Knowledge Management
Paper Analysis
By: Sven Thoms
KM Perspectives on Resources
and Organizational Memory
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Papers Analyzed
• Wernerfelt,Birger. “A Resource-Based View of
the Firm”. Strategic Management Journal, 1984
• Von Hippel, Eric. “Sticky Information and the
Locus of Problem Solving: Implications for
Innovation. Management Science, 1994
• Walsh, James; Ungson, Gerardo.
“Organizational Memory”. The Academy of
Management Review, 1991
15 Nov 2005
MIS 580 - KM Most Cited 13-15
A Resource-Based View of the
Firm
Wernerfelt, Birger,
Professor of Management Science,
M.I.T.
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Resource-Based View
• Wernerfelt coined term in
1984
• 1994 Strategic
Management Journal
Best Paper Prize
• Key Elements:
– Scarce Resources can
create competitive
advantage
– Resource Identification,
Profitability Assessment,
and Development using
Porter’s 5 Forces Model
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Resource-Based View
• Resources are assets tied to firm, e.g.
–
–
–
–
–
–
Machinery
Processes
Brand Names
Skilled Workers
Technology Know-How
Trade Contacts
• Current and Future Resources provide strategic
insights into the firm’s competitiveness
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Resource-Based View
• Recall: Porter’s 5
Forces
 Product-Based
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Resource-Based View
• Buyers, Suppliers, Substitutes
– Resources in few hands limit user’s return
– Bad if product from resource only sold to few buyers
– Substitute resources always a threat to suppliers
• Example:
– Diamonds, DeBeers
– Oil vs. Hydrogen
– Gallium Arsenide chips for military and NASA
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Resource-Based View
• New Entrance Barriers
– Resource Position Barriers
• Temporary advantage from holding a key resource
– Barriers within same market !
• Resource-Entry Barrier Duality
– Create barrier to entry from exclusive access
to resource AND from product-based entry
barriers
• Example: Pharma patents and skill sets
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Resource-Based View
• Attractive:
– Machine Capacity
– Customer Loyalty
– Production Experience
• Do Portfolio Analysis of Resources
• Generate Technical Lead and keep it by
employing knowledgeable staff
• Look for supplementary and
complementary resources in mergers
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Resource-Product Matrix
•
•
•
•
An aid to resource identification
Links resources and profitability potential
Primary and secondary resources
Balancing Existing and New Resources
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Related Paper
• Gold, Malhotra, Segars. “Knowledge
Management: An organizational
capabilities perspective”. University of
North Carolina, 2001
• Related Theme:
– knowledge infrastructure (techn, structure,
culture) and knowledge process capability
(acquision, conversion, application,
protection) combine to form organizational
effectiveness
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Sticky Information and the
Locus of Problem-Solving
Von Hippel, Eric
Professor of Management Innovation
and Entrepreneuship, M.I.T.
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Sticky Information
• Sticky:
– Tacit
– Bound to one place
• Depending on:
– Nature of Information
– Transfer Problems
– Mismatch of Buyer-Seller
needs and capabilities
• Key Elements:
– Makes problem-solving
more complex
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Mitigating Sticky Information
in Innovation
• 4 Approaches:
– Solve problem where information is
– Iterate between sites to solve problem
– Subdivide tasks to fit resource
availability
– Decrease stickiness by technological
means
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Cross-Cutting Theme
• Once resource (information) is identified as in
Wernerfelt’s model, then strategic use of the
sticky information can be discussed
• Cost of transfer can be seen as a barrier to
intra-company effective use, similar to barriers
for other firms to use information resources
• Relevancy:
–
–
–
–
Allen Curve, BMW Research and Innovation Center
Expert Systems
Consulting environment, on-site presence
Videoconferencing, Content Mgt Systems
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Related Paper
• Audretsch, Feldman. “Knowledge
Spillovers and the Geography of
Innovation”. University of Toronto, 2003
• Key concept:
– Innovation clusters, R&D center of expertise
development
– Innovation happens best where resources are
concentrated, facilitating tacit knowledge
interchange
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Organizational Memory
Walsh & Ungson
Business Administration, U. Mich.,
International Business, San Francisco State
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Analogies
• Human Brain processes
and stores past
information
• Flawed concepts of
organizations’ memory
• Key Questions:
– How is organizational
memory different
– How do individuals retrieve
from organizational
memory
– Can knowing an
organization’s past
experience really help with
current decision-making?
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Assumptions
• Organizations process information
• Organizations interpret environmental
facts and changes with help of memory
• Semantics given to information by shared
meanings and interaction in organization
• Systems perspective to organizational
memory
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Definition
• Staff Members develop knowledge, share it,
becomes part of organization
• Decision Factors and Lessons Learned,
Outcomes
• Framework of information acquision, retention,
and Processing needed
• 3 roles
– Informational
– Control
– Political
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Memory Processes
• Information
– Acquisition
– Retention
– Retrieval
15 Nov 2005
MIS 580 - KM Most Cited 13-15
The Framework
•
•
•
•
•
•
Individuals
Culture
Transformations
Structures
Ecology
External Archives
 Acquire, Process, Retrieve
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Walsh’s Suggestions
• Make current decisions in past’s context
• Less Resistance to decisions if backed up by past
experience
• Unlearn old information to adapt to present
• Past can confuse, need also to be able to retrieve it
• Automated retrieval = routine responses
• Analysis Paralysis
• Rewriting History to suit organizational power plays is a
danger
• Design Organization with memory in mind
• Retain knowledge workers
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Related Themes
• Kleiner, Roth: How to make experience your
company’s best teacher (2000)
– Learning histories, narratives
• Argvris, Chris: Teaching Smart People How to
Learn (1991)
– Defensive Reasoning
• Ginsburg, Mark: Annotate A Web-based
Knowledge Management Support System for
Document Collections (1998)
– Enable document annotations and usage history
tracking of DMSs
Link to Article
15 Nov 2005
MIS 580 - KM Most Cited 13-15
Conclusion
• Von Hippel’s Sticky Information Concept
very intuitive
• Wernerfelt’s Resource-Based model
universally applicable
– Mathematics hard to grasp
• Walsh’s observations on organizational
memory akin to 11 Deadly Sins of
Knowledge Management by Prusak and
Fahey
15 Nov 2005
MIS 580 - KM Most Cited 13-15