1. MIS 580 Knowledge Management KM Most-Cited 4 to 6 Harsha Gunnam | Hetal Mehta | Nargis Memon | Manish Wadhwa

2. Articles Covered  A model of knowledge management and n-form corporation, Strategic Management Journal  Organizational learning: the contributing process and the literatures, Organization Science  Knowledge of the firm, combinative capabilities, and the replication of technology, Organization Science 2MIS 580: Knowledge Management6/14/2016

3. A MODEL OF KNOWLEDGE MANAGEMENT AND N-FORM CORPORATION Gunnar Hedlund Strategic Management Journal 1994

4. Outline  Introduction  Knowledge Model  Japanese vs. Western companies  Organization Structure vs. Knowledge Management  N-Form vs. M-Form  Where the N-form fails? 4MIS 580: Knowledge Management6/14/2016

5. Introduction  Two trends in analysis of corporate strategy of firms  Internal organizations and management of firms  Dynamics (change & innovation) of firms  These dynamics does not capture relationship between organization and knowledge management  Solution: A model of Knowledge Management which captures knowledge types and transfer and transformation in an organization 5MIS 580: Knowledge Management6/14/2016

6. Knowledge Model Types of Knowledge 6/14/2016MIS 580: Knowledge Management6 IndividualGroupOrganization Inter- Organizational Articulated Knowledge Knowing calculus Quality circle’s documented analysis of its performance Organization chart Suppliers’ documented practices Tacit Knowledge Negotiation skills Team coordination Corporate culture Clients’ attitude to products & expectations

7. Knowledge Model Transfer and Transformation ASSIMILATION Individual GroupOrganization Interorganizational domain AppropriationExtension Articulation Internalization Reflection Dialogue Expansion DISSEMINATION Articulated Knowledge (AK) Tacit Knowledge (TK) 7MIS 580: Knowledge Management6/14/2016

8. Knowledge Model Knowledge transfer and transformation (cont)  Articulation  Tacit made explicit  Example: Senior engineers write down their design rationale  Internalization  Articulated becomes tacit  Example: Internalize the training materials  Reflection = Articulation + Internalization  The interaction between articulation and internalization  Necessary for genuine knowledge creation  Example: Writing a science paper 8MIS 580: Knowledge Management6/14/2016

9. Knowledge Model Knowledge transfer and transformation (cont)  Extension  Transfer of knowledge from lower to higher agency levels  Example: An employee sends product design for approval  Appropriation  Transfer of knowledge from higher to lower agency levels  Example: Group members coaches a new member  Dialogue = Extension + Appropriation  The interaction between extension and appropriation  Example: Dialogue between teacher and student 9MIS 580: Knowledge Management6/14/2016

10. Knowledge Model Knowledge transfer and transformation (cont)  Assimilation  The input of knowledge  Example: Selective recruiting of key individuals  Dissemination  The output of knowledge  Example: Selling of patents  Expansion=Assimilation + Dissemination  The interaction between assimilation and dissemination  Example: Creation and selling of patents database 10MIS 580: Knowledge Management6/14/2016

11. Japanese CompaniesWestern Companies AK  TK  AKAK + TK  AK  AK + TK Input: patent or productsInput: recruitment at senior level patent, product, selective Process: employee commitment and participation Process: replaceable parts and people, division of labor Output: patent or productsOutput: product, consulting E.G. Toyota E.G. IBM Weakness in integration of large systems Excel at managing large and complex system with articulation and systematic approach Japanese vs. Western companies 6/14/2016MIS 580: Knowledge Management11

12. Organization Structure Vs. Knowledge Management  Knowledge model applied on Japanese and Western companies show organizational characteristics like employment policies  Knowledge is embedded in structured individual relationships and so knowledge of the firm can be understood from the organization of human resources - Organization Structure  Effective knowledge management requires a departure from the logic of hierarchical (U-form) organization and multi- divisional organization (M-form)  N-form 12MIS 580: Knowledge Management6/14/2016

13. Additional Research Organization Structures  U-form: Unitary form / Functional form  Process focused, similar tasks grouped together  M-form: Multi-divisional Form  Product focused, complimentary tasks grouped together Reference: Coordination and Experimentation in M-Form and U-Form Organizations(2005, December 26). Retrieved March 18, 2008 from Berkeley.edu at http://elsa.berkeley.edu/~yqian/coordination%20and%20experimentation.pdf 13MIS 580: Knowledge Management6/14/2016

14. Additional Research Organization Structures (cont)  N-form: Networked form  Information is shared and available throughout the firm  Leadership and decision-making changes depending on the situation for optimal organization effectiveness  Skills are constantly evaluated and upgraded  Emphasis is on establishing trust, relationships, and networks  Information tentacles reach out to customers and into suppliers  E.G. Dell Inc.’s business model exists because of efficient & extremely low cost communication across supply chain, in manufacturing, and in customer service Reference: The Rise of the Networked Organization (2004, Spring). Retrieved March 18, 2008 from Diamondconsultants at http://exchange.diamondconsultants.com/pdf/Network_Org_White_Paper.pdf 14MIS 580: Knowledge Management6/14/2016

15. N-form vs. M-form 15MIS 580: Knowledge Management6/14/2016 N-formM-form Technological Interdependence CombinationDivision People interdependence Temporary constellations, given pool of people Permanent structures, changing pool of people Critical organizational level MiddleTop Communication network LateralVertical Top Management role Catalyst, architect, protector Monitor, allocator Competitive scope Focus, economies of depth, combinable parts Diversification, economies of scale and scope, semi independent parts

16. N-form WeaknessesM-form Strengths Radical innovation not achieved by (re)combination and experimentation Radical innovation through specialization Long time to acquire fundamental new knowledge because of restrictions on senior recruitment and acquisitions Rapid infusion and diffusion of drastically new perspectives through people, acquisitions, and spinoffs Difficulty in coordinating very large projects because of reliance on small groups Large systems design capability through complex articulation and tightly controlled complexity Difficult to change overall vision because of internal management promotion Change of basic direction and culture through external recruitment of top management Where the N-form fails? 16MIS 580: Knowledge Management6/14/2016

17. Summary  Knowledge Model: Types of knowledge, transfer and transformation process  Application of knowledge model on Japanese and Western patterns of knowledge management  Relationship between organization structure and knowledge management  Differences in N-form and M-form organization  Where is M-form superior over N-form 17MIS 580: Knowledge Management6/14/2016

18. Discussion Questions  Which approach is better in Knowledge Management? Japanese or Western? 18MIS 580: Knowledge Management6/14/2016

19. ORGANIZATIONAL LEARNING: THE CONTRIBUTING PROCESS AND THE LITERATURES George P. Huber Organization Science 1991

20. Outline  Introduction  Knowledge Acquisition  Information Distribution  Information Interpretation  Organizational Memory 20MIS 580: Knowledge Management6/14/2016

21. Introduction  Organizational learning – intentional process directed at improving effectiveness: Narrow View  Focus on broader view of organizational learning  Complete understanding of organizational learning through four constructs:  Knowledge Acquisition  Information Distribution  Information Interpretation  Organizational Memory 21MIS 580: Knowledge Management6/14/2016

22. Introduction Constructs & Processes Sub-Constructs & Sub-Processes Sub-Constructs & Sub-Processes 1.5.3. Performance Monitoring 1.5.2. Focused Search 1.5.1. Scanning 1.2.5. Experience-based Learning Curve 1.2.4. Unintentional or Unsystematic Learning 1.2.2 Organizational Self-appraisal 1.2.3 Experimenting Organizations 1.2.1 Organizational Experiments 1.0. Knowledge Acquisition 2.0. Information Distribution 3.0. Information Interpretation 4.0. Organizational Memory 1.1. Congenital Learning 1.2. Experiential Learning 1.3. Vicarious Learning 1.4. Grafting 1.5. Searching & Noticing 3.1. Cognitive Maps and Framing 3.2. Media Richness 3.3. Information Overload 3.4. Unlearning 4.1. Storing and Retrieving Information 4.2. Computer-Based Organizational Memory 22MIS 580: Knowledge Management6/14/2016

23. Knowledge Acquisition  It is the process by which knowledge is obtained  Example: Customer surveys, Research and development activities, Performance reviews, Analyses of competitor’s products  The five processes that organizations use to acquire information or knowledge are:  Congenital Learning  Experimental Learning  Vicarious Learning  Grafting  Searching and Noticing 23MIS 580: Knowledge Management6/14/2016

24. Knowledge Acquisition Congenital Learning  Inherited Knowledge obtained since organization’s conception  Knowledge acquired by drawing from already existing knowledge at organization’s birth.  Congenital knowledge strongly affects future learning – yet to be investigated  Pro-active Learner: American Oil http://findarticles.com/p/articles/mi_m4339/is_6_21/ai_71969770/pg_14 24MIS 580: Knowledge Management6/14/2016

25. Knowledge Acquisition Experimental Learning  Organizational Experiments  Enhanced by the feedback of cause and effect relationships between the actions and outcomes of organizations  Learning facilitated through two methods:  Successive Limited Comparisons  Logical Incrementalism 25MIS 580: Knowledge Management6/14/2016

26. Knowledge Acquisition Experimental Learning (cont)  Organizational Self-Appraisal  Focus on member interaction and participation  Aim to improve mental health and relationships of members  Experimenting Organizations  Directed towards adaptability  Focus on operation in a mode of change 26MIS 580: Knowledge Management6/14/2016

27. Knowledge Acquisition Experimental Learning (cont)  Unintentional or Unsystematic Learning  Contrasting method when compared to other learning methods  Random exploration that results in learning  Experienced-based Learning Curve  Experience enhances performance  Predictable and measurable results 27MIS 580: Knowledge Management6/14/2016

28. Knowledge Acquisition Vicarious Learning  Learning from “ Corporate Intelligence”  Example: Acquiring corporate intelligence through channels like consultants and networks of professionals  Observation of other organizations – mimic the competitor’s learned experience  Also by Second-hand experience  Vicarious Learner: Canada West Oil, Hospitals http://findarticles.com/p/articles/mi_m4339/is_6_21/ai_71969770/pg_14 28MIS 580: Knowledge Management6/14/2016

29. Knowledge Acquisition Grafting  Acquire knowledge through acquisition of resources not possessed by the organization  Example: acquisition of another organization  Method faster than acquisition through experience and complete than acquisition through imitation  Grafting is the most frequently used method of acquiring knowledge in today’s world 29MIS 580: Knowledge Management6/14/2016

30. Knowledge Acquisition Searching & Noticing  Knowledge acquired through noticing and searching environment and performance of organization  Scanning  Wide range sensing of organization’s external environment  Scan for clues as to what may happen in the future  Active Scanning, Passive Scanning  Focused Search  Search with respect to response for problems or opportunities  Has an objective 30MIS 580: Knowledge Management6/14/2016

31. Knowledge Acquisition Searching & Noticing (cont)  Performance Monitoring  Includes both focused an wide-range sensing of organization’s effectiveness  Measure performance against the expectation of the management and stakeholders  Noticing is the unintended acquisition of information relating to the organization’s:  External environment  Internal environment  Performance 31MIS 580: Knowledge Management6/14/2016

32. Information Distribution  Sharing of information between organizational units  Leads to more broadly based organizational learning & new organizational learning  Precursor to aspects of organizational learning that involve information interpretation 32

33. Information Distribution Propositions Probability that member or unit A will route information to member or unit B  Positively related to A's view of the information's relevance to B  Positively related to B's power and status  Negatively related to A's view of A's costs of routing the information to B  Negatively related to A's workload  Positively related to the rewards and negatively related to the penalties that A expects to result from the routing and  Positively related to the frequency with which A has previously routed information to B in the recent past Reference: Huber (1982) and Huber and Daft (1987) 33

34. Information Distribution Propositions Probability or extent of information distortion by A when communicating to B  Positively related to A's view of the consequent increase in A's goal attainment that will result from the distortion  Negatively related to the penalty that A expects to incur as a result of introducing the distortion  Positively related to the amount of discretion allowed in the presentation format  Positively related to the difference between the actual information and the desired or expected information  Positively related to A's work overload and  Positively related to the number of sequential links in the communication chain connecting A with B Reference: Huber (1982) and Huber and Daft (1987) 34

35. Need for Effective Information Distribution  Access to Synergistic Information  Identifying Key Sources  High Availability 35

36. Information Interpretation  The process through which information is given meaning  The process of translating events and developing shared understandings and conceptual schemes 36  More learning occurs with varied interpretations affecting organization‘s potential behaviors

37. Information Interpretation Factors Affecting Interpretation  The uniformity of prior cognitive maps possessed by the organizational units  The uniformity of the framing of the information as it is communicated  The richness of the media used to convey the information  The information load on the interpreting units and  The amount of unlearning that might be necessary before a new interpretation could be generated. 37

38. Information Interpretation Cognitive Maps and Framing  Belief structure or mental representation or frame of reference will shape interpretation of information  Framing & labeling affects information interpretation  Non uniformly framed distribution implies non uniform interpretations 38

39. Information Interpretation M edia Richness  Extent to which information is given common meaning by the sender and receiver of a message  “Medium's capacity to change mental representations within a specific time interval“  Two underlying dimensions -  The variety of cues that the medium can convey and  The rapidity of feedback that the medium can provide  Managers choosing rich communication medium are more effective 39

40. Information Interpretation Information Overload  Interpretation is less effective if the information to be interpreted exceeds the units' processing capacity  Overload detracts from effective interpretation  Organization designs minimizing the need for information distribution should be adopted by organizations in excessively rich information environments  This "design for informational autonomy“ would consequently curtail some types of organizational learning 40

41. Information Interpretation Unlearning  A process through which learners discard obsolete and misleading knowledge  Effects:  Temporarily inactive in the context where this knowledge had been used  New learning to take place 41

42. Organizational Memory (OM)  Concerns:  Personnel turnover - great loss organization's memory  Non anticipation of future needs - great amount of data not stored  No idea of whereabouts of information possessed or stored by other members  Variables influencing effectiveness of OM :  Membership attrition  Information distribution and organizational interpretation of information  The norms and methods for storing information and  The methods for locating and retrieving stored information 42

43. Organizational Memory Storing and Retrieving Information  Great deal of routine information stored  When to store non-routine information?  Variables governing non-routine information storage:  The degree to which the future needs are predictable  The scope of future needs that the member can envision  The commitment to the well-being of the organization and  The accessibility and utility of the channels and mechanisms available for storage 43

44. Organizational Memory Computer-Based Organizational Memory  Information concerning the time is more frequently resident in computers as transactions artifacts  Automatic capturing and sophisticated retrieval of information result in completeness and precision  Computer-based expert systems provide accessibility, reliability, and "own-ability," 44

45. Summary  Little cumulative work and little integration  Information distribution is affected by organizational decisions  Information interpretation is greatly affected by cognitive maps or frames of reference  Organizational memory is critical to organizational learning 45

46. Discussion Questions  In the various methods of knowledge acquisition, which approach would be most suitable for a certain organization?  How to handle conflicting interpretation?  Shouldn't researchers build on others research?  How do you retain the knowledge of new employees before unlearning? 46

47. KNOWLEDGE OF THE FIRM, COMBINATIVE CAPABILITIES, AND THE REPLICATION OF TECHNOLOGY Bruce Kogut and Udo Zander Organization Science, 1992

48. Outline  Introduction  Information and Know-How  Inertness of Knowledge  Personal To Social Knowledge  Paradox of Replication  Combinative Capabilities  Selection Environment  Make Buy decision 48MIS 580: Knowledge Management6/14/2016

49. Introduction  Theory of firm knowledge  A major objective of a firm is to grow  To achieve the goal, a firm must  Codify tacit knowledge and facilitate technology transfer  Paradox – Technology transfer and imitation are two sides of a coin  How firms create new knowledge?  Make or Buy Decision 49MIS 580: Knowledge Management6/14/2016

50. Information and Know-How  Two types of knowledge: information and know-how  Information:  Knowledge which can be transmitted with loss of integrity once the rules for deciphering it are known.  Information implies knowing what something means.  Know-How:  “Know-How is the accumulated practical skill or expertise that allows one to do something smoothly and efficiently.  Know-how is a description of knowing how to do something. MIS 580: Knowledge Management506/14/2016

51. The Inertness of Knowledge  Why knowledge is not easily transmitted and replicated?  2 dimensions : Codifiability and Complexity  Codifiability and complexity are related 51MIS 580: Knowledge Management6/14/2016

52. Transformation of Personal To Social Knowledge 52 Use of common language and organizing principles for knowledge transfer within small groups MIS 580: Knowledge Management6/14/2016 IndividualGroupOrganizationNetwork Information -facts-who knows what -profits -accounting data -formal & Informal structure -prices -whom to contact -who has what Know-how -skill of how to communicate -problem solving -recipes of organizing such as Taylorist methods or craft production -higher order organizing principles of how to coordinate groups and Transfer knowledge -how to cooperate -how to sell and buy

53. The Paradox of Replication  Goal of the firm to reduce cost while preserving the quality and value of the technology  Firm may codify and simplify such knowledge to be accessible.  While this type of codification reduces the cost of transferring knowledge, it runs the risk of encouraging imitation 53MIS 580: Knowledge Management6/14/2016

54. Combinative Capabilities  Distinction between exploiting and developing capability. Example: Japanese shop and American operations  Combinative Capability- the degree of "technological opportunity." 54 MIS 580: Knowledge Management6/14/2016

55. Selection Environment  The ability of a firm to indulge in a forward-looking development of knowledge  Long-term survival depends on a critical tradeoff between current profitability and investing in future capabilities.  Future capabilities are of little value if the firm does not survive.  If the competitive environment is too rigid, especially in the early years of a firm’s development, it may impede subsequent performance by retarding a firm’s ability to invest in new learning. 55MIS 580: Knowledge Management6/14/2016

56. The Make Buy decision and Firm capabilities  The decision to make or buy is determined by :  The production knowledge is similar to their current organizing principles and information (make)  The supplier has superior knowledge (buy)  The development may lead to new markets (make)  Immediate survival pressure (buy) 56MIS 580: Knowledge Management6/14/2016

57. Sony Ericsson Alliance 57MIS 580: Knowledge Management6/14/2016 http://www.ugma.unige.ch/Article_Archives/ArticleArchivesPrize2002-2.pdf

58. Summary  Firms are a repository of capabilities, as determined by the social knowledge embedded in individuals structured by organizing principles.  Switching to new capabilities is difficult because it forces individuals to go outside their organization’s common area of knowledge, thereby making the transfer of knowledge more difficult.  Firms create new knowledge by the concept of combinative capabilities, that is, combining their current knowledge with the potential capabilities of that knowledge. 58MIS 580: Knowledge Management6/14/2016

59. Discussion Questions  How can we resolve the major challenge of knowledge sharing between two firms with different culture in case of Sony Ericsson alliance ?Does ‘N- form’ help to resolve this issue ?  Is Consulting a source of external learning? If yes then what are the challenges faced in this case ? 59MIS 580: Knowledge Management6/14/2016

60. 60MIS 580: Knowledge Management6/14/2016

61. Information Distribution Propositions Probability or extent of delay in the routing of information by A to B  Positively related to the workload of A  Positively related to the number of sequential links in the communication chain connecting A to B and  Negatively related to A's view of the timeliness of the information for B Reference: Huber (1982) and Huber and Daft (1987) 61