Meiho Institute of Technology
Working Paper: December 2006
Moving beyond tacit and explicit distinctions: A realist
theory of organizational knowledge
Dr Ashok Jashapara
School of Management
Royal Holloway
University of London
Abstract
This paper challenges the popular notions of tacit and explicit organizational knowledge and
argues that its philosophical underpinnings derived from Gilbert Ryle are problematic due to
their logical behaviourist perspective. The paper articulates the philosophical problem as the
neglect of any role for the mind in organizational activity and the representation of mental
activity as purely a set of behaviours. An alternative realist philosophy is advanced taking into
account the potential of adopting a number of competing philosophical perspectives. The
paper forwards a realist theory of organizational knowledge that moves beyond the surface
behaviours of tacit and explicit knowledge and argues that collective consciousness and
organizational memory play primary and deeper roles as knowledge mechanisms and
structures. Consciousness is not a Hegelian world spirit but rather a real process embedded in
people’s brains and mental activity. Further, the paper argues that organizational routines
provide the contingent condition or ‘spark’ to activate organizational knowledge processes.
The implications of this model are explored in relation to the measurement of intellectual
capital. The theory developed in this paper represents the first attempt to provide a coherent
philosophically grounded framework of organizational knowledge that moves organizational
theory beyond neat conversion processes of tacit and explicit knowledge.
Keywords: organizational knowledge, realism, consciousness, memory, tacit knowledge,
explicit knowledge, past experience, organizational routines, philosophy.
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Introduction
The reality for many western economies is that capital and labour intensive industries have
continued to decline and the relative importance of knowledge-intensive industries has
increased. One of the key driving forces behind this situation has been the rapid rise of
information technologies that have created opportunities for generating and disseminating
new forms of knowledge across organizations (Empson 2001, p. 812). Knowledge has
become the most important source of competitive advantage and given rise to the emerging
discourse of knowledge management (Drucker 1995; Drucker 1999). In the UK, central
government has acknowledged the fundamental economic role knowledge plays in promoting
innovation, creativity and the exchange of ideas (Department for Education and Employment
2000).
In organizational theory, Edith Penrose (1959) provided the insight that every firm confronts a
different set of heterogeneous resources leading to different responses to competitive
pressures. In time, this basic assumption gave way to the resource based view (RBV) of the
firm where a firm’s performance is ultimately driven by its valuable and unique resources
rather than external factors such as industry forces (Barney 1991, 2001; Conner 1991). As
early as the 1960s, Etzioni (1964, pp. 77-78) was mindful that the critical resource of a firm
was the way it’s knowledge was produced, applied, preserved and communicated. More
recently, these developments in organizational theory have led to the knowledge based view
(KBV) of the firm where knowledge is considered strategically the most significant resource
of a firm in terms of its market value and the primary source of Ricardian rents (Grant 1996;
Grant and Baden-Fuller 2004: 66; Spender 1996, p. 59).
But what is this entity termed knowledge in organizations? From a philosophical perspective,
the very essence of knowledge has been debated for over 2000 years in western philosophy
and shows no signs of abating. If the pressing task in organizations is increasingly the
management of knowledge, it is important that scholars make explicit their conceptions of this
valuable resource and the assumptions underlying them. For instance, Abrahamson &
Eisenmann (2001, p. 67) treat knowledge as a substance or commodity that can be traded
rather like a football depending on its supply and demand characteristics. Similarly, Hansen
and Haas (2001, p. 2) adopt a similar (internal) market metaphor to describe the dissemination
of electronic document records within organizations. In contrast, scholars such as Orlikowski
(2002, p. 252) view knowledge as a process or an ‘ongoing social accomplishment’. It is only
through interaction between an individual’s latent knowledge and knowledge manifest in their
surroundings that knowledge emerges as a social phenomenon (Carlile 2002, p. 295).
The current popular conception of organizational knowledge makes a distinction between
tacit and explicit knowledge. Such a logical behaviourist perspective derives from the
philosopher Gilbert Ryle (1949) who made a distinction between ‘knowing what’ (explicit)
and ‘knowing how’ (tacit). In The Concept of Mind (1949), Ryle criticizes Cartesian dualism
arguing that descriptions of human behaviour need never refer to anything but the operations
of human bodies. Michael Polanyi (1967) helped clarify our understanding that these two
forms of knowledge were not distinct entities but existed along a continuum. A theoretical
development of these notions of knowledge has been the articulation of processes that convert
one form of knowledge to another in organizations. Nonaka (1994) proposed four separate
processes called socialization, combination, externalization and internalization in this
knowledge conversion process.
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However, there have been numerous criticisms of these popular conceptions of knowledge
and the simplistic conversion processes. Knowledge conceived as tacit and explicit suffers
from ontological incoherence, vagueness, objectivity, functionalism and emptiness from its
all-embracing view (Alvesson and Karreman 2001, p. 997). Knowledge can become an allencompassing but little revealing concept (Tsoukas and Vladimirou 2001, p. 974) particularly
in certain contexts. Also, scholars question whether knowledge is more likely to be created
through Nonaka’s (1994) neat conversion processes or rather through debate, dialectics and
collective enquiry (Lanzara and Patriotta 2001, p. 945).
The aim of this paper is to move discourse on organizational knowledge beyond the limited
logical behaviourist perspective and provide a conception of organizational knowledge that is
grounded philosophically in critical realism. The paper begins by explaining key tenets of
realist philosophy and provides a critique of key competing philosophical positions adopted
by management scholars. The paper argues that Ryle’s (1949) behaviourist approach becomes
philosophically problematic when all aspects of the human mind are ignored and reduced to a
set of behaviours. An alternative realist theory of organizational knowledge is proposed that
builds on the surface level phenomena of tacit and explicit knowledge and argues that
collective consciousness and organizational memory play key roles as knowledge
mechanisms and structures even though they may not be directly observable. The paper
concludes by noting general implications of our realist theory for the management of
knowledge and for further research.
Competing Philosophical Perspectives: A Realist Conception of Knowledge
The Enlightenment vision of realism is that the real world exists independent of us, our
experiences, our thoughts or our language (Sayer 2000, p. 2; Searle 1999, p. 4). It seeks to
penetrate surface phenomena and disclose deep social structures (Brown et al. 2002, p. 774).
Realist theory employs abstraction to move beyond appearances in social reality to their ‘real’
essences in terms of deeper causal structures and mechanisms. However, when theories of
social reality change (their transive dimensions) it does not necessarily mean that their
intransitive or inherent characteristics change as well (Searle 1999, p. 11).
The realist conception of explanation rejects the Humean ‘billiard ball’ secessionist view of
regularities among sequences and events. Hence, the conventional impulse to gather data on
regularities and repeated occurrences is seen as misplaced. Such analyses tend to provide
purely an understanding of formal relations in social phenomena. Instead, explanation
depends on identifying causal mechanisms and how they work, especially the conditions
under which they are activated (Bhaskar 1975). These mechanisms or social processes have
powers and liabilities whether or not they are activated. For example, an unemployed person
has the power to work even though they may not do so at the current time (Sayer 2000, p.
192). Hence, the focus of explanation is to identify substantial relations in the form of
necessary (internal) and contingent (external) relations that cause certain events to occur
(Harré 1986). In terms of generalisations, realist scholars adopt pluralistic methodological
approaches which seek out formal relations through quantitative studies and the more
substantial relations of causal mechanisms and structures through qualitative means.
The realist notion of theory is a conceptualisation or way of seeing something. This is very
different from the conception of a theory as an ordering framework or ‘filing system’ as
common in disciplines with high levels of orthodoxy such as economics. In these ordering
frameworks, observational data, predominantly in mathematical form, is used to explain and
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predict empirical events. However, the objectivity of such observations is questioned from a
realist perspective as the observations are seen as theory laden rather than being considered as
theory neutral. Theory is recognised to affect observation leaving it conceptually saturated.
For example, we are aware that if a theory gains certain currency in organizations, managers
begin to act in accordance to the theory rather than act opportunistically through their own
insights.
Apart from the explanatory and descriptive aspects of knowledge, realists adopt a critical
theoretical stance that has an evaluative, critical and emancipatory role in its understanding of
social phenomena. This involves criticizing an organization or society’s self understanding
rather than adopting a disinterested stance common in more positivist or scientific
approaches. Before his untimely death, Ghoshal (2005, p. 77) argued that the absence of
moral or ethical considerations in our theories has had a negative impact on management
practices as well as contributing to business failures such as Enron.
A number of competing philosophical perspectives have been adopted in studying
organizational knowledge. The dominant management scientific paradigm is built on the
assumption that there is no distinction between the social and natural worlds. Realism is built
on a rejection of this positivist stance. The naturalism debate argues that the positivist stance
ignores social relations and intersubjectivity between subjects and objects and assumes that all
social realities are directly observable. It is not surprising that our transitive theories in social
science do not produce universal laws and logically coherent theories. Another premise of the
scientific endeavour is that the social world can be characterised as a closed system. The
reality is that social systems are open, complex, ambiguous and messy. The same causal
powers can produce very different outcomes (Sayer 2000, p. 19). Human actors have the
ability of modifying the external configuration of systems as well as a capacity for learning
and self change to modify internal characteristics. The processes are dynamic and in a
perpetual state of flux.
The diametrically opposite ‘subjective’ perspective to the positivist paradigm is idealism. This
paradigm asserts that the only reality is one of ideas and constituted by our perceptions.
Hence, instead of making our knowledge claims answerable to an independent reality, we
make external reality answerable to our representations (Searle 1999, p. 16). Cartesian
scepticism asserts that despite all our evidence for knowledge claims, we may still be
mistaken. However, this argument conceals a controversial premise that one must have sound
reasons for believing something but no good reasons for doubting it (Macmurray 1957).
Realists recognise that to isolate mental activity as the distinctive feature of the self is to
exclude the possibility that action, the material world and other people have definitive
importance in our understanding of what is human (Macmurray 1961). The realist
philosopher, John Macmurray (1957), suggested we substitute the Cartesian dictum ‘Cogito
Ergo Sum’ (I think, therefore I am) to ‘Ago Ergo Sum’ (I do, therefore I am). He insisted that
action was more primary than thought with the assertion that thought begins only where
action fails (Macmurray 1933).
While an interpretive understanding is an important and necessary feature of social
phenomena, realists argue that it does not mean that there is no scope for causal explanations
(Sayer 2000: 6). Social phenomena are concept dependent but causal explanations can be
determined in terms of material changes as well as their underlying causal mechanisms and
structures. Postmodernist perspectives emphasise the diversity of the world, the plurality of
perspectives and the difficulty of obtaining reliable knowledge (Stones 1996, p. 2). Such
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relativist perspectives where knowledge is divided into discrete systems of thought can nullify
the key role of criticism and evade critical evaluation. The problem of incommensurability is
that we cannot understand radically different discourses while we retain our own beliefs.
However, in practice, some form of translation is always possible and incommensurability can
be seen as a way of protecting favoured discourses from criticism (Collier 2003).
Feminist critique of male stream science has contributed the notion of ‘situated knowledge’
concerning questions of power in what constitutes knowledge (Grimshaw 1996; Haraway
1991; Harding 1991). Knowledge bears social markings of its context including the sex, race
and gender of its authors as well as the media through which it is transferred. From this
perspective, the dominant position of the western, white, heterosexual male in research
provides one situated view of knowledge even though it may often be passed within an
academic community as having universal applicability (Sole and Edmondson 2002). Such a
feminist perspective would support a drift towards a relativist position. However, this stance
would deny the role of critical enquiry particularly where feminist standpoints argue that
certain positions are advantageous over others (Haraway 1991, p. 191). In essence, all
knowledge is social, situated and contextual. However, the feminist critique becomes
problematic when it is assumed that certain forms of knowledge are only applicable to
particular groups from which they arise such as acupuncture for the Chinese and French social
theory for the French. Realists accept the need for reflexivity to guard against myopias and
biases in their research but would argue that it would be wrong to dismiss research a priori
from certain groups such as white males as distorted but not that conducted by black females
on the same grounds.(Sayer 2000: 55).
A Realist Theory of Organizational Knowledge
In the mind-body problem, the logical behaviourist philosophy of Gilbert Ryle(1949)
becomes problematic when all forms of mental states and especially consciousness are
ignored. Consciousness is reduced to little more than behaviour or dispositions to behaviour
of the body and computational states of the brain. The default position of such materialism is
that the world is entirely made up of physical or material entities and that consciousness does
not exist as a real and irreducible entity. This view is challenged by the realist philosopher,
John Searle(1999), who argues that the primary characteristic of the mind is consciousness.
All our everyday experiences create states of sentience or awareness that have a first person
ontology. Conscious states are an inner, subjective, first-person and qualitative phenomena.
They are caused by brain processes and, hence, are biological phenomena. Consciousness can
be considered as higher level processes created in the structure of the brain. As such,
consciousness is completely material and irreducibly mental at the same time (Searle 1999, p.
69). There is no duality between mind and body.
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FIGURE 1
Realist conception of individual and organizational knowledge
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Working Paper: December 2006
The problem with Ryle’s (1949) behaviourism can be illustrated in relation to an experience
such as pain. For example, an individual can be in pain but may refuse to show the behaviour
linked to it. If one observes an individual’s behaviour of pain, is there any difference between
the person being in pain and pretending to be in pain? Also, does an individual only have
access to their experience or belief in pain through observing their own behaviour? This
limited perspective applies equally to Gilbert Ryle’s popularised notions of tacit (know-how)
and explicit (know what) knowledge. From a realist perspective, Ryle’s notions of knowledge
can be considered as surface level phenomena in terms of behaviours observed at individual
or collective levels. This paper forwards a realist conception of organizational knowledge, as
shown in Figure 1, and argues that consciousness and organizational memory play primary
underlying roles as knowledge mechanisms and structures even though they may not be
directly observable.
Let us begin by exploring knowledge at an individual level. When a new problem or situation
arises, it will trigger a personal conscious experience as a mental state. This qualitative
subjective experience will be informed by the person’s memory of dealing with similar
problems or situations in the past. This conscious experience may create positive, negative or
indifferent attitudes towards the problem. In turn, the person’s consciousness will influence
the nature of tacit or explicit knowledge they bring to bear on the problem. These are directly
observable behaviours in terms of an individual’s knowledge base and skills. In any new
situation, the way an individual responds (action or inaction) will be determined by their level
of knowledge and intentionality. Intentionality is a mental process that occurs within an
individual and concerns their representation of objects, events and states of the world related
to any given situation (Searle 1999, p. 104). These intentional states may be conscious, semiconscious or unconscious such as hopes, desires, beliefs and fears. The condition of
satisfaction of any intention is action within the person’s locus of control (Zaibert 2003, p.
211). However, other forms of intentionality such as beliefs and desires about the external
world do not need to result in action as they may be outside the person’s locus of control. For
example, the desire of a new graduate to become Managing Director of a large company may
go unrealised for some time and result in inaction. The cycle of learning occurs when action
fails and gives rise to thoughts and reflections that may influence present consciousness or
become stored in memory as past experiences.
When new problems or situations arise in organizations, they are experienced immediately in
terms of a collective consciousness based on dialogue, discussion and interaction between
individuals. This may occur in formal environments or informal ones such as communities of
practice. Shared meanings and representations are established in the collective psyche. Such
representations may be literal or metaphorical. The nature of the collective consciousness will
be determined by the strength and quality of relationships in the social network; whether it is
a team, a department or the whole organization. Organizational culture or sub-cultures shape
the collective consciousness through the facility of stories and narratives and provide a
symbolic representation of norms and values through which the new situation is tackled.
Collective consciousness does not exist in a vacuum and is influenced by organizational
memory and collective remembering. This takes the form of past experiences retold orally in
narratives despite the fallibility of human memory. Organizational history is drawn again in
light of history of present circumstances (Foucault 1970). Our past experiences are surfaced
and modified to provide insight to our present circumstances. Organizational memory may
also be stored in information systems such as data warehouses and case-based reasoning
systems and their value is in their utility to inform the collective consciousness.
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The observed knowledge behaviours of tacit or explicit knowledge occur as a consequence of
certain knowledge mechanisms activated in the collective consciousness. This may take the
form of information made meaningful through a variety of classification, categorisation and
retrieval processes. Alternatively, the knowledge behaviour may manifest as organizational
capabilities or core competences (Prahalad and Hamel 1990) such as exploration and
exploitation behaviours in response to previous outcomes of success or failure (March 1991).
This paper argues that organizational routines provide the contingent conditions or spark to
enable this three level model of organizational knowledge, as shown in Figure 1, to occur in
organizations.
If the ultimate consequence of organizational knowledge is its capacity for action (Inkpen
2000, p. 1020; Macmurray 1933), there needs to be some coherence between knowledge and
shared intentions in organizations. This collective intentionality is a web of related and
interlocking attitudes that leads to the choice and execution of certain actions rather than
others from the domain of organizational capabilities. In a competitive context, this
intentionality becomes the strategic intent where the web of mental attitudes and aspirations
are centred on goals outside the scope of current organizational resources (Hamel and
Prahalad 1989). This intentionality acts as a major driver for organizational commitment and
motivation of employees and determines whether certain actions are realised or remain
unrealised.
Knowledge Behaviour: Explaining the Commodity of Explicit Knowledge
A normative perspective of knowledge is to view such an entity as an asset; an objectively
definable commodity. Such a perspective has disciplinary roots in economics where
exchanges of knowledge are governed by an internal market for the commodity within
organizations (Empson 2001, p. 813). At this level, knowledge can be construed as
information (Leonard and Sensiper 1998, p. 113). The qualities of this information
‘substance’ (Nunberg 1996, p. 115) that become important in organizational terms are its
accuracy, its relevance and its classification and categorisation.
The reason that inaccurate information is an issue is that people may be misled and make
inappropriate decisions from this information. Independent corroboration and agreement
between different information sources does not always indicate that the information is
accurate. Instead, Fallis (2004, p. 472) suggests that the verifiability of information or
testimony should be based on the plausibility of a claim and the evidence offered to support
the claim. This is the ‘operationalism’ theory of meaning deriving from logical positivism. An
alternative ‘picture theory’ of meaning from Wittgenstein (2001/1921(original)) proposes that
the extensional meaning of a word is its referent. For instance, the extensional meaning of
“routines” is the set of all past, present, and future routines in organizations (Svenonius 2004).
In terms of relevance of a piece of information, many scholars assume that relevance can be
established by studying the relevance criteria of users. However, from a realist perspective,
any document can be relevant for a given purpose whether or not the user believes it to be so
(Hjørland 2004, p. 497). The information or document is external to the cognitive state of the
user and does not depend on it.
The classification and categorization of information becomes important when one adopts a
container metaphor of knowledge. The effective organization of knowledge allows
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information to be gathered and retrieved efficiently. In any knowledge domain,
“categorization is the process of dividing the world into groups of entities whose members are
in some way similar to each other” (Jacob 2004, p. 518). Categorization is much more flexible
than classification and allows creative and nonbinding associations between entities. In
contrast, classification divides any knowledge domain into an arbitrary system of mutually
exclusive classes. Two systems that have been adopted for classifying knowledge in libraries
are Ranganathan’s (1960) Colon Classification and The Broad System of Ordering (Mills
2004).
However, the very notion of ‘information’ is problematic depending on its epistemological
assumptions. For example, Floridi (2002, p. 39) argues for a social epistemology of
information based on neither an externalisation (naturalization) or internalisation (mind of the
beholder) of information (Floridi 2004, p. 661). Instead, this declarative commodity of
information is defined in relation to data, as meaningful data. The problem is that information
becomes divorced from its utility value where the mass of information becomes noise rather
than a key to unlock a given problem.
Knowledge Behaviour: The Ambiguous Nature of Tacit Knowledge
Tacit knowledge is not a factual commodity but takes on the character of a ‘process of
knowing’ in organizations. Such knowledge is recreated in the present moment and is largely
invisible in organizations except when questions are asked or problems need to be resolved
(McDermott 1999). At such times, attempts are made to articulate the implicit, uncodifiable
and procedural nature of this knowledge.
The idiosyncratic nature of tacit knowledge means that it is not amenable to the classifications
and categorizations of the more declarative knowledge. Hence, this lack of representation and
the firm specific nature of this resource protects this knowledge from imitation by rival firms
(Martin and Salomon 2003, p. 298). Such tacit knowledge is often embedded within a system
or context of a work processes. This can make it much harder for competitors to imitate a
process as the observability of different aspects of a process are further diminished
(Birkinshaw et al. 2002, p. 274; Zander 1991). A subtle aspect of tacit knowledge is its
ambiguity. The degree and diversity of experience in organizations is negatively related to
ambiguity (Simonin 1999, p. 601). Hence, the more codifiable or teachable an organizational
capability, the higher the risk of knowledge being transferred between firms (Zander and
Kogut 1995, p. 85). The inverse of this ambiguity is that it can prevent firms from learning
from their own experience and improving their performance over time (McEvily et al. 2000,
p. 296). For this reason, ambiguity can provide organizations with external strengths and
internal challenges at the same time.
Knowledge Mechanisms: The Shared Experiences of Collective Consciousness
From a realist perspective, consciousness is at the same time a mental state as well as an
internal biological phenomena arising from activity in the brain. It has the quality of
subjectivity as its mental state only exists as experienced by the individual (Searle 1999, p.
73). At an organizational level, collective consciousness is still experienced at an individual
level as a mental state and is constituted and reconstituted in everyday experience (Orlikowski
2002, p. 252). It is not some sort of Hegelian world spirit or a ‘super mind’ floating above an
individual’s head (Meijers 2003, p. 181; Searle 1995, p. 25). Instead, collective consciousness
is produced in a process through interactions in work teams and communities of practice and
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through daily dialogue and discussions occurring at different levels of an organization. Such
consciousness is situated in a historical, socio-material and cultural context in which it occurs
(Gherardi and Nicolini 2000, p. 330).
Collective consciousness can be defined as the shared experience, meanings and
representations of social networks in organizations. As such, it has cognitive, relational and
cultural dimensions. The cognitive dimension concerns the collection of internalised symbolic
systems that mediate between the individual and the external world (Karamanos 2003, p.
1878). Knowledge representations of social networks can vary along two dimensions; the
literal to the figurative as well as the abstract to the concrete (Boland et al. 2001, p. 394). The
shared representations, interpretations and systems of meaning among parties arise from
shared language and codes (Cicourel 1973) as well as shared narratives (Orr 1990).
The relational dimension of collective consciousness concerns the nature and strength of
personal relationships developed through a history of interactions in organizations
(Granovetter 1992). This aspect includes all aspects of relationships such as respect and
friendship that may influence a person’s behaviour. This relational dimension is influenced by
the levels of trust (Adler 2001; Stephens 2001), norms and sanctions (Coleman 1990),
obligations and expectations (May et al. 2002) and identity (Parker 1997). The presence or
absence of network ties between individuals and the configuration of social networks will
have a marked bearing on the strength and intensity of personal contacts (Hansen 2002; Tsai
2001).
An organization’s culture shapes a human mind but is also shaped by it through narrative
language (Boland et al. 2001, p. 396). The cultural dimension of collective consciousness
concerns the shared mental models around values, beliefs, attitudes and underlying
assumptions in organizations. Values may be deeply ingrained principles, aspirational,
minimum standards or accidental reflecting common interests of workers such as a distrust of
management (Lencioni 2002). Shared mental models have a propensity to develop and
transform themselves in informal networks or communities of practice using storytelling and
narratives. Stories play an important role in cognitive embedding of ideas of work practices as
well as social embedding of individuals and their ties in organizations (Hansen 1999). It is
precisely this form of embedding that makes knowledge ‘sticky’ (Szulanski 1996; von Hippel
1994) in terms of its complex social and cognitive linkages and, hence, proves difficult for
competitors to imitate.
Knowledge Structures: The Art of Remembering and Forgetting in Organizational
Memory
Organizational knowledge structures differ from personal schemata as they are socially
constructed and rely on consensus and agreement. They could be considered as mental
templates of organized knowledge about an environment that allows interpretation and
effective action in that environment (Lyles and Schwenk 1992, p. 157; Walsh 1995, p. 286).
We argue that the primary knowledge structure in organizations is past experience as learning
and knowledge acquisition are closely associated with memory and collective remembering
(Middleton and Edwards 1990; Walsh and Ungson 1991). Middleton (2002, p. 93) maintains
that history matters not only in terms of what came before but also in what comes next. These
commonalities of experience help resource future trajectories of participation in organizations.
A firm’s absorptive capacity is largely based on its past experience of a knowledge domain
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prior to its transfer (Cohen and Levinthal 1990). If the former knowledge or skills gap is too
great, learning becomes almost impossible.
The collective memory in organizations develops its coherence by connecting and
interweaving along the social and temporal dimensions. This social space of meaning allows
the continuous flow of actions, narratives and images from one generation to the next. This
enables practical and theoretical knowledge to be preserved and transmitted as well as
formative past experiences (Brockmeier 2002, p. 18). Such organizational memory can be
conceptualised as storage bins of past decisions including memories about individual actions,
cultural developments and changes, transformations in structures, rules and procedures and
workplace ecology (Walsh and Ungson 1991). Human memorizing and remembering also
needs to be understood in terms of the social functions it fulfils and the cultural web in which
it is integrated (Bruner 1994). Human individuals develop memory frames and practices as
part of social communities and organise these individual memories in the context of their
cultural participation and the process of everyday routines (Brockmeier 2002, p. 23). These
frames of memory are defined by the cultures and subcultures in which they are embedded
(Tschuggnall and Welzer 2002).
The cultural memory in organizations comprises not only the practical and theoretical
knowledge and experiences but also the moral and aesthetic values of the organization. These
values are shaped through narratives which allow individuals to grasp a longer past and
become manifest through stories, myths and organizational legends (Brockmeier 2002, p. 34).
Collective forgetting plays an important role in past experience through the forgetting of
elements that may no longer be meaningful or too painful in the present; a form of ‘structural
amnesia’ (Assmann 1995). Forgetting may occur out of organisational necessity such as
discarding organizational practices and routines that no longer fulfil changed circumstances or
strategies that hinder organizational learning and new ways of doing things (de Holan and
Phillips 2004, p. 1605). This loss of organizational knowledge may be accidental or
purposeful. Firms may have difficulty in consolidating new knowledge due to their lack of
absorptive capacity or may forget established knowledge over time due to deterioration of
memory and a lack of mechanisms to maintain it. More purposeful forms of forgetting are
when firms need to discard new forms of knowledge arising from experiments and
innovations as well as established forms of knowledge through unlearning old habits and
practices (de Holan and Phillips 2004, p. 1606; de Holan et al. 2004, p. 47; Hedberg 1981).
The Contingent Condition: The Spark of Organizational Routines and Sensemaking
The three levels of organizational knowledge shown in Figure1 provide a realist explanation
of the necessary causal powers or internal relations but say little about the contingent
conditions or external relations. In essence, what drives the cycle of organizational knowledge
creation and transformation? For instance, gunpowder has the necessary condition to explode
but does not do so at all times. It requires the contingent condition of a spark to explode
(Bhaskar 1975). We argue that organizational routines play a principal role as contingent
conditions and coordination mechanisms for dispersed knowledge in organizations. This is
particularly acute in large organizations where ‘pockets’ of specialised knowledge exist and a
firm’s effectiveness is based on its ability to integrate these spatially and temporally dispersed
assets (Purvis et al. 2001, p. 117). These contingent conditions occur as formal hierarchical
structures or as informal lateral relations in organizations (Tsai 2002, p. 180).
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We argue that organizational routines are complex patterns of coordination that allow
organizational members to integrate their specialist knowledge in the production of goods and
services (Nelson and Winter 1982). They are regular and predictable patterns of behaviour
and play an important role as an organization’s competence. Without them, organizations
would lack an effective method for collective action. Organizational routines provide
‘connections’ or interactions between people which allow for the development of social ties
between actors and transfer of organizational knowledge (Feldman and Rafaeli 2002).
Organizational routines allow different perspectives to be explored and a common
understanding or knowledge to be developed within an organizational context of power
relations, performance expectations and organizational identity (Jashapara 2004, p. 77). The
physical copresence of actors and their shared physical settings play an influential role in
developing shared understandings and affiliations. This mutual knowledge is established by
first hand experience, interactional dynamics and category membership (Krauss and Fussell
1990).
Organizational routines operate at two levels in organizations to facilitate knowledge
integration. First, they promote automatic and practicised patterns of interaction that allow
knowledge integration for task performance. Second, they allow improvisation of responses
and interactions as individuals explore new situations and challenges. By definition, these
imply learning and the creation of dynamic capabilities (Zollo and Winter 2002). The
distinction between an organizational routine and a dynamic capability is the level of
reflection. In stable or static environments, organizational routines predominate and are
characterised by stable patterns of behaviour. Routines can be complex but predictable and
exhibit qualities of ‘single-loop learning’ (Argyris and Schon 1978). In contrast, in highly
volatile market conditions, organizations may not be able to rely on systemic learning and
existing knowledge. In such circumstances, organizations may reflect on their situation and
question their underlying norms and assumptions. Such questioning is more indicative of
‘double-loop learning’ and a dynamic capability (Jashapara 2004, p. 80). In uncertain
environments, these dynamic capabilities are likely to resemble simple routines based on few
rules and a greater tendency towards improvisation (Eisenhardt and Martin 2000).
Routines have the characteristic of requiring relatively little attention from organizational
actors. However, when major differences are noticed between expectations and actual results,
sensemaking processes materialise (Weick et al. 2005, p. 409). Thought begins as action fails
(Macmurray 1957). Sensemaking is about a quest for meaning in organisations through the
creation of plausible stories that are resilient in the face of criticism. The stories may provide
diagnostic labels that offer plausible solutions for subsequent activity. Each story is
communicated through different channels around the organisation and retold to mirror local
circumstances. Sensemaking processes are not about accuracy in terms of organisational
interpretations but rather the search for plausible stories that incorporate observations and past
experiences (Weick 1995; Weick et al. 2005).
Conclusions
This paper has challenged the populist notions of organizational knowledge as tacit and
explicit knowledge and shown that their philosophical bases are problematic coming from a
logical behaviourist perspective (Ryle 1949). At best, these notions provide the scholar with
surface level phenomena in terms of behaviours of individuals or groups. The materialist
assumptions of this perspective neglect any role of the mind in organizational activity and
equate mental activity purely to a set of behaviours. The paper argues that any meaningful
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notions of organizational knowledge need to be more philosophically grounded. Otherwise,
there is a risk in management literature of the perpetual appraisals of themes or patterns
without any recourse to their philosophical underpinnings or criticisms. The dominant
positivist paradigm in management research is criticised in its attempts to make closed
systems out of open social systems and its rejection of intersubjectivity and learning in the
naturalism debate. Similarly, idealist approaches of social constructivism, postmodernism and
feminism are found wanting isolating mental activity as the distinctinctive feature of the self,
invoking problems of relativism and incommensurability. Instead, the paper forwards a realist
philosophy of a physical world independent of human beings that seeks to penetrate surface
behaviours and phenomena and disclose deeper causal mechanisms and structures.
The gaps identified in current organizational knowledge discourse are the neglect of collective
consciousness and organizational memory as primary knowledge mechanisms and structures.
The contribution of this paper is to move beyond the relatively static discourse of tacit and
explicit knowledge and their simplistic conversion processes to a more philosophically
grounded one that acknowledges the key role of collective consciousness and organizational
memory. Consciousness is not some super mind floating in the sky but rather a real process
embedded in people’s brains and mental activities simultaneously. In organizations, this
collective consciousness is experienced at individual levels as shared mental models and is
influenced by the nature and strength of personal relationships, the stories that provide
cognitive and social embedding of ideas and people as well as the construction of meaning
through language. Future research may wish to explore how language games in narrative or
allegorical processes influence the nature and shifts of collective consciousness (Boland et al.
2001, p. 396; Gherardi and Nicolini 2000, p. 216; Wittgenstein 1953). In multicultural
environments and internet conversations, there is the danger of misunderstandings through a
lack of individual eloquence and speech performance (Chompsky 1968; Kalling and Styhre
2003, p. 66) that may have an adverse effect on collective consciousness. Future research
could explore speech performance and power relations in social networks and their impacts
on the collective consciousness.
Past knowledge resides in the brains of individuals as well as artificial memories of
organizational information systems. Potential tensions arise reconciling the literal memories
of artificial systems with the figurative or allegorical stories of human actors. These issues
can provide fruitful unfarrowed avenues of research into how perceptions of history change in
the present over fallible notions of human memory juxtaposed by the relentless mechanical
accuracy of organizational systems. An organization’s ability to absorb new knowledge or its
absoprtive capacity (Bloodgood and Morrow 2003, p. 1779; Cohen and Levinthal 1990) is a
direct function of the diversity of its past experiences.
The practical value of the realist conception of organizational knowledge is in its contribution
to the discourse of intellectual capital and its measurement for financial reporting.
Organizational memory and past experiences have components of human memory and
information systems in line with notions of human and organizational capital respectively
(Reinhardt et al. 2001). The nature of collective consciousness in organizations relates closely
with the level of social capital in terms of its cognitive, relational and cultural dimensions
(Cohen and Prusak 2001; Nahapiet and Ghoshal 1998). There is an inherent difficulty in
measuring collective consciousness as, by definition, it is diverse and ever changing at any
given moment. Given that history is reinacted differently in the present (Foucault 1970),
organizational memory is also in a state of flux. This makes measurement of organizational
memory and collective consciousness somewhat challenging due to its very subjective nature.
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Working Paper: December 2006
A more fruitful methodological approach is to treat these aspects of intellectual capital as a
narrative and ensuring that issues of bias and myopias are resolved (Mouritsen et al. 2002). In
contrast, the behavioural and more observable dimensions of tacit and explicit knowledge can
lend themselves to measurement as a form of customer capital. There is a pressing need
among scholars and the accounting fraternity to establish rigorous and consensual metrics that
can be used across sectoral and national boundaries.
Bearing in mind the numerous theories of managing knowledge based on Gilber Ryle (1949)
and his derivatives, this paper has provided a critique of this dominant perspective and offered
an alternative realist conception of organizational knowledge. The paper has argued that
philosophical introspection on the nature of organisational knowledge is necessary before it
can be managed effectively in organizations. We hope that the analysis presented in this paper
may serve to stimulate further theoretical interest in the knowledge based view (KBV) of the
firm and practical interest in managing the different dimensions of collective consciousness
and memory in organizations.
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