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KM Most-Cited Reading Packet 10-12. By Manny Martinez & Yi-Hsuan Lee. Agenda. The Firm As A Distributed Knowledge System: A Constructionist Approach Organizational Memory: Review of Concepts and Recommendations for Management

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KM Most-Cited Reading Packet 10-12

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KM Most-Cited Reading Packet 10-12


Manny Martinez & Yi-Hsuan Lee


  • The Firm As A Distributed Knowledge System: A Constructionist Approach

  • Organizational Memory: Review of Concepts and Recommendations for Management

  • Exploring Internal Stickiness: Impediments to the Transfer of Best Practice within the Firm

The Firm As A Distributed Knowledge System: A Constructionist Approach

Author: Haridimos Tsoukas, 1996



Recent Developments

Structure of Social Practices

Industry Recipes



  • Two key questions regarding traditional management research

    • 1. In what direction should the firm channel its activities?

    • 2. How should a firm be organized?

  • Assumptions underlying these questions

    • rationality

    • propositional reasoning

    • sufficient knowledge


  • The traditional approach does not account for particular circumstances of time and space

  • Full knowledge and access to that knowledge is assumed, but this is clearly not the case

  • “A firm’s knowledge cannot be surveyed as a whole; it is not self contained…”(p13)

Recent Developments

  • The author argues that firms draw upon existing knowledge and it’s ‘collective knowledge’ - just as Stein (19) argued

  • Instead of employees as cogs reacting to given scenarios, individuals interact with their past experiences and create their surroundings

  • Those following this idea either: create taxonomies or create analogies between the mind and the organization

Recent Developments

  • Taxonomists create types of organizational knowledge and draw out their implications

    • tacit vs. explicit

    • Opposition to Nonaka and Takeuchi relating to the inter-connectivity between tacit and explicit

  • Analogies between the organization and the mind

    • the necessary knowledge is distributed

    • the collective mind is created as individuals interact

Recent Developments

  • Human understanding is based on a unique and unarticulated background, thus rendering the ‘rationalist’ view lacking

  • This background is then applied by an individual to a target, thus resulting in understanding the target

  • The background is a result of socialization

Structure of Social Practices

  • Three dimensions of social practices

    • 1. Normative expectations are associated with a particular role

    • 2. An individual brings past socializations to particular situations

    • 3. Interactive-situational dimension-the context of an activity activates expectations

  • The absence of predictable rationality results in a dispersed environment

Structure of Social Practices

  • “Human agency is ‘always and at every moment confronted with specific conditions and choices…’” (p19)

  • The human decision is always grounded in local, socialized, and personal experiences

  • The infinite number of resulting possibilities is managed through institutional context

Industry Recipes

  • “Through a process of socialization, managers internalize industry-specific distinctions” (p20)

  • A recipe “consists of a set of background distinctions tied to a particular field of experiences” (p20)

  • Recipes represent tacit knowledge


  • Resources are not given or discovered but created…..through human interaction

  • Firms rely on knowledge that is dispersed throughout the individuals

  • Thus the firm is a distributed knowledge system

  • The firm’s knowledge is in a broad context

  • Normative and actual situations are in tension, resulting from the localness of individuals


  • Management is therefore not a rule-making endeavor, but should be the process of allowing individuals to interact

  • This interaction allows employees to create knowledge

  • Assumptions not stated by the author

    • requires experts, education, and motivation

  • Compare the role of managers to that given by Drucker

Organizational Memory: Review of Concepts and Recommendations for Management

Author: Eric Stein, 1995



Defining Organizational Memory

Processes of Organizational Memory



  • Working definition: Organizational memory is the means by which knowledge from the past is brought to bear on present activities, thus resulting in higher or lower levels of organizational effectiveness (p22)

  • Involves the coding of information via suitable representations, which later have an effect on the organization in light of current conditions


  • Organizational memory as a capability

    • means to transmit information from past to future members

  • Three types of organizational memory

    • metaphor allowing insight into organizational life

    • embedded in management theory

    • relevant to management practice


  • Organizational memory as a metaphor

    • Three types of information can be stored as a memory to “steer” an organization

      • 1. Outside information

      • 2. Information from the past

      • 3. Information about the organization itself

    • What is the importance here?


  • Organizational memory as related to management theory

    • learning vs. unlearning

    • flexibility vs. stability

    • human resources vs. information resources

  • Necessary for planning and decision making in organizations


  • Organizational memory as related to management practice

    • Capturing the lessons of experts and other personnel to reduce loss of knowledge during turnover

    • Capturing knowledge over time will result in a competitive advantage

Defining Organizational Memory

  • How to use organizational memory to enhance effectiveness - provides a useful framework

    • Guarding against inflexibility and lowered effectiveness

    • Look at types of memories

      • encoded but not sent immediately

      • time in transmission is critical

      • extended duration following transmission


  • Recommendations

    • 1. Identify the types of memories

      • What is the usefulness?

    • 2. Look at coupling between senders and receivers

    • 3. Consider the role of short/long term memories

    • 4. Inventory and classify memory


  • Recommendation 4 is the most useful and doable

    • 1. Knowledge-base in crucial for effectiveness

    • 2. Knowledge supports effective strategic decision making, resulting in a strategic advantage:

      • suggestive

      • predictive

      • decisive

      • systemic

Processes of Organizational Memory

  • Consist of acquisition, retention, maintenance, retrieval

  • Provide the means by which knowledge from the past is brought to bear on present activities

Processes of Organizational Memory

  • Acquiring organizational memories

    • Mostly focuses on learning

    • The receipt of a sensory signal is the most basic form of learning

    • Individual learning cycles are completed when new knowledge is accepted and encoded into individual minds

    • Organizational learning is not complete until individual learning is embedded in the organization

    • Organizational memory is essential to organizational learning, while learning is a necessary condition for memory

Processes of Organizational Memory

  • Acquiring organizational memories

    • Organizational memories may also produce barriers to learning, especially double-loop learning

    • Double-loop learning occurs when members detect conflicting requirements and try to resolve those conflicts by changing prevailing norms and values

    • Since individuals must change their shared theories-in-use and images of organization, unlearning might take place

Processes of Organizational Memory

  • Retaining organizational memories

    • Retention is the most important and widely recognized feature of organizational memory

    • Three categories to retain organizational information

      • Schemas:

        • A schema is an individual cognitive structure that helps people organize and process information efficiently

      • Scripts:

        • Scripts describe the appropriate sequencing of events in conventional or familiar situations

      • Systems:

        • Memories may be retained in the social fabric of organizations, in their physical structures, and in explicitly designed information systems

Processes of Organizational Memory

  • Three major categories of means to retain organizational memories

Processes of Organizational Memory

  • Maintenance and loss of organizational memories

    • Departing members leave 'holes' in existing knowledge networks

    • The average experience of those who leave may be more important than the absolute number of those who leave

    • Firms that fail to reinforce social structures may experience a loss of knowledge as relationships atrophy

    • Organizational memories also can be maintained through recurrent patterns of interaction

Processes of Organizational Memory

  • Retrieving organizational memories

    • Organizational memories can be recalled to support decision making and problem solving

    • An inquirer is motivated to retrieve information if:

      • the inquirer values what has been done in previous contexts

      • the desired information exists and the inquirer is aware of the information

      • the inquirer has the ability to search, locate, and decode the desired information

      • the cost to locate the information is less than re-computing the solution from scratch

    • An organization that maintains but does not use its knowledge-base is dysfunctional


  • Recommendations

    • 5. Explore the impact of both individual and organizational learning

    • 6. Examine the retentive capacities of personal and shared schema

    • 7. Examine the retentive capacities of personal and organizational scripts

    • 8. Examine the retentive capacities of the social and physical structures associated with organizations

    • 9. Leverage advanced information technologies to support the processes and products of organizational memory


  • Recommendations

    • 10. Assess the loss of knowledge experienced by organizations due to turnover and organizational restructuring

    • 11. Assess the means by which organizations maintain different types of knowledge through communication processes, repetition, sanctification, and validation

    • 12. Examine the degree to which organizations support the retrieval of knowledge from the past and the impact of that knowledge on organizational effectiveness


  • An improved organization memory can benefit the organization in several ways:

    • Helps managers maintain strategic direction over time

    • Helps the organization avoid the nightmare of cycling through old solutions to new problems

    • Gives new meaning to the work of individuals if such efforts are retained

    • Facilitate organizational learning

    • Strengthen the identity of the organization

    • Provide newcomers with access to the expertise


  • Does this article really provide management tools?

  • Can managers actually identify the memories?

Exploring Internal Stickiness: Impediments to the Transfer of Best Practice within the Firm

Author: Gabriel Szulanski, 1996


Stages in the Transfer Process

Origins of Internal Stickiness

Research Results and Suggestions

Stages in the Transfer Process

  • Initiation

    • This stage comprises all events that lead to the decision to transfer

    • A transfer begins when both a need and the knowledge to meet that need coexist within the organization

  • Implementation

    • During this stage, resources flow between the recipient and the source

    • Related activities cease or diminish after the recipient begins using the transferred knowledge

Stages in the Transfer Process

  • Ramp-up

    • The recipient use the new knowledge ineffectively at first, but gradually improves performance, ramping up toward a satisfactory level

  • Integration

    • Use of the transferred knowledge gradually becomes routinized in every recurring pattern

    • A shared history of jointly utilizing the transferred knowledge is built up in the recipient

Origins of Internal Stickiness

  • Four sets of factors are likely to influence the difficulty of knowledge transfer:

    • Characteristics of the source of knowledge

    • Characteristics of the recipient of knowledge

    • Characteristics of the context

    • Characteristics of the knowledge transferred

Origins of Internal Stickiness

  • Characteristics of the source of knowledge

    • Lack of motivation

      • A knowledge source may be reluctant to share knowledge for fear of losing ownership or a position of privilege

    • Not perceived as reliable

      • When a source unit is not perceived as reliable, initiating a transfer from that source will be more difficult

Origins of Internal Stickiness

  • Characteristics of the recipient of knowledge

    • Lack of motivation

      • Some recipients may be reluctant to accept knowledge from the outside

    • Lack of absorptive capacity

      • Recipients might be unable to take advantage of outside source of knowledge

    • Lack of retentive capacity

      • The ability of a recipient to institutionalize the utilization of new knowledge reflects the retentive capacity

      • Without such ability, initial difficulties may become an excuse for discontinuing its use and reverting to the previous status

Origins of Internal Stickiness

  • Characteristics of the context

    • Barren organizational context

      • Intrafirm exchanges of knowledge are embedded in a organizational context

      • A context that stops the gestation and evolution of transfers is said to be barren

    • Arduous relationship

      • A transfer of knowledge may require numerous individual exchanges

      • An arduous (i.e., distant) relationship might create additional difficulties in the transfer

Origins of Internal Stickiness

  • Characteristics of the knowledge transferred

    • Causal ambiguity

      • When the precise reasons for success or failure cannot be determined, causal ambiguity is present

    • Unprovenness

      • A proven record of past usefulness helps in the process of selecting knowledge for transfer

Which factor will mostly affect the difficulty of knowledge transfer?

Research Results and Suggestions

  • The correlation between the two sets of constructs is very high

  • The three most important barriers are:

    • The lack of absorptive capacity of the recipient

    • Causal ambiguity

    • The arduous relationship between the source and the recipient

Research Results and Suggestions

  • These results contrast to conventional wisdom

    • Conventional wisdom attributes stickiness almost exclusively to motivational factors

  • Knowledge-related barriers dominate rather than motivation-related barriers

    • Why organizations do not know what they know?

    • It may be less because organizations do not want to learn but rather because they do not know how to

Research Results and Suggestions

  • Using only incentive systems to mitigate internal stickiness is inadequate or misled

  • It might be profitable to devote scarce resources and managerial attention to:

    • Develop the learning capacities of organizational units

    • Foster closer relationships between organizational units

    • Systematically understand and communicate practices


  • Are there any other barriers to the transfer?

  • Are these results suitable to the companies from other countries?


  • Research samples are from 8 companies:

    • AMP, AT&T Paradyne, British Petroleum, Burmah Castrol, Chevron Corporation, EDS, Kaiser Permanente, Rank Xerox

  • 2 sets of constructs:

    • Dependent variables: stickiness in stages in the transfer process

    • Independent variables: Origins of Internal Stickiness

  • The data set

    • 271 observations of 122 best-practice transfers in 8 companies

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