From: AAAI Technical Report WS-93-03. Compilation copyright © 1993, AAAI (www.aaai.org). All rights reserved.
Artificial
Intelligence
and Organizational Learning
Howcan AI contribute to Organizational Learning?
ShigehisaTsuchiya
Interdisciplinary Courseon Advanced
Scienceand Technology
TheUniversity of Tokyo
4-6-1 Komaba,Meguro-ku,Tokyo, 153 Japan
e-mail: tsuchiya@ai,
rcast.u-tokyo.ac.jp
Abstract
Informationtechnologyassisted by artificial intelligence can support organizational learning and enable organizations to form
and executestrategy effectively.
Organizationalstyle is changing.
Realizingthe characteristics of social problems, moreand moreorganizations are now
loosening couplingsso that their subsystems mayhave morechance to enact environment. As Weick (1976) suggested,
loosely coupled organizations permitting
considerableflexibility in the behaviorof
their subsystemsare better able to adapt
and survive. Traditional organization style
--hierarchical tightly coupledsystem-- is
becomingout of date.
In formulatingstrategy, executives are
nowbecomingaware of inevitable ambiguity in the real world.Traditional analytical
strategy is based on two assumptions
whichoften prove false: that the formulator is fully informed,and that the environmentis stable, or at least predictable. Due
to the absenceof either condition these
days, the importanceof emergentstrategy
(Mintzberg, 1978) has becomewidely acknowledgedamongmanagers in the busi16
ness world.
Becauseof these changes in organization and strategy, manyorganizations are
havingdifficulties in makingstrategic decisions. Throughintensive case studies of a
private college, a typical exampleof loose
coupling, 1 have developedand verified following new hypotheses:
information technologyassisted by artificial intelligence can help organizations form and implementappropriate
strategies by improvingorganizational
decision makingprocess through organizational learning.
Keywords.information technology; artificial intelligence; organizationallearning;
emergentstrategy; loosely coupled system;
IBMhas drastically restructured its organization from tightly coupled hierarchy
to loosely coupled federation. Soviet
Union died and Commonwealthof
Independent States was created. Thus traditional organizationstyle -- hierarchical
tightly coupled system-- is becomingout
of date and loosely coupled system seems
to be the organizationstyle in the future.
Faced with frequent and drastic environmental changes, more and more organizations are now loosening couplings so that
I Strategy Formation
The term strategy has been defined in a
their subsystems may have more chance to
variety of ways, but almost always with a
enact environment. Sensitivity and flexibility to the environmentare essential for
commontheme, that of a deliberate conscious set of guidelines that determines de-
their survival.
Loosely coupled system seems to be the
cision into the future. A typical definition
organization style in the future. However,
there is a big problem: strategy formation is
basic long-term goals and objectives of an
enterprise, and the adoption of courses of
difficult
action and the allocation of resources nec-
in a loosely coupled system. Weick
of strategy is "...the determination of the
(1976) suggests that loosely coupled orga-
essary for carrying on these goals
nizations permitting considerable flexibility
in the behavior of their subsystems are bet-
(Chandler, 1962)". All these definitions
treat strategy as (a) explicit, (b) developed
ter able to adapt and survive. Yet, he ad-
consciously and purposefully,
mits that, whenthe changes in the environ-
in advance of the specific decisions to
ment are drastic, the organizations have to
tighten up their couplings to survive.
which it applies. The basic assumption here
is the environment is analyzable.
Meanwhile,as for strategy, the impor-
and (c) made
However,deliberate and analytic strate-
tance of emergent strategy (Mintzberg,
gies such as PPMmodels, SBU, etc.,
1978) has become widely acknowledged.
Traditional planning theory postulates that
failed to be effective in the "real world",
because the environment surrounding orga-
the strategy-maker "formulates" from on
nizations is unanalyzable. By nature,
high while the subordinates
humanworld is not rational nor systematic.
"implement"
have
lower down. This dichotomy is based on
but ambiguous, equivocal and liquid.
two assumptions which often prove false:
"real world" is composed of innumerable
that the formulator is fully informed, and
facts and characteristics,
that the environmentis stable, or at least
ship amongthose components and causali-
predictable. Due to the absence of either
condition these days, strategy formation
ty are ambiguous.
Through empirical studies,
has becomea learning process, whereby im-
(1978) defined strategy as "a pattern in
plementation feeds back to formulation and
stream of decisions". Successful organiza-
intentions get modified en route, resulting
tions in Japan have never adopted analytical strategies. Assumingthe unanalyzable
in an emergent strategy.
Many organizations
muchdifficulties
The
and the relation-
Mintzberg
environment, they experiment environment
are now having
in makingstrategic deci-
sions because they are loosely coupled and
adopt emergent strategies.
by action and form effective strategies inductively. For them, strategy formation is a
learning process, where emergent strategies
play important roles. Emergentstrategies
17
are formedandimpleUNDIRECTEDVIEWING
mentedfrom the middle
interprststione.
up, while deliberate
Unenelizabla Constrained
Nonroutine,informal data.
Hunch, rumour, chance
strategiesare formulated
ASSUMPTIONSopportunities.
and implementedfrom
ABOUT
ENVIRONMENT
the top down. Loose
CONDITIONEDVIEWING
couplingis suited better
Analizable Interprets within traditional
for such "process type
boundaries. Passive
detection. Routine, formal
strategies" than tight
data.
coupling..
ENACTING
Experimentation,
testing, coercion, invent
environment. Learn by
doing.
DISCOVERING
Formal torch.
Questioning, surveys,
datagathering.Active
detection.
Passive
Active
ORGANIZATIONALINTRUSIVENESS
0Neick8, Daft,1983;
Daft & Weick,1984)
Fig.1 Modelof Organizational Interpretation Modes
2 Organizational Decision Making
Organizational decision makingis governed by the modeof its interpretative
framework.Organizations must makeinterpretations. Interpretation is the processof
translating events surroundingthem, of
developing modelsfor understanding, of
bringing out meaning,and of assembling
conceptual schemes amongkey members
(Daft and Weick, 1984). The modelproposed by Daft and Weickdescribes four
interpretation modes:undirected viewing,
conditioned viewing, discovering, and enacting (Fig. 1). Eachmodeis determined
(I) management’s
beliefs about the analyzability of the external environmentand
(2) the extent to whichthe organization intrudes into the environmentto understand
iL
In order to cope with the newturbulent
environment by loosening couplings and
adopting emergentstrategies, organizations
must changethe modeof its interpretative
framework to ENACTING.
18
3 Organizational Learning
ORGANIZATIONAL
LEARNINGis defined as the process by which knowledge
about action outcomerelationships between the organization and the environment is developed (Duncan& Weiss, 1979).
It is the process of evolutionof interpretation modeof the organization.
Organizational interpretative framework
is formedthrough interpreting the outcomes of its DECISIONS
and ACTIONS.
Organizationalinterpretation is defined as
the process of translating events and developing shared understanding and conceptual schemesamongmembersof organization.
The organization makesdecisions and actions based on its organizational INFERENCE.Andorganizational inference is limited by the modeof its interpretative frameworkbecause the organization will not
perceive any information inconsistent with
its interpretation mode.
Thusthe three stages -- inference, decision and action, and interpretative framework-- are interconnected through a
feedback loop in Figure
2. Changingorganizational interpretation
modethrough organi-
"~’"l
zational learning is a very
I I
difficult processbecause
theorganization
has
tokl
cut the loop. According "-~
NewInterpretative Framework
Interpretation
Interpretative
"~"’i
Mode
Framework
interpretation
Dialogue Mode
Decision~Action
Inference
i.~ Decision/
through Dialogue
I" I Action
Mode ]
L-,,J
/
to mycasestudies, the
Fig.2 OrganizationalLearning
key stage in evolution of
interpretation modeis INFERENCE.
possible.It includesstorage,reproduction,
transportation, andrearrangement.
Man’s
4 Inference
intellectual superiorityoverthe animalsis
Organizations as well as humansmake
almostentirely dueto the useof language.
But, tacit knowing
is still the fundamental
tacit and explicit inferencein a simultanepowerof the mind,whichcreatesexplicit
ous and integrated wayto cope with probknowing,lends
meaning
to it andcontrols
lemsin the ambiguousreal world. Tacit inference is nonlinguistic and comprehensive its uses.
thought,and explicit inferenceis linguistic
and analytical thought.
5 Information Technology ad AI
Informationtechnologies assisted by arKnowledgeis fundamentally tacit. We
knowmorethan we can tell (Polanyi,
tificial intelligence can support organiza1966). All knowledge
is either tacit or roottional learning and makeinterpretative
ed in tacit knowledge,because, while tacit
frameworkto evolve by improving organiknowledgecan be possessed by itself, exzational inference.
5.1 Substitution of Human
Activities
plicit knowledgemustrely on being tacitly
Traditional view of the contribution of
understood and applied. All explicit
informationtechnologyin inference is that
knowledge,howevercrystallized in the forinformation technology can substitute a
malismsof words,pictures, or other articulate devices, relies on the grasp of meaning part of humanactivities so that we may
throughits articulate forms: on the comprespendmoretime in creative activities which
is innate in humanbeings.
hensionthat is its tacit root.
However,formalization of tacit knowing
Usinginformationtechnologyis diffiimmenselyexpands the power of the mind,
cult. Dueto the characteristics of managerial problems,flexibility is essential for the
by creating a machineryof precise thought.
system, which makesbuilding an effective
It also opensup newpaths to intuition.
systemdifficult and expensive. In addition,
Whenknowledgeis expressed in language
becausethe benefits of the systemare inin a broad meaningthrough articulation,
tangible, a high initial investmentis difficult
sign manipulation of knowledgebecomes
19
to be justified. However,in spite of those
difficulties, several companiesare now
using informationtechnologies to let
employeeshave moretime for creative
work.
S.2 Support of inference
However,my case studies have madeit
clear that information technologyassisted
by artificial intelligence can directly support
and improve inference. Whenthinking,
humansmaketacit and explicit inference
simultaneouslyand interactively. It is an
integrated process. Although knowledgeis
fundamentally
tacit, formalizationof tacit
knowing immensely expands the power of
the mind.
Sign manipulation of knowledgeimmensely improves humanthought. Human
intellectual superiority to animals comes
fromthe ability of articulation and sign
manipulation. As long as sign manipulation
is concerned, computers surpass humansby
far. Human
beings are strong at intuitive
thinking, but weakat calculation and
logical reasoning. Therefore, information
technology can support inference through
effectively replacingthe explicit side of
humanthinking process.
Individual tacit knowledge,whichis the
fundamentalsource of organizational
knowledge,needs to be shared and legitimated before it becomesorganizational
knowledge. Transmission of knowledge
becomespossible whenknowledgeis expressed in language (in a broad meaning)
through sense-giving. Communicationis
an interactive process of sense-giving and
sense- reading: endowingones ownutterances with meaningand attributing mean2O
ing to the utterances of others. As the
language used in communicationincludes
facial expression, gesture, atmosphere,etc.,
nothing is better than face-to-face communication. However,it has limitations regarding time, space, and organization. Information technology can overcomesuch
problemsand supplementface to face
communication,because articulate knowledge in communicationcan be processed
by information technology.
AI plays a very importantrole here.
Explicit inference including sign manipulation creates knowledgeonly whentacit inference gives sense to explicit inference.
Therefore, decision makersshould control
their owndevelopmentand operation of
information systems. Whatis most important in inference using informationtechnology is intuitive interaction betweenthe
computer and the end-user. Consequently,
a simplebut flexible user interface is indispensable. AI can contribute to improve
organizational inference by providing user
friendly interface.
5.2.1 Interpretation Tools
Byproviding interpretation tools,
information technologies can help proper
manipulation and reading of sign. They
improvethe process of internalization of
articulate knowledge,and assist sense-reading of events surroundingindividuals,
groups, and organizations. For instance,
raw data can hardly meananything, but
statistical analysesusing informationtechnologies can endowdata with meaning.
5.2.2 Metaphors
Individual knowledgeis fundamentally
tacit and can only be expressed and
transferred indirectly by metaphor.
Information technologies can assist sensegiving or articulation, whichis the other
important process of thinking, by providing
effective metaphorssuch as words, data,
graphs and images. These metaphors also
assist sharing knowledgewhichis the essential process of inference at grouplevel.
5.2.3 SharedField
Informationtechnologiescan assist inference at group level by providing shared
field. In discussion, group membersoften
use a blackboardor a piece of paper because they knowvisual expression complementinglanguageis effective in sharing
knowledgethrough sense-giving and sense
reading process. A large display with many
terminals in a conference roomwill be much
moreefficient than a blackboard.
Althoughnothing is better than face-toface communication
to have a shared field,
it is often not possible. Informationtechnologies such as electronic mail and electronic blackboard can overcomelimitations
inherent in face-to-face sharedfield, regarding time, space and organization.
5.2.4 Appropriate Process
Informationtechnologies can assist inference at organizational level. Group
knowledgebecomes organizational knowledge only whenit is regardedto be legitimate. Legitimacy often depends as much
on the appropriatenessof the process as it
does on the outcomes (March and Olsen
1986). Information technologies help make
knowledgelegitimate by facilitating
forecast, simulation,analysis, etc. whichare
regarded as appropriate processes.
21
6 AI and Organizational Learning
Informationtechnologyassisted by arlificial intelligence can improveorganizational decision makingprocess through organizational learning and assist organizations to
form and implementappropriate strategies.
Organizationallearning is a difficult process
for all organizations, becausethe feedback
loop amonginference, decision and action,
and interpretative frameworkhas to be cut.
Especiallyin a loosely coupledsystem,it is
extremelydifficult becauseorganizational
learning process is inherently incomplete.
However,information technologies can
assist organizational learning by helping
organizational inference as follows:
(1) Informationtechnologies are able
improvethe process of inference and
make dialogue mode evolve.
(2) As a result, a divergenceis generated
between dialogue modeand decision/action mode, which makesdecision/
action mode change.
(3) As the decision~action mode
changes, existing interpretative framework becomes incapable of making
sense of the environment. Andthe
interpretative frameworkof the organization shifts to a newmodethrough
reinterpretation of experiences.
(4) The improvedinterpretation mode
makesit possible for the organization
and its membersto perceive what they
haveso far beenunable to see.
Consequently, tacit knowledgein the
organization is enlarged and reconstructed.
(5) It makesdialogue modechange,
generating a discrepancy between
dialogue modeand information
technologies. This discrepancy urges
information technologies to develop.
(6) Such developmentof information
technology in return helps dialogue
modeimprovefurther.
Throughsuch spiral dynamism,interpretation modechanges and strategy formation process evolves as shownin Fig.3.
Themost successful corporation of the
1990swill be somethingcalled a learning
organization (Fortune Magazine). The
organizationsthat will truly excel in the
future will be the organization that discover
howto makeand keep its interpretation
modeenacting through organizational
learning.
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~----~
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Interpretative
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t.......
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Flg.3
Mode
}
Information Technology and Organizational Learning
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