E-Journals KM Articles
October 21, 2004
MIS 580
Michael Fry & Yih-Jong Fu
Department of Management Information System
The University of Arizona
1
A Model of Knowledge
Management And The N-Form
Corporation
By Gunnar Hedlund 1994
2
Article outline




Introduction
Knowledge Model
Comparative approaches of Japanese
and Western companies
N-From vs. M-Form
3
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
4
Knowledge Model
Individual
Group
Articulated
Knowledge
Express
Group
mathematical evaluation
functions
form
Tacit
Knowledge
Negotiation
skills
Organization
InterOrganizational
Organization
chart
Suppliers’
documented
practices
Team
Corporate
coordination culture
Clients’
expectation
and
satisfaction
5
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
6
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.
7
Knowledge Model –
Knowledge transfer and transformation
8
Knowledge Model –
Knowledge transfer and transformation

Articulation



Internalization



Tacit turns explicit
Example: employee training session
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.
9
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
10
Knowledge Model –
Knowledge transfer and transformation

Assimilation



Dissemination



The input of knowledge
Example: Create a patent database
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
11
Japanese and Western
companies
Japanese
Western
Tacit transfer of knowledge  Both tacit and articulated
 Group and Inter Individual and organization
organizational levels
levels

Small improvement
 Rapid incremental
development
 No explicit structure of
knowledge = inconsistency
 Bureaucracy

Radical innovation
 Inflexible system of
knowledge inhibits tacitness
 Bureaucracy

12
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

Weak

in term of integration of
large and complex system
Assimilation in both articulation
and tacit
 Make explicit, structured
implementation
 Reflect an organizational
environment where articulation
is the key focus
AK + TK → AK → AK + TK
Excel at managing large and
complex system with articulation
and systematic approach
13
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
14
N-From vs. M-Form
N-Form
 Integration of
Technological
interdependence technology and
combination of expertise
M-Form
Divide complexity
into independent
units

People
interdependence

Permanent people pool
Temporary 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
15
N-From vs. M-Form
N-Form
Lateral = horizontal
coordination
Communication
network

Top
management
role

Competitive
scope

M-Form

Vertical
Must know the business  Monitor and
resource allocator
 Build the infrastructure
for interpersonal (culture)
 Promote and guard the
investment in new
knowledge
Shared focus enables
combination of different
pieces of knowledge
Diversifying rejects
internalization of
processes into tacit
knowledge

16
N-From vs. M-Form
N-Form
Basic
organizational
form
Heterarchy
 Network like

M-Form
Hierarchy
 All relevant
knowledge is brought
to a central decision
point

17
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?
18
Organizational Learning: The
Contributing Processes and the
Literatures
By George P. Huber 2001
19
Article outline





Introduction
Knowledge Acquisition
Information Distribution
Information Interpretation
Organizational Memory
20
Article outline
21
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
22
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
23
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
24
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
25
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
26
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
27
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
28
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
29
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
30
Knowledge Acquisition

Searching and Noticing – Focused
search


Has an objective
Usually occurs when there is a problem
and solution is needed
31
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.
32
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.
33
Information Interpretation

Definitions:


“the process through which information is
given meaning”
“the process of translating events and
developing shared understandings and
conceptual schemes”
34
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?
35
Information Interpretation

Either way, more complete learning
leads to a change in potential
behaviors.
36
Information Interpretation

Shared interpretation of new information in
an organization is effected by five factors:
1.
2.
3.
4.
5.
The uniformity of prior cognitive maps
possessed by the organizational units.
The uniformity of the framing of the information
as it is communicated.
The richness of the media used to convey the
information.
The information load on the interpreting units.
The amount of unlearning that might be
necessary before a new interpretation could be
generated.
37
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.
38
Media Richness

Definition:


What does this mean?


“The communication medium’s capacity to
change mental representations within a specific
time interval.”
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.
39
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.
40
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.
41
Organizational Memory

Organizational memory:

The ways in which an organization stores
and retrieves its information.
42
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?
43
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?
44
Summary
1.
2.
3.
4.
Information acquisition depends in many instances
on instances, which is directed by previous
learning retained in memory.
Information distribution is affected by
organizational decisions made using information
contained in memory.
Information interpretation is greatly affected by
cognitive maps or frames of references.
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.
45
Discussion

What are the motivations for initiating
organizational experiments?
46
KNOWLEDGE OF THE FIRM,
COMBINATIVE CAPABILITIES,
AND THE REPLICATION OF
TECHNOLOGY
By Bruce Kogut and Udo Zander, 1992
47
Outline
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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
48
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.
49
Information and Know-How

Two types of knowledge: information and know-how

Information:


Know-How:


Knowledge which can be transmitted with loss of integrity
once the rules for deciphering it are known.
“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.
50
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.
51
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.
52
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.
53
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.
54
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.
55
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.
56
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.
57
Questions?
Comments?
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