Knowledge has long been recognized as a critical component of organizational success. As such there is a strong desire to manage it, especially when companies are faced with a fast changing market environment that requires rapid recombination of information from an array of information sources.
But how do you manage something that is invisible and immeasurable? In the past, many studies on the topic mainly focused on specific aspects of the overall knowledge creation process (such as interorganizational knowledge transfer, knowledge flows within the firm and the interplay of tacit and explicit knowledge). As a result, our understanding of knowledge creation is somewhat fragmented. It is limited to certain aspects rather than understanding the process in its entirety.
This working paper, authored by INSEAD Professor David Midgley, Professor Timothy Devinney (from the Australian Graduate School of Management, University of New South Wales) and Professor Christine Soo (Faculty of Business, University of Technology, Sydney), is a comprehensive analysis of the knowledge creation chain, incorporating both environmental and organizational factors that play a role in the overall process. Their study draws upon perspectives from the network, organizational learning, dynamic capabilities and innovation literatures, and they present a model of how it all works which incorporates four main components.
They write that knowledge creation is a chain of events: information must be acquired, then integrated with previously-held information, then utilized to solve problems or develop new products and thats when it becomes knowledge. Also, the authors explain that knowledge should be free to travel as opposed to being confined to certain places and people in an organization. And its use will be maximized in an environment where it can flow, mix, be exchanged and be applied. Thus, managers must accept the task of creating and maintaining the right conditions for this to happen.