Knowledge that Transforms

At times knowledge can be seen as the source of organizational innovation and change—at other times, however, it can be the very constraint on that change. This conflicted role offers insights into why the phenomenon of organizational knowledge has been interpreted by researchers in multiple and possibly conflicting ways. Some theories depict knowledge as an empirical phenomenon, residing in action and becoming “organizational” in the acquisition, diffusion, and replication of those actions throughout the organization. Others consider it a latent phenomenon, residing in the possibility for constructing novel organizational actions. This paper argues that while each of these qualities—empirical and latent—are intrinsic to knowledge in organizations, our understanding of organizational phenomena is essentially incomplete until the relationship between them is considered. Building on structuration theory, we propose a complementary perspective that views organizational knowledge as the product of an ongoing and recursive interaction between empirical and latent knowledge, between knowledge as action and knowledge as possibility. We ground this complementary model of knowledge in evidence from the field study of two firms whose innovation practices provide unique insights into how knowledge simultaneously enables and constrains behavior in organizations. We then discuss how a complementary perspective avoids the reification of knowledge by depicting it instead as an ongoing and social process and offers an alternative distinction between individual and collective knowledge.

In the field of organizational identity, theory development has far outpaced theory testing. Specifically, several researchers have proposed identity-based models of organizational identification but few have operationalized and tested them. Furthermore, virtually no research has explored how members identify with multiple-identity organizations. This study addresses these gaps and makes three specific contributions to identity theory. First, we operationalize and test a model in which a member's organizational identification is conceptualized in terms of an identity comparison process, i.e., a cognitive comparison between what a member perceives the identity to be and what they think it should be. Second, we extend current thinking by operationalizing organizational identification in terms of multiple and competing identities. Third, as a theory-building exercise, we explore the possibility that a similar identity comparison process operates at the organizational form level of analysis, affecting members' identification with the encompassing form or social institution. We test our model via a survey of members of rural cooperatives—a prototypical ‘hybrid’ identity organizational form, embodying elements of both ‘business’ and ‘family’ identities. Results of the analyses show that organizational identity congruence has a significant effect on member commitment, and form-level identity congruence has significant effects on both cognitive and pragmatic legitimacy, lending support for the use of identity as a multilevel construct. These results provide empirical support for current identity-based models of organizational identification and expand their generalizability to include multiple-identity organizations.

This paper investigates the mechanisms through which organizations develop dynamic capabilities, defined as routinized activities directed to the development and adaptation of operating routines. It addresses the role of (1) experience accumulation, (2) knowledge articulation, and (3) knowledge codification processes in the evolution of dynamic, as well as operational, routines. The argument is made that dynamic capabilities are shaped by the coevolution of these learning mechanisms. At any point in time, firms adopt a mix of learning behaviors constituted by a semiautomatic accumulation of experience and by deliberate investments in knowledge articulation and codification activities. The relative effectiveness of these capability-building mechanisms is analyzed here as contingent upon selected features of the task to be learned, such as its frequency, homogeneity, and degree of causal ambiguity. Testable hypotheses about these effects are derived. Somewhat counterintuitive implications of the analysis include the relatively superior effectiveness of highly deliberate learning processes such as knowledge codification at lower levels of frequency and homogeneity of the organizational task, in contrast with common managerial practice.

In today's turbulent business environment innovation is the result of the interplay between two distinct but related factors: endogenous R&D efforts and (quasi) external acquisition of technology and know-how. Given the increasing importance of innovation, it is vital to understand more about the alternative mechanism—such as alliances and acquisitions—that can be used to enhance the innovative performance of companies. Most of the literature has dealt with these alternatives as isolated issues. Companies, however, are constantly challenged to choose between acquisitions and strategic alliances, given the limited resources that can be spent on research and development. This paper contributes to the literature because it focuses on the choice between innovation-related alliances and acquisitions. We focus on the question of how the trade-off between strategic alliances and acquisitions is influenced by previous direct and indirect ties between firms in an industry network of interfirm alliances. We formulate hypotheses pertaining to the number of direct ties between two companies, their proximity in the overall alliance network, and their centrality in that network. In so doing, we distinguish between ties that connect firms from the same and from different industry segments, and those that connect firms from the same or from different world regions. These hypotheses are tested on a sample of strategic alliances and acquisitions in the application-specific integrated circuits (ASIC) industry. The findings show that a series of strategic alliances between two partners increases the probability that one will ultimately acquire the other. Whereas previous direct contacts tend to lead to an acquisition, this is not true of previous indirect contacts, which increase the probability that a link between the companies, once it is forged, takes the form of a strategic alliance. In the case of acquisitions, firms that are more centrally located in the network of interfirm alliances tend to be acquirers, and firms with a less central position tend to become acquired. These findings underscore the importance of taking previously formed interfirm linkages into account when explaining the choice between strategic alliances and acquisitions, as these existing links influence the transaction costs associated with both alternatives.

A central proposition in organization theory is that discrete organizational forms are matched to environmental conditions, market strategies, or exchange conditions. This paper develops a contrary theoretical proposition. We argue that efficiency may dictate modulating between discrete governance modes (i.e., structural modulation) in response to a stable set of exchange conditions. If governance choices are discrete, as much of organization theory argues, then the consequent steady-state functionality delivered by these organizational forms is itself discrete. However, if the desired functionality lies in-between the steady-state functionality delivered by two discrete choices, then efficiency gains may be available by modulating between modes. We develop an analytical model of structural modulation and examine factors that influence when modulation is ef- ficiency enhancing, as well as the optimal rate of modulation. We conclude that under certain conditions structural modulation is efficiency enhancing. Further, contrary to theories that highlight the potentially destructive consequences of inertia on organizational survival, we identify important efficiencyyielding benefits of inertia.

In this study, we explore seven in-depth cases of high-technology acquisitions and develop an empirically grounded model of technology and capability transfer during acquisition implementation. We assess how the nature of the acquired firms' knowledge-based resources, as well as multiple dimensions of acquisition implementation, have both independent and interactive effects on the successful appropriation of technologies and capabilities by the acquirer. Our inquiry contributes to the growing body of research examining the transfer of knowledge both between and within organizations. Propositions are developed to help guide further inquiry into the dynamics of acquisition implementation processes in general and, more specifically, the process of acquiring new technologies and capabilities from other firms.

Interpersonal relationships can be fragile. The mere perception of opportunistic behavior can lead to a breakdown in cooperation. Once damaged, the question then arises as to whether and how cooperation might be restored. Noncooperative game theory raises serious doubts about the possibilities, although interactional justice and impression management research have shown that verbal explanations can dampen reactions to aversive behavior. Philosophical, anthropological, and ethological research all suggest that genuine forgiveness may require something more tangible and substantive than an explanation. Thus, the current experiment investigated the effects of explanations and varying forms of substantive amends on the restoration of mutual cooperation. The results confirm that rebuilding cooperation is feasible. Apologies and simple explanations can be effective to a degree, though substantive amends have significantly more positive effects than explanations alone. In contrast to prior findings on interactional justice, acknowledgments were more effective than denials in repairing short interactions. This research demonstrates that, once breached, cooperation can be reestablished and that actions as well as explanations and apologies can augment the process in important and sometimes subtle ways.

This paper examines the validity of knowledge as a contingency variable. Building on recent advances in thinking about the dimensions of knowledge assets (Winter 1987, Zander and Kogut 1995), we argue that such dimensions might have an important influence on organization structure. More specifically, we focus on two dimensions of knowledge—observability and system embeddedness—and their influence over the level of unit autonomy and interunit integration in an international network of R&D units. Statistical analysis of questionnaire responses from 110 R&D unit managers show strong association between the dimensions of knowledge and organization structure. It also indicates partial support for the “fit” hypothesis in contingency theory. The paper makes two important contributions to the knowledge management literature. First, we find support for the contingency logic, suggesting that effective organization design has to take into account the underlying characteristics of the firm's knowledge base. Second, we shed light on a relatively neglected dimension of knowledge that we call system embeddedness. This is the extent to which knowledge is a function of the social and physical system in which it exists. In the statistical analysis it emerges as a strong predictor of organization structure. Moreover, it also appears to be conceptually distinct from the tacit-articulate dimension that is normally emphasized. This allows us to speculate on four generic forms that a firm's knowledge might take, that we label integrated, isolated, opaque, and transparent. These are discussed using examples from the data.

Preface In lieu of writing an introduction that runs the risk of adding more smoke than fire, the guest editors elected to engage in a dialogue with one another. Its purpose is to give readers a sense of the thinking behind the special issue, of the debates that ensued, and of the possible directions for further work. We met for lunch in a cafe-bar in Greenwich Village in April 2001 to discuss the special issues introduction. Through a series of exchanges, the discussion emerged. What follows is a dialogue about Knowledge, Knowing, and Organizations.

Traditional approaches to organizational change have been dominated by assumptions privileging stability, routine, and order. As a result, organizational change has been reified and treated as exceptional rather than natural. In this paper, we set out to offer an account of organizational change on its own terms—to treat change as the normal condition of organizational life. The central question we address is as follows: What must organization(s) be like if change is constitutive of reality? Wishing to highlight the pervasiveness of change in organizations, we talk about organizational becoming. Change, we argue, is the reweaving of actors' webs of beliefs and habits of action to accommodate new experiences obtained through interactions. Insofar as this is an ongoing process, that is to the extent actors try to make sense of and act coherently in the world, change is inherent in human action, and organizations are sites of continuously evolving human action. In this view, organization is a secondary accomplishment, in a double sense. Firstly, organization is the attempt to order the intrinsic flux of human action, to channel it towards certain ends by generalizing and institutionalizing particular cognitive representations. Secondly, organization is a pattern that is constituted, shaped, and emerging from change. Organization aims at stemming change but, in the process of doing so, it is generated by it. These claims are illustrated by drawing on the work of several organizational ethnographers. The implications of this view for theory and practice are outlined.