Knowledge that Transforms

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.

This paper considers the role of team learning in organizational learning. I propose that a group-level perspective provides new insight into how organizational learning is impeded, hindering effective change in response to external pressures. In contrast to previous theoretical perspectives, I suggest that organizational learning is local, interpersonal, and variegated. I present data from an exploratory study of learning processes in 12 organizational teams engaged in activities ranging from strategic planning to hands-on manufacturing of products. These qualitative data are used to investigate two components of the collective learning process—reflection to gain insight and action to produce change—and to explore how teams allow an organization to engage in both radical and incremental learning, as needed in a changing and competitive environment. I find that team members' perceptions of power and interpersonal risk affect the quality of team reflection, which has implications for their team's and their organization's ability to change.

This paper applies evolutionary economics reasoning to the strategic alliance context and examines whether and how routinization processes at the partnering-firm level influence the performance of the cooperative agreement. In doing so, it introduces the concept of interorganizational routines, defined as stable patterns of interaction among two firms developed and refined in the course of repeated collaborations, and suggests that partner-specific, technology-specific, and general experience accumulation at the partnering-firm level influence the extent to which alliances result in knowledge accumulation, create new growth opportunities, and enable partnering firms to achieve their strategic objectives. We also consider how governance design choices at the transaction level shape the effectiveness of interorganizational routizination processes. Based on a sample of 145 biotechnology alliances, we find that only partner-specific experience has a positive impact on alliance performance, and that this effect is stronger in the absence of equity-based governance mechanisms. We interpret these results to support the role of interfirm coordination and cooperation routines in enhancing the effectiveness of collaborative agreements.

This paper analyzes the contextual cues female managers attend to when considering raising gender-equity issues at work. Study 1 provides a qualitative look at the range of cues indicating context favorability, including demographic patterns, top management qualities, and cultural exclusivity. Study 2 experimentally manipulates these cues and reveals that the exclusiveness of organizational culture is the most potent cue affecting willingness to sell a gender-equity issue. A discussion of mediators sheds lights on why cultural exclusivity affects issue selling.

Adaptation to radical change is central to research in organization theory, and some of the most dramatic examples of environmental change have occurred recently in transition economies such as China. I take advantage of change during China's economic reform to study the relative importance of organizational and environmental factors in producing innovative managerial response. I find that strategic choice predicted innovation in the early stages of reform, but environmental factors increased in salience over time. Intrafirm support, Communist Party connections, and a market orientation produced innovation early in reform. Simple imitation of others was also salient in early years. As reform progressed, managers increasingly imitated other profitable firms and drew on their own experience. My results inform an understanding of both the process by which innovation occurs and firm behavior in transition economies.

Drawing on a social network perspective of organizational coordination, this paper investigates the effectiveness of coordination mechanisms on knowledge sharing in intraorganizational networks that consist of both collaborative and competitive ties among organizational units. Internal knowledge sharing within a multiunit organization requires formal hierarchical structure and informal lateral relations as coordination mechanisms. Using sociometric techniques, this paper analyzes how formal hierarchical structure and informal lateral relations influence knowledge sharing and how interunit competition moderates the association between such coordination mechanisms and knowledge sharing in a large, multiunit company. Results show that formal hierarchical structure, in the form of centralization, has a significant negative effect on knowledge sharing, and informal lateral relations, in the form of social interaction, have a significant positive effect on knowledge sharing among units that compete with each other for market share, but not among units that compete with each other for internal resources.

The history of management practice is filled with innovations that failed to live up to the promise suggested by their early success. A paradox currently facing organizational theory is that the failure of these innovations often cannot be attributed to an intrinsic lack of efficacy. To resolve this paradox, in this paper I study the process of innovation implementation. Working from existing theoretical frameworks, I synthesize a model that describes the process through which participants in an organization develop commitment to using a newly adopted innovation. I then translate that framework into a formal model and analyze it using computer simulation. The analysis suggests three new constructs—reversion, regeneration, and the motivation threshold—characterizing the dynamics of implementation. Taken together, the constructs provide an internally consistent theory of how seemingly rational decision rules can create the apparent paradox of innovations that generate early results but fail to produce sustained benefit.

This study explores the role information technology (IT) plays in organizational downsizing by studying two medium-sized American cities over a period of 10 years (1985-1995). Data were collected through 73 interviews, a questionnaire, and numerous documents. Four main findings emerged from the case studies. First, IT was found to facilitate organizational downsizing, but not to cause it. New City invested heavily in state-of-the-art IT over the years and more successfully downsized the organization than Old City, which lagged behind in IT investment and made no serious attempts to use IT as a tool to support strategic actions. Second, adverse environmental conditions triggered downsizing in both cities and determined the change strategies that managers used. When environmental pressures were mild (1985-1990), managers favored a convergent change strategy that resulted in limited downsizing efforts and small personnel reductions. In contrast, when environmental pressures were strong (1990-1995), managers of both cities engaged in strategic reorientation and in downsizing efforts that led to larger personnel reductions. Third, the role IT played in organizational downsizing varied according to the change strategy. IT was used to facilitate work redesign in a convergent change strategy and to facilitate more significant structural and work redesign in strategic reorientation. Fourth, more integrated and better use of IT allowed managers of New City to downsize more rationally and efficiently. It facilitated the transfer of personnel within departments, from middle management to the operations level, and across departments, from internally oriented to customer-oriented personnel. In doing so, managers of New City minimized operating costs while maintaining the same level of services. In contrast, IT in Old City did not facilitate such an agenda and managers downsized more superficially across the board, in all departments. Differences in IT consequences in the two cities are explained using the theory of slack resources in organizations.