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Journal Article

Firms as Connected, Temporary Coalitions: Organisational Forms and the Exploitation of Intellectual Capital  pp11-20

Sandra Begley, Michael J Taylor, John R Bryson

© Apr 2009 Volume 7 Issue 1, ECKM 2008, Editor: Roy Williams, pp1 - 198

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Abstract

The paper presents the case for conceptualising firms as 'connected temporary coalitions' that are able to respond to the challenges of and adapt to, changing environments: in particular, to build, exploit and determine the value of Intellectual Capital (human, structural and relational) enabling different trajectories of renewal and growth in the long term. The paper adopts the perspectives of theoretical pluralism to identify distinctive viewpoints regarding the theory of the firm and the dynamic nature of knowledge. The study draws on four areas of theory: (a) the institutionalist ideas of New Regionalism in economic geography — in particular the conceptualisation of firms as temporary, dynamic, place‑ based coalitions; (b) the structural contingency model of organisation theory coupled with ideas from the knowledge based theory of the firm in exploring changes over time in business activity; (c) evolutionary economics and the perspective it offers on emergent developments, change and time; and (d) knowledge management thinking, and the perspective it provides on intellectual capital and its contribution to firm dynamics, drawing on ideas on social interaction, social practices, social contexts, and the impacts of power and control. The paper extends our understanding of the processes and dynamics operating in and around temporary coalitions, the shifting and reconfiguring of knowledge assets and the role of dynamic capabilities. In addition, the paper challenges earlier concepts of intellectual capital as being embedded in business clusters. The paper argues that, collectively, the coalitions of people that comprise firms deploy their knowledge assets through different forms of organisational arrangement to achieve temporary equilibrium in order to commercialise knowledge, achieve renewal and generate growth. This perspective on the firm has significant policy implications.

 

Keywords: temporary coalitions, intellectual capital, organisational form, enterprise renewal

 

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Journal Issue

Volume 7 Issue 1, ECKM 2008 / Apr 2009  pp1‑198

Editor: Roy Williams

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Editorial

This special edition of the journal is a selection of the best papers from the recent European Conference on Knowledge Management, held at Southampton Solent University in 2008. Several of the papers addressed the shift to what is increasingly being called knowledge ecologies, within the more general field of digital ecologies (see IEEE 2009)

Vanessa Lawrence's keynote speech on Ordnance Survey: underpinning Great Britain with geographic information set the tone for the conference, and set the standard for key aspects of knowledge management and knowledge ecologies. The Ordnance Survey (OS) is an exemplary case study of how to create well mapped data and maximise its use in today's digital ecologies. This case study combines the best aspects of interoperability at the level of data with the best aspects of dynamic, complex and even open systems at the level of information and knowledge creation and exchange. Intelligently mapped data is at the heart of the OS topological information system, creating uniquely identified data objects which are the building blocks for the four layers of the Master Map: topography, address, integrated transport, and imagery.

More importantly from a knowledge management point of view, this integrated Master Map crosses seamlessly from data base management, to information systems, to traditional knowledge management and into knowledge ecologies. A range of commercial and community organisations can build on the Master Map, using elements from it, to create their own maps from their own perspectives, such as housing, health care, flood management, or policing. These different, user‑generated derivative maps create a knowledge ecology, which is a dynamic, flexible, and adaptable set of meta‑mappings (literally and figuratively) or what might be called 'map‑ups', which people can read, write and contribute to, link to, and mash‑up with their own data.

The intelligent data is itself dynamic and changing, and in a ""mobile, transient society and economy where location is a dynamic resource within business"" (Lawrence op. cit.), the data has to be accurate and constantly updated. The figures are impressive: 460M data fields, 1.8M changes per annum, 0.5M updates per annum, of which 99.9% are updated or added within 6 months of completion on the ground, and a potential resolution of 20mm for information on reticulation.

The Open Space initiative, for non‑commercial use only, provides a base and a framework for social mapping or map‑ups. In the first year it involved 900 developers and 156k visitors. The Explore programme allows people to create routes, tag points of interest, and share pictures, news and events.

Lawrence summed up the Ordnance Survey approach as the challenge to ""establish principles to make information sources accessible and connectable"", an elegantly simple framework for knowledge management in the service of knowledge ecologies.

Maracine et al describe knowledge ecosystems (KE) as a new kind of digital ecosystem which is an ""active and dynamic process, that … helps the building, growth, sharing and forgetting of knowledge"". They explore this in healthcare systems for home rehabilitation, which differ from other KEs because of the role and importance of the patient: in practice the entire ""life"" of the ecosystem gravitates around the patient and their personal rehabilitation chain.

Managing Intellectual Capital is now central to the EU strategy, so small and medium sized companies (SME's) must play their part in this. Mertins, Wang and Will's study analyses the different rankings of IC factors across 5 major economic sectors, and leads to some interesting conclusions, for instance that ""the traditional distinction between Industry and Services is improper for researching the strategic impact of IC. Rather companies should be classified by comparing the actual business models"".

Third sector organisations are also applying KM. In this case study, Reilly describes the way resource priorities, programme funding and dispersed Authority inhibit successful KM. There is widespread support for the discovery of knowledge, but it is subject to diverse interpretation, and consensus on how to apply it is difficult to achieve. Reilly proposes a relational knowledge domain to promote a more holistic approach in value driven organisations, to integrate and optimise KM. There seems to be similar issues in the corporate sector too, as Brännström and Giuliani have found, namely that one of the difficulties in IC reporting is that ""goodwill is substantially based not on particular components of IC, but on the synergies between them"". Another problem with IC reporting, and with FRS IFRS3 in particular is that some firms deliberately ""want to continue to use goodwill as a 'blackbox' to avoid disclosing some items to analytic scrutiny by outsiders"".

The link between descriptions and analyses of real business situations and personal experience can be used to build a real consensus. The Socratic Dialogue (Remenyi & Griffiths) involves much more than a simple verbal agreement. Participants try to clarify the meaning of what has just been said by testing it against their own experiences. In this way the limitations of individual experience which stand in the way of a clear understanding can be made conscious, and these limitations can hopefully be transcended.

Garcia‑Perez & Ayres's paper outlines an approach where elicitation and transfer, and possibly also creation, are carried out in one process. This involves identifying key experts and stakeholders, who then work together to develop a representation of the experts' domain knowledge. They conclude that ""communicational problems are minimised because the main interaction will take place between domain experts and their stakeholders. Also, discussion of their own experience with colleagues through a process of modelling their expertise significantly increases experts' motivation to share knowledge"".

Begley et al outline their 'new' theory of the firm, its relationship to networked society, and to other theories of the firm, within KM. They see the firm as a 'connected temporary coalition' perspective (based on Taylor, 1999; 2006), within an interactive model of the firm, containing diverse types of relationships, collections of both closely coupled and loosely coupled systems that configure, dissolve and reconfigure over time, forming a distinct capability in leveraging collective knowledge assets.

A new approach to systems development for KM is presented by Moteleb & Woodman, which is based in action research and Grounded Theory, using a number of business problems experienced by organizations. The KMSD approach is highly participatory, requiring full involvement of members of an organization, in three interacting aspects: envisioning knowledge work behaviour, design of knowledge management system (KMS), and identifying technology options. The KMS design integrates organizational, social and technological aspects of the system.

Landwitch et al have developed a more interactive and dynamic process for Information Retrieval in which the IR systems explicitly support the user's query requirements, but also their cognitive abilities, to realize a dynamic dialogue between the user and the system. This is aimed at satisfying both the information needs of the users, and the innovation‑process. Smith deals with the specifically human elements of what could also be called knowledge ecology, integrating cultural and process issues, and ""issues of organisational adaptation, survival and competence in and increasingly discontinuous environment. Rather than being a process problem, poor knowledge emergence from a new system is more likely to be a communication and learning problem where there is a failure to engage with the individuals who are within the system"".

Vedteramo & de Carolis advocate a community‑based approach to KM in the growing sector of project‑based organizations. Projects are typically temporary, and much learning may be lost when they disband, the storage of lessons learned is not effective, the databases are not widely used and the people are too engaged in their projects to share knowledge or help other people cope with similar problems. Vedteramo suggests the adoption of McDermott (1999)'s ""double knit organisation"", integrating project teams and communities of practice.

Webb uses open ended diaries and strategically resourced reflection on the diaries, and provides material on management and complexity theory for managers to use, to reflect on and make sense of their practice and learn from it. This provides ""multiple first person accounts and opened up new avenues of exploration and … [suggests that is could also be used for] the stimulation, initiation and development of knowledge transfer activities on particular themes.

Koolmees et al have developed and tested a new Knowledge Management Scan which assesses six basic KM abilities in an organisation , based on a survey of 15 statements per ability, and is based on work on value based KM, and different organisational learning types. The abilities are: to produce, anticipate, respond, learn, create and to last. The Scan produces an understanding of the organisation's overall learning ability, in terms of single, double and triple loop learning.

Harorimana's case studies describe how knowledge gatekeepers contribute to the benefits of the firm's internal capabilities, without being paid for their role. However, the informal nature of people's roles as gatekeepers makes their job difficult to recognize, and therefore requires some form or rewards.

Evans and Wensley's research on network structure and trust explores the extent to which network principles determine the level of trust in Communities of Practice. They provide a detailed analysis of the how trust is established and how it functions in CoP: in self‑directed teams, mutual trust takes the place of supervision, and this has a positive impact on knowledge sharing and on innovation.

Rees and Protheroe recommend the joint development of KM and kaizen practices (continuous improvement), embedded into the redevelopment of an existing strategy set, to facilitate the development of knowledge value, and show how this is implemented in the higher education sector.

Aidemark points out the ongoing confusion in the theoretical base of KM, and specifically highlights the complexity and paradoxes that arise between knowledge as information on the one hand, and as competence (or know‑how) on the other hand, and provides models which should improve our awareness of these problems, and help us in developing strategy.

And finally, Devane and Wison, in their paper on Non‑managed Knowledge, provide an interesting critique of traditional approaches to knowledge 'management' and knowledge transfer, and suggests that Coverdale's focus on the development of skills is a better foundation for a company's success. They argue that knowledge should not be seen as something extrinsic, and external that can be managed 'for' individuals, but rather as something intrinsic, in which case the best approach is to allow individuals to manage it themselves.

Conclusion

The papers in this special edition provide new ideas, new critiques, and new research on KM. Most of them in some way also address the very welcome shift from 'management' to 'ecologies', which adds more emphasis on personal roles and at the same time, more emphasis on networking, content and knowledge creation beyond the confines of the traditional Weberian institution. Lawrence's approach is an interesting exemplar of how this can be done, as it integrates well mapped data and basic information structures with flexible, customisable and personalisable knowledge creation and sharing. Perhaps this could be called 'connectable interoperability'?

 

Keywords: action research, agency, assessment, learning organisation, brokerage, case study, certification, closure, communities of practice, cultural memes, culture, digital ecosystem, dynamic knowledge, enterprise renewal, financial accounting, flows of knowledge, goodwill, grounded theory, groups design, healthcare knowledge ecosystem, home health rehabilitation, homophily, information retrieval, information visualisation, innovation intellectual capital, innovation-process, intellectual capital statement audit, interactive systems, kaizen, knowledge audit, knowledge communities, knowledge creation, knowledge elicitation, knowledge gatekeeper, knowledge management frameworks, knowledge management in higher education, knowledge management scan, knowledge management systems, knowledge management systems development, knowledge sharing, knowledge strategy, knowledge transfer, leading firms, network structure, nonprofit organizations, organisational form, organisational learning knowledge, organiz

 

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