Organizations as Knowledge Systems: Knowledge, Learning, and Dynamic Capabilities

Citation

Cromb, D. (2005), "Organizations as Knowledge Systems: Knowledge, Learning, and Dynamic Capabilities", Leadership & Organization Development Journal, Vol. 26 No. 5, pp. 413-415. https://doi.org/10.1108/01437730510607907

This book is based on papers from the Third European Conference on Organizational Knowledge, Learning, and Capabilities in Athens, April 2002. The organizational capability to communicate, share, learn and develop knowledge was a core theme of the conference, which has largely been reflected in the essays that comprise the book.

Viewing an organization as a knowledge system implies simultaneous concern with three issues: how individuals exercise their judgements and create new knowledge, how collective domains of action are sustained and particular values and beliefs within them become institutionalized, and how particular sets of generalizations and abstract statements are selected, institutionalized and modified.

The book is in three parts, containing 12 essays. Part 1: Organizational Knowing and Learning, examines some issues in organizational learning, especially on what makes such learning possible/impossible. In one of the four essays, Chris Argyris, of double‐loop learning fame, examines the defensive routines that are active both in the organizations being studied and in the academic community undertaking the study. Why is single‐loop learning still so prevalent? The argument put forward is that scholars seek to produce valid, generalisable knowledge, where validity is assessed solely by deriving hypotheses and testing them empirically. This describes the status quo (single‐loop): scholars fail to generate actionable knowledge (double‐loop). Knowledge claims may have internal and external validity, and yet be lacking in implementability.

Also covered is the emergence of learning communities and the different levels of exploratory learning and subsequent change and adaptation within the community. There is also the questioning of the presumed positive relationship between communities of practice (COPs) and organizational learning. Organizational learning is presented as a process of three moments – externalization, objectification, and internalization: COPs are most useful in the first and third moments, but may be a hindrance in the second. For local tacit knowledge to become part of organizational learning, it needs to be objectified – to be accepted and shared throughout the organization. This part concludes with a review of the literature on tacit knowledge, noting a lack of agreement as to what the term means and problems with current conceptualization, and offers a way forward.

Part 2: Sharing and Managing Distributed Knowledge, leads with a review of how open source software communities produce results. These communities comprise individuals without any prior common history and who are unlikely to meet face to face: the communities rely on the intrinsic motivation of their members to produce complex work. The homogenizing nature of the internet attenuates the differences and focuses the attention of participants on pursuing their common goal. This is followed by an essay that examines the motivational aspects of knowledge sharing. Using four models of social relations, namely community sharing, authority ranking, equality matching, and market pricing, the authors argue that the model in use determines the perception of knowledge and the motivations for sharing it.

Two case studies conclude this part. The first examines a knowledge sharing failure in an university, where academics were brought together to propose the establishment of new schools. The tensions and contradictions brought by the participants were not effectively addressed. Knowledge sharing is not just the exchange of information: it involves also the values and beliefs of the participants, which need to be addressed and a common language established. The second case study looks at temporary project organizations in the film industry, and their processes of knowledge sharing, creation and learning. Knowing is seen as a shared activity and knowledge persists together with the necessary trust, reputation and norms that enable the perpetual formation and performance of production projects.

Part 3: Organizational Knowledge and Dynamic Capabilities, focuses on how a knowledge‐based perspective of firms helps with better understanding of the nature of dynamic capabilities firms develop. The first essay looks at the difference between innovating firms and imitating firms and their capabilities for knowledge creation. The second revisits Edith Penrose's theory of the growth of the firm, with her emphasis on internal resources, the role of intro‐firm learning, and the dynamic interaction between the internal and external environment of firms.

Presented in this part also is empirical evidence of the antecedents of knowledge quality and its impact on firm innovation and financial performance. The authors define knowledge quality in terms of its usefulness and innovativeness. Findings include the differing value a firm receives from formal and informal networking, and the indirect effect of knowledge quality on financial performance. The final essay looks at two trends: the increasing interactivity of customers with companies, and the growing interconnectivity and networking between actors in the value chain. The authors propose the Customer Integration and Market Integration Matrix as a management decision‐making tool. The positioning of a company in this matrix reflects the depth and breadth of a firm's CRM strategy, as well as, the variety and effectiveness of the CRM tools used.

Building a knowledge base within an organisation is a difficult task: fostering organizational learning is a complex additional extra. Whilst knowledge management has dimensions of people, process, content and technology, viewing organizations as knowledge systems moves beyond the individual to explore the broader social basis upon which individual knowledge and action draw. These essays generally explore the processes of organizational knowing and learning within this broader social basis. Nearly all the contributors are academics: the essays, by my reckoning, are divided between wholly theoretical (five), theory with application (four), and empirical (three). There are numerous concepts, models and frameworks presented, meaning that there is value to be had by both practitioners and researchers.

The book's editors acknowledge that there is still a lot of work to be done in creating sound, empirically testable knowledge‐based theories of organizations, but they believe that these essays do point the way forward. Researchers should be satisfied with the breadth and depth or conceptual material and literature coverage of the essays: organizational learning practitioners will gain deep insights and may well discover the gem needed to advance their cause. Neither will be disappointed with this book.