The importance of Organizational Learning for Growth


In the 80s and 90s, organizational learning started to gain importance in the middle if the other ideas which controlled other management studies. In both, academia (Argyris and Schon, 1978; Srivastava, 1983) and in business practices (Hayes et al., 1988; Argyris, 1993), organizational learning has got an escalating attention. According to Arie de Geus (1988), the only competitive advantage in future will be learning. However, the organizations which are not able to prove their potential will stand amongst the losers.

There is still confusion with the use of definition and the term of organizational learning (Edmondson and Moingeon, 1998). The main problem is the amalgamation or integration of the different approaches of organizational learning and at the same time evaluating the variety that emerged from its starting point (Buchel and Probst, 1997). The focus of this paper is on the knowledge management which is known as the competency of organizational learning. Also, many researchers have often linked the competency of organizational learning with the learning organizations (Easterby-Smith et al., 1998).

Knowledge and Knowledge Management:

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The researchers in knowledge management try not to define it as they think that the definition is mere wastage of time and add a little or no value to the effective work for knowledge management. However, there is no record on what are knowledge characteristics (Firestone and McElroy, 2003). So, there are many definitions offered by different researchers in knowledge management.

Knowledge can be defined as "Justified true belief" (Nonaka and Takeuchi, 1995, 58). This definition is adopted by many researchers and philosophers and it signifies that knowledge arguments or states can be acceptable only by facts (Goldman, 1991). However, in this definition it is difficult to know that, in spite of a good justification, every knowledge belief is correct. Though, the well justified knowledge beliefs prove the meaning of knowledge in this definition. The other difficulty in understanding that knowledge is a true belief is that knowledge claims cannot be achieved by the testing and evaluation phenomena that include full justification because a proof cannot actually result in a true knowledge belief (Firestone and McElroy, 2003). Therefore, according to the above definition it can be concluded that there is no knowledge. However, if there is no knowledge, this is objectionable when it comes to the sphere of knowledge management.

"The other most important definition of knowledge is that it is composed of and grounded exclusively in potential acts and in those signs that refer to them" (Cavaleri and Reed, 2000, 114). This definition is just common sense. Another similar definition in the same context provided by Ralph Stacey (1996) says that "knowledge is social acts". However, both these definitions have severe issues with them. First and foremost, the potential acts mentioned in the definition above are not beliefs. These are just concepts and estimates about the information and knowledge. Moreover, this definition of knowledge as a potential act results in confusion about how the potential acts can be tested and assessed to be the knowledge beliefs (Firestone and McElroy, 2003). And in case of other definition of knowledge as "social acts", it is clear that social acts are not beliefs. These can be termed as just commodities in nature.

Images of Knowledge within Organization Studies:

There are a number of approaches to knowledge which can be recognized in the literature of organization studies and one important place where these approaches to knowledge can be best studied is the organizational learning (Blackler, 1995). There are five images of knowledge described by Blackler (1995) and these are embrained, embodied, encultured, embedded and encoded. Embrained knowledge is dependent on imaginary skills and cognitive abilities, abstract, higher-level knowledge (Blackler, 1995; Fiol and Lyles, 1985). Embodied knowledge is obtained by doing and it depends on physical presence of people which is action oriented and somewhat explicit based on sensory opinion (Blackler, 1995; Zuboff, 1988). Encultured knowledge is the phenomenon to attain shared consideration through a socially structured language which is open to negotiation and thus this knowledge is a lot dependent on language (Blackler, 1995). Embedded knowledge resides in the systematic routines. Now, here the concept of embeddedness states that the economic action is neither over-socialized nor under-socialized (Granovetter, 1985; Blackler, 1995). Encoded knowledge is a type of knowledge in which the information is communicated through signs and symbols, i.e., the information is encoded and sent out by electronic means rather than through conventional forms such as books, manuals, codes of practice, etc (Blackler, 1995).

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After studying these five images of knowledge it can be easily identified that these images make the issues more complex and tough to implement that any discussions of knowledge in between organizations address to. These forms actually don't focus on the codification of knowledge into products, systems or services (Blackler, 1995).

Many researchers and writers have done a lot of research on importance of knowledge in management, however, the least concentrated part is how the knowledge is created and how this knowledge can be managed (Nonaka, 1994). First and foremost, the element of knowledge creation is to understand the two types of knowledge, i.e., tacit knowledge and explicit knowledge. Michael Polanyi (1966) described human knowledge in two forms. First is the explicit or codified knowledge which is in the form of formal and systematic language and second is the tacit knowledge which is more personal and where formal communication is very tough. Tacit knowledge is relative in character and very difficult to express. The important features of tacit and explicit knowledge for knowledge creation are explained in detail in Nonaka and Takeuchi's (1995) book which states that the knowledge is created by converting the tacit knowledge to the explicit knowledge and vice-versa and by integrating both tacit and explicit knowledge. The mode of knowledge conversion that allows us to convert tacit knowledge through communication between individuals is known as the tacit to tacit knowledge conversion. The beneficial thing to be taken into notice is that a person can inherit tacit knowledge just with the observation and practice. There is no need of language to learn this type of knowledge. Everything here is based on experience. However, it is not easy for individuals to gain from experience of others by sharing their thinking processes. It does not make any sense when the transfer of information is just through the emotions and shared experiences. The phenomenon of creating tacit knowledge through shared experience is called "socialization" (Nonaka, 1994).

Modes of Knowledge Creation

Source: Nonaka, 1994

Next important mode of knowledge creation is done through the use of social procedures in order to integrate different entities of explicit knowledge within the individuals. This exchange and integration of knowledge is done through the use of different exchange methods such as meetings, telephonic discussions, and video conferencing and so on. Today, in the technological world, there are a lot of new ways to reorganize the knowledge through sorting, calculating and reclassifying which can also direct to some new form of knowledge. This process is called "combination" (Nonaka, 1994).

Last two modes of knowledge creation involve both tacit and explicit knowledge. These forms can develop through shared communication. First is known as "externalization" which can be defined as the conversion of tacit knowledge to explicit knowledge. Second is known as "internalization" which can be seen as the conversion of explicit knowledge to tacit knowledge which is also similar to the conventional concept of learning (Nonaka, 1994).

Now, after studying the different modes of knowledge creation the important point to note is that the research of organizational learning does not illustrate the important aspect of externalization. Also, there is less stress laid in the effectiveness of socialization. Another point is that it is very difficult for the organization to execute the questioning and renovate the existing viewpoints, understanding the structures, or decision making. The problems can be caused if there is an unsuccessful communication between tacit and explicit knowledge. The existing knowledge may seem to be shallow if there is a lack of assurance and negligence of the personal meaning of knowledge. It may be difficult to create further knowledge if there is a failure to shape the knowledge. There may be a difficulty to apply knowledge to other contexts (rather than where it was originally created) if the knowledge sharing created by socialization is limited (Nonaka, 1994).

Barriers to knowledge creation:

At the individual level, there are many activities engaged in knowledge creation such as ability to deal with new situations, events, information and contexts (Krogh, Ichijo and Nanaka, 2000). The managers are very optimistic about how well the individual workers will handle new situation in order to combine knowledge management. However, many organizations find it very tough to avoid and overcome individual knowledge barriers. There are two individual barriers which can create problems in integrating knowledge management - limited accommodation and threat to self image. There are different situations for which individuals do not have clear responses or routines. And the phenomenon by which individuals provides some significance to new inputs, differentiating those as something other than what they already know. So they have to try new actions in new situations if their response is called for. However, the individual barriers develop when these accommodations happen to be very difficult in nature. There are situations where an individual's past knowledge and experience is not sufficient, for example, a difficult task, technological vocabulary or may be a touching outburst from a colleague. The workers may face new technological development to be carried out without any prior warning or training or there may be a new set of customer requirements they need to handle. In these situations, individuals can lose interest and their confidence may breakdown (Goldman, 1992). Thus the tasks may result in a wrong direction (Krogh, Ichijo and Nanaka, 2000). Second barrier to the individual knowledge creation is a threat to self image. Sometimes people may find it easy to accommodate in a new situation and sometimes will find it threatening. The people tend to make stories about their careers, dreams, hopes, etc in order to impress the listeners to justify their behavior just to avoid looking incompetent in front of others (Dennet, 1988). However, co-workers and the managers know better about the performance of an individual. Even then these stories and beliefs are a barrier for the creation of knowledge (Krogh, Ichijo and Nanaka, 2000).

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At organizational level, there are three stern obstacles for an individual to justify his/her beliefs in a group. These are the need for a legal and justifiable language, organizational stories and procedures (Berger and Luckmann, 1967). Organizational barriers also arise because of natural tendencies as in case if individual knowledge barriers mentioned above. But when it is related to procedures and the acceptance of limited company standards, these barriers may strengthen due to the wrong attitude of managers towards knowledge. First of all, language is important for individual learning and reflection. The main point here is that people shift from open distinctions to increasingly fine distinctions with the help of knowledge and distinction making (Krogh and Roos, 1995). But if these fine distinctions are not there, the organization may not get the new knowledge. On the contrary, if these distinctions are too superior, there may be a problem where large issues may be ignored. The major barrier to create new knowledge and broader distinction making is the justifiable push for balanced thinking in the society (Weick and Westley, 1996). Second barrier is that all organizations have stories. These stories constitute a common sense and the memory of organization in order to understand how things work. But these are also a barrier to organization's knowledge base as they don't allow individuals to create and convey differing thoughts. These are stories that are largely negative and they describe failed marketing campaigns, failed attempts for implementing technology, thus resulting in failed entrepreneurs (Krogh, Ichijo and Nonaka, 2000). The third knowledge barrier has the procedures involved in it. A procedure represents all the experiences and solutions for the complex tasks. But it also work against the public justification of beliefs by directing communication, defining planning steps and setting performance measures for control (Leonard, 1995). However, the procedures in place does not allow going beyond the disciplinary or functional lines in most companies. Procedures also don't allow individuals to make use of much time and resources for new projects of knowledge creation. When it comes to an ineffective procedure, employees are least motivated which results in acquiring a bad reputation, getting very few or no incentives or weakening there career vision (Barnes, 1988).

Knowledge Management:

Knowledge management is an important resource within the organization. It is in the form of unprocessed material, work-in-progress or a finished good of decision making (University of Kentucky, 1998).

According to Malhotra (1998), "Knowledge Management caters to the critical issues of organizational adaption, survival, and competence in the face of increasingly discontinuous environmental change…. Essentially, it embodies organizational processes that seek synergetic combination of data and information processing capacity of information technologies, and the creative and innovative capacity of human beings." Knowledge always exists in the individual's personal context based on particular information. So, information generated by computer systems is not at all a right way to carry the human understanding for a possible action. Therefore, it might be correct to say that the knowledge exists in the user and not in the set of information (Churchman, 1971). It is very unclear about what knowledge and management is from the definition. This shows a highly biased view of knowledge and unoriginal of Knowledge Management (Firestone and McElroy, 2003).

Another definition by Ellen Knapp, PWC (1998) says that "knowledge management is an art of transforming information and intellectual assets into enduring value for an organization's clients and its people." This definition is more inclined about showing us about knowledge management as an art rather than emphasizing on management. Intellectual assets concept is not at all within the scope of knowledge management. Management does not mean transforming information and there are many other things that have durable values. To conclude this definition this is mystifying as it acts more on information rather than managing knowledge and processing knowledge. This blunder is committed over and over again in knowledge management (Firestone and McElroy, 2003).

With the growing use of information and communication technologies (ICTs), companies and governments are facing many opportunities and threats, for example, global markets and competition, new types of organizational structure and inter-organizational dependency, and new relationships between buyers and sellers (Quintas, Lefrere and Jones, 1997). There are many industries and companies which have the potential to implement the technologies required to focus across different spheres (Kodama, 1995). So, these industries have to search continuously for new knowledge acquisition from different sources in order to facilitate themselves to innovate well (Allen, 1977). For instance, in R&D companies and in KPOs (Knowledge Process Outsourcing), a huge amount of expenditure is only for gathering, understanding and incorporating knowledge from outside the firm's limits (Cohen and Levinthal, 1989). This is very easy in case of codified knowledge as it is expressed and shared in written form, designs, specifications, etc. but it is very challenging and difficult in case of tacit knowledge as it exist within the individuals and may be sometimes rooted in organizational and shared processes (Nelson and Winter, 1982). Such type of difficult knowledge is not easy to be transferred among organizations (Hamel, Doz and Prahalad, 1989). There is some form of tacit aspect attached to all types of knowledge and its management, so tacit knowledge should always be seen as a reliant of explicit knowledge (Polanyi, 1958). Organizations must resolve their boundary restrictions before the knowledge is transferred across the organizational boundaries. The limits should be open for the flow of information and knowledge from one organization to other organization (network and markets in which the organizations work) in tacit as well as explicit forms. And the organizations should be able to cultivate and protect their intellectual and knowledge base (Quintas, Lefrere and Jones, 1997). In order to transfer the knowledge across the organization's boundaries, following framework is defined (Carlile, 2004):

Knowledge Boundaries:

Source: Carlile, 2004

Here the syntactic capacity means the growth of the common list of glossary or dictionary that is used to transfer and share the knowledge. However, it is not a sufficient tool to share and assess the knowledge (Carlile, 2004). The second feature is the semantic translation. Here the individuals involved have to recognize and learn about the differences and needs related to translating a domain-specific knowledge. The third feature is the pragmatic transformation where the common interests for making trade-offs and transforming of domain-specific knowledge is created. Last feature of boundary framework is the use of multiple iterations. This aims at developing enough knowledge for sharing and assessing each other's knowledge (Carlile, 2004). Although, this framework is illustrative and shows how the knowledge is transferred and assessed at different levels, there is no testing tool being developed for this. So, it makes this tool more of trial and error method rather than being specially designed to solve the errors through knowledge transfer.

Where knowledge management goes wrong?

Organizational knowledge weakens, becomes out of date and can result in bad results if any organizational learning plan is just carried out without the detection and correction of errors (Fahey and Prusak, 1998). It is very important to detect these errors so as to deliver what is promised. However, if these errors are not identified and corrected, all the efforts made to manage the knowledge will be based on imperfect principles. Knowledge management is highly dependent on easily visible, quantifiable information (Krogh, Ichijo and Nonaka, 2000, pp 26). The most important purpose of knowledge management is to send out the right information to the right people at the right tempo and it highly depends on information technology for this. But one critical error with some uses of information technology has restricted its potential involvement to organizational knowledge. No doubt that information technology is a very useful tool for data transmission and information distribution but the communication and learning which is best possible through face-to-face interaction cannot be substituted with the information technology (Fahey and Prusak, 1998). Information systems are very limited when it comes to facilitate a group which is sharing feelings related to tacit knowledge understanding. The knowledge creation and knowledge management cannot be done only with the information technology (Krogh, Ichijo and Nonaka, 2000).