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IE 780Advanced Topics in MIS
From Information Processing to Knowledge Creation: A Paradigm Shift in Business Management
From Information Processing to Knowledge Creation: A Paradigm Shift in Business Management
POSMIS Sungjin Kim2005. 05. 10
POSMIS Sungjin Kim2005. 05. 10
Ikujiro Nonaka, Katsuhiro Umemoto and Dai Senoo, Technology In Society, Vol. 18, No. 2 pp. 203~218, 1996
Postech Strategic Management of Information Systems Laboratory
ContentsContents
Introduction The process of organizational knowledge creation Four types of knowledge conversion
Socialization Externalization Combination Internalization
The knowledge spiral IT and the five enabling conditions for organizational
knowledge creation IT and the five-phase model of organizational
knowledge creation Conclusion
Postech Strategic Management of Information Systems Laboratory
IntroductionIntroduction
Importance of knowledge Alvin Toffler, Peter Drucker, James Quinn, etc.
“Knowledge Society” Western authors
Didn’t examine how business organizations create new knowledge Knowledge
Essentially given Already exists within the organization Can be learned or acquired from outside
Ikusiro Nonaka Building a model of how business firms create information “Organizational knowledge creation”
• Examine “How Information Technology (IT) can help implement the concept of the knowledge-creating company”
• Propose as the management paradigm for the emerging “knowledge society”
Postech Strategic Management of Information Systems Laboratory
The process of organizational knowledge creation (1/3)The process of organizational knowledge creation (1/3)
Knowledge Western
“Justified true belief” Fails to include physical skills or embodied knowledge
Authors “A meaningful set of information that constitutes a justified
true belief and/or embodying a technical skill through practice”
Knowledge creation “A dynamic human process of justifying a personal belief toward
the truth and/or embodying a technical skill through practice” Two types of knowledge
Tacit knowledge
IntuitionsUnarticulated mental models
Embodied technical skills
Explicit knowledge
A meaningful set of information articulated in clear language including
numbers or diagrams
Knowledge
Postech Strategic Management of Information Systems Laboratory
The process of organizational knowledge creation (2/3)The process of organizational knowledge creation (2/3)
Japanese tend to consider knowledge as primarily “tacit” i.e. personal, context-specific, and not so easy to communicate to
others Western tend to consider knowledge as
“explicit” i.e. formal, objective, and not so difficult to process with computers
New organizational knowledge Created by human interactions among individuals with different
types (tacit or explicit) and different contents of knowledge Knowledge conversion
Socialization: individual tacit knowledge group tacit knowledge Externalization: tacit knowledge explicit knowledge Combination: from separate explicit knowledge systemic
explicit knowledge Internalization: explicit knowledge tacit knowledge
Postech Strategic Management of Information Systems Laboratory
The process of organizational knowledge creation (3/3)The process of organizational knowledge creation (3/3)
Socialization Externalization
Internalization Combination
Tacit knowledge Tacit knowledge
Tacit knowledge
Tacit knowledge
Explicitknowledge
Explicitknowledge
Explicit knowledge Explicit knowledge
Postech Strategic Management of Information Systems Laboratory
SocializationSocialization
Socialization A process of creating common tacit knowledge through shared
experiences Need to build a “field” of interaction
Individuals share experiences at the same time and space Creating common unarticulated beliefs of embodied skills
Two dimensions of tacit knowledge Technical dimension
Traditional apprenticeship: observation, imitation, practice, etc. Cognitive dimension
Informal meetings outside the workplace creating common tacit knowledge, mutual trust
IT is not useful in this mode Only face-to-face interaction
Postech Strategic Management of Information Systems Laboratory
ExternalizationExternalization
Externalization A process of articulating tacit knowledge into such explicit knowledge as c
oncepts and/or diagrams, often using metaphors, analogies, and/or sketches
Groupware: supporting the creation of new knowledge “Colab”: a computer-supported conference system
Bordnoter: electronic blackboard Cognoter: brainstorming, organizing and evaluating information Argnoter: presenting, arguing, and evaluating ideas http://www2.parc.com/istl/members/stefik/colab.htm
Postech Strategic Management of Information Systems Laboratory
CombinationCombination
Combination A process of assembling new and existing explicit knowledge into
a systemic knowledge such as a set of specifications for a prototype of new product
Newly-created concept Should be combined with existing explicit knowledge to
materialize it into something tangible Thus, “combination” start with linking different bodies of
explicit knowledge “breakdown”
e.g. one for a corporate vision descended from top management
Creating deductively a systemic, explicit knowledge “mother concept”: which is created by organizational leader
Gives birth to many “offspring concepts” IT comes into full play
The greater part of knowledge and information in Combination is explicit and easy to process with IT
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InternalizationInternalization
Internalization Embodying explicit knowledge into tacit, operational knowledge
such as know-how Learning by doing or using Manuals are widely used Engineering case studies help novice engineers to internalize
explicit knowledge Increasingly adopted training with computer simulation
Instead of OJT (on the job training) and reading manuals
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The knowledge spiral (1/2)The knowledge spiral (1/2)
Organizational knowledge is created through a “Knowledge Spiral” across four modes of knowledge conversion
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The knowledge spiral (2/2)The knowledge spiral (2/2)
Knowledge spiral across the levels of knowledge-creating entities such as individuals, groups, an organization, and collaborating organizations
Postech Strategic Management of Information Systems Laboratory
IT and the five enabling conditions for organizational knowledge creation (1/4)IT and the five enabling conditions for organizational knowledge creation (1/4)
1. Organizational intention The knowledge spiral is driven by organizational intention Organization’s aspiration to its goals “Knowledge vision”, “Knowledge domain”, corporate standards Most important justification criterion for judging the truthfulness
and relevance of a new piece of knowledge E-mail: convenient tool to disseminate top management’s
messages
2. Individual and group autonomy Autonomy
Increasing the chances of finding valuable information and motivating organizational members to create new knowledge
The whole and each part share the same information Have greater flexibility in acquiring, interpreting, and relating
information
Postech Strategic Management of Information Systems Laboratory
IT and the five enabling conditions for organizational knowledge creation (2/4)IT and the five enabling conditions for organizational knowledge creation (2/4)
3. Fluctuation/creative chaos Fluctuation
Not a disorder but a change that is hard to predict Market needs, growth of competing companies, and
challenges given by top management Breakdown
Chance to reconsider their basic perspectives and a sense of crisis that urges them to have dialogues with people within as well as outside the organization
Thereby creating new knowledge such as novel understandings of new circumstances and revolutionary corporate visions
Necessary to monitor the environment and to communicate with outside organizations
Postech Strategic Management of Information Systems Laboratory
IT and the five enabling conditions for organizational knowledge creation (3/4)IT and the five enabling conditions for organizational knowledge creation (3/4)
4. Informational redundancy Harm due to unnecessary duplication, waste, or information
overload to western managers Redundancy to authors
The existence of information that goes beyond the immediate operational requirements of organizational members
Intentional overlapping of information about business activities, management responsibilities, and the company as a whole
Informational redundancy promotes organizational knowledge creation in two ways
Facilitating the sharing of tacit knowledge Individuals can sense what others are trying to articulate and invade
each other’s functional boundaries to provide pieces of advice or information from different perspectives
Helping loosely-connected individuals understand where they stand in the organization and control their directions of thinking and action
Postech Strategic Management of Information Systems Laboratory
IT and the five enabling conditions for organizational knowledge creation (4/4)IT and the five enabling conditions for organizational knowledge creation (4/4)
5. Requisite variety Organizations can cope with many contingencies if it has “requisite variet
y” or minimax internal diversity Two major approaches to realize requisite variety
Flattening of organizational structure and the building of a corporate-wide IS give organizational members fast access to variety of information
Changing the organizational structure frequently and rotating personnel frequently enabling employees to acquire interdisciplinary knowledge to cope with the complexity of environmental fluctuations and internal problems
Postech Strategic Management of Information Systems Laboratory
IT and the five-phase model of organizational knowledge creationIT and the five-phase model of organizational knowledge creation
Postech Strategic Management of Information Systems Laboratory
ConclusionConclusion
Davenport wrote: “The lesson from reengineering is a reminder of an old truth: IT
is only useful if it helps people do work better and differently
Organizations should fuse synergistically IT as knowledge-creation tools and human beings with
collaborative knowledge-creation capabilities to become a “knowledge-creating company”