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The Enterprise in Peoples Minds

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T he Ent e rprise in Pe ople 's M inds
T he Ent e rprise in Pe ople 's M inds
Arc hive s
by Christian Bertram
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Polic y T ha t M a t t e rs - T he Ra dio Show !
We propose an overlay of two prevailing paradigms for understanding
how knowledge is constructed. The first is the constructionist
paradigm. It which describes knowledge as a duality of the two
complementary constituent’s soft and hard knowledge. The second is
the representational paradigm. It describes that knowledge exists in a
dichotomy of two forms, tacit and explicit knowledge. Understanding
this overlay of the prevailing paradigms, and applying it to an
enterprise setting, can lead to insights for better managing
institutional knowledge.
While many approaches recognize its intrinsic link to people, many
also assume that managing knowledge by extracting it from people is
possible. We support that it is not, and offer the overlay to help
explain and understand why. We highlight that managing knowledge
means managing all of the different knowledge aspects – soft and
hard knowledge in tacit or explicit form. Finally, we propose that a
selective mix of techniques is required to manage the different
knowledge aspects - explicit, tacit, hard and soft knowledge.
Co-hosts Tyler Savage and Alex Blouin, two
students at Heinz College, had their first show
on 88.3 back on October 28th and discussed the
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1 .1
I nt roduc t ion
K now le dge
Standards Australia AS 5037-2005, 2005 defines k now le dge as the body
of understanding and skills that is constructed by people and increased
through interaction with other people and with information. It is intrinsically
linked to people (Wissensmanagemement Forum 2003). It provides the
paradigm for how people perceive, understand, interpret and interact with
their environment (Covey, S R 1989). According to recent literature on
human capital, this body of understanding and skills includes people’s
values, attitudes, mindsets and beliefs; experience, abilities, expertise and
competencies; judgment, behaviours, and wisdom (Hung, Y-C, Liou, C-C,
Chiu, C-L & Chiu, S-C 2009).
1 .2
I nst it ut iona l k now le dge
When this knowledge is relevant to the continuous and effective functioning
of an enterprise, it is referred to as inst it ut iona l k now le dge (Howard
Rosen cited in Transportation Research Board 2007). The term enterprise in
this context denotes the systematic and purposeful activity of people,
especially in a business organization (Merriam-Webster 2010).
1 .3
K now le dge c onst ruc t ion
People acquire and construct knowledge in many ways, such as reading,
thinking, reasoning, interacting, socialising and experiencing (Hildreth, P.
and Kimble, C., 2002, Clinical Services Redesign Program, 2006, Nonaka,
I., Takeuchi H. 1991, Gourlay, S., 2006, Standards Australia AS 5037-2005,
2005, McDavid, D. W., 1999, Polanyi M., 1967). Those activities can be
broadly categorized into mental and physical activities (Covey, S R 1989).
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The Heinz Journal | Policy, Process, Practice
Mental activities take place in people’s m inds, for example as recall,
thought and reason. It is stimulated by sensory perception (MerriamWebster 2010, Wissensmanagemement Forum 2003).
Physical activity constructs knowledge as people systematically interact with
their environment (Covey, S R 1989, Wissensmanagemement Forum 2003).
Leonard, D & Sensiper, S 1998 suggests that part of this knowledge resides
in people’s bodies. An illustrative example is the set of physical abilities
required to balance on a bicycle (Goguen, J A 1997).
1 .4
K now le dge m a na ge m e nt
K now le dge m a na ge m e nt is concerned with positively influencing how
people create, share, use and apply their knowledge (Standards Australia
AS 5037-2005, 2005).
Often, the problem is that those efforts concentrate on recording knowledge
in some form. For example, by extracting and capturing it in information
systems or making it explicit into records and documents (Hildreth, P. and
Kimble, C., 2002). A number of authors argue however, that it is not feasible
or even possible to capture and record all aspects of people’s knowledge.
Many facts about the enterprise are inexplicit, unspoken, unrecorded,
unconscious, and locked away in people’s minds (Goguen, J A 1997, Govil,
R., 2007, Callahan, S 2007).
This leads to limited success of many knowledge management efforts, and
much of the institutional knowledge is walking out the door as people
change roles, leave or retire (Buckingham S., 1998 cited in Hildreth, P. and
Kimble, C., 2002, Clinical Services Redesign Program, 2006 ).
1 .5
Ove rla y of k now le dge pa ra digm s
We will overlay two prevailing paradigms to offer a new paradigm to explain
how knowledge is constructed. They are the representational and the
constructionist paradigms. Understanding this aspect of epistemology, and
applying it to an enterprise setting can lead to insights for better managing
institutional knowledge.
2 .1
Pa ra digm s of K now le dge T he ory
Re pre se nt a t iona l Pa ra digm
The widely accepted representational approach to knowledge views
knowledge as a dichotomy of two mutually exclusive forms. Knowledge can
either be explicit, or tacit (Nonaka, I., Takeuchi H. 1991, Standards Australia
AS 5037-2005, 2005, Wissensmanagemement Forum 2003, Hildreth, P.
and Kimble, C., 2002).
The first category, explicit knowledge, is the organization's recorded
knowledge. It is knowledge that was extracted into knowledge stores outside
people’s minds and bodies. Examples are written records or documents,
and information systems (Hildreth, P. and Kimble, C., 2002, Govil, R., 2007
(2), Callahan, S 2007). Some authors suggest that recorded knowledge is
perhaps better thought of as information. It has been extracted from people’s
mind and bodies. And, at the time of recording, it replicates some aspects of
people’s knowledge. Later, we will explain that hard knowledge is
particularly suitable for making explicit.
The second category, tacit knowledge, comprises inarticulated,
undocumented knowledge intrinsic to people (McDavid, D. W., 1999 and
Middleton, M., 2005, Wissensmanagemement Forum 2003). It is knowledge
embedded in their mind and body, and is often personal or subconscious
(Leonard, D & Sensiper, S 1998, Wissensmanagemement Forum 2003).
Govil, R., 2007 (2) suggests that up to 42% of enterprise knowledge may
reside in people’s minds.
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The Heinz Journal | Policy, Process, Practice
Figure 1 - Enterprise Knowledge Model – Based on the Knowledge Spiral of
Nonaka, I., Takeuchi H. 1991
2 .2
Const ruc t ionist Pa ra digm
An alternative paradigm is the constructionist approach. Here knowledge
exists in a mutually dependent duality of two complementary fractions
(Hildreth, P. and Kimble, C., 2002, Kimble, C. and Hildreth, P. M., 2004).
One fraction is termed hard knowledge, the other soft knowledge. Hard
knowledge is the fraction of knowledge that is suitable for recording. The
other fraction is described as less quantifiable, not easily or impossible to be
captured and stored, or not to be learnt simply by demonstration or
instruction (Lave, J. & Wenger, E., 1991 cited in Hildreth, P. and Kimble, C.,
The constructionist approach may be best understood as a continuum of
varying hard and soft knowledge proportions.
At one end, pure soft knowledge would simply not be representable
explicitly. Pure hard knowledge, on the other hand, could be recorded in its
entirety. Along the continuum, knowledge has a recordable fraction, and one
that must be reconstructed socially or individually.
This approach attempts to overcome the identified flaw that not all
knowledge can be captured and recorded without becoming invalid
(Buckingham S., 1998 cited in Hildreth, P. and Kimble, C., 2002).
2 .3
T he Const ruc t ionist -Re pre se nt a t iona l ove rla y
Rather than siding with a particular paradigm, an overlay of both paradigms
promises greater utility. This section explains how.
Let us support that knowledge can have both, a hard and a soft fraction. We
also support that the hard component is suitable for extracting from people,
while the soft component is not.
We can now combine the above with the representational view. Accordingly,
the hard fraction may be represented in tacit, explicit or both forms. It may
be known by people (tacit), recorded (explicit), or both. Accepting also that
the soft fraction is not suitable for recording, it would only exist as tacit
knowledge in people’s minds. Let’s call this the ConstructionistRepresentational overlay of how knowledge is constructed..
Let us illustrate this overlay with touch typing. The declarative knowledge,
such as the character location on a typist’s keyboard, can be known by
people (tacit), and also be recorded in a training workbook (explicit). It is
hard knowledge. On the other hand, the procedural knowledge for touch
typing has soft elements, such as some fine motor skills for striking the
keys. We argue that while this can be explained, it cannot be passed on
easily through documents. This fraction of knowledge is soft. It simply
cannot be learned from a manual without the individual reconstructing it in
practice. Documents and instructions can help, but will not simply instill the
I m plic a t ions
When those knowing the soft fraction leave without having passed it on, the
hard fraction of the record may be the only remnant of the overall
knowledge. But if hard and soft knowledge fractions need to be joined to
become meaningful and useful (Hildreth, P. and Kimble, C., 2002), the
partial, incomplete knowledge may have little meaning or use.
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3 .1
Com ple t e a nd I nc om ple t e K now le dge
Based on the above, it is possible to create a concept incomplete
knowledge. This is when knowledge falls short of some hard or soft
constituent. And this is how it could occur.
If piece of knowledge consists of a soft and a hard fraction, a record simply
cannot adequately represent the knowledge. It can only document its hard
fraction. And then the documented knowledge falls short of its soft fraction.
Consequently, we argue that complete knowledge can only reside in people
as tacit knowledge. What cannot be recorded cannot exist outside people’s
minds. And the hard fraction may or may simply not be recorded.
This would support Hildreth, P. and Kimble, C., 2002, who argue in support
of Hargadon, A.B. 1998, that capturing hard knowledge alone is likely to
create an incomplete representation.
3 .2
T rue a nd Fa lse K now le dge
It is also possible to create a concept of true and false knowledge.
True explicit knowledge would be any part of the hard knowledge fraction
being represented explicitly. False explicit knowledge would be any part of
the soft, non-representable knowledge fraction, being associated with an
explicit record.
For example, simply passing on a record of fine motor skills for typing would
ultimately fail. Typing can simply not be learned by reading about it alone. It
requires reconstructing the soft fraction, for example through training and
The concept of true and false is equally valid for tacit knowledge. When
people reconstruct knowledge with practice, instructions from records, or
through interaction, it is not guaranteed that the resulting body of
understanding and skills will be equivalent to the original. A person’s
reconstructed knowledge may simply change as aspects of it are passed on,
and reconstructed with differences to the original knowledge.
3 .3
K now le dge V a lue De gra da t ion t hrough
I nc om ple t e K now le dge
Hildreth, P. and Kimble, C., 2002 cite Glazer, R., 1998 and Allee, V., 1997
‘…when something is to be managed, People feel that it must be quantified,
counted, organised and measured. It must be able to be built, owned and
controlled if its value is to be maximised’.
As a result, efforts to manage knowledge often concentrate on recording it
(Hildreth, P. and Kimble, C., 2002). And the fixation on readily available
tools to manage hard knowledge, such as electronic records and document
management systems can distract from the need for holistic knowledge
management (Clinical Services Redesign Program, 2006).
The non-recordable fraction of knowledge is often undervalued (Clinical
Services Redesign Program, 2006). But while capturing, circulating and
maintaining hard knowledge often requires sophistication and effort, it may
fail to meet the high expectations. The soft fraction may simply be
overlooked. When accessing and rejoining the missing soft fraction from
people is then too cumbersome, costly and lengthy, or even impossible as a
person moved on, the incomplete knowledge may turn out to be of little or
no value.
3 .4
T ra nsie nt K now le dge
Without acknowledging the different aspects of institutional knowledge,
much of it may be transient. When experienced people leave or retire, soft
knowledge may simply be walking out the door (Clinical Services Redesign
Program, 2006). Especially if tacit knowledge has not been passed on.
Valéry, P., 2008 also portrays enterprises as living systems that are
undergoing a continual process of evolution. The inherent liability of
managing knowledge is that as knowledge is utilized, applied, constructed
and transformed by people, the knowledge must be synchronized
continuously. It is also necessary to share the continuously created new
knowledge. This synchronisation process also demands resources, and
presents an opportunity cost. But the output is much less tangible, and may
hence receive significantly less attention.
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The Heinz Journal | Policy, Process, Practice
Re c om m e nda t ions
4 .1
Const ruc t ionist -Re pre se nt a t iona l ove rla y t o
re c ognise a ll k now le dge c onst it ue nt s
The Constructionist-Representational overlay can help understand a more
complete view of how knowledge is constructed. It has hard and soft
knowledge fractions, which exist as tacit or explicit knowledge in people.
This paradigm can provide a fresh perspective for evaluating practices to
manage institutional knowledge.
4 .2
T a rge t e d M a na ge m e nt of T a c it a nd Soft
K now le dge Aspe c t s
To better manage knowledge, it is necessary to understand the significance
of tacit and soft knowledge. Managing knowledge requires consciously and
selectively recording and circulating explicit knowledge, interconnecting
people, and rejoining recorded knowledge with people (Clinical Services
Redesign Program, 2006).
Enterprises need to acknowledge that a large proportion of institutional
knowledge is deeply rooted in people (Wissensmanagemement Forum
4 .3
Pit fa ll of ha rd k now le dge fix a t ion
We join other authors in warning of a common knowledge management
pitfall, the fixation on recorded knowledge. It has been substantiated that
some aspects of knowledge cannot be articulated, abstracted, recorded,
captured and stored (e.g. Buckingham S., 1998, Swan, J., Newell S.,
Scarborough, H. & Hislop D., 1999, Gourlay, S., 2006). Hence, efforts that
simply try to make knowledge explicit are likely to underperform. They form
unrealistic expectations, and overlook that only a fraction of institutional
knowledge may be effectively managed in recorded form.
4 .4
T a rge t e d m a na ge m e nt of soft k now le dge
Middleton, M., 2005 describes personal human interaction and dialogue as
the richest avenue of transferring knowledge. They also found a preference
to use social networks to obtain information. This view is also supported by
one thesis of Polanyi M., 1967, that knowledge is socially constructed.
In the spiral of knowledge described by Nonaka, I., Takeuchi H. 1991, tacit
knowledge is also 'shared' through interaction. Lave, J. & Wenger, E., 1991
have formalised a process called Legitimate Peripheral Participation in
Communities of Practice. This is suitable to create and sustain tacit
knowledge. Community members are immersed in the practices of their
community and learn from the community members (Lave, J. & Wenger, E.,
1991). This learning includes the unspoken conventions.
Here knowledge is created and passed on by immersing in the practice
itself, under the guidance of a mentor and whilst situated in a particular
environment. Nonaka, I., Takeuchi H. 1991 is cited in Hildreth, P. and
Kimble, C., 2002 that the sharing of tacit knowledge takes place through
joint activities that require physical proximity. The example of a master
craftsman with years of experience illustrates this. This craftsman may not
be able to articulate the principles behind what he knows, but may be able to
transfer this knowledge to an apprentice (Hildreth, P. and Kimble, C., 2002).
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