I. Introduction.................................................................................................................

2
Section I.1 Self Organization and Complexity Theory ...........................................3
Section I.2 The ontology of learning in complex adaptive systems...........................4
Section I.3 Practice Implications................................................................................4
Section I.4 Assumptions of New Knowledge Managament.......................................6
Section I.5 Four dimensions of NKM........................................................................6
1. Embryology of knowledge.................................................................................6
2. Politics of knowledge.........................................................................................7
3. Intellectual diversity...........................................................................................7
4. Connectedness....................................................................................................7
Section I.6 How to measure innovation.....................................................................8
(a) About thought leadership..................................................................................8
Section I.7 Sustainable Innovation.............................................................................9
Section I.8 Knowledge processing, a self-organizing social process.........................9
Section I.10 POLICIES: ..........................................................................................10
II. My Research............................................................................................................12
Section I.11 How to conduct research and measure KM policy effectiveness in
Philips:......................................................................................................................12
Section I.12 Methodology: the types of theoretical models.....................................12
Section I.13 Role of culture: ...................................................................................13
III. Additional literature that goes along or adds to the organic knowledge
management theory......................................................................................................13
Section I.14 Knowledge sharing as a human behaviour that must be examined in
the context of human performance...........................................................................13
Section I.15 Culture and knowledge sharing study..................................................13
Section I.16 Linking the idea of social capital.........................................................14
IV. Getting Real about Knowledge Networks..............................................................15
Section I.17 The philosophy: Nishida’s and Cartesian world..................................15
Section I.18 Ba: Organic ground for knowledge creation........................................15
V. Organizational Learning and organizational knowledge.........................................15
Section I.19 Theories of knowledge.........................................................................15
(a) Cognitive-possession perspective...................................................................15
(b) Positivist view.................................................................................................15
(c) The connectionist approach............................................................................16
(d) Nonaka (1994): dynamic knowledge creation process...................................16
(e) Social approach...............................................................................................16
(f) Social constructionist theory...........................................................................16
Section I.20 Theories of learning.............................................................................16
(a) Positivist view.................................................................................................16
(b) Social-process perspective..............................................................................16
(c) Learning as a cultural process.........................................................................16
(d) Learning as social construction......................................................................16
Section I.21 Theories of the firm..............................................................................17
(a) Connectionist .................................................................................................17
(b) Spender (1996): dynamic theory of a company..............................................17
(c) Social constructionist theory...........................................................................17

1
 New Knowledge Management
Mark W. McElroy
Butterworth-Heinemann of Elsevier Science, Knowledge
Management Consortium International, 2003.
KM is about improving ways in which people work together
to create and share knowledge.

I. Introduction

1. There are two generations of knowledge management.

The older generation concerned the information technology
loaded processes, such as and information collection, storage
and distribution, and was focused more on old knowledge
diffusion rather than new knowledge generation.
“Unfortunately, this interpretation of KM has done nothing but
confuse the business world for years now, since what’s really
going on in the scenario above is just information integration
(i.e. information or knowledge capture, deployment and
retrieval) and not knowledge management, much less
knowledge processing. As discussed, earlier knowledge differs
from information by virtue of the strength contained in the
claims about claims (metaclaims).” Pp.12 => the power
relations article + Plato
“First-generation KM, then, can be seen as a management
discipline that focuses on knowledge operations, or knowledge
deployment and use. It fails to address how knowledge is
produced.”pp.44
2. “It is also not only true that each knowledge domain in a
system has its own KLC, but also its own independent
outcomes. In other words, what’s true for me (my validated
knowledge claims) may not be true for you, because we each
have our own separate KLCs and my validation criteria may
differ from yours” pp.18 (odniesienie do artykułu o Power is
Knowledge – codes to desicpher knowledge)

2
 3. Peter Senge 1995 The Fifth Discipline: ” the only
sustainable advantage in business: the ability to learn faster
than your competitors. OL, therefore, focuses on how to create
and forste effective knowledge processing environments in
human social systems.”pp.19
4. Definition of Open Enterprise: “knowledge processing
environments might be more or less open to including the
broader population of a firm when it comes to knowledge
claim formulation, evaluation, and adoption by management.
The more restrictive management is in the conduct of its
knowledge processing affairs, the more “closed” the firm
would be.” Pp.20

Section I.1Self Organization and Complexity Theory

1. CAS theory holds that living systems (i.e. organizations made
up of living, independent agents, such as people) self-organize
and continuously fir themselves, individually and collectively,
to ever-changing conditions in their environment. Pp.27
(R.D.Stacey Complexity and Creativity in Organizations)
2. Practitioners of second generation KM believe that people in
organizations tend to self-organize around the production,
diffusion, and use of knowledge, (and the KLC is the pattern of
organizational behaviour that follows). Pp.28
3. “Complex adaptive systems are driven by three control
parameters: the rate of information flow through the system,
the richness of connectivity between agents in the system,
and the level of diversity within and between the schemas
[i.e., knowledge bases] of the agents.” (Stacey, 1996, pp.99)
4. “According to the adaptive systems camp, human social
systems survive by continuously adjusting, or fitting,
themselves to their environments; and they do this by
engaging in real-time, non-stop learning.” Pp.148
See how cognition happens in living systems

3
Section I.2The ontology of learning in complex adaptive systems
1. “Complexity theory – or, to be more precise, the science of
complexity – is the study of emergent order in what are
otherwise very disorderly systems. Spirals in whirlpools,
funnels in tornadoes, flocks of birds, schools of fish – these are
all examples of orderly behaviour in systems that are neither
centrally planned nor centrally controlled.”
2. […] Complexity studies indicate that the most creative phase
of a systes, that is the point at which emergent behaviours
inexplicably arise, lies somewhere between order and chaos.
Stuart Kauffman points out that complex systems produce
their most inventive displays in the region of behaviour he
calls “the edge of chaos”. Systems operating in the vicinity of
the edge exhibit wild bursts of creativity and produce new and
novel behaviours at the level of the whole system.
3. […] In a sense, complex systems innovate by producing
spontaneous, systemic bouts of novelty out of which new
patterns of behaviour emerge. Patterns that enhance the
system’s ability to adapt successfully to its environment are
stabilized and repeated; those that do not are rejected in
favour of radically new ones, almost as if a cosmic game of
trial-and-error were being played. Complexity, therefore, is in
part the study of pervasive innovation in the universe. “ pp.37
4. Definition of learning: Learning in its purest form is a
voluntary, self-directed act that follows from intrinsic
motivation and is intended to solve a problem. Pp.151

Section I.3Practice Implications

1. Double-loop learning: “people not only reference rules but
constructively challenge them.” pp.70 see Chris Agryris
2. Why evolution is a must: “The extent to which an organism
engages in healthy rule-making and learning will, to a large
degree, determine its outcomes in life. An agent that rarely
tests its rules will tend to perform more poorly in practice than

4
 one that constantly challenges, upgrades, and refreshes them.
Agents include organizations. A business that rarely revises its
approach to the marketplace or its operating routines will tend
to ossify and atrophy. On the other hand, companies that
engage in healthy levels of rule-making and revision are
inherently more capable of adjusting to changes in their
environment. Indeed, organizational agility depends, to a large
extent, on just how well an organization’s learning system
works. => see the article on autopoiesis and the biological
nature of knowledge
That, then, is the principal aim of second-generation KM – to
enhance an organization’s ability to engage in constructive levels
of double-loop learning and, therefore, its capacity to adapt. In a
sense, what we’re talking about here is double-loop KM, an OL
practitioner’s method for helping organizations, not just
individuals, learn. “Pp.71
3. Measuring KM: “Measuring return on investment from KM
and OL initiatives, then, should occur in two ways: 1) by
tracking the evolution of rules held in knowledge containers,
and 2) by measuring related changes in the performance of
the organization (i.e., in correlated business outcomes). […]
First, is the impact of investments on the knowledge
processing capacity of a firm, and second, is the downstream
impact of enhancements in knowledge processing on business
performance.” Pp.80
4. “Strategy, itself, is a product of knowledge
production”. Knowledge management strategy should
transcend business strategy, and KM interventions and
methodologies should be crafted accordingly. Pp.87
5. “Innovation and organizational learning are largely
synonymous terms” (see Schon and Agryris) “The
output of organizational inquiry may take the form of a change
in thinking and acting that yields a change in the design of

5
 organizational practices” (C.Agryris, D.A.Schon, Organizational
Learning II, Reading, MA, Addison-Wesley Publishing Company,
1996, pp.12) Each occurrence of organizational learning can,
in turn, be regarded as an innovation. The means by which
new knowledge is produced and integrated into widespread
organizational practice is what we mean by the term
“innovation”.

Section I.4Assumptions of New Knowledge Managament

“Knowledge production in organizations is an emergent social
process. Human social systems, by their intrinsic nature, give rise
to collective knowledge-making by their members as a byproduct of
their individual learning and interpersonal interactions. Pp.100 […]
In other words, no manipulation or management is required to get
people to innovate in organizations; human social systems are
already endowed with predispositions to do so.
You don’t manage innovation, you either get out of its way or you
engage it on its own terms, not yours.” Pp.101

See Thomas Kuhn that observed evolutions in science

Section I.5Four dimensions of NKM

1. Embryology of knowledge
1. Creativity is a group process: “Ralph Stacey says, <<This
means we cannot view creativity purely as an attribute of an
individual. An individual is creative only if he or she is a
member of groups that are capable of assisting in the
containment of anxiety, although the degree to which
individuals rely on groups for this purpose varies
enormously.>>[…]<<Ultimately, creativity, and thus
innovation, lie in interaction within a group>>”. (Stacey,
1996, pp.139)

6
“The embryology of knowledge refers to the extent to which
individuals in an organization are free to pursue their own learning
agendas, and the degree to which they are further free to self-
organize into knowledge-making communities of interest or
practice” pp.137

2. Politics of knowledge
“The politics of knowledge making, diffusion, and use in an
organization can have a dramatic impact on the overall rate of
business innovation, and the quality of the ideas produced.” Pp.137

3. Intellectual diversity
“The degree to which a business supports a plurality of ideas, even
dissident ones, will also have a material impact on its overall
performance in innovation. Firms that seek diversity in ethos tend to
be more innovative than those that don’t. “ pp.137
Ethographies: Diversities of values, worldviews, and ethos

See CAS theory for more evidence: “Complex adaptive systems are
driven by three control parameters: the rate of information flow
through the system, the richness of connectivity between agents in
the system, and the level of diversity within and between the
schemas [i.e., knowledge bases] of the agents.” (Stacey, 1996,
pp.99)

4. Connectedness
The density of communications networks are also important to
business innovation. The degree to which a culture values rich
communications and connectivity between individuals and groups
will, therefore, materially affect the rate and quality of its
innovation. Pp.137
1. “The degree to which a culture enables and supports effective
communications and connectivity between individuals and

7
 groups will materially affect the rate and quality of its
innovation.” Pp.108

Section I.6How to measure innovation

In R&D: records on research reports or patents,
In HR: personnel programs
In marketing: new ad campaigns
In sales: new contract offerings
1. Measuring the quality of innovation:
2. incremental revenue gained, or the cost saved
3. Trace the evolution of new knowledge, in retrospect, to the
process that created it, and to grant a higher value, or quality,
to innovations that were subjected to, and survived,
thoughtful innovation.
4. Focus on the extent to which a knowledge processing system
has allowed its hosts to solve their problems (pp.111)

See more about how to measure IC

(a)About thought leadership

5. In complex adaptive systems all learning is bottom-up. There
are leaders in such systems, but they derive their authority
from the fact that they are the “attractor basins” (i.e.,
surrogate focal points) of self-organized knowledge
processing. As soon as their knowledge claims no longer
represent the emergent result of the system’s knowledge
processing interactions, their authority withers. Pp.115 (see JH
Holland, Hidden Order: How Adaptation Builds Complexity,
1995)
6. “knowledge managers are knowledge policy and program
managers” pp.119
7. We need a prescriptive model to analyze KM policies:
“to indicate how conditions might be established within which

8
 spontaneous self-organization might occur to produce
emergent outcomes” pp.119

Section I.7Sustainable Innovation

“By synchronizing innovation-related policies and programs with
intrinsically-held patterns of self-organized knowledge-making
behaviour in human social systems (i.e., the “knowledge drive”),
businesses can realize the incomparable advantage of achieving
both sustainable innovation and sustainable outcomes in
commerce.” Pp.131
(see JH Clippinger, III Editor, The Biology of Business, San Fransisco:
Josey-Bass Publishers, 1999).
Cook and Brown contend that innovation is the result of a
generative dance between knowledge and knowing: S.D.Cook,
J.S.Brown, Bridging Epistemologies: The Generative Dance Between
Organizational Knowledge and Organizational Knowing,
Organization Science 10(4) (July-August 1999), 381-400.

Definition: “The process by which new knowledge is formulated by

individuals, validated by communities, and embraced into practice
by organizations is what we call innovation” – pp.134

Section I.8Knowledge processing, a self-organizing social process

Independent individual learning => Group/community formation &
learning => Organizational knowledge adoption => Knowledge
integration
E.Brauner and A.Becker, Beyond Knowledge sharing: The
Management of Transactive Knowledge Systems, Knowledge and
Process Management 13 (1) (2006), 62-71. : propose knowledge
management as an instrument of organizational learning. Social
process is stressed.
Existence and influence of learning drive as a basis for the
propagation of knowledge and adaptive behaviour in living
systems. Pp.153

9
Section I.9
Section I.10POLICIES:
PP.157 “Policies should be permissive in intent, but not prescriptive”
pp.182
“[…] the active management not of innovation per se, but of the
policies that surround its effective practice in a firm.” Pp.183
Knowledge processing
behaviours
Independent individual learning
(embryology and ethodiversity
policies)
Group or community formation
and learning (politics policies)
Organizational knowledge
adoption (politics policies)
Supporting policies
• Support self-directed, self-
managed learning
programs for all employees
• Recruit, hire, and retain
workers with diverse
values and worldviews
• Facilitate omnidirectional
communications
• Embrace policies and
programs that enable and
support self-organized
communities of knowledge
• Formalize the inclusion of
community-made
knowledge in the politics of
organizational knowledge-
making
• Facilitate omnidirectional
communications
• Enforce policies of
transparency and
openness in management
deliberations and
10
 knowledge making
• Facilitate omnidirectional
communications
Knowledge integration • Enforce aggressive
(connectedness policies) knowledge sharing
• Facilitate omnidirectional
communications

See L.Edvinsson, M.S.Malone, Intellectual Capital, 1997

J.Nahapiet, S.Goshal, Social Capital, Intellectual Capital, and the
Organizational Advantage, 1996

Policies can concern either of the two aspects of a living system:

1. Structural dimension policies
 Ethodiversity
 Connectedness
 Community formation
2. Operational dimension
 Individual learning
 Group learning
 Knowledge production
 Knowledge sharing
 Knowledge entitlement – patents, trademarks,
copyrights
Industry example: at 3M, there is the 15% rule, according to
which employees can spend up to 15% of their time engaged in self-
determined, self-managed, independent individual learning. It is
seen as a major factor in what accounts for that company’s
industry-leading levels of innovation. Pp.162

Social capital: social capital points to the value of relationships

between people in firms, and between firms and other firms. Trust,
reciprocity, shared values, networking, and norms are all things that

11
speed the transfer of information and the development of new
knowledge. (see section 3.03)

A firm has a natural ability to self-organize around

innovation on an enterprise-wide basis => source of
competitive advantage.

II. My Research

Section I.11How to conduct research and measure KM policy

effectiveness in Philips:
1) three areas of investigation
a) organization: the existence of learning communities, the
support of flexible communication, dynamics in the
organization, rigidity of job definition, ethodiversity in hiring
b) specific programs for the support and development of
individual and group learning: talent development, culture of
accepting mistakes, open innovation, knowledge sharing or
ownership?
c) ICT support and usage
d) KPIs: no of innovations coming from a given department and
the money value generated by them. All knowledge declines
in value over time, therefore the returns on investment in
policies supporting new knowledge are higher than
investments in policies aimed at the re-use of retrospective
knowledge.
e) Analyze by social network analysis (see Lee)

Section I.12Methodology: the types of theoretical models

J.L.Casti, Would-Be Worlds: How Simulation is Changing the
Frontiers of Science, John Wiley&Sons, Inc., New York, 1997.
The Garden metaphor: is innovation a machine or a garden?

12
Section I.13Role of culture:
“Learning policies are expressions of culture in the sense that
they reflect the principles, beliefs, norms, values, and so on held
by a collective population of people on how learning should
happen and what its importance is to the organization. […]Policy
is the voice of culture.” Pp.207.

III. Additional literature that goes along or adds to the

organic knowledge management theory

Section I.14Knowledge sharing as a human behaviour that must be

examined in the context of human performance
Human performance is influenced by many activities:
• Business context: business goals, business strategy,
communication of strategy
• Organizational context: policies and programs supporting KM;
knowledge sponsors and integrators
• Additionally, there are organizational performance indicators
(structure and roles, processes, culture and physical
environment), and individual performance indicators
(direction, measurement, means, ability, motivation)

W.Ives, B.Torrey, C.Gordon, Knowledge Sharing is Human Behavior,

in: Knowledge Management: Classic and Contemporary Works
D.Morey, M.Maybury and B.Thuraisingham, eds, MIT Press,
Cambridge MA, 2003.

Section I.15Culture and knowledge sharing study

Establishing a KnS proficiency can help to jump start and build a KnS
culture. Liebowitz and Chen define a KnS proficiency as “an attribute
that allows the creation of knowledge to take place through an

13
exchange of ideas, expressed either verbally or in some codified
way”. The best practice report examined culture on three levels:
1. company’s espoused philosophy, values, structures, and
systems
2. behaviour of people’s peers and managers
3. deeper core company values
As a result, factors influencing or enabling KnS were identified:
• link between knowledge sharing and business strategy
• fit with overall culture of the organization
• fit with daily work
• role of leaders and managers
• role of human networks
• institutionalization of learning disciplines
American Productivity and Quality Center. 1999. Creating a
Knowledge-Sharing Culture. Consortium Benchmarking Study –
Best-Practice Report

Section I.16Linking the idea of social capital

• Social networks that create opportunities
• Social capital has three dimensions: structural (network
ties); cognitive (shared codes and languages); and
relational (mutual trust and norms).
• The conclusion was that companies should devote a lot of
time and energy into managing employee relationships
because of the impact they can have on the resulting KnS
behaviour.
M.Huysman and D.de Wit, Practices of Managing Knowledge
Sharing: Towards a Second Wave of Knowledge Management,
Knowledge and Process Management 11 (1) (2004), 81-92.

14
Additionally: M.Stankosky, ed., Creating the Discipline of Knowledge
Management: The Latest in University Research, Butterworth –
Heinemann, 2005.

IV. Getting Real about Knowledge Networks

A.Beck, G.von Krogh, A.Seufert, E.Enkel
Palgrave Macmillan, 2006

Section I.17The philosophy: Nishida’s and Cartesian world

Interacting ba is the lace where tacit knowledge is made explicit,
thus it represents the externalization process. Dialogue is key for
such conversations; and the extensive use of metaphors is one of
the conversion skills required. The importance of sensitivity for
meaning and the will to make tacit knowledge explicit is recognized
at companies like Honda or 3M.

Section I.18Ba: Organic ground for knowledge creation

The organic concentration of knowledge assets in ba involves not a
consumption process of resources, but an ecological process with a
cyclical cultivation of resources. However, knowledge creation and
application represent ecology, not economy, and ba is the stage for
this resource cycle.

V. Organizational Learning and organizational

knowledge
R.Chiva and J.Alegre, Management Learning, SAGE Publications, 2005, Vol.36 (1):
49-68.

Section I.19Theories of knowledge

(a) Cognitive-possession perspective

The view of knowledge as perceptive and as a commodity has its origns in cognitive
science, particularly in cognitive psychology and artificial intelligence (system theory,
computer science, psychology and neurology.

(b) Positivist view

Knowledge is considered as a collection of representation of the world, made up of a
number of objects and events. Knowledge is the result of a systematic analysis of our
sensory experience of a knowable external reality.
Knowledge is universal.

15
The objective of a cognitive system is to generate the most accurate representation of
this world.
Knowledge exists prior to and independently from the knowing subject, who creates
no knowledge in the act of appropriation.

(c) The connectionist approach

Knowledge is generated through networks and relationships, and not by individuals.
Knowledge is found in the connections that exist between the expert and the
organization. It is shared by all members of the organization.

(d) Nonaka (1994): dynamic knowledge creation process

Dynamic aspects of the organizational knowledge creation process: organizational
knowledge is created through continuous dialogue between tacit and explicit
knowledge. Interaction between individuals plays a fundamental role in the
development of new ideas.
Org. Knowledge is created by individuals, organizations play a key role in articulating
and expanding this knowledge.

(e) Social approach

Knowledge is something people create, in other words, it’s a social process. (Spender,
1996). Knowledge is neither universal nor abstract.

(f) Social constructionist theory

Von Krogh (1994): autopoiesis, reality based on social interaction and discursive
behaviour, which give rise to social constructions. Knowledge as a constructing or
creating act, and not as a representation.

Section I.20Theories of learning

(a) Positivist view

Learning is the improvement of the accuracy of representation of the world, which is
a given entity.

(b) Social-process perspective

Learning is not conceived as a way of knowing the world, but as a way of being the
world (Gherardi, 1999). Learning is development of situated identities based on
participation in a community of practice.
Lave and Wenger (1991) say that learning is in social relationships.

(c) Learning as a cultural process

(Cook and Yanow, 1996): learning is inherent in culture, and those who introduce
knowledge into culture and its artefacts seem to be in a good position to obtain
inferences on organizational learning.

(d) Learning as social construction

Organizational learning involves the joint construction of new collective meanings,
through dialogue, equality in participation, tolerance of different viewpoints, shared
experiences, and first-hand access to data. Dialogue is of vital importance.

16
Oswick et al.(2000) demonstrate that it is dialogue which generates individual and
organizational learning, creating meaning and understanding.

What is learned is intricately connected to the conditions in which the learning takes
place. Therefore, learning means acquiring the skills necessary to behave as members
of what they refer to as communities of practice.

Section I.21Theories of the firm

(a) Connectionist
Organizations are networks made up of relationships and managed by
communication.

(b) Spender (1996): dynamic theory of a company

Main aim of a company is application of knowledge to the production of goods and
services, and not the creation or acquisition of knowledge. Organization is the entity
that creates, maintains and makes use of this knowledge. Knowledge is socially
constructed

(c) Social constructionist theory

Wenger (2000): communities of practice are the basic building blocks of a social
learning system since they are the social ‘containers’ of the competencies that make
up such a system. Communities are sets of relationships. Communities of practice are
groups of people informally connected by a shared experience and the passion they
gold for a common issue (Wenger and Snyder, 2000).
They believe organizations are communities formed by communities of practice.

17