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Title: Knowledge Management and Organizational Design: Confluence and New Perspectives


1
Knowledge Managementand Organizational
DesignConfluence and New Perspectives
IAE Aix En Provence International Seminars May
2nd, 3rd and 4th, 2005
PART I
  • Philippe Baumard
  • Philippe.baumard_at_iae-aix.com
  • Pbaumard_at_berkeley.edu
  • Professor of Management,
  • Institut dAdministration des Entreprises
  • Clos Guiot BP 33
  • 13540 Puyricard France
  • Visiting Scholar, 2004-2006
  • Institute of Business and Economic Research
  • University of California, Berkeley
  • Haas Business School
  • F502 Haas Building
  • Berkeley, CA 94720-1922 USA

2
  • Where is the Life we have lost in living?
  • Where is the wisdom we have lost in knowledge?
  • Where is the knowledge we have lost in
    information?
  • Eliot, T.S. "The Rock", Faber Faber 1934.
  • http//www-personal.si.umich.edu/nsharma/dikw_ori
    gin.htm
  • We live in a society where information is cheap,
    knowledge is expensive, and wisdom is rare
  • Dionysios (Dennis) Tsichritzis
  • http//www.gmd.de/People/Dennis.Tsichritzis

3
Knowledge Management
  • The process that leverage individual,
    organizational and interfirm knowledge in order
    to secure the organizations goals and strategic
    objectives
  • A process that helps organizations find, select,
    disseminate, and transfer important information
    and expertise necessary for activities such as
    problem solving, dynamic learning, strategic
    planning and decision making (Gupta et al., 2000)

4
Organizational Design
  • The first task of organizational design is to
    create the architecture that governs purpose,
    vision and core values by which people will live.
  • Policy and structure are the institutional
    embodiment of purpose. (Philip Selznick )
  • The first responsibility of a leader is to
    define reality. (Herman Miller CEO Max de Pree)
  • What  Organizational Design  is made of?
  • Physical design (places, desks, architecture),
    processes and systems of relations, governing
    activities of employees, reliant upon one another
    to meet common goals
  • Cognitive processes design how information,
    data, signals are generated, disseminated, acted
    upon through routines, storage, revisions, and
    spatial / functional arrangements

5
Why a seminar on KM OD?
  • Design will be critical to organizations
    survival in the future
  • Managers have to coordinate more people with more
    distance between them According to the Census
    Bureau (2002), managers in 1997 were supervising
    7 people on average, and will manage an average
    of 21 people in 2010.
  • The rise of productivity linked to IT is
    destroying the middle management layers The
    ability to codify and shared knowledge through
    digital media has stopped the growth of
    management hiring in the US in 2004 (less than 7
    on new job creation)
  • As organizations have less staff management to
    rely upon, an efficient organizational design and
    knowledge management is becoming critical for
    their survival
  • As future managers, you need to know and display
    such expertise
  • Leadership will be more and more based on your
    abilities to define the right design to generate
    the right knowledge in the adequate hands.

6
Seminar Content Overview
  • May 2nd Design, Knowledge and Management
  • 1. Definitions and theory
  • 2. Knowledge Renewal And Transformations
  • 3. Knowledge and Organizational Design
  • May 3rd Tacit Knowledge, Knowledge Sharing and
    Competition
  • 4. The Critical Role of Tacit Knowledge
  • 5. Knowledge Sharing Transfer
  • 6. Knowledge in Competition
  • May 4th Designing Strategy that Encompass a
    Knowledge Advantage
  • 7. Managing Knowledge in Networked Organizations
  • 8. Developing knowledge rents with complementors
  • 9. Aligning Knowledge with Corporate Strategy

7
Definitionsand Theory
1
  • What are data, information and knowledge?
  • What are the different types of knowledge?
  • How knowledge is created, dissiminated,accumulate
    d, shared and leveraged?

8
What is the ontological status of knowledge ?
  • 1. In every knowledge lies a part that is
    ultimately unreachable
  • Not by means of abstraction and representation
  • Part of knowledge is impossible to represent
  • Unconscious individual inferences
  • Collective unconscious
  • 2. Knowledge is dependent on purpose and context
  • According to faith, beliefs, ideologies,
    religions, etc.
  • Knowing as believing Faith
  • Knowing as defining Belief
  • 3. Knowledge is mostly unsubstantial
  • One cannot possibly describe his or her state of
    knowledge
  • A collectivity, a group, cannot define it
  • A society cannot define it.

9
Information vs Knowledge
  • Information and knowledge are often confused
  • Information is a representation of knowledge, but
    information itself is not knowledge
  • Even if they are tigthly coupled
  • NASA case of  destructive information  leading
    to  destructive knowledge 
  • Relationship between organizational design,
    information dissemination, and knowledge
    production (NASA case, Case Western Gehry
    building)
  • We still need appropriate definitions.

10
What is data?
  • A set of discrete, objective facts or measures
    about events
  • Polls results (a measure/count of votes)
  • Usually stored in structured records and
    independent from the observers point observation
    (i.e.  objectified )
  • Newspapers, databases, spreadsheets, documents,
    hardrives
  • Widely available and can be transported from a
    context to another one
  • Which is a source of numerous organizational and
    human flaws
  • Which fosters and installs the self-deception
    that the organization is  knowledgeable  when
    it is not
  • Which can turn a contributing data into a pretty
    destructive one

11
What is information?
  • Information is an interpretation of one or
    several data that makes this data actionable
  • The computation of the majority as an outcome of
    polls data leads to the information of who won
    the election
  • Information is a message derived from data
    (Drestke, 1989)
  • Excessive numbers of cumulus clouds is data,  it
    rains  is the information
  • Increasing numbers of white collar workers spend
    their days identifing, processing and
    disseminating this information
  • Organizations are all information-intensive, they
    might not be all  knowledge intensive 

12
What is knowledge?
  • Knowledge is the ability of producing new
    information, data, and make sense from previous
    data and information
  • Majority at the senate and from the electorate
    votes are two separate information total control
    on executive policy from the new administration
    is the  knowledge 
  • London cabbies pass an exam (theoretical
    driving) that is called  the knowledge 
  • Knowledge is a combination / articulation of
    framed experience, values, contextual information
    and insight that provides a framework for
    evaluating and incorporating new experiences and
    information. It originates and is applied in the
    minds of knowers.
  • In organizations, it often becomes embedded not
    only in the documents or repositories but also in
    organizational routines, processes, practices,
    and norms.

13
Turning information into knowledge
  • Dretske (1999) knowledge as a production that is
    made from raw material information
  • Zack (1999) data as observation or facts, with
    information as data in a meaningful context and
    knowledge as meaningfully organized accumulation
    of information
  • Kogut and Zander (1992) information as factual
    statement and knowledge as a statement of how to
    do (e.g. recipe).

Source Minsoo Shin,  Knowledge Management ,
2003
14
Is there a hierarchy out there?
15
Some researchers suggest a hierarchy
  • Harris(1996) data is known fact, information is
    analyzed data, and knowledge is a combination of
    information, context, and experience
  • Kock and McQueen (1998) data as carrier of
    information and knowledge, information as
    relating to descriptive and historical fact, and
    knowledge as new or modified insight or
    predictive understanding

Source Minsoo Shin,  Knowledge Management ,
2003
16
Far from a hierarchy, instead
  • There is no proven correlation between the level
    of information and of knowledge in individuals
    and organizations
  • Very little and disparse information can produced
    highly valuable knowledge
  • Serendipity, Blaugs  adduction 
  • Paradigmatic change a little signal that changes
    all known models
  • The Thiokol filters lack of resistance to cold
    in the Challengers explosion
  • Extensive knowledge can turn into very little
    information
  • A Master Chess Player next move
  • Information-overfloaded organizations are often
    producing little knowledge
  • Previous knowledge influences what we notice,
    and what we fail to notice what information we
    produce and fail to produce what data we chose
    to use or chose to ignore

17
Laings Paradox
The range of what we think and do is limited by
what we fail to notice. And because we fail to
notice that we fail to notice there is little we
can do to change until we notice how failing to
notice shapes our thoughts and deeds
18
A summary of knowledge characteristics
  • Knowledge is action-oriented, is supported by
    rules and is constantly changing (Sveiby, 1997)
  • Knowledge is validated through a proof against
    experience either by the individual or the
    organization. Knowledge is inherently embedded
    into practice and context
  • Knowledge is shaped by what we notice and fail
    to notice
  • Knowledge is embedded in peoples deeds,
    beliefs, contexts and action

19
Knowledge RenewalAnd Transformations
2
  • Generation / Preservation
  • Dissemination / Discontinuation
  • Tacit vs. Explicit / Individual vs. Collective

20
Whats new in our Brand New World?
  • Information overload calls for sense-making
    expertise
  • Fast social-learners with very low-tech tools gt
    Global instability
  • Divide between the heartland and the
    interconnected world (traditional knowledge vs.
    a distant hyper-cognitive world) gt see 2004 US
    Elections
  • Co-ordination and control will be more and more
    replaced by intelligent computerised devices
    intranets are pushing the middle-line out,
    leaving narrow manoeuvres for doers (front line)
    and policy-makers.
  • Cognitive economics of forces
  • Conceptual competition Companies pursue minds
    matching. Ideologies develop through new
    channels, mostly individualised, with mass media.
  • Esoteric, mystic, misinformation and
    mismanagement can infuse the networks.
  • The professionalisation of everyone (after
    Wilensky, 1967)
  • Will lead to the emergence of knowledge economy.
  • Calls from a shift from conform learning to
    combinatory learning, i.e.
  • Higher degree of abstraction
  • Reframing, Re-problematising

21
Leading to a shifting focus in knowledge
generation
  • The five main changes in focus
  • Focus on knowledge as a commodity vs.
    improvement of knowing
  • Focus on large scale vs. small scale (the
    world vs. my suburb)
  • Focus on generalization (networks) vs. intimacy
    (interconnectedness)
  • Focus on codified learning vs.
    socially-embodied learning
  • Focus on fast access (i.e. slow indeed!) vs.
    intelligibility
  • Most organizations are unfit for the management
    and capitalization of intangible assets in
    general, and counter-productive in terms of
    knowledge generation in particular.
  • Why ?
  • Inertia that built priorities that differs from
    knowledge generation.
  • Purpose We dont produce knowledge for
    knowledges sake
  • Culture Statutory expertise vs. dynamic
    knowledge contribution
  • Belief in simple representations reductions are
    more cost efficient.

22
What Knowledge Generation is NOT
  • It is not solely a cumulating process
  • One can learn by experiencing infrequent events
    richly (ex Van de Ven experiments)
  • Innovations are not outcomes, but ruptures.
  • It is not its codification
  • There is much more into knowledge that solely its
    codification
  • The codified bears the unmodified
  • Tacit knowledge is EMBODIED in WRITING, into
  • Style
  • Implicit references to a readership community
  • Allusions, suggestions, signals, stimuli )
    lt(
  • It is not information
  • Information contributes to knowledge, but is not
    knowledge
  • Organizations are flooded with information, but
    can still die from a lack of knowledge
  • It is not overlapping or redundancies (Nonaka,
    1994)
  • Twice the same information does not
    systematically produce knowledge
  • Two brains on the same information can !

23
Where does knowledge hide in organizations?(Black
ler, 1998)
  • Embedded in procedures routines (behavioral
    programming)
  • Rules, regulations, employee guideline,
    management
  • Embodied in people's roles (action-generated)
  • Functional distribution in organizations,
    specialized functions, professional firms.
  • Embrained in people's minds (cognitive)
  • Mental models, experience, learning curve, tacit
    knowledge, cognitive maps
  • Encoded on paper (or electronic format)
    (symbolic)
  • Reports, powerpoint slides
  • Encultured in the way things are done
    (institutional)
  • Communities of practice, know how, skills

24
How knowledge is renewedin organizations ?
Where knowledge is embodied...
Organization,
Groups
Structures Capital
Communities
Individuals
RD
Imitation
Socialization
Investments
Action generating
 Boundary
Invention
Scanning
    spanners 
Learning
Interaction
Generation
Intrusions
Imagination
Enactment
Crises
Deviance
KNOWLEDGE
GENERATION
Adapted from Ekstedt, 1989
25
Through its diffusion
Where knowledge is embodied...
Organization,
Groups
Structures Capital
Communities
Individuals
RD
Imitation
Socialization
Investments
Action generating
 Boundary
Invention
Scanning
    spanners 
Generation
Learning
Interaction
Intrusions
Imagination
Enactment
Crises
Deviance
Standardization
Rotation
Redondancies
Codification
Leadership
Diffusion
 Top-Down 
Socialisation
Culture
Justifying
Routines
Training
performance
Explicitations
Reporting
Reporting
Procedures
Action
KNOWLEDGE
RENEWAL
Adapted from Ekstedt, 1989
26
Through its preservation
Where knowledge is embodied...
Organization,
Groups
Structures Capital
Communities
Individuals
RD
Imitation
Socialization
Investments
Action generating
 Boundary
Invention
Scanning
    spanners 
Generation
Learning
Interaction
Intrusions
Imagination
Enactment
Crises
Deviance
Standardization
Rotation
Redondancies
Codification
Leadership
Diffusion
 Top-Down 
Socialisation
Culture
Justifying
Routines
Training
performance
Explicitations
Reporting
Reporting
Procedures
Action
KNOWLEDGE
Specialization
ASSIMILATION
Individual memory
Collective memory
Codified norms
Know-how
Databases
Communities
Dynamic
of practice
Contracts
Preservation
preservation
Archives
Reports
Professional codes
though action
and traditions
Patents Secrets
Rules of thumb
Adapted from Ekstedt, 1989
27
Through its discontinuation
Where knowledge is embodied...
Organization,
Groups
Structures Capital
Communities
Individuals
RD
Imitation
Socialization
Investments
Action generating
 Boundary
Invention
Scanning
    spanners 
Generation
Learning
Interaction
Intrusions
Imagination
Enactment
Crises
Deviance
Standardization
Rotation
Redondancies
Codification
Leadership
Diffusion
 Top-Down 
Socialisation
Culture
Justifying
Routines
Training
performance
Explicitations
Reporting
Reporting
Procedures
Action
KNOWLEDGE
Specialization
RENEWAL
Individual memory
Collective memory
Codified norms
Know-how
Databases
Communities
Dynamic
Preservation
of practice
Contracts
preservation
Archives
Reports
Professional codes
though action
and traditions
Patents Secrets
Rules of thumb
Fusion decline
To forget
Socialization
Divisionnalization
"flakes"
To unlearn
Organization
Restructuration
To convert
dissolution
Discontinuation
Reengineering
To resign
Transfer
Intangible
To self-deceive
assets depreciation
Normalisation
Deviance
Adapted from Ekstedt, 1989
28
Knowledge andOrganizational Design
3
  • How Design influences Knowledge
  • How Knowledge influences Design
  • Discussion around the Case WesternGehry Building
    and NASA Columbia and Challenger disasters

29
IntroductoryDocumentary
  • Managing as Designing Bringing the Art of
    Design to the Practice of Management (DVD 30
    minutes)
  • Franck Gehry, Lucy Schuman, Karl Weick and 60
    other designers, managers and scholars gathered
    in Mr. Gehrys recently completed Peter B. Lewis
    Building to consider how the art of design can
    inform the practice of management
  • The objective of this presentation is to discuss
    an extraordinary achievement, both in terms of
    new knowledge creation (on how a business school
    should be designed to produce better knowledge)
    and an exceptional management accomplishment
  • Questions to be discussed after the DVD
    presentation
  • How do the designer show his concern for
    knowledge generation in his building?
  • What can we learn between the relationship
    between design and knowledge?
  • How does design influence knowledge creation,
    dissemination, retention and renewal?
  • How could you apply these teachings to the IAE
    Aix en Provence? What do you think of the
    relationship between design and knowledge in your
    own school?
  • Requires preparation before the seminar. See
    http//design.case.edu/ and http//weatherhead.ca
    se.edu/lewis/

30
What the design tells us about the intended
circulation of knowledge in this building?
31
What was the architect and team of professors
intent?
  • What is the likeliness of meeting other
    students, PhDs, faculty when moving around the
    building?
  • Where are the amphitheaters located?
  • How the faculty offices are organized (right
    side)? Why?

32
Exercise Draw a map of the IAE!
  • Draw the map as you know it Just rely on your
    memory
  • Try to locate places you know, dont bother about
    the other places, it will tell us the  blind
    spots  in knowledge circulation in the building
  • Assess the map! (circle directly on your map)
  • Where knowledge is the most circulated?
  • Where are the sources of codified knowledge?
    (i.e. obviously,  library )
  • Where are the sources of informal knowledge?
  • What would you like to know more about? Where is
    it?
  • Try to identify areas where you believe you have
    a weak knowledge? Who or where do you think this
    knowledge might be?
  • Write your recommendation
  • What would you change on the map to improve
    knowledge accessibility, sharing, transfer in the
    building?

33
The NASA Case Study
  • How does history of an organizational design
    shapes knowledge?
  • The adhocractic organization of NASA is rooted in
    its pioneer years founders vision
  • NASA has managed to maintain heavy vertical silos
    (geographic / operations), functional silos (the
    prestigious  space  people vs. The
     underdogs  earth/safety operationals), and a
    heavy centralized bureaucracy (From A to T)
  • The merger of Army, Navy, NACA, and other
    elements into NASA in 1958 proved exceptionally
    difficult and still creates difficulties.
  • How design can produce destructive information?
  • As with the (positive) Case Western Gehry
    building, organizational and spatial design can
    influence the production of information, and turn
    it into destructive knowledge
  • Design can create blind spots and framing in
    knowledge generation

Sources Philippe Baumard, NYU Stern 04/06/06,
Lost In Translation How Destructive Information
Gets Into BehavioralAnd Cognitive Routines, And
How To Get It Out", paper presented at the NSF
/NYU / Academy of Management / NASA Conferenceon
Organizational Design, New York, 4-6 juin 2004
Roger D. Launius (2003) After Columbia How We
Got into this Fix and How WeCan Get out of It ,
presentation at the Division of Space History
National Air and Space Museum, Smithsonian
Institution, Washington, D.C.
34
The NASA Culture
  • NASA is composed of 17,000 civil servants and
    around 80,000 jobs in its contractors network a
    mix of bureaucracy and network organization
  • Organizational practices emphasizing cost and
    schedule but detrimental to reliability and
    safety.
  • Reliance on past success as a substitute for
    sound engineering practices.
  • Failure to determine why systems did not perform
    in accordance with specifications.
  • Normalization of risk. / Normal accidents
  • Organizational culture barriers to effective
    communication.
  • Competition between programs some more
    prestigious than other Code T Exploration
  • Geographical competition Senators can give
    direct resources to their  State-hosted  NASA
  • Allowance of informal decision-making processes
    that operate outside established procedures.
  • The over-codification and the  silo syndrome 
    encourages people to build their own  ad hoc 
    communication channels
  • Perfect place syndrome.

Source Adapted from Roger D. Launius (2003)
After Columbia How We Got into this Fix and How
We aan Get out of It , presentation at the
Division of Space History National Air and Space
Museum, Smithsonian Institution, Washington, D.C.
35
A comparison with NASA
  • Codified Knowledge at NASA
  • NASA Space Shuttle software, 40 000 000 lines of
    object code
  • Dutch KLM airline reservation system (1993), 2
    000 000 assembler loc (lines of code)
  • Unix System V, release 4.0 with Xnews and X11,
    over 3 700 000 loc
  • Nokia NMS/2000 network management system, over 2
    400 000 loc
  • IBM OS360 5000 man years of development
  • The echoes of Challenger in Columbia identified
    in this chapter (Chapter 8) have serious
    implications. These repeating patterns mean that
    flawed practices embedded in NASAs
    organizational systems continued for 20 years and
    made substantial contributions to both accidents.
  • CAIB Report, Page 202

36
Space Shuttle and NASA Ideology
  • NASA proposed Space Shuttle as formal program in
    1966, feasibility studies began in 1967, and
    public unveiling took place in 1968.
  • Decided in the context of the Cold War, in
    competition with the Soviet Program
  • Very short time span from idea to decision
    little concern with design at the beginning
  • NASA determined 100 reusability a primary
    objective in 1969.
  • Influences design necessity of reusing
    achievements from the military (the Titan
    boosters the Thiokol joints)
  • Led to have a vehicle that would fly several
    times components being sent again, and checked
    for resistance for the next launch (Thiokol
    joints for Challenger protective foam for
    Columbia)
  • Next step in realizing the vision of a
    multi-planetary human presence.
  • Core belief of  man in space  gives more
    credibility and elligibility to talk to the
     space programs  members against the  earth /
    base  people
  • Viewed as one-size-fits-all space access
    vehicle.
  • Forced engineers into fine-tunning and small
    adjustments within a preconceived framework
  • Led to the combination of very heterogenous
    technologies

Source Adapted fromRoger D. Launius (2003) After
Columbia How We Got into this Fix and How We aan
Get out of It , presentation at the Division of
Space HistoryNational Air and Space Museum,
Smithsonian Institution, Washington, D.C.
37
The Columbia Accident
  • ET foam insulation from bipod ramp, where struts
    attach the tank to the bottom of the orbiter's
    nose, hit the orbiter approximately 82 seconds
    after launch.
  • Struck leading edge of left wing between RCC
    panels 8 and 9 at a relative velocity of 530 mph.
  • Two smaller foam chunks that broke off at the
    same time missed the wing.
  • Seemingly insubstantial, the foam Frisbee,
    traveling at that velocity and spinning at least
    18 times a second, struck with about a ton of
    force.
  • Impact blew a hole 6 to 10 inches across.

Source Roger D. Launius (2003) After Columbia
How We Got into this Fix and How We aan Get out
of It , presentation at the Division of Space
History National Air and Space Museum,
Smithsonian Institution, Washington, D.C.
38
What went wrong? (Columbia)
  • Exceptional weather conditions
  • The metal structure of the shuttle contracted
    because of the cold
  • The ice created a space between the foam and the
    metal body
  • When the shuttle took off, the created space led
    to the loss of the foam panel
  • Did they know?
  • Yes. A  Earth Life Support Systems  manager
    tried to warn the  Space Life Systems  manager
    by email before the take off
  • His mail led to several feed-backs, up to the
    Board of NASA. Alerts worked.
  • His mail was disregarded because he was perceived
    as non  elligible  to give an expertise of the
     Space Life Systems  (being from the
     ground )
  • What role did  design  played in this?
  •  Knowledge Silos  between Space / Ground
    between Safety / Operations
  • Very long pipes of program controls, with little
    transversal knowledge transfer

39
The InvestigationEchoes of Challenger
  • Technical causes of accident strikingly different
    between Challenger and Columbia, but
    institutional factors allowing technical causes
    to go unresolved are identical.
  • Board recognized early on that the accident was
    probably not an anomalous, random event, but
    rather likely rooted to some degree in NASA's
    history and the human space flight program's
    culture.
  • Management decisions made during Columbias
    final flight reflect missed opportunities,
    blocked or ineffective communications channels,
    flawed analysis, and ineffective leadership.
  • Perhaps the ultimate example of engineering
    concerns not making their way upstream,
    Challenger astronauts were told that the cold
    temperature was not a problem, and Columbia
    astronauts were told that the foam strike was not
    a problem.

Source Roger D. Launius (2003) After Columbia
How We Got into this Fix and How We aan Get out
of It , presentation at the Division of Space
History National Air and Space Museum,
Smithsonian Institution, Washington, D.C.
40
The Perfect Place Syndrome
  • NASA came close to being the best organization
    human beings could create to accomplish selected
    goalsbut success reinforces lessons that
    eventually become obsolete or even harmful.
  • Consequences of an organization viewing itself as
    a perfect place include righteousness, flawed
    decision making, self deception, introversion,
    and a diminished curiosity about the world
    outside the perfect place.
  • NASA is no longer a perfect place. It is deeply
    troubled and needs new ways of thinking, new
    people, and new means to come to terms with
    social, economic, and political environments as
    challenging and harsh as deep space itself.

Source Adapted from From Gary Brewer, Perfect
Places NASA as an Idealized Institution. In
Radford Byerly Jr., ed., Space Policy
Reconsidered (Boulder, Col. Westview, 1989).
41
The troubled relationship between information
organizational design
  • High-reliability organizations (HRO) are too
     knowledge intensive 
  • Program documentation (3 containers for 1 Ariane
    IV launch)
  • Complex interactions with highly
    information-intensive coordination
  • Complex chains of control command communication
    intelligence (C4I)
  • Design influences knowledge-generation
  • People listen upwards (Porter, 1975)
  • Project-based, adhocratic organizations rely upon
    intensive informational infrastructure
  • Knowledge-generation influences design
  • Knowledge shapes beliefs, deeds and thoughts
  • Beliefs, deeds and thoughts, in return, shape
    design.

42
Unveiling the destructive knowledgeconcept and
its implications
  • We define as destructive knowledge a set of
    messages, signals and stimuli which misleads
    cognitive and behavioral routines of an
    organization, and leads the organization to
    generate a blind spot in the reliable pursuit of
    its goals.
  • Guilty knowledge (Fetterman, 1984) dirty data
    (Van Maanen, 1982) destructive information
    (Goffman, 1971) are postdictive and realized
    ex-post
  • Knowledge can be destructive without any
    malevolent intent

43
Research Question
  • How does a recurrent destructive knowledge
    lead individuals and organizations to fossilize
    their behavioral and cognitive routines and
    ultimately lead them to disasters?
  • Effects unquestioned fine-tuning (Starbuck,
    Milliken, 1988) action-generation (Starbuck,
    1983) fossilized learning doing more of the
    same thing (Watzlawick at al., 1975) etc.
  • Mechanisms collective self-deception (Goleman,
    1985 Ruddick, 1988) placebo information
    (Langer et al., 1978) iron-caged perceptions
    (DiMaggio, Powell, 1983) rational myths (Meyer
    and Rowan, 1977) etc.

44
Behavioral and cognitive programming
  • Why and how people in organizations program
    themselves?
  • Behavioral and cognitive programming hence
    reduces the complexity of social relations and
    keeps people from behaving unpredictably. It
    improves interoperability and reduces the need
    for repeated transactions, and subsequently
    reduces transaction costs.
  • Knowledge and the  boiling frog syndrome 
  • When directly thrown in boiling water, a frog
    will jump out right away, sensing the heat. If
    you very slowly boil the water, with the alive
    frog inside it, the frog will simply boil!
  • Small adjustments are unnoticed. People fine-tune
    slowly their knowledge, and they end up with a
    completely different knowledge base.

45
Cognitive Programming in Interaction
  • Small variations during interaction are
    unnoticed
  • -R.W. Wood, the pioneer physical optics
    scientist, who achieved the first Ultra Violet
    light transmission (1897) used this property of
    human cognition to hoax a victim in believing in
    a growing / shrinking turtle
  • What happened at NASA with the Challenger case?
  • Communication between Thiokol engineers and NASA
    engineers ressemble the R.W. Wood and the
    duchess turtle spun
  • Errors noticed during the first experimentations
    were first seen as priorities, and then gradually
    acknowledged as  normal accidents 
  • Over the years, test results that were once seen
    as critical were perceived as acceptable
  • The turtle story in detail As the story goes,
    R.W. Wood was very found of a certain beautiful
    duchess, who shall remain nameless. He gave her
    as a gift a small turtle in an aquarium-like tank
    of water, explaining that it was a rare and
    unusual type of turtle but neglecting to
    elaborate on the details. The duchess was pleased
    with her gift and, at Woods suggestion, placed
    the tank on the large rail of her ground level
    evening porch, where she sat each day with the
    sunset. Wood knew no one went out on the porch
    except the duchess, in the evening. Each morning
    at sunrise, unobserved on the grounds surrounding
    her dwelling, Wood sneaked over to the balcony,
    removed the turtle and replaced it with one that
    was very similar in appearance but slightly
    larger. The ducess remarked to Wood how rapidly
    her turtle was growing, soon in fact it was
    almost too big for the tank. But wood was not yet
    finished with his prank. He began replacing the
    turtle each day with a smaller one. Soon, it was
    even smaller than the first turtle he had given
    her. At this, he stopped. The turtle remained
    small. Wood delighted in hearing the duchess tell
    her friends about this turtle. 
  • Excerrpt from Gilbert Smith, Senior Scientist,
    NASA, in Optics Photonics News, July 2004, p.23

46
Three forms of destructive information
  • Taken for granted
  • Thus, destructive information can take the form
    of a highly regarded, acknowledged, well shared
    expertise. Information that reinforces the
    legitimacy of misleading behavioral program
    without being noticed has a far more destructive
    power than misleading, false, truncated
    information within a successful program
  • Information that helps people in organizations to
    maintain unquestioned behavioral programs or
    cognitive routines therefore leading
    organizations to do more of the same thing
    (Watzlawick and al., 1975), engaging their
    organization, its design, deeds and actions in a
    blind spotted escalation of commitments
  • Information that prevents people to question
    their learning processes, either by reinforcing
    its homothetic iron caged acquisition, or by
    fine-tuning their core beliefs to make them
    compliant to a misleading dominant logic.
  • Information that prevents the generation of new
    information i.e. information which entropy
    provides a self-sufficient platform for a large
    number of interpretative variations, which
    prevent program designers and managers to
    question its validity.

47
Findings How destructive information gets into
behavioral and cognitive routines
  • The Challenger and Columbia programming not only
    shaped peoples behavior, but also congealed both
    their ideologies and cognitive routines.
  • Information generators thrive in ambiguous
    settings. Destructive information grows quickly
    on the ground of coalitions, parochialism, and
    inter-subjectivity
  • information generators can be as misleading and
    threatening for an organization, as action
    generators (1983) information-rationality has
    the same capacity for autonomous development,
    behavioral programming, than action rationality.

48
Ratification systems, jurisdictions and good
intent reinforce destructive information
  • The more a destructive information is part of a
    ratification routine or system, the most likely
    it will go unnoticed the more rapidly it will
    shape managers thoughts and deeds
  • Designers and managers are well intended.
    Destructive information flourishes on settings
    paved with good intentions.
  • People in organizations make information
    destructive by forbidding themselves to emit,
    transfer or manipulate outside of their
    jurisdictional boundaries. Therefore,
    organizational programs that reinforce
    jurisdictional boundaries are likely to generate
    destructive information.

49
How to get it out? Prescriptions and propositions
  • Prop. 1 Unquestioned designs are likely to
    carry destructive information. The lack of
    dissent on organizational design should be seen
    as a sign of the presence of an information
    preventing new information, rather than of its
    exceptional performance
  • Prop. 2 Excessive translation mechanisms are
    likely to be a sign of destructive information..
    When managers start to get lost in translation,
    it is very likely that they try to accommodate
    very disaccording information with on going
    behavioral programs or cognitive routines.
  • Prop. 3 Ad hoc informational organizations
    (Zand, 1981) should be perceived as a sign of
    destructive information in the main design. When
    cognitive and behavioral routines collide,
    observed managers were either creating a double
    cognitive routine (ad hoc or parallel), or were
    disconnecting their behaviors from disturbing
    information from the market. Hence, the
    proliferation of ad hoc informational routines or
    systems in an organization could be a sign that
    engineers, managers salesmen are struggling with
    destructive information.

50
How design was responsiblefor flawed knowledge
in both cases
  •  Cognitive Silos  created by the
    organizational design
  • System safety engineering and management is
    separated from mainstream engineering, is not
    vigorous enough to have an impact on system
    design, and is hidden in the other safety
    disciplines at NASA Headquarters (CAIB
    Organizational Findings, F 7.4.4.)
  • Design encouraged  fine tunning  that impedes
    unlearning
  • NASA is now implementing new  fast prototyping 
    processes
  • NASA is shifting its culture to more openess to
     out of the box  experimentation
  • Juridictional elligibility on knowledge can be
    deadly
  • The warning signal was ultimately discarded
    because of its source
  • There is a  wall  between the safety
    organization and the space operations
  • Over-codification
  • As many organizations, NASA is floaded with the
    proliferation of codificied knowledge

51
Knowledge Managementand Organizational
DesignConfluence and New Perspectives
IAE Aix En Provence International Seminars May
2nd, 3rd and 4th, 2005
PART II
  • Philippe Baumard
  • Philippe.baumard_at_iae-aix.com
  • Pbaumard_at_berkeley.edu
  • Professor of Management,
  • Institut dAdministration des Entreprises
  • Clos Guiot BP 33
  • 13540 Puyricard France
  • Visiting Scholar, 2004-2006
  • Institute of Business and Economic Research
  • University of California, Berkeley
  • Haas Business School
  • F502 Haas Building
  • Berkeley, CA 94720-1922 USA

52
The critical role oftacit knowledge
4
  • Most knowledge cannot be expressed
  • Tacit knowledge is a source of differentiation
  • How knowledge is created, disseminated,accumulate
    d, shared and leveraged?

53
What is tacit knowledge?
  • Its what we know and cannot express, either as
    an individual, or as a group or an organization
  •  We know more than we can tell 
  • Tacit knowledge encapsulates both the unconscious
    acquisition of knowledge and the collective
    mental models shared with other members of a
    community or an organizations
  • Why is it so important?
  • Most of our learning is automatic or accidental
  • Most of our decisions are fueled by tacit knowing
  • Most of organizational failures are rooted in
    overlooked tacit knowledge
  • Tacit knowledge influences behavior, that in turn
    influences performance
  • Why is it so resilient?
  • Its a core mechanism of human cognitions
    consistency (buffering)

54
Researching Tacit Knowledge
  • 1991-1994 CS Swiss Private Banking Senior
    Advisors, Qantas Pilots, Pechiney CEOs,
  • Large organizations do not develop adequate
    processes to encourage, manage, and preserve key
    tacit knowledge
  • Banks customer knowledge lost when advisers
    resign
  • Pilots TK of pilots is not taken into account
    by marketers
  • Aluminum Pioneers have better strategies in the
    midst of crisis
  • 1994-2004 Still looking for answers -)
  • Investigating Knowledge Refineries in the
    Intelligence Community (Indigo, OSS, etc)
  • Knowledge performance relies on respecting its
    propensity for its autonomous development
  • Developing Mail Agents that learn tacit behavior.

55
Tacit Knowledge.
  • Automatic
  • Swimming, crafting, art, skills, know how
  • Workplace Knowledge researchers (Scribner,
    Spender, Charue-Duboc, etc.)
  • Blocked
  • I know more than I can tell
  • Deliberate expertise, difficult to express
  • Collective or Embedded into Organizations
  • Organizations achieve more than the sum of their
    individual cognitive capacities
  • KM OK researchers (Hedlund, Brown, Sveiby,
    Nonaka)
  • Behavioral learning the way people intuitively
    behave in organizations follow strong programs

56
Tacit vs. Explicit Knowledge
Type Definition
Automatic1/Embodied24/ Tacit34 /Instrumentalities3 Instinctive skill, Know-how, or Technique of individual
Conscious1/Embrained2 3 Informal3/Contingent3/ Explicit knowledge of individual, Syntax of individual speech
Collective1/Embedded2 Encultured4/Meta3/ Contingent3 Tacit knowledge of social system, Corporate culture
Objectified1/Encoded2 3 Formal1/ Symbolic4 Explicit knowledge of social system, Operation manual, Signs
1 Spender (1996), 2 Blackler
(1995), 3 Fleck (1997), 4 Collins (1993)
Source Minsoo Shin,  Knowledge Management ,
2003
57
Knowledge as mind, process and object
Viewpoints Implications for KM and implementing systems
Belief in mind Main focus is providing infrastructure that enables individuals to access knowledge and information. Infrastructure includes organisational culture and information technologies. Information technologies only support access to existing information.
Process Main focus is the development of effective process of knowledge creation and distribution. A system/technology is required to link source and recipient of knowledge and support effective understanding of strategic know-how.
Object Main focus is how to gather and manipulate knowledge. A system/technology is required to effectively codify, store, and retrieve knowledge.
Source Minsoo Shin,  Knowledge Management ,
2003
58
Examples of knowledge repositories
Individual Group Organization
Network
Knowing calculus
Analysis of Quality Circle performance
Organization chart
Prices Contacts
Articulate Tacit
Negotiating skills
Team coordination
Conduct protocols
How to cooperate
Source Hedlund 1994
59
Knowledge that cannot be expressed
60
Four levels of more or less expressed knowledge
61
Paradigms of Tacit Knowledge Research
Propositions
Laboratory Experiments
Field research
62
Autonomous and Induced Knowledge
Transformations(Matrix adapted and extended from
Nonaka, 1992 Spender, 1993, etc.
INDIVIDUAL
COLLECTIVE
E X P L I C I T
Extension
Appropriation
INDUCED AND AUTONOMOUS TRANSITIONS
Awareness
Articulation
INDUCED AND AUTONOMOUS TRANSITIONS
T A C I T
Group interiorisation
Personal assimilation
Implicit learning (Reber, 1993)
AUTONOMOUS TRANSITIONS
63
How Firms Infuse New Knowledgeto Cope with
Environnemental Ambiguities?
  • The Indigo Case A knowledge-refinery with a
    taste for the ambiguous
  • The small confidential newsletters publishing
    firms staff develops its own theory about
    knowledge-generation
  • (a) Avoiding to write too quickly (maintaining
    equivocally),
  • (b) Experimenting with unknown settings through
    blind-tests with hypothetical knowledge (acting
    on settings, when knowledge itself cannot be
    acted)
  • (c) lying in wait while knowledge goes through
    its autonomous development
  • (d) keeping socialized to grasp outcomes (as the
    sole deliberate strategy).
  • The Indosuez case Learning through mergers and
    from newcomers is not as easy as it seems
  • In 1993, Indosuez is hiring a team of
    derivatives experts from Drexel-Lambert. As
    newcomers do not cope with over-institutionalized
    French banks, they threat to resign and leave. A
    crisis is provoked by CEO, and the breakdown is
    an opportunity for building a tacit agreement.

64
Findings New perspectives on knowledge management
Individual
Collective
An organization facing ambiguity on a daily
basis  (a) acknowledge and use knowledge
propension for its autonomous development, (b)
has a modest attitude towards its own knowledge,
(c) favors induced transformations rathere than
awakening of its hidden schemata.
The Court. Forced to bring evidences Explicitation
(1985-1992)
Explicit
Induced transformation M. Botbol has its own
theorisation of knowledge generation. No writing,
no fossilizing, maturation.
Autonomous devlopment Letting the interplays of
socialization create an independent body of
tacit knowledge
Individual
Collective
With a goal of deliberate learning, Indosuez
absorbs the experts to integrate their knowledge
Tacit
Explicit
Will of explicitation
Crisis
When making collective knowledge explicit fails
to articulate this knowledge with the on-going
knowledge generation (a) acknowledging
knowledge propension for its autonomous
development permits to induce the desired
articulation, (b) awaking hidden schemata
provokes crisis.
Autonomous development Non-codifiable
know-how of derivative products Drexel experts
themselves cannot explain. High performance.
Induced transformation The CEO uses
several adjustments of the Drexelites environment
as to integrate their community of
practice (peripheral inducement)
Tacit
65
Expanding the matrix
Individual 
Collective
Objectified / Codified / Scientific knowledge
Conscious knowledge (Spender, 1993)
(Spender, 1993)
Declarative knowledge (Polanyi, 1958)
Explicit
Extension (Nonaka, Hedlund, 1991)
episteme
Organizational knowledge (Nonaka, Hedlund, 1991)
Statutory expertise
Appropriation (Nonaka, Hedlund, 1991)
Socialization (Lewicki, 1986 Nonaka, 1993)
techne
Procedural knowledge (Anderson, 1976 Scribner,
1986)
Implicit learning
Social norms, values, tacit rules
eustochia
Automatic knowledge (Spender, 1993 Hasher
Zacks, 1984 Polanyi, 1958)
Communal knowledge (Spender, 1993, )
Community of practice (Lave, Wenger, 1991
Vygotsky, 1962)
Tacit
Practical Knowledge (Nyiri, Smith, 1988)
phronesis
Clandestine management, web of complicity
(Moullet, 1992 Baumard, 1994)
Animal knowledge (Morin1986,Griffin, 1982)
Collective mind (Weick, Roberts, 1993)
Traditions with lost origins (Nyiri, Smith, 1988)
Purposeful tacitness (Eco, 1991 Detienne,
Vernant, 1978)
66
Why did we chose to study ambiguities to
understand knowledge infusion ?
  • Ambiguities are critical times for knowledge
    (purpose)
  • Ambiguities are opportunities for knowledge
    renewal
  • Ambiguities are unstable (e.g. antithetical but
    compatible meaning)
  • Ambiguities create tensions in knowledge
    evaluation
  • Therefore, ambiguous situations are good
    opportunities to study knowledge transformations
    (e,g, infusion of new knowledge)
  • How organization theory deals with ambiguity ?
    (Angle)
  • Engineering of choice (March, Olsen, 1975)
  • Events are not obvious, reasons for events are
    unknown, we dont know if the event is good or
    bad
  • In theories of choice, ambiguity is usually seen
    as a sin.
  • What were we aiming at ?
  • To understand how knowledge is acknowledged
  • To describe possible processes that display
    regularities
  • To challenge the sin view of ambiguities
  • To unveil the link between the organization, its
    members, their coupling and knowledge creation

67
What is going on when people face ambiguity ?
  • Either, they become univocal
  • We proceed as if we were faced with a choice
    between the univocal and the ambiguous, and we
    come to the discovery that the univocal has its
    foundations and consequences in ambiguities
    (McKeon, 1964, p. 243).
  • Ambiguities are dealt through forcing a choice
  • Incompatible knowledge subsists, but is either
    ignored or left aside
  • Incompatible knowledge is discarded (believed as
    inappropriate unlearning)
  • Ambiguities are dealt through clearing
    premises
  • Preferences, motivations, beliefs are
    rationalized as to fit with environmental
    ambiguous settings
  • Or, they thrive in the fog (they become
    ambiguous)
  • Ambiguities are dealt through indecision (no
    choice is made)
  • Contradictory knowledge is taken for granted
  • Incompatibility of knowledge is used as a means
    of flexibility (e.g. political discourse)
  • Ambiguities are dealt as opportunities
  • When specification would become a threat (e.g.
    after a merger, organization members do not make
    their claims specific as to survive
    rationalization)
  • When new knowledge is awaited (as not to force an
    interpretation against another, as to give time
    to new knowledge to emerge)

68
How ambiguity and (un)learning interact
?(inspired from Levine, 1985 Hedberg, 1981
March, Olsen, 1975 Quinn, Cameron, 1988
Starbuck, 1983 Weick, 1976 Baumard, 1996 Brown
Duguid, 1991)
69
Findings and Propositions
  • Organizational Settings that Reduce Ambiguities
  • Because they are designed for it
  • The Multi-Divisional Form
  • Various forms of Hierarchies
  • They tend to make knowledge univocal
  • Organizational Settings that Produce Ambiguities
  • Unpurposefully
  • Joint-Ventures and Strategic Alliances
  • Fusion with Two Different Cultures
  • Matrix
  • Purposefully
  • Small knowledge refineries that thrive in the fog
    (Indigo)
  • Large firms that want to change their brand
    equity (Mercedes/Swatch)
  • Insurance companies that enter the pension funds
    market (AXA)
  • Airlines alliances with FFP with other carriers
    (SAS-Lufthansa)
  • They induce new knowledge of their markets
  • By exploiting equivocalities and developing new
    communities of practice

70
Propositions Conclusion
  • Organizations produce new knowledge through
    equivocalities
  • Of their market interface (i.e. Airlines,
    Mercedes-Swatch)
  • Of their market commitments (AOL - Time Warner)
  • Organizational knowledge generation relies on
    three forms of trust
  • Affective Trust (linking individuals knowledge)
  • Cognitive Trust (importing experts knowledge)
  • Moral and/or performative trust (assembling new
    collective knowledge)
  • Knowledge generation need Hierarchies
  • Because people need institutional trust in
    delivered knowledge
  • To lever resources (financial markets, investors)
  • To be able to sanction and punish (through a
    depersonalized frame)

71
KnowledgeSharing Transfer
5
  • Why people do not share?
  • Processes that impede KS
  • Processes that ameliorate KS

72
Knowledge sharing
  • Why dont they share their knowledge?
  • No knowledge about others needs
  • No understanding about the value of own knowledge
  • No connections
  • No appropriate media
  • It is more beneficial not to share
  • They are not rewarded
  • Does design can help?
  • A better organizational design can encourage
    knowledge sharing
  • The goal of designer is to improve flows of bot
    tacit and explicit knowledge

73
Knowledge Flow
  • Knowledge flow in an organization is
    fundamentally driven by communication processes,
    human interactions and information flows.
  • Knowledge flow is most likely influenced by four
    factors knowledge transferred, source,
    recipient, and context in which the knowledge
    flow takes place.

74
Knowledge Flow- Barriers to Knowledge Flow
 
 
  • Source
  • - Fear for loss of hegemony (Pascarella, 1997
    Sulanski, 1996 Von
  • Hippel, 1994)
  • - Lack of up-to date knowledge (Detmer and
    Shortliffe, 1997)
  • Context
  • - Weaker co-location (Doz and Santos., 1997
    Appleyard, 1996
  • Kogut and Zander, 1993 Gupta and
    Govindaraja, 1991)
  • - Unfriendly relationships between source and
    recipient (Nonaka,
  • 1994 Ghoshal and Bartlett, 1994)
  • - Limitations in individuals network of
    knowledge or doubt about the
  • network (Robertson et al., 1996 Kogut and
    Zander, 1996)





75
Knowledge Flow- Barriers to Knowledge Flow
 
  • Knowledge Transferred
  • - Causal ambiguity (Szulanski, 1996 Polanyi,
    1962)
  •    - Limitation in interpretative ability
    (Dougherty, 1992)
  • - Immobility (tacitness) of knowledge
    (Stopford, 1995 Nonaka, 1994
  • Grant, 1996)
  • Recipient
  • - Limited knowledge processing capacity
    (Madhavan and Prescott,
  • 1995 Simpson and Prusak, 1995 Cohen and
    Levinthal, 1990
  • Dierickx and Cool, 1989 Taylor, 1984
    OReilly, 1982)
  • - No information on knowledge existence or
    limitations in pre-existing
  • knowledge (Huber, 1991 Cohen and
    Levinthal, 1990)
  • - Not invented here syndrome (Hu et al.,
    1998 Leonard-Barton,1990,
  • Katz and Allen, 1982)
  • - Limitations in the capacity to
    institutionalize new knowle
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