Developing local government performance by optimizing organizational learning (haris faozan)

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: [email protected] and [email protected]

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

mailto:[email protected]

mailto:[email protected]

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.


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.


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.


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


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


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).


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


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


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,


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.


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


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.


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.


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,


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.


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


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


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.


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


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.


Bibliography

Antal, A.B. (2002). Organizational Learning and its Relevance for Corporate

Sustainability. Ensuring Openness without Reinventing the Wheel. A

paper at Okologisches Wirtschaften, Ausgabe 5/2002, S. 11-13

Argyris, C. & D. Schön (1978), Organiztional Learning: A Theory of Action

Perspective. Addison-Wesley Publishing Company, Menlo Park,

California.

Choo, C. W. (1998). The Knowing Organization: how organizations use

information to construct meaning, create knowledge, and make

decisions. Oxford Univ. Press, New York.

Conference Board of Canada. (2001). Investing in Innovation: Third annual

Innovation Report. Conference Board of Canada, Ottawa.

Cyert, R.M. & J.G. March (1992). A Behavioural Theory of the Firm (2nd

ed.).

Prentice-Hall, Inc., Englewood Cliffs, NJ.

Dixon, N. (1994). The Organizational Learning Cycle. McGraw-Hill,

Maidenhead.

Djamin, A. (1994). Improving Government Apparatus and Public

Administration of the Republic of Indonesia: First Decade Evaluation

and Its Prospects. Fostering Foundation of The Management of Public

Administration Institution, Jakarta. (in Indonesian language)

Duncan, R.B & A. Weiss (1979), “Organizational Learning. Implication for

Organizational Design”. In Malek, T. & Hilkermeier, L. The European

Commission as a learning Organization? Theoritical Considerations and

Empirical Ideas, Paper presented at the ECPR Workshop “Political logic

within the European Commission”, Grenoble, 6-11 April 2001.

Faozan, H. & M.M. Mansoer. (2008). “Local Government Organization”. In

Adi Suryanto (Ed), Management of Local Government. The Centre for

Performance Evaluation of Local Autonomy – National Institute of

Public Administration, Jakarta. (in Indonesian language)

Faozan, H. (2004a). ‘Optimizing Key Enablers of Innovation as Key

Leverages of Bureaucratic Reforms (An Insight into Perspectives of

Organization Development)’. in I. Suhady and Sugiyanto (eds.). Notes

on Having a Mandate of Bureaucratic Reform and Public

Administration Mission in the New Government of the 2004 Post

General Election, The National Institute of Public Administration,

Jakarta. (in Indonesian language)

Faozan, H. (2004b). Effectiveness of Organizational Learning Enablers in

Developing Multi Corridor Network: Case Study in Dompet Dhuafa

Charity Foundation, a Thesis for Magister degree in the Faculty of

Social and Political Science, University of Indonesia, Jakarta.

Unpublished. (in Indonesian language)


Faozan, H. (2005). ‘Perestroika of Bureaucratic Structure: Renewing Space

for the Growth of Government Institution Performance. Journal of

Administrative Science, Vol 2 (4) pp.335-346. Graduate School of

Administrative Science – the National Institute of Public

Administration, Bandung. (in Indonesian language)

Huseini, M. (1997). ‘Paradigm Shift in 2003 Era’. Academic Oration during

the 33 rd First Degree Inauguration of Graduate School of

Administrative Science – the National Institute of Public

Administration, Jakarta 12 July 1997. (in Indonesian language)

The National Institute of Public Administration – the Directorate for

Fostering Education and Training for Government Apparatus I/NIPA

DFETGA-Bandung. (2007). Good Local Governance Policy in the

framework of Optimizing Public Services. NIPA DFETGA, Bandung. (in

Indonesian language)

The National Institute of Public Administration – the Centre for

Performance Evaluation of Government Apparatus/ NIPA-CPEGA.

(2005). Bureaucratic Reforms. The National Institute of Public

Administration, Jakarta. (in Indonesian language)

Leonard-Barton, D. 1995. Wellspring of Knowledge: Building and Sustaining

the Source of Innovation. Harvard Business School Press, Boston, MA.

Nadler, D. (1989). ‘Even Failures Can Be Productive’. New York Times,

Business Forum, April. 23.

Nadler, D. A. (1992). ‘Key Leverage Points for Improving Competitive

Performance’. In D. A. Nadler, M. S. Gerstein, R. B. Shaw and

Associates, Organizational Architecture: Designs for Changing

Organizations. Jossey-Bass, San Francisco, CA.

Nevis, E. C. et al. (1995). Understanding Organization as learning System.

Sloan Management Review, Winter, pp. 73-85.

Nonaka, I. & H. Takeuchi (1995). The Knowledge Creating Company. Oxford

Univ. Press, New York.

Senge, P.M. (1990). The Fifth Disciplin-The Art and Practice of the Learning

Organization. Doubleday, New York.

Shaw, R. B. & D.N.T. Perkins (1992). ‘Teaching Organizations to Learn’. In D.

A. Nadler, M. S. Gerstein, Robert B. Shaw, and Associates,

Organizational Architecture: Designs for Changing Organizations.

Jossey-Bass, San Francisco, CA.

Tobin, D. R (1996). Transformational Learning: Renewing Your Company

Through Knowledge and Skills. John Wiley and Sons, Inc., New York.

von Krogh, G., K. Ichijo, and I. Nonaka (2000). Enabling knowledge creation:

How to unlock the mystery of tacit knowledge and release the

power of innovation. Oxford university Press, Oxford.

Developing local government performance by optimizing organizational learning (haris faozan)

Documents

Transcript of Developing local government performance by optimizing organizational learning (haris faozan)