Organizations as Knowledge Systems

Next time you receive your bank statement take a look at it. Probably the electricity and phone bills were directly debited, and the mortgage paid with a standing order. Perhaps you wrote a cheque for two tickets to the opera, and charged the cookery books you bought down town to your account. Suppose now that I look at all your bank statements for the past year. Can I tell what sort of person you are? Someone who always pays their bills on time? Someone who loves music and cooking? Probably. I have information about some of your financial transactions and, through them, I learn about your patterns of consumption. But do I get to know you?

This chapter has two main objectives. The first is to suggest that a greater emphasis on double-loop learning and implementable validity represents a next important focus of research if the field of organizational learning is to become more scientifically robust and provide greater assistance to practitioners. The second objective is to propose that the widespread ideas about theory and research methods that scholars use, when implemented correctly, will inhibit the progress to achieving this objective. I plan to focus on the defensive routines of the scholarly community of practice.

A central issue in theories of organizational learning concerns the relation between knowledge of individuals and knowledge on the level of an organization (Cohen, 1991; Cook and Yanow, 1993; Weick and Westley, 1996). Communities form an intermediate level for learning between an organization as a whole and individual people. There, knowledge links between individuals are achieved and common knowledge is acquired. The central purpose of this chapter is to further analyse this process, in communities. One question to be explained is what types of communities there are (Bogenrieder and Nooteboom, 2002).

Despite its almost fifty years of existence, the literature on organizational learning is still growing. Over the years, the topic has been approached from various angles. Some scholars have been mostly interested in learning processes as adaptation with typically organizational routines as its outcomes (for example Simon and March, 1958; March and Olsen, 1976; Cyert and March, 1963; Levitt and March, 1988). Others focus mainly on the cognitive rather than the behavioural aspects that typify the learning of organizations (for example Hedberg, 1981; Argyris and Schon, 1978). With the advent in the 1980s of Management Information Systems, IS scholars joined the organizational learning debate by introducing an information processing perspective to learning (for example Huber, 1991; Duncan and Weiss, 1979; Walsh and Ungson, 1991), stimulating people to think of ways to technically support learning processes and storage and retrieval of organizational knowledge bases. At the start of the 1990s, yet another perspective was introduced within the literature on organizational learning. This time the topic gained attention from ethnographers studying organizational behaviour. Based on theories derived from Vygotsky and Piaget, the idea was introduced that learning is essentially social.

The importance of tacit knowledge in and for organizations is widely attested to. As Baumard (1999: 8, 22) wrote, tacit knowledge is the basis of expertise, it is critical to daily management activities, and is a firm’s source of competitive advantage (see also Wagner and Sternberg, 1986; Lubit, 2001; Ambrosini and Bowman, 2001; Johannessen et al., 2001; Berman et al., 2002; Marwick, 2001). Nevertheless it appears that there are flaws in the argument for tacit knowledge, and that we lack agreement on what the phrase refers to, which bode ill for any attempts to manage it. This chapter will argue that Polanyi has largely been misunderstood, but that his focus on knowing, an activity, and Dewey and Bentley’s (1949) treatment of knowing as semiosis opens the way for a potentially more coherent approach to tacit knowledge.

Open Source development projects are internet-based communities of computer programmers (von Hippel and von Krogh, 2003). Internet technology not only enables worldwide and almost cost-free distribution of software, but also enables a distributed production of software by users (von Hippel, 2001). The physical distance between the community members (programmers) prevents most face-to-face contact. This condition, together with the internet-based communication that is limited to written conversation and software code, provide the basis for our investigation. Using knowledge creation theory we discuss and analyse the Open Source software development process. How is new knowledge generated in Open Source projects? Who constitutes Open Source communities and how do people interact? Based on findings that indicate a direct sharing of tacit knowledge in Open Source communities (von Krogh, Spaeth and Lakhani, 2003), we propose how this may occur without co-location of the sharing parties. The knowledge creation process can be enabled by activities that take into account the emergent nature of Open Source projects. We address the question of what the role of a knowledge activist can be in Open Source and draw theoretical and practical implications.

The central concern of this chapter is to provide a theoretical explanation of the nature of knowing in an industry organized around project-based work, the film industry. In particular, it explains how knowledge of the work process, culture and rules of film production are gained and stored by both individuals and semi-permanent work groups (SPWGs, Blair, 2000) and then contributed for a short time to organizations. This exploration is particularly interesting as the film industry presents a context in which production organizations are temporary entities and there are no permanent organizational structures through which knowledge can be communicated and maintained.

The role of knowledge in firm strategy and performance is well documented in the literature. There are numerous theoretical and empirical studies examining the relationship between knowledge and firm performance. The essence of these studies is that the higher the level of knowledge acquired or accumulated, the greater the level of firm innovation and performance.

In a world where rapid technological changes lead to continuously innovative forms of interactivity and connectivity among companies and customers, Customer Relationship Management (CRM) has emerged as a key managerial issue that companies increasingly need to master. The available CRM strategic options are now numerous. This chapter provides a framework that can enable managers to have a better understanding of the current status of CRM and future trends in their industry. We introduce a model that looks simultaneously at the two main levers of change in the market today: the increasing interactivity with customers and the networking effect among the market elements, namely customers and companies. Using examples from today’s market we point out that scoring high in all CRM dimensions is not necessarily ideal for each and every company and we identify the key factors that should be taken into account in defining a successful CRM strategy.