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The Enterprise in People's Minds

The Enterprise in People's Minds


by Christian Bertram

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We propose an overlay of two prevailing paradigms for understanding how knowledge is constructed. The first is the constructionist paradigm. It which describes knowledge as a duality of the two complementary constituents soft and hard knowledge. The second is the representational paradigm. It describes that knowledge exists in a dichotomy of two forms, tacit and explicit knowledge. Understanding this overlay of the prevailing paradigms, and applying it to an enterprise setting, can lead to insights for better managing institutional knowledge. While many approaches recognize its intrinsic link to people, many also assume that managing knowledge by extracting it from people is possible. We support that it is not, and offer the overlay to help explain and understand why. We highlight that managing knowledge means managing all of the different knowledge aspects soft and hard knowledge in tacit or explicit form. Finally, we propose that a selective mix of techniques is required to manage the different knowledge aspects - explicit, tacit, hard and soft knowledge.

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I
1.1

Introduction
Knowledge

Standards Australia AS 5037-2005, 2005 defines knowledge as the body of understanding and skills that is constructed by people and increased through interaction with other people and with information. It is intrinsically linked to people (Wissensmanagemement Forum 2003). It provides the paradigm for how people perceive, understand, interpret and interact with their environment (Covey, S R 1989). According to recent literature on human capital, this body of understanding and skills includes peoples values, attitudes, mindsets and beliefs; experience, abilities, expertise and competencies; judgment, behaviours, and wisdom (Hung, Y-C, Liou, C-C, Chiu, C-L & Chiu, S-C 2009).

1.2

Institutional knowledge

When this knowledge is relevant to the continuous and effective functioning of an enterprise, it is referred to as institutional knowledge (Howard Rosen cited in Transportation Research Board 2007). The term enterprise in this context denotes the systematic and purposeful activity of people, especially in a business organization (Merriam-Webster 2010).

1.3

Knowledge construction

People acquire and construct knowledge in many ways, such as reading, thinking, reasoning, interacting, socialising and experiencing (Hildreth, P. and Kimble, C., 2002, Clinical Services Redesign Program, 2006, Nonaka, I., Takeuchi H. 1991, Gourlay, S., 2006, Standards Australia AS 5037-2005, 2005, McDavid, D. W., 1999, Polanyi M., 1967). Those activities can be broadly categorized into mental and physical activities (Covey, S R 1989).

http://journal.heinz.cmu.edu/Article.aspx?ID=41[16/11/2010 10:39:27 AM]

The Heinz Journal | Policy, Process, Practice Mental activities take place in peoples minds, for example as recall, thought and reason. It is stimulated by sensory perception (MerriamWebster 2010, Wissensmanagemement Forum 2003). Physical activity constructs knowledge as people systematically interact with their environment (Covey, S R 1989, Wissensmanagemement Forum 2003). Leonard, D & Sensiper, S 1998 suggests that part of this knowledge resides in peoples bodies. An illustrative example is the set of physical abilities required to balance on a bicycle (Goguen, J A 1997).

1.4

Knowledge management

Knowledge management is concerned with positively influencing how people create, share, use and apply their knowledge (Standards Australia AS 5037-2005, 2005). Often, the problem is that those efforts concentrate on recording knowledge in some form. For example, by extracting and capturing it in information systems or making it explicit into records and documents (Hildreth, P. and Kimble, C., 2002). A number of authors argue however, that it is not feasible or even possible to capture and record all aspects of peoples knowledge. Many facts about the enterprise are inexplicit, unspoken, unrecorded, unconscious, and locked away in peoples minds (Goguen, J A 1997, Govil, R., 2007, Callahan, S 2007). This leads to limited success of many knowledge management efforts, and much of the institutional knowledge is walking out the door as people change roles, leave or retire (Buckingham S., 1998 cited in Hildreth, P. and Kimble, C., 2002, Clinical Services Redesign Program, 2006 ).

1.5

Overlay of knowledge paradigms

We will overlay two prevailing paradigms to offer a new paradigm to explain how knowledge is constructed. They are the representational and the constructionist paradigms. Understanding this aspect of epistemology, and applying it to an enterprise setting can lead to insights for better managing institutional knowledge.

II
2.1

Paradigms of Knowledge Theory


Representational Paradigm

The widely accepted representational approach to knowledge views knowledge as a dichotomy of two mutually exclusive forms. Knowledge can either be explicit, or tacit (Nonaka, I., Takeuchi H. 1991, Standards Australia AS 5037-2005, 2005, Wissensmanagemement Forum 2003, Hildreth, P. and Kimble, C., 2002). The first category, explicit knowledge, is the organization's recorded knowledge. It is knowledge that was extracted into knowledge stores outside peoples minds and bodies. Examples are written records or documents, and information systems (Hildreth, P. and Kimble, C., 2002, Govil, R., 2007 (2), Callahan, S 2007). Some authors suggest that recorded knowledge is perhaps better thought of as information. It has been extracted from peoples mind and bodies. And, at the time of recording, it replicates some aspects of peoples knowledge. Later, we will explain that hard knowledge is particularly suitable for making explicit. The second category, tacit knowledge, comprises inarticulated, undocumented knowledge intrinsic to people (McDavid, D. W., 1999 and Middleton, M., 2005, Wissensmanagemement Forum 2003). It is knowledge embedded in their mind and body, and is often personal or subconscious (Leonard, D & Sensiper, S 1998, Wissensmanagemement Forum 2003). Govil, R., 2007 (2) suggests that up to 42% of enterprise knowledge may reside in peoples minds.

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The Heinz Journal | Policy, Process, Practice

Figure 1 - Enterprise Knowledge Model Based on the Knowledge Spiral of Nonaka, I., Takeuchi H. 1991

2.2

Constructionist Paradigm

An alternative paradigm is the constructionist approach. Here knowledge exists in a mutually dependent duality of two complementary fractions (Hildreth, P. and Kimble, C., 2002, Kimble, C. and Hildreth, P. M., 2004). One fraction is termed hard knowledge, the other soft knowledge. Hard knowledge is the fraction of knowledge that is suitable for recording. The other fraction is described as less quantifiable, not easily or impossible to be captured and stored, or not to be learnt simply by demonstration or instruction (Lave, J. & Wenger, E., 1991 cited in Hildreth, P. and Kimble, C., 2002). The constructionist approach may be best understood as a continuum of varying hard and soft knowledge proportions. At one end, pure soft knowledge would simply not be representable explicitly. Pure hard knowledge, on the other hand, could be recorded in its entirety. Along the continuum, knowledge has a recordable fraction, and one that must be reconstructed socially or individually. This approach attempts to overcome the identified flaw that not all knowledge can be captured and recorded without becoming invalid (Buckingham S., 1998 cited in Hildreth, P. and Kimble, C., 2002).

2.3

The Constructionist-Representational overlay

Rather than siding with a particular paradigm, an overlay of both paradigms promises greater utility. This section explains how. Let us support that knowledge can have both, a hard and a soft fraction. We also support that the hard component is suitable for extracting from people, while the soft component is not. We can now combine the above with the representational view. Accordingly, the hard fraction may be represented in tacit, explicit or both forms. It may be known by people (tacit), recorded (explicit), or both. Accepting also that the soft fraction is not suitable for recording, it would only exist as tacit knowledge in peoples minds. Lets call this the ConstructionistRepresentational overlay of how knowledge is constructed.. Let us illustrate this overlay with touch typing. The declarative knowledge, such as the character location on a typists keyboard, can be known by people (tacit), and also be recorded in a training workbook (explicit). It is hard knowledge. On the other hand, the procedural knowledge for touch typing has soft elements, such as some fine motor skills for striking the keys. We argue that while this can be explained, it cannot be passed on easily through documents. This fraction of knowledge is soft. It simply cannot be learned from a manual without the individual reconstructing it in practice. Documents and instructions can help, but will not simply instill the knowledge.

III

Implications

When those knowing the soft fraction leave without having passed it on, the hard fraction of the record may be the only remnant of the overall knowledge. But if hard and soft knowledge fractions need to be joined to become meaningful and useful (Hildreth, P. and Kimble, C., 2002), the partial, incomplete knowledge may have little meaning or use.

http://journal.heinz.cmu.edu/Article.aspx?ID=41[16/11/2010 10:39:27 AM]

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3.1

Complete and Incomplete Knowledge

Based on the above, it is possible to create a concept incomplete knowledge. This is when knowledge falls short of some hard or soft constituent. And this is how it could occur. If piece of knowledge consists of a soft and a hard fraction, a record simply cannot adequately represent the knowledge. It can only document its hard fraction. And then the documented knowledge falls short of its soft fraction. Consequently, we argue that complete knowledge can only reside in people as tacit knowledge. What cannot be recorded cannot exist outside peoples minds. And the hard fraction may or may simply not be recorded. This would support Hildreth, P. and Kimble, C., 2002, who argue in support of Hargadon, A.B. 1998, that capturing hard knowledge alone is likely to create an incomplete representation.

3.2

True and False Knowledge

It is also possible to create a concept of true and false knowledge. True explicit knowledge would be any part of the hard knowledge fraction being represented explicitly. False explicit knowledge would be any part of the soft, non-representable knowledge fraction, being associated with an explicit record. For example, simply passing on a record of fine motor skills for typing would ultimately fail. Typing can simply not be learned by reading about it alone. It requires reconstructing the soft fraction, for example through training and practice. The concept of true and false is equally valid for tacit knowledge. When people reconstruct knowledge with practice, instructions from records, or through interaction, it is not guaranteed that the resulting body of understanding and skills will be equivalent to the original. A persons reconstructed knowledge may simply change as aspects of it are passed on, and reconstructed with differences to the original knowledge.

3.3 Knowledge Value Degradation through Incomplete Knowledge


Hildreth, P. and Kimble, C., 2002 cite Glazer, R., 1998 and Allee, V., 1997 that: when something is to be managed, People feel that it must be quantified, counted, organised and measured. It must be able to be built, owned and controlled if its value is to be maximised. As a result, efforts to manage knowledge often concentrate on recording it (Hildreth, P. and Kimble, C., 2002). And the fixation on readily available tools to manage hard knowledge, such as electronic records and document management systems can distract from the need for holistic knowledge management (Clinical Services Redesign Program, 2006). The non-recordable fraction of knowledge is often undervalued (Clinical Services Redesign Program, 2006). But while capturing, circulating and maintaining hard knowledge often requires sophistication and effort, it may fail to meet the high expectations. The soft fraction may simply be overlooked. When accessing and rejoining the missing soft fraction from people is then too cumbersome, costly and lengthy, or even impossible as a person moved on, the incomplete knowledge may turn out to be of little or no value.

3.4

Transient Knowledge

Without acknowledging the different aspects of institutional knowledge, much of it may be transient. When experienced people leave or retire, soft knowledge may simply be walking out the door (Clinical Services Redesign Program, 2006). Especially if tacit knowledge has not been passed on. Valry, P., 2008 also portrays enterprises as living systems that are undergoing a continual process of evolution. The inherent liability of managing knowledge is that as knowledge is utilized, applied, constructed and transformed by people, the knowledge must be synchronized continuously. It is also necessary to share the continuously created new knowledge. This synchronisation process also demands resources, and presents an opportunity cost. But the output is much less tangible, and may hence receive significantly less attention.

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IV

Recommendations

4.1 Constructionist-Representational overlay to recognise all knowledge constituents


The Constructionist-Representational overlay can help understand a more complete view of how knowledge is constructed. It has hard and soft knowledge fractions, which exist as tacit or explicit knowledge in people. This paradigm can provide a fresh perspective for evaluating practices to manage institutional knowledge.

4.2 Targeted Management of Tacit and Soft Knowledge Aspects


To better manage knowledge, it is necessary to understand the significance of tacit and soft knowledge. Managing knowledge requires consciously and selectively recording and circulating explicit knowledge, interconnecting people, and rejoining recorded knowledge with people (Clinical Services Redesign Program, 2006). Enterprises need to acknowledge that a large proportion of institutional knowledge is deeply rooted in people (Wissensmanagemement Forum 2003).

4.3

Pitfall of hard knowledge fixation

We join other authors in warning of a common knowledge management pitfall, the fixation on recorded knowledge. It has been substantiated that some aspects of knowledge cannot be articulated, abstracted, recorded, captured and stored (e.g. Buckingham S., 1998, Swan, J., Newell S., Scarborough, H. & Hislop D., 1999, Gourlay, S., 2006). Hence, efforts that simply try to make knowledge explicit are likely to underperform. They form unrealistic expectations, and overlook that only a fraction of institutional knowledge may be effectively managed in recorded form.

4.4

Targeted management of soft knowledge

Middleton, M., 2005 describes personal human interaction and dialogue as the richest avenue of transferring knowledge. They also found a preference to use social networks to obtain information. This view is also supported by one thesis of Polanyi M., 1967, that knowledge is socially constructed. In the spiral of knowledge described by Nonaka, I., Takeuchi H. 1991, tacit knowledge is also 'shared' through interaction. Lave, J. & Wenger, E., 1991 have formalised a process called Legitimate Peripheral Participation in Communities of Practice. This is suitable to create and sustain tacit knowledge. Community members are immersed in the practices of their community and learn from the community members (Lave, J. & Wenger, E., 1991). This learning includes the unspoken conventions. Here knowledge is created and passed on by immersing in the practice itself, under the guidance of a mentor and whilst situated in a particular environment. Nonaka, I., Takeuchi H. 1991 is cited in Hildreth, P. and Kimble, C., 2002 that the sharing of tacit knowledge takes place through joint activities that require physical proximity. The example of a master craftsman with years of experience illustrates this. This craftsman may not be able to articulate the principles behind what he knows, but may be able to transfer this knowledge to an apprentice (Hildreth, P. and Kimble, C., 2002).

Bibliography
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Australia -Knowledge-Management Covey, S R 1989 , The seven habits of highly effective people , Simon & Schuster, London. EMCParadigm Publishing, 2008 , If Two Minds Are Better Than One, Then How About Two Thousand ? A Review of Marvin Minsky's The Society of Mind, retrieved September 2008, http://www.emcp.com/intro_pc/reading12.htm Glazer, R., 1998 , Measuring the knower: towards a theory of knowledge equity., California Management Review, 40(3), 175 -194 Goguen, J A 1997 , Toward a social, ethical theory of information, Social science, technical systems and cooperative work: beyond the great divide, edited by G.C. Bowker, Susan, L. Star, W. Turner and L. Gasser, Mahwah, NJ: Lawrence Erlbaum Associates, pp.27-56 Gourlay, S., 2006 , Conceptualizing Knowledge Creation: A Critique of Nonaka's Theory. Journal of Management Studies, Vol. 43, No. 7, pp. 1415 -1436, November 2006. Available at SSRN: http://ssrn.com/abstract=942391 or DOI: 10.1111/j.14676486.2006.00637.x Govil, R., 2007 (2), Knowledge Management 360 Why tacit knowledge be converted into explicit knowledge ? , July 2007, retrieved October 2008, http://kmlearning.blogspot.com/2007/07/why -tacit-knowledge be -converted-into.html Govil, R., 2007 , Knowledge Management 360 Knowledge Management Process or Lifecycle, July 2007, retrieved October 2008, http://kmlearning.blogspot.com/2007/07/knowledge -managementprocess.html Hargadon, A.B. 1998 , Firms as knowledge brokers: lessons in pursuing continuous innovation., California Management Review, 40(3), 209 227. Hildreth, P. and Kimble, C., 2002 , The duality of knowledge, Information Research, Vol. 8 No. 1, October 2002 Hung, Y -C, Liou, C-C, Chiu, C-L & Chiu, S -C 2009 , Research on Measuring Human Capital Factors An Example of Household Sewing Machine Industry in Taiwan, Proceedings of the International Conference on Pacific Rim Management, Association for Chinese Management Educators, pp. 334 -341 Kimble, C. and Hildreth, P. M., 2004 , Communities of Practice: Going One Step Too Far? , Available at SSRN: http://ssrn.com/abstract=634642 Lave, J. & Wenger, E., 1991 , Situated learning. Legitimate peripheral participation, Cambridge: Cambridge University Press Le Leonard, D & Sensiper, S 1998 , The role of tacit knowledge in group innovation. California Management Review, Vol. 40, Issue 3, pp. 112 -132 McDavid, D. W., 1999 , A standard for business architecture description, IBM Systems Journal, Volume 38, Number 1, 1999, retrieved October 2008, http://www.research.ibm.com/journal/sj/381/mcdavid.html McNabb, D. E., 2006 , Knowledge Management in the Public Sector, A Blueprint for Innovation in Government, Published by M.E. Sharpe, 2006 Merriam-Webster 2010 , Online Dictionary, http://www.merriamwebster.com/dictionary/enterprise Middleton, M., 2005 , Enterprise knowledge: the document, content and records context, Queensland University of Technology, School of Information Systems, Brisbane, November 2005 Nonaka, I., Takeuchi H. 1991 , The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation., Oxford University Press Polanyi M., 1967 , The Tacit Dimension, Routledge and Kegan Paul, London, 1967

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http://journal.heinz.cmu.edu/Article.aspx?ID=41[16/11/2010 10:39:27 AM]

The Heinz Journal | Policy, Process, Practice

http://journal.heinz.cmu.edu/Article.aspx?ID=41[16/11/2010 10:39:27 AM]