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E-Journals KM Articles

October 21, 2004MIS 580

Michael Fry & Yih-Jong FuDepartment of Management Information System

The University of Arizona

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A Model of Knowledge Management And The N-Form Corporation

By Gunnar Hedlund 1994

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Article outline

Introduction Knowledge Model Comparative approaches of Japanese

and Western companies N-From vs. M-Form

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Introduction

Currently there are no models/ thoeries that can correctly capture the relationship between organization and knowledge management

Goal: Capture the transfer and transformation of knowledge in an organization on a model

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Knowledge Model

Individual Group Organization Inter-Organizational

Articulated Knowledge

Express mathematical functions

Group evaluation form

Organization chart

Suppliers’ documented practices

Tacit Knowledge

Negotiation skills

Team coordination

Corporate culture

Clients’ expectation and satisfaction

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Knowledge Model

The model distinguishes 3 aspects of knowledge Cognitive knowledge Skills Knowledge embodied in products or services

These 3 aspect corresponds to 3 modes of corporate expansion Licensing – selling cognitive knowledge Capacity-increasing investment – transfer of skills Increased sales – embodied product

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Knowledge Model

The current model is static To make the model more dynamic, it

needs to show the processes of transfer and transformation of knowledge.

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Knowledge Model – Knowledge transfer and transformation

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Knowledge Model – Knowledge transfer and transformation

Articulation Tacit turns explicit Example: employee training session

Internalization Articulated turns tacit Example: Internalize the training materials

Reflection = Articulation + Internalization The interaction between articulation and internalization Genuine Knowledge Creation Example: employees create a knowledge of the org.

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Knowledge Model – Knowledge transfer and transformation

Extension Transfer of knowledge from lower → higher agency levels Example: an employee emails project charter

Appropriation Transfer of knowledge from higher → lower agency levels Example: Group members coaches a new member

Dialogue = Extension + Appropriation The interaction between extension and appropriation Different dialogue for different agency levels Example: addressing to another organization

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Knowledge Model – Knowledge transfer and transformation

Assimilation The input of knowledge Example: Create a patent database

Dissemination The output of knowledge Example: Selling of patents

Expansion = Assimilation + Dissemination The interaction between assimilation and dissemination Market organizational capabilities Example: Creation and selling of patents database

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Japanese and Western companies

Japanese Western Tacit transfer of knowledge Group and Inter-organizational levels

Both tacit and articulated Individual and organization levels

Small improvement Rapid incremental development No explicit structure of knowledge = inconsistency Bureaucracy

Radical innovation Inflexible system of knowledge inhibits tacitness Bureaucracy

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Japanese and Western companies

Japanese Western Articulated assimilation (e.g. patents) of knowledge Dissemination of products instead of skills Organizational tacitness makes foreign implementation difficult. AK → TK → AK

Assimilation in both articulation and tacit Make explicit, structured implementation Reflect an organizational environment where articulation is the key focusAK + TK → AK → AK + TK

Weak in term of integration of large and complex system

Excel at managing large and complex system with articulation and systematic approach

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N-From vs. M-Form

The knowledge model and Japanese/ Western styles have to do with the different organizational behaviors

Now take a comparative approach to the different kinds of organizational behaviors in 2 types of company structure

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N-From vs. M-Form

N-Form M-Form

Technological interdependence

Integration of technology and combination of expertise

Divide complexity into independent units

People interdependence

Permanent people poolTemporary team of multifunctional, multinational and multidivisional

Changing people pool Clear structure of specialized roles

Critical organizational level

Focus on middle level will bring benefit to knowledge creating firm

Focus on top level of the firm

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N-From vs. M-Form

N-Form M-Form

Communication network

Lateral = horizontal coordination

Vertical

Top management role

Must know the business Build the infrastructure for interpersonal (culture) Promote and guard the investment in new knowledge

Monitor and resource allocator

Competitive scope

Shared focus enables combination of different pieces of knowledge

Diversifying rejects internalization of processes into tacit knowledge

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N-From vs. M-Form

N-Form M-Form

Basic organizational form

Heterarchy Network like

Hierarchy All relevant knowledge is brought to a central decision point

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Discussion

How can tacit transfer of knowledge be possible?

Blaming bureaucracy, a real problem or an excuses?

Lessons learned from the Japanese approach to internalization?

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Organizational Learning: The Contributing Processes and the Literatures

By George P. Huber 2001

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Article outline

Introduction Knowledge Acquisition Information Distribution Information Interpretation Organizational Memory

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Article outline

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Introduction

Organizational learning – intentional process directed at improving effectiveness

This view is narrow Does not have to be conscious or intentional Not always increase the effectiveness of learner May not results in behavioral changes

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Knowledge Acquisition

Common ways to obtain organizational knowledge Surveys, research, competitive analysis,

reading newspaper and communicating with other people

There are 5 different methods of acquisition: Congenital, Experiential, Vicarious, Grafting and Searching

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Knowledge Acquisition

Congenital Learning A.K.A. Inherited knowledge Firms carry knowledge at the time it was

created plus additional knowledge prior its creation

Congenital knowledge affect future learning – not yet support by any studies

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Knowledge Acquisition

Experimental learning – Organizational experiments Motivated by the feedback of cause and

effect relationships between organizational action and outcome

How? Successive Limited Comparison ~ similar to trial and error

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Knowledge Acquisition

Experimental learning – Organizational self-appraisal Focus on people interaction and

participation The goal is to improve the relationships

of people through interaction Some study suggest learning new frames

of reference

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Knowledge Acquisition

Experimental learning – Unintentional or unsystematic learning Opposite to other learning methods Random exploration that results in learning

Experimental learning – Experienced-based learning curve The increase in experience results in faster

learning

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Knowledge Acquisition

Vicarious learning Learning from second-hand experience E.g. corporate intelligence acquired

through consultants and net work professionals

Also by the way of imitation – mimic the competitor’s learned experience

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Knowledge Acquisition

Grafting Acquire knowledge through acquisition of

resources E.g. acquisition of another organization Study shows that grafting is a fast way to

acquire large amount of knowledge/ information

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Knowledge Acquisition

Searching and Noticing – Scanning Scan environment for clues as to what may

happen in the future Active scanning = high vigilance = react to

certain event in time Searching and Noticing – Performance

monitoring Measure performance against the expectation of

the management and stakeholders One problem – bureaucracy does not learn from

their mistake

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Knowledge Acquisition

Searching and Noticing – Focused search Has an objective Usually occurs when there is a problem

and solution is needed

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Information Distribution

Organizations often do not know what they know. While most organizations have systems

which routinely store “hard” information, they often only have weak systems for finding where a certain piece of information is known to the organization.

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Information Distribution

When information is widely distributed in an organization, retrieval efforts are more likely to succeed and individuals and units are more likely to be able to learn.

Therefore, information distribution leads to more broadly based organizational learning rather than new organizational learning.

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Information Interpretation

Definitions: “the process through which information is

given meaning” “the process of translating events and

developing shared understandings and conceptual schemes”

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Information Interpretation

Where does the most organizational learning come from? When all organizational units interpret the

information the same way?

- or - When the organizational units interpret

the information differently?

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Information Interpretation

Either way, more complete learning leads to a change in potential behaviors.

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Information Interpretation

Shared interpretation of new information in an organization is effected by five factors:

1. The uniformity of prior cognitive maps possessed by the organizational units.

2. The uniformity of the framing of the information as it is communicated.

3. The richness of the media used to convey the information.

4. The information load on the interpreting units.5. The amount of unlearning that might be

necessary before a new interpretation could be generated.

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Cognitive Maps and Framing

What are cognitive maps? A belief structure or mental representation.

A person’s prior cognitive maps will shape their interpretation of information.

The way an organization “frames” or labels information will affect the way units interpret the information. If information is not uniformly framed when

distributed to different units, uniform interpretations are less likely.

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Media Richness

Definition: “The communication medium’s capacity to

change mental representations within a specific time interval.”

What does this mean? How well and quickly can a medium be used for

learning. Research shows that managers who

consider media richness when choosing a communications medium are more effective.

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Information Overload

If the amount of information to be interpreted exceeds an organization’s processing capacity, the interpretation will be less effective.

Furthermore, overload that is not uniform across units leads to even greater differences of interpretation.

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Unlearning and Its Effects on Learning

What is unlearning? “A process through which learners discard

obsolete and misleading knowledge.” Unlearning opens the way for new learning

to take place. Organizational units who are not able to

move on from doing something in an outdated way are not being as effective as they could be.

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Organizational Memory

Organizational memory: The ways in which an organization stores

and retrieves its information.

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Storing and Retrieving Information

Organizations store a great deal of “hard” information routinely, but a lot of “soft” information has to be stored mentally by members in the organization.

If this non-routine information was stored deliberately, how could it be used to help make future decisions?

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Computer-Based Organizational Memory

Organizations are continually storing more and more information in computers.

As usability and capacity of computer system improves, the amount and types of information that can be stored increases.

Many organizations have created expert systems, but can these systems really substitute for human experts in areas such as influencing people or locating information through non-official, non-standard channels?

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Summary

1. Information acquisition depends in many instances on instances, which is directed by previous learning retained in memory.

2. Information distribution is affected by organizational decisions made using information contained in memory.

3. Information interpretation is greatly affected by cognitive maps or frames of references.

4. That which has been learned must be stored in memory and then brought forth from memory; both the demonstrability and usability of learning depend on the effectiveness of the organization’s memory.

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Discussion

What are the motivations for initiating organizational experiments?

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KNOWLEDGE OF THE FIRM, COMBINATIVE CAPABILITIES, AND THE REPLICATION OF TECHNOLOGY

By Bruce Kogut and Udo Zander, 1992

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Outline

Themes Information and Know-How The Inertness of Knowledge Transformation of Personal to Social Knowledge The Paradox of Replication Combinative Capabilities Selection Environment The Make Decision and Firm Capabilities Summary

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Themes

Organizations are social communities in which individual and social expertise is transformed into economically useful products and services.

Organizations are not merely mechanisms for transferring knowledge. By synthesizing and applying current and acquired knowledge, they create new knowledge/ learning.

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Information and Know-How

Two types of knowledge: information and know-how Information:

Knowledge which can be transmitted with loss of integrity once the rules for deciphering it are known.

Know-How: “Know-How is the accumulated practical skill or expertise

that allows one to do something smoothly and efficiently.”

Information implies knowing what something means. Know-how is a description of knowing how to do something.

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The Inertness of Knowledge

Why is knowledge not easily transmitted and replicated? Two dimensions that influence the transferability and

imitability of a firm’s knowledge: codifiability and complexity. Codifiability:

Not all kinds of knowledge are easily codifiable. I.e. Simply creating an instruction sheet for making a musical

instrument is unlikely to capture the skills of the craftsman. Complexity:

Knowledge varies in its complexity. I.e. Instructions for turning on a PC are simple, but the

instructions for creating a microprocessor would be extremely complex.

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Transformation of Personal to Social Knowledge

The teaching of know-how and information requires frequent interaction within small groups.

It is the sharing of common stock of knowledge, both technical and organizational, that facilitates the transfer of knowledge within groups.

Personal knowledge can be transmitted because a set of values are learned, permitting a shared language by which to communicate.

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The Paradox of Replication

For a firm to grow, it must develop organizing principles and a shared code by which to orchestrate large numbers of people, and potentially, varied functions.

Since personal and small group knowledge is expensive to re-create, firms desire to codify and simplify this knowledge to make it accessible to the wider organization.

While this type of codification reduces the cost of transferring knowledge, it runs the risk of encouraging imitation.

Being taught the functional skills of how to do something is different than being taught how to create it.

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Combinative Capabilities

New learning, such as innovations, are products of a firm’s combinative capabilities to generate new applications from existing knowledge.

What are combinative capabilities? The intersection of the capability of the firm to exploit its

knowledge and the unexplored potential of the technology or the degree of “technical opportunity.”

Firms learn in areas closely related their current practice.

As the firm moves away from its knowledge base, its probability of success converges to that of a start-up operation.

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Selection Environment

The ability of a firm to indulge in a forward-looking development of knowledge is strongly contingent on selection environment.

Long-term survival depends on a critical tradeoff between current profitability and investing in future capabilities. Future capabilities are of little value if the firm does not survive.

If the competitive environment is too rigid, especially in the early years of a firm’s development, it may impede subsequent performance by retarding a firm’s ability to invest in new learning.

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The Make Decision and Firm Capabilities

The decision to make or buy is dependant on three elements: How good a firm is currently at doing

something. How good a firm is at learning specific

capabilities. The value of these capabilities as

platforms into new markets.

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Summary

Firms are a repository of capabilities, as determined by the social knowledge embedded in individuals structured by organizing principles.

Switching to new capabilities is difficult because it forces individuals to go outside their organization’s common area of knowledge, thereby making the transfer of knowledge more difficult.

Firms create new knowledge by the concept of combinative capabilities, that is, combining their current knowledge with the potential capabilities of that knowledge.

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Questions?

Comments?