
progressive demands of the environment (Faozan, 2004a). The behavioral
change of the government bureaucracy can, perhaps, be done in a number
of ways and approaches. However, in the context to be able to anticipate
the fast progress of public administration, it seems that the adoption of
organizational learning breakthrough approach is relevant and logical.
This paper aims to describe the importance of optimizing organizational
learning as a means to improve the performance of the local government
organizations in Indonesia today. It is very necessary to get an insight into
the meaning of importance and various obstacles of organizational
learning as a discourse for the local government bureaucracy to boost
their performance amidst the continuously progressive environment. First
of all, it starts with the discussion on the strengths of organizational
learning. It discusses such issues as definition and model organizational
learning. Secondly, it outlines the obstacles of organizational learning. It
presents various issues that hinder the manifestation of organizational
learning, its symptoms and causes. Thirdly, it elaborates the performance
development of the local government in Indonesia through optimizing
Developing Local Government Performance by Optimizing Organizational Learning | 6
organizational learning. It discusses important elements that need to be
paid attention to in creating an organization that is able to learn
efficiently. Furthermore, it will elaborate as to how organizational learning
is able to produce the behaviors of individuals, groups and organization
within the local governments, so that they are responsive and able to face
environmental change. This paper will be closed with a conclusion.
The Strengths of Organizational Learning
Organizational learning is defined relatively diverse. According to Nevis et
al. (1995), “organizational learning as the capacity or processes within an
organization to maintain or improve performance based on experience.”
Wood (1998:11) states that: ”learning is the process by which people
acquire the competencies and beliefs that affect their behaviour in
organization.” Other writers that defines organizational learning as a
process are Duncan and Weiss (1979:84) who state that: “organizational
learning is the process within the organization by which knowledge about
action-outcome relationship and the effect of the environment on these
relationships is developed.” Whereas Chris Argyris and Donald Schön
(1978:29) perceive organizational learning as follows:
“organizational learning occurs when members of the organization
acts as learning agents for the organization, responding to changes in
the internal and external environments of the organization by
detecting and correcting errors in theory-in-use and embedding the
result of their inquiry in private images and shared maps of the
organization”
The definition of organizational learning with the emphasis of the
importance of the roles of various internal parties is aired by Dixon
(1994:5) as follows: “organizational learning is the intentional use of
learning processes at the individual, group and system level to
continuously transform the organization in a direction that is increasingly
satisfying to its stakeholders.”
Other writer that emphasizes organizational learning from the knowledge
basis amongst others is Antal (2002) who defines it as follows (Antal
2002:1):
“Organizational learning is essentially a creative and interactive
process. It is sometimes achieved by acquiring and applying existing
knowledge and sometimes by generating new knowledge. In both
situations, creativity is required because the transfer of knowledge
from one context to another is never simple copying process”
From several definitions above it can be inferred that organizational
learning is a process of possessing and applying tacit and explicit
knowledge that is acquired both from internal and external organization
Developing Local Government Performance by Optimizing Organizational Learning | 7
and that is optimized integratedly at the level of individuals, groups, and
organization to develop organizational actions or behaviors (Faozan,
2004b). From such definition several important elements of organizational
learning can be traced as follows (Faozan, 2004b):
1) Process. Organizational learning is part of dimension (its process) of
organizational learning (its structure). Argyris and Schön (1978:29)
“…a process of detecting and correcting error”; Nevis et al.
(1998:31) “…or process … to maintain or improve performance
based experience”.
2) Knowledge. Duncan and Weiss (1979:84) “organizational learning is
the process within the organization by which knowledge … is
developed”; Antal (2002:1): “… It is sometimes achieved by acquiring
and applying existing knowledge and sometimes by generating new
knowledge.”
3) Individuals, groups, and organizational (all system levels). Dixon
(1994:5) “organizational learning is the intentional use of learning
processes at the individual, group and system level …”.
4) Skills. Antal (2002:1): “…In both situations, creativity is required
because the transfer of knowledge from one context to another is
never simple copying process.”
5) Stakeholder Satisfaction. Dixon (1994:5) “organizational learning is …
to continuously transform the organization in a direction that is
increasingly satisfying to its stakeholders”.
Generally in the literature of organizational learning there are various types
of organizational learning. For instance, Chun Wei Choo (1998) introduces
two modes or forms that complete organizational learning, that is,
exploitation and exploration. The former is learning through spesialization
and amassing of experience in the scope of available goals and activities.
The latter is learning through discovery or experimentation that focus on
new goals and untapped opportunities. Both modes are complimentary in
organizational learning thus they are necessary in organizational learning.
From the discussion above it is found out that the essence of
organizational learning is the ability of the organization to gain an insight
into the experiences that have been gone through. In relation to the
intended organizational learning, Shaw & Perkins (1992) offer the following
model of organizational learning (Figure 1).
Developing Local Government Performance by Optimizing Organizational Learning | 8
Sources: Adapted from Robert B. Shaw & Dennis N.T. Perkins. “Teaching
Organizations to Learn”. In David A. Nadler, Marc S. Gerstein, & Robert B. Shaw,
Organizational Architecture: Designs for Changing Organizations. San Francisco:
Jossey-Bass, 1992.
1. Beliefs systems, actions, and outcomes
The model of organizational learning as offered by Shaw & Perkins (1992)
starts with belief systems that influence behaviors of all members of
organization. “Belief” in wide scope according to Shaw & Perkins (1992)
accommodates the understanding of combination of values, knowledge
and skills. Therefore, the belief system in the organizational context serves
as a reference for individuals in an organization where they take various
actions based on their organizational belief system. In turn, such actions
will influence particular outcomes, either success or failures in the efforts
to reach predetermined goals.
2. Reflection, insight, and dissemination
Effective learning takes place when people in an organization are able to
think deeply (reflection) towards various consequences from the action
that they take and get an insight –enriching and accurate understanding
towards key factors within their environment. In relation to that, it is,
therefore, very important to understand the link of “cause-and-effect”. In
principle, effective reflection enables to augment existing individual basic
knowledge and the results will bring to better understanding towards the
relationship between “actions and outcomes”.
In principle group learning is similar with the individual one. The belief of a
group will thrive and support the concerned group whose actions will
influence the outcomes. Effective reflection in group context is to assist a
Figure 1. Organizational Learning Model
Developing Local Government Performance by Optimizing Organizational Learning | 9
group to make some modification of the existing belief system. For
instance, a group is asked to develop a new product. Both success and
failure that are obtained by the group will eventually bring positive impact
to the group in terms of better understanding of various things that have
been learned. This sort of insight becomes a reference for the group,
although not all members of the group is involved in the process of
product development that has been instructed.
Next, diffusion of what has been learned through reflection is better than
merely presenting simple information. Information sharing among groups
in an organization is an important thing in facilitating reflection and action.
Effective learning system is closely related with different perspectives in
the framework of interpreting experiences and problems in a better
manner. Apart from that the effective learning system will be able to
stimulate innovation. Therefore the effective reflection will be more
optimal when exchange of information takes place. This is very likely to
take place because the more complete the required information to
interpret various consequences of their actions is the better.
Other writer that talks about organizational learning is Leonard-Barton
(1995). The focus of Leonard-Barton analysis is directed to the
organization with core technological capabilities. According to him, the
organization that possesses core technological capabilities has their own
competitiveness because the organization keeps developing everytime so
that there existence is difficult to emulate. To create and maintain the core
technological capabilities, the organization needs to understand what
dimensions that these capabilities have, and to find out how to manage
the knowledge creation activities. These core technology capabilities are
the results of a sinergy between four dimensions that are complimentary
in nature, that is: 1) employee’s knowledge and skill; 2) physical technical
system such as facilities, data base, and software; 3) managerial system
including the system of education, rewards, and incentives; and 4) values
and norms that determine the types of knowledge they are looking for.
In the process of developing and expending or creating new capabilities,
according to Leonard-Barton (1995) there are four main activities that
conduct a series of new product and process development, namely: 1)
shared, creative problem solving; 2) implementing and integrating new
methodologies and tools; 3) experimentation and prototyping; and 4)
importing knowledge from outside. These series of activities are explained
as follows:
a) In the shared problem solving, the employees from various
specializations and their different approaches to problem solving
are brought along, so that the diversity of their knowledge and
background can be channeled in creative problem solving. In order
to open the clogged creative energy productively, it is necessary
for managers and employees to develop skills and integrative use
Developing Local Government Performance by Optimizing Organizational Learning | 10
of technology such as defining clearly the shared vision in terms
of the outputs and the development of physical prototype to
bridge the gap of the specialization.
b) In implementing and integrating new methods and tools, the
proprietary knowledge is introduced in the process of tools and
methods to enhance internal operation. To ensure the success to
the implementation, the users’ involvement is a very essential
element because they will hold critical information that is
necessary to be integrated during the design phase. If both –
technology and the users’ environment—can adapt mutually, the
new tools can become an effective complementary.
c) Through experimentation and prototyping, the organization
expands the available capabilities such as developing new
capabilities in the future. Experimentation is a concrete action
that makes innovation cycle formidable. Thus it is necessary to
manage experimentation accordingly to ensure that learning is
taking place in an organization.
d) The activity of importing knowledge from outside is a search of
knowledge activities from outside institutions. The knowledge
consists of two types, namely the knowledge that is closely
related with technology in general and the market knowledge.
In his summary, Leonard-Barton (1995) emphasizes the needs to interact
continuously between knowledge-building activities and core capabilities
of the organization. When the core capabilities are created through
knowledge-building activities, these activities themselves are depended
upon and supported by the core capabilities of the organization.
Talking about organizational learning or organizational knowledge creation
it seems to be insufficient if the master piece of Ikujiro Nonaka is not
elaborated here. The cycle model of organizational learning developed by
Nonaka and Takeuchi (1995:56-94) (see also Nonaka, 1994, 1996; von
Krogh et al., 2000) known as “the five phase model of the organizational
knowledge-creation”. The model is based on the spiral organizational
knowledge creation, by employing two dimensions, namely
Epistemological and Ontological.
Epistemology dimension consists of tacit and explicit knowledge as its
main key and this also includes in the shifting process between the
different ways of knowledge conversion. The knowledge conversion starts
with 1) socialization (field building), proceeded with 2) externalization
(dialogue or shared reflection), then 3) combination (connected with
explicit knowledge), and finally it is closed with 4) internalization (learning
by doing) or the cycle will re-start again.
Epistemology and ontology dimensions are combined with five enabling
conditions, namely intention, autonomy, fluctuation/crative chaos,
Developing Local Government Performance by Optimizing Organizational Learning | 11
redundancy, and requisite variety for example internal difference in an
organization. The combination between epistemology and ontology
dimensions with enabling conditions that are to create the five-phase
model of organizational-knowledge creation.
According to Nonaka & Takeuchi (1995:59), there are two dynamics tools
that encourage the knowledge-creation process, namely (1) the shift from
tacit knowledge to explicit knowledge; and (2) knowledge transfer from
individual level to group level, organization and inter organization. The
process developes like a spiral because the interaction between tacit and
explicit knowledge take place dinamically at a higher level and even much
higher in organization. The basis of organizational-knowledge creation is,
therefore, a conversion from tacit knowledge to explicit knowledge and
return to tacit knowledge.
From the above elaboration, finally it can be summarized that learning
almost always takes place when the individuals and groups effectively
think deeply and interpret the results of their actions; individuals and
groups disseminate the new learning to the whole organization; and
individuals and groups act in accordance with their respective belief and
reveal new learning either that of comes from of their own and from other
parties. Organizational learning is defined as how to do something better,
how to do something different and better. According to Daniel R. Tobin
(1996) confirms that knowledge is obtained, only if the employees have
applied the information on their jobs and use it to add the values on their
jobs.
Obstacles of Organizational Learning
Although the concept of organizational learning offered by the experts
gives a lot of opportunities and strengths, to manifest it is not an easy job.
There are relatively plenty obstacles that need to be anticipated, so that
the organizational learning can run optimally. In their studies, Shaw &
Perkins (1992) state that the obstacles of organizational learning are
classified into three big categories, namely: 1) a capacity to reflect and
interpret, 2) a capacity to transfer and disseminate learning, and 3) a
capacity to act. Each category gives different capacities effect in
organization. The three categories of the obstacles (Figure 2) can be
elaborated as follows:
a) The ability to reflect –in-depth thinking— and to interpret can be
achieved when people reflect the results of their actions in the
framework of obtaining optimum insight in their experience and
their various consequences. Without such reflection, the connection
between “cause-and-effect” cannot be fully understood. Therefore,
the mistakes or incomplete reflection will result in limited or even
irrelevant learning.
Developing Local Government Performance by Optimizing Organizational Learning | 12
b) The ability to transfer and disseminate learning can be fulfilled when
there are exchanges of ideas collaboratively, where different
perspectives are aired and understandings are disseminated.
Without such exchanges, the insights obtained from the action and
reflection at the individual and group level will not be able to be
realized in full at the organizational level. The consequences are the
organization will repeat the mistakes and failures in adapting the
changes of internal and external conditions.
c) Capacities to act can be realized when people in all organization are
empowered to act based on their beliefs. Without actions, the stated
goals will not be able to be achieved optimally. Experimentation
through actions is a very important thing if the organization
encounters increasing complexities of challenges in the external
environment. With the capacity to act possessed by the members of
organization, it is likely that new learning can be applied into the
whole organization.
Source: Adapted from Robert B. Shaw & Dennis N.T. Perkins. “Teaching
Organizations to Learn”. In David A. Nadler, Marc S. Gerstein, & Robert B. Shaw,
Organizational Architecture: Designs for Changing Organizations. San Francisco:
Jossey-Bass, 1992.
Figure 2. Barriers to Organizational Learning
Developing Local Government Performance by Optimizing Organizational Learning | 13
1) Insufficient capacity to reflect: Symptoms & Causes
The issues of insufficient capacity to reflect and interpret problem can be
defined as the inability of the members of organization to interpret
correctly concerning various consequences of internal and external factors
that are related with the organizational outcomes. In such cases the
employees tend to take actions based on insufficient information and
conduct exploration with inadequate alternatives. This tendency can
become very worrying because it makes the organization ineffective and
unable to adapt with the changing condition.
The insufficient capacities to reflect and interpret problems can be seen
from several symptoms, namely denial of problem, incomplete analysis,
and incorrect analysis.
a) Denials of crucial problems that develop are important symptoms
related with insufficient capacities to reflect and interpret problems.
The denials of crucial problems referred to is an indication that an
organization possesses problems with reflection. Such crucial
problems never reach on the solution desk and completely done.
Therefore it is not surprising if the employees ignore or avoid the
existing crucial problems. They may press the crucial problems that
develop, or perhaps they even choose the wrong problems to be
followed up instead of the vital problems that influence the
performance of the organization.
b) The symptoms of insufficient capacities to reflect and interpret
problems are also closely related with insufficient and incorrect
analysis. In this situation the members of the organization identify
problems and develop solutions without fully considering relevant
data. The consequence of this issue is that the existing problems
cannot be optimally solved.
The main causes of insufficient capacities to reflect and interpret problems
are performance pressure, competency traps, and absence of learning
forum.
a) Performance pressure is concerned with short term target
performance. This is often the cause of a weak perception of the
members of organization in perceiving long term target
performance. They tend to prioritize short term target performance.
Prioritizing this short term target performance that concretely
undermines the importance of formal reflection in the framework of
building learning. In this context, the employees generally focus
more on their efforts to do things that are measurable, observable,
and controllable. In relation to that, if the members of organization
received rewards exclusively for their achievement of the short term
target performance, it is, therefore, not surprising when a high-level
reflection is hard to implement.
Developing Local Government Performance by Optimizing Organizational Learning | 14
b) Competency traps are concerned with the organizational successes
in the past that are continuously attached in today’s organizational
policies and practices, although they are obsolete and often counter
productive. In relation to that, the employees (individuals and
groups) are often trapped by their perceived best methods,
although actually there are other approaches that might fit in better
and are necessary. As a results. The employees are not interested
and not challenged to find out the new approach that is probably
more effective in the future.
c) The absence of learning forum is a situation where learning does not
have space and is not facilitated by the organization. This has
become a general knowledge where organization protects the
routine that has lasted for such a long time and avoids various
conflicts and challenges when learning is nurtured. Generally the
leaders focus more on how to increase existing practices and
processes. With the absence of learning forum, an organization will
find it difficult to conduct analysis of the strengths and weaknesses
of the organization from wider perspectives concerned with external
threats and opportunities.
2) Insufficient capacity to disseminate learning: Symptoms & Causes
The failure to exchange of information and to do an insight in different
groups of organization is a normal thing to occur. This is what has been
referred to as insufficient capacities to conduct learning dissemination.
Insufficient capacities to conduct learning dissemination can be seen from
several symptoms, namely problem ignorance, solution ignorance, and
redundancy of effort.
a) Problem ignorance is one of the symptoms of failures of various
information and insight into individuals or groups. This often takes
place on the employees at a lower level. The employees at this level
usually understand crucial problems of the organization, but they do
not communicate them with competent parties or authorized
parties. Other symptoms that are concerned with this issue are
solution ignorance. The solution ignorance takes place when certain
groups identify problems and develop solutions, but those efforts
are not spread out to the whole organization.
b) Due to various solutions –as mentioned above—are not spread out
to the whole organization, finally it is found out that the
organization often conducts similar thing (finding similar solution)
without going through sharing learning from the past failures
among the concerned parties. Redundancy like this is a general issue
in various wide-scale organizations.
Next, what makes insufficient capacity to conduct learning dissemination,
namely intergroup boundaries, myth of uniqueness, and narrow
information bandwidths.
Developing Local Government Performance by Optimizing Organizational Learning | 15
a) Strong intergroup boundaries are basically an attitude that states
that although the group is in one organization, but each group
possesses diversities, so that the information and insights required
are different. Such differences, for instance different department
and staff, tasks and functions, and geographic differences. Due to
the revealing strong differences, it often happens that each group
acts like a rival that must win over the others, instead of focus
together towards the threats faced by the organization as a whole.
b) Myth of uniqueness appears from the beliefs of the individuals and
groups that they are different with the others, so that it revealed
the perception that the existence of individuals and groups is unique
in nature. Due to this perceived differences they perceive that the
experiences of other individuals and groups are not relevant for
their own situation.
c) Narrow bandwidths to receive exchange of various important
information can hinder required communication to conduct in-depth
learning. The exchange of various important information referred to,
of course, covers short- and long-term information, so that it is rich
of information that can be transferred.
3) Insufficient capacity to act: Symptoms & Causes
Insufficient capacity to act is a situation where good thoughts and ideas
are unable to be implemented, and the desires to realize organizational
successes are unable to be realized due to insufficient organizational
environmental condition to implement it.
Several symptoms of the insufficient capacity to act namely lack of
experimentation and implementation failures.
a) Lack of experimentation is concerned with too little experiments
done for various new approaches. The employees prefer to choose
policies and standard operation principles that have been
predetermined by the leaders, although actually the policies and the
principles need to be amended in order to get a far better result.
b) Implementation failures in this context are concerned with
unimplemented or poorly implemented solutions, so that the results
are out of the tracts or the results are too far from the expectation.
The causes of insufficient capacity to act are priority stress, bias toward
activity versus results, and perceived powerlessness.
a) Priority stress appears as a result of so many prioritized targets that
confuse the employees. This condition can cause the employees to
be misdirected in doing their jobs.
b) Bias toward activity versus results is a condition where the
employees are demanded to focus on their efforts that are targeted
at present, although it does not contribute positively towards
effective performance at certain situations. This is done because
they will receive punishment or penalty if they do not do the jobs,
Developing Local Government Performance by Optimizing Organizational Learning | 16
and meanwhile they will not receive sufficient rewards although the
jobs can be done well. This has led to the fact that although the
employees work very hard, they respond to trivial problems instead
of the vital ones, namely the long term ones.
c) The powerlessness is an employees’ apathy attitude where they feel
incapable to make changes, so that they do not bother towards
what goes on in their organization. This powerlessness itself is built
when the accountability concept is not clear and when the
employees (individuals and groups) are over controlled. This may be
caused by the limited resources (time and money).
The Development of Local Government Performance in
Indonesia through Optimizing Knowledge Creating
Looking at the importance of organizational learning as previously
elaborated, it is, therefore, unsurprising if organizational learning has
become a light tower in the business zones as a new management concept
that leads to the possession of organizational competitive advantage.
Regarding learning according to David Nadler (1989) there are five general
elements that are important in creating learning-efficient company,
namely: 1) Open boundaries, 2) Motivation of risk taking, 3) Experiments
structured for learning, 4) Environments that extract and disseminate
learning, and 5) Encouragement of the capacity to act.
a) Open boundaries. The first challenging step in the effort to build
learning is to open organizational boundaries to accept new ideas
and information. This can be done through sending employees to
search and gather various important information concerning
organization competitors, importing ideas through speeches or
seminar, and bring in outsiders that are able to give important
information for the improvement of organizational performance.
One of the most important border lines to be open is the border
between the organization and the customers. The most effective
learner is those who constantly listen to the needs and the wants of
their customers.
b) Motivation of risk taking. Effective organization is an organization
that is able to create an environment where the employees can feel
motivated and be able to conduct experiment. Without
experimentation, organizational learning will never happen. In
relation to that, an organization is demanded to provide fund for
experiments. It is necessary to understand that not all experiments
lead to successes. It is, therefore, necessary to be tolerant towards
employees that have the courage to do “productive failures”, so that
the new approach can be created. On top of that, it is decent to
reward those who are able to conduct experiments.
c) Experiments structured for learning. It is necessary to understand
that not all experiments or innovations provide benefits to learning.
Developing Local Government Performance by Optimizing Organizational Learning | 17
There are theories and methods of experiment design to help create
experiments that produce productive successes or productive
failures. Learning-efficient organization conducts regulation towards
various experiments with clear targets, ensuring that those
experiments are done well, and the results are well documented as
learning evidence in a form of explicit knowledge. Apart from that,
learning-efficient organization also institutionalizes integrated
quality processes that are perceived important to the whole
organization and provide training in statistics, experimental design,
problem analysis that enable the employees to design, implement,
and analyze various experiments.
d) Environments that extract and disseminate learning. Learning,
whether you are aware or not, absolutely needs an environment
where the results of the experiments are demanded, examined, and
disseminated to the whole organization. The effective learners
spend a lot of time and efforts to hold meetings and conferences,
and to provide training programs to disseminate learning.
e) Encouragement of the capacity to act. Through organizational
learning effective action will be produced from time to time for the
concerned organization. This takes place because learning is able to
be applied for the whole organization. From here, it is necessary for
an organization to free and motivate their employees to exploit
what have been learnt by others.
Current development has shown that the possession of competitive
advantage not only belongs to private organizations, but also to local
government bureaucratic organizations. The competitive advantage can be
possessed by local government when the local government bureaucratic
organizations are able to develop their knowledge systematically and
integratedly that in the end they are able to develop the performance of
the local government in terms of product innovation, services, processes,
and their institution.
Various problems faced by the local governments in Indonesia have shown
incredibly complex. This can be referred to several findings of the studies
conducted by the National Institute of Public Administration. –The Center
for Performance Evaluation of Government Apparatus of the National
Institute of Public Administration /LAN-PKKSDA (2005) underlined that the
stagnant condition faced by the bureaucracy currently came from three
main problematic bureaucratic dimensions in Indonesia, namely
government management system, institution in terms of government
organizational structures, and government apparatus human resources.
Therefore to be able to conduct bureaucratic reforms and to realize more
efficient, effective, professional and accountable bureaucracy, those three
dimensions must become critical points that are absolutely necessary to be
followed up in accordance with the needs and development of the
strategic environment that is ever growing fast. The challenges of the
Developing Local Government Performance by Optimizing Organizational Learning | 18
globalization currently require the implementation of bureaucratic reforms
of the central and local governments in a planned, comprehensive and
sustainable manner.
In the studies of the adoption of Good Local Governance principles (GLG) in
public services in the regions, the centre for Research and Education and
Training for the Government Apparatus I/LAN-PKP2A I (2007) concluded
several crucial problems. They are, amongst others, insufficient capacities
of the local government bureaucracy in responding increasing demands of
quality services through the arrangement of public service system that
prioritizes Good Local Governance principles. The main indicators that can
become the indicators of unpreparedness are the emergence of conflict of
interest of the arrangement of authority of service provision functionaries
among work units that take place in most of the locus of the research.
Other problem was not optimum capacity of internal local government
bureaucracy in implementing public service reforms. This can be seen from
the performance of the public service institutions that are incapable of
responding to the public expectations. The evaluation from the society in
the locus of the research concerning the quality services showed an
average score of 68.81 from an absolute score of 100.
The problems related with local government institutions in Indonesia based
on Faozan & Mansoer (2008) can be seen from their distinctive
characteristics, namely:
1) The size of an organization. The designs of local government
organization structures generally do not go through sufficient
academic research. The tendency is more based on the maximum
formation stipulated by the Government Regulation.
2) Overlapping tasks and functions. Although to avoid all overlapping
tasks and functions within local government work units seems to be
very difficult to do, too many overlapping must be avoided.
3) More rowing than steering roles. The local government fat
organizational structure is a mirror of the number of rowing
function that is developed by the local government (as well as the
central government). Whereas the paradigm shift of government
leads to steering functions.
4) Unstable existence. The organizational change that often takes place
brought about various public policies that do not reach their
predetermined targets. This is due to the fact that organizational
change has negative impacts towards policy implementation that
has been decided previously.
The existing complex issues have concretely hindered development and
the attainment of the local government performance optimally. In
principle the development of local government performance is in the
framework of local government bureaucratic reforms. The reforms in the
eyes of Faozan (2004a) could be defined as an effort done by the local
Developing Local Government Performance by Optimizing Organizational Learning | 19
government to increase local government performance as public servant
as well as civil servant through improving institution, management and
local government apparatus, so that they are able to fulfill the society’s
expectations and stakeholders as well as in the framework of encouraging
the manifestation of state goals as stipulated in the preamble of the 1945
Constitution. This implies that the tasks contained in the local government
bureaucratic reforms are heavy. This also means that the tasks of the local
government bureaucracy to implement the reforms successfully require
the possession of competitive advantage, both local governments as a
whole and respective local apparatus work units (Faozan, 2005).
According to Nadler (1992), organizational learning is the frontline for the
success to organizational strategies, optimizing total quality management,
and effectiveness of organizational design. It is, therefore, not
exaggerating if organizational learning is a determining critical success
factor that will, in turn, be able to drive the organization the organizations
on the possession of competitive advantage. This is, of course, not
exaggerating because the hub of organizational learning is sustainable
innovation and the leading organizational competitiveness. Unfortunately,
although organizational learning is not a new concept in the local
governments, in reality it is very difficult to find the practices of effective
organizational learning in the local governments in Indonesia.
Huseini (1997) drew the flow of the possession of competitive advantage
started with the skills of transforming data into information through
detailed analysis. Then the information was judged by the think-tanks of
the organization to become ideas. The ideas were then put into context in
order to make it into knowledge that could be developed by the
organization to result in various activities and innovation continuously.
According to him the organizational knowledge creation process was a
condition and thinking capabilities in an inter-active manner either
individuals, groups, or even intra and inter organization.
The importance of organization knowledge creation in the framework of
increasing the ability to innovate has been widely discussed either in
corporate, government organization or even in state context (Leonard-
Barton, 1995; Nonaka & Takeuchi, 1995; Choo, 1998; von Krogh et al.,
2000; Conference Board of Canada, 2001). Basically each organization
possesses opportunity to obtain data, information, ideas, knowledge,
innovation and even competitive advantage. This means that local
governments possess equal opportunity, so that the chance to achieve
successes to bureaucratic reforms is very feasible. Based on Faozan
(2004a) although the concept of innovation in local governments in
Indonesia is a new phenomenon, this can be used as a breakthrough to
find the key enablers that are very potential to be the key leverages for
the local government bureaucratic reforms in Indonesia.
Developing Local Government Performance by Optimizing Organizational Learning | 20
Closing
The four critical success factors for the organization to be able to compete
effectively as convinced by David A. Nadler --strategy, quality,
organizational design, and organizational learning—are the key factors that
are practically relatively difficult to realize by the local government
organizations within the local governments all over Indonesia. The
practices of the implementation concerned with the three critical success
factors first of all it is often done although the results have not met the
expectations. The strategy design is conducted by the local government
apparatus when formulating their institution strategic planning and
drawing Local Long Term Development Plan and Local Medium-Term
Development Plan. The issue of quality also draws relatively serious
attention in the local government apparatus. This can be seen from the
enactment of the Law regarding Public Service as well as various
government policies concerning the enhancement of public service
quality. Similar thing that draws serious attention is institutional
arrangement where the Government Regulation Number 41 Year 2007
becomes their reference.
Something that needs to be aware of by the local apparatus organizations
within the local government in Indonesia is the fact that the
implementation of the three critical success factors absolutely requires
continuously serious evaluation. This is, of course, justifiable because the
formulated strategies, predetermined quality, and the organization design
drawn generally have not given significant impacts towards the
performance achieved by the local governments in general and local
apparatus work units in particular. As a result, the predetermined
decentralization policy remains far from the predetermined goals. Looking
at the condition, in general it can be said that the local government
competitiveness in Indonesia is relatively minimum, so that hard and smart
effort must be done in order to be able to increase their competitiveness
gradually and sustainably.
If the first three critical success factors still indicate many weaknesses,
then the fourth critical success factor, namely organizational learning
rarely receives adequate attention from the side of local government
bureaucracy. In spite of the fact that, almost all government officials
within local governments starting from the lowest level managers until the
highest level managers receive the knowledge of the importance of
manifesting and nurturing organizational learning during their leadership
education and training. Almost all officials within the local government
know that organizational learning is the frontline leverage of the
organizational competitiveness. However, that seems insufficient to
become leverage for the local government bureaucracy to immediately
implement organizational learning. Through knowledge sharing concerning
Developing Local Government Performance by Optimizing Organizational Learning | 21
organizational learning that covers definition, model, obstacles, and
elements that must be paid attention to in the organizational learning, it is
expected that inspiration and willingness will reveal within the local
government to immediately apply it in a more serious manner.
From the above elaboration, it is very obvious that organizational learning
is centred towards the change in behavioral pattern, both individuals,
groups, and organizations. The behavior in the context of organizational
learning obviously leads to the creation of high performance of individuals,
groups and organization as a whole. However, it seems that, the essence
of organizational learning in the sphere of bureaucracy in Indonesia
receives less attention. Learning organization remains to be considered as
part of learning materials in the education and training sessions either
technical, functional, or leadership. It seems that not even one
government bureaucracy practises organizational learning concretely and
intensely. Looking at this condition, it is, therefore, not surprising if the
behavior of government bureaucracy has not been able to show optimum
behavioral results as expected by the Indonesian society in general.
Growing new behavior in the local government bureaucratic side through
intense organizational learning clearly requires strong collective
committment at all levels of local government bureaucracy. If these can be
realized, this can, of course, be a milestone for the resurrection of local
government bureaucracy in Indonesia. This condition will bring local
governments in Indonesia to clearer direction in the framework of
achieving local government goals at the same time the goals of local
autonomy.
Developing Local Government Performance by Optimizing Organizational Learning | 22
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