KNOWLEDGE Management For Technological Innovation in Orgns - For Creating Intellutural Capital

ABSTRACT
Title of Dissertation: KNOWLEDGE MANAGEMENT FOR

TECHNOLOGICAL INNOVATION IN
ORGANIZATIONS: THE FUSION
PROCESS FOR CREATING
INTELLECTUAL CAPITAL
Michael Clifford Heffner, Doctor of

Management, 2006
Dissertation Directed By: Dr. Nawaz Sharif, Graduate School of

Management and Technology, University of
Maryland University College
In a knowledge-centric economy, knowledge, embodied as intellectual capital, is increasingly a
strategic resource for organizations in all areas of human endeavor. This dissertation presents an
integrative conceptual framework for knowledge management that encompasses a fusion process
for creating new knowledge and technological innovations in a competitive environment, using
management services firms as a specific economic context for application. The framework
embodies the premise that the most effective and efficient organizations are those that can learn
to learn – to incorporate learning processes, including knowledge creation, into their everyday
operations and management.
The theoretical foundations of the framework include multiple perspectives of knowledge
formation and technological innovation, with a particular focus on conversion of knowledge
from tacit to explicit forms and ultimately to intellectual capital, especially technologically
embodied forms – tools, skills, facts and procedures that are the knowledge-in-use within
organizations. The framework is conceived as an organizational learning cycle or fusion
process, which encompasses sub-processes for knowledge acquisition and formation,
technological embodiment of knowledge, entrepreneurial application of technologies, and
assessment of knowledge-in-use by an organization, in order to create or form intellectual
capital.
The framework has been refined and validated through several means: (1) feedback from
participants in an academic conference; (2) four case studies that encompassed interviews with
practitioner professionals as well as application of the framework as an analytical framework in
field studies of the associated firms; and (3) participation as an observer in an ICT solutions
project as an additional case for field study of analytic application of the framework.
Operationalization of the framework as a management tool is demonstrated by applying the
Analytic Hierarchy Process, using comparison matrices prepared by the interviewees.
Key findings include: (1) perceptions of knowledge management definition and use vary among
practitioners, even within a single industry; (2) there may be significant differences in priorities
between knowledge management professionals and practicing consultants; and (3) to be
actionable, knowledge developed in the organizational context must be re-assimilated by
individuals, who remain the main agents of action.
Keywords: technological innovation; intellectual capital; knowledge management; knowledge

creation; organizational learning; knowledge fusion; technoware, humanware, inforware and orgaware
KNOWLEDGE MANAGEMENT FOR TECHNOLOGICAL INNOVATION IN
ORGANIZATIONS: THE FUSION PROCESS FOR CREATING INTELLECTUAL CAPITAL
By
Michael Clifford Heffner
Dissertation submitted to the Faculty of the

Graduate School of Management and Technology of the
University of Maryland University College, in partial fulfillment
of the requirements for the degree of
Doctor of Management
2006
Advisory Committee:
Dr. Nawaz Sharif, Chair
Dr. John Aje, Member
Dr. Jim Chen, Member
Dr. Marcus K. Rogers, External Member
UMI Number: 3213465
Copyright 2006 by
Heffner, Michael Clifford
All rights reserved.
UMI Microform 3213465

Copyright 2006 by ProQuest Information and Learning Company.
All rights reserved. This microform edition is protected against
unauthorized copying under Title 17, United States Code.
ProQuest Information and Learning Company

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© Copyright by
Michael Clifford Heffner
2006
All rights reserved.
Dedication
To Michele, Jason and Bryan for their constant support and understanding.
To my parents, Ann and Chuck, for instilling in me the value of life-long learning.
And to my brother, Jim, for demonstrating the courage of entrepreneurship.
ii
Acknowledgements
I thank the dissertation committee, Dr. Nawaz Sharif, Dr. John Aje, Dr. Jim Chen, and
Dr. Marcus Rogers, for their valuable assistance in this project. Dr. Sharif, as committee Chair,
advisor, and counselor has been a continual source of guidance and encouragement throughout
this project, as well as the entire course of my Doctoral studies. I also want to acknowledge the
valuable contributions of the faculty and staff of University of Maryland University College in
imparting the knowledge and providing an environment that enabled me to conceive and
accomplish this work. And I want to thank my fellow doctoral students and professional
associates for sharing this journey, providing support, and inspiring me to do that much more to
complete this project.
iii
Table of Contents
Dedication ........................................................................................................................................ ii
Acknowledgements......................................................................................................................... iii
Table of Contents.............................................................................................................................iv
List of Tables ...................................................................................................................................vi
List of Figures ..................................................................................................................................ix
Chapter 1. Introduction and Research Question....................................................................... 1
1.1 Challenges of a Knowledge-Centric Economy..................................................................... 1
1.2 Economic Sector Context ..................................................................................................... 6
1.2.1 Knowledge-Centric Organizations................................................................................. 6
1.2.2 Management Services Organizations............................................................................. 7
1.2.3 The Organization as a System........................................................................................ 8
1.3 Knowledge Sources for Management Services Projects ...................................................... 9
1.4 Research Question .............................................................................................................. 12
Chapter 2. Literature Review.................................................................................................. 13
2.1 Knowledge .......................................................................................................................... 14
2.1.1 Personal Knowledge .................................................................................................... 15
2.1.2 Organizational Knowledge .......................................................................................... 16
2.1.3 Typology of Knowledge .............................................................................................. 20
2.2 Innovation ........................................................................................................................... 21
2.2.1 Innovation as Object .................................................................................................... 23
2.2.2 Innovation as Process................................................................................................... 26
2.2.3 Environmental Conditions for Innovation ................................................................... 28
2.3 Intellectual Entrepreneurship .............................................................................................. 30
2.4 Performance Measurement ................................................................................................. 31
2.4.1 Balanced Scorecard...................................................................................................... 32
2.4.2 Measuring Organizational Competence and Capability .............................................. 35
2.5 Knowledge Management and Intellectual Capital.............................................................. 37
2.5.1 Computer and Information Science, Knowledge Management (IT Perspective), and
Artificial Intelligence ............................................................................................................ 37
2.5.2 Knowledge Management (Organizational Learning Perspective)............................... 38
2.5.3 Intellectual Capital ....................................................................................................... 39
2.6 Gaps and Limitations in the Literature ............................................................................... 41
Chapter 3. Conceptual Framework and Research Method ..................................................... 42
3.1 Knowledge Fusion .............................................................................................................. 42
3.1.1 Transforming tacit to explicit knowledge .................................................................... 43
3.2 The Guiding Framework for Knowledge Management...................................................... 48
3.2.1 Acquiring Knowledge and Wisdom............................................................................. 49
3.2.2 Fusing Knowledge with Resources.............................................................................. 50
3.2.3 Executing Projects ....................................................................................................... 51
3.2.4 Assessing Performance ................................................................................................ 51
3.2.5 Building an Actionable Knowledge Base .................................................................... 52
3.3 Research Method ................................................................................................................ 52
iv
3.3.1 Specific Conduct of the Study ..................................................................................... 54
3.3.2 Methodological Considerations ................................................................................... 55
3.3.3 Limitations ................................................................................................................... 63
Chapter 4. Discussion, Results and Conclusions.................................................................... 65
Overview of the Cases .............................................................................................................. 65
4.1.1 ICT Services Industry Description............................................................................... 65
4.1.2 The Nature of Work in the ICT Services Industry....................................................... 66
4.2 Interviews and Field Study Cases ....................................................................................... 68
4.2.1 Case 1: IT Solution Provider........................................................................................ 69
4.2.2 Case 2: Consulting Practice ......................................................................................... 86
4.2.3 Case 3: Consulting Practice of a Public University ................................................... 100
4.2.4 Case 4: Large Systems Integration Contractor .......................................................... 116
4.3 Participant Observer Case Study (Case 5): IT Solution Provider for Commercial Client
Serving the Government Sector ................................................................................ 130
4.3.1 Sample Extract from Observations ............................................................................ 131
4.3.2 Activities Observed.................................................................................................... 133
4.3.3 Reflection................................................................................................................... 134
4.4 Results............................................................................................................................... 135
4.4.1 Validation of the Integrative Framework................................................................... 135
4.4.2 Applying the Framework in an Operational Context................................................. 136
4.4.3 Other Observations .................................................................................................... 139
4.5 Conclusions....................................................................................................................... 142
Chapter 5. Recommendations for Future Work.................................................................... 145
5.1 Avenues for Further Research .......................................................................................... 145
5.2 Use in Management Practice ............................................................................................ 147
References................................................................................................................................... 149
Curriculum Vitae ........................................................................................................................ 158
v
List of Tables
Table 1. Scale for pair-wise comparison under the Analytic Hierarchy Process......................... 60
Table 2. Pair-wise comparison of Level 1 factors. ...................................................................... 61
Table 3. Pair-wise comparison of Level 2 factors for Fusing Knowledge with Resources......... 62
Table 4. Subset of the relative dominance table for the factors under Fusing Knowledge with
Resources. ......................................................................................................................... 62
Table 5. Case 1 pair-wise comparison of Level 1 factors: raw scores......................................... 77
Table 6. Case 1 pair-wise comparison of Level 1 factors: normalized scores............................. 78
Table 7. Case 1 relative dominance of Level 1 factors................................................................ 78
Table 8. Case 1 pair-wise comparison of Level 2 factors for Acquiring Knowledge & Wisdom:
raw scores.......................................................................................................................... 79
normalized scores.............................................................................................................. 79
Table 10 . Case 1 pair-wise comparison of Level 2 factors for Fusing Knowledge with
Resources: raw scores. ...................................................................................................... 80
Table 11. Case 1 pair-wise comparison of Level 2 factors for Fusing Knowledge with
Resources: normalized scores. .......................................................................................... 80
Table 12. Case 1 pair-wise comparison of Level 2 factors for Executing Projects: raw scores.. 80
Table 13. Case 1 pair-wise comparison of Level 2 factors for Executing Projects: normalized
scores................................................................................................................................. 81
Table 14. Case 1 pair-wise comparison of Level 2 factors for Assessing Performance: raw
scores................................................................................................................................. 81
Table 15. Case 1 pair-wise comparison of Level 2 factors for Assessing Performance:
Table 16. Case 1 pair-wise comparison of Level 2 factors for Building an Actionable
Knowledge Base: raw scores. ........................................................................................... 82
Knowledge Base: normalized scores. ............................................................................... 83
Table 18. Case 1 relative dominance of Level 2 factors.............................................................. 83
Table 19. Case 2 pair-wise comparison of Level 1 factors: raw scores....................................... 90
Table 20. Case 2 pair-wise comparison of Level 1 factors: normalized scores........................... 91
raw scores.......................................................................................................................... 92
Resources: raw scores. ...................................................................................................... 93
Resources: normalized scores. .......................................................................................... 93
Table 26. Case 2 pair-wise comparison of Level 2 factors for Executing Projects: raw scores.. 93
scores................................................................................................................................. 94
vi
scores................................................................................................................................. 94
Knowledge Base: raw scores. ........................................................................................... 95
Knowledge Base: normalized scores. ............................................................................... 96
Table 33. Case 3 pair-wise comparison of Level 1 factors: raw scores..................................... 106
Table 34. Case 3 pair-wise comparison of Level 1 factors: normalized scores......................... 107
Table 35. Case 3 relative dominance of Level 1 factors............................................................ 107
raw scores........................................................................................................................ 108
normalized scores............................................................................................................ 108
Resources: raw scores. .................................................................................................... 109
Resources: normalized scores. ........................................................................................ 109
Table 40. Case 3 pair-wise comparison of Level 2 factors for Executing Projects: raw scores.109
scores............................................................................................................................... 110
scores............................................................................................................................... 110
Knowledge Base: raw scores. ......................................................................................... 111
Knowledge Base: normalized scores. ............................................................................. 112
Table 47. Case 4 pair-wise comparison of Level 1 factors: raw scores..................................... 121
Table 48. Case 4 pair-wise comparison of Level 1 factors: normalized scores......................... 122
raw scores........................................................................................................................ 123
Resources: raw scores. .................................................................................................... 124
Resources: normalized scores. ........................................................................................ 124
Table 54. Case 4 pair-wise comparison of Level 2 factors for Executing Projects: raw scores.124
scores............................................................................................................................... 125
vii
scores............................................................................................................................... 125
Knowledge Base: raw scores. ......................................................................................... 126
Knowledge Base: normalized scores. ............................................................................. 127
Table 61. Group activities attended by the participant observer. .............................................. 134
viii
List of Figures
Figure 1. Knowledge context for management services projects ................................................ 11

Figure 2. Knowledge Transformation from Tacit to Explicit Form [Source: Sharif, 2005a]...... 44
Figure 3. Transforming Knowledge and Natureware to Intellectual Resources for Wealth
Creation [Source: Sharif, 2005] ........................................................................................ 47
Figure 4. Knowledge fusion process for creating intellectual capital.......................................... 49
Figure 5. The framework restructured as an analytic hierarchy. ................................................. 59
Figure 6. Comparison of plan vs. actual investment profile for Fusing Knowledge with
Resources. ......................................................................................................................... 62
Figure 7. Comparison of AHP Scores for Level 1 Factors. ....................................................... 137
Figure 8. Comparison of AHP Scores for Level 2 Factors. ....................................................... 138
ix
Chapter 1. Introduction and Research Question
A knowledge-centric economy presents many challenges to organizations, whether they
are for-profit or not. This dissertation discusses many aspects of knowledge creation and use
within organizations in order to develop an integrative conceptual framework that may be used
by managers to assess and improve the management of intellectual capital. This introductory
chapter outlines the challenges of a knowledge-centric economy, describes an economic sector
context for the study as well as the knowledge environment within which management services
are provided, and describes the research question addressed in this dissertation.
1.1 Challenges of a Knowledge-Centric Economy
A shift towards a knowledge-centric economy, from a primarily industrial-age economy
based on traditional mass production and generalized services, was observed four decades ago
(Machlup, 1962 & 1979; Drucker, 1969; Bell, 1973). Especially the rapid growth in capabilities
of information and communications technology (ICT) 1 has accelerated this transformation, and
recently has supported the emergence of a new “digital economy,” a marketspace 2 that exists
primarily, in some cases entirely, in the virtual world of electronic media. With the advent of the
digital economy, within which businesses are highly dependent on technologies and explicit
encoding of knowledge because there may be little or no “face-to-face” personal interaction,
effective use of intellectual resources becomes ever more important to sustain competitive
advantage. But the centrality of knowledge is not limited to the digital marketspace; knowledge,
1
The term information and communications technology (ICT) is an expansion of the earlier term information
technology (IT) – this expansion emphasizes the importance of the integration of information with communications
technologies in the highly networked information infrastructure which has evolved over the past half century.
2
Marketspace is a term that has emerged in recent years to evoke the changed nature of the marketplace. It is
intended to differentiate virtual marketplaces, which include electronic marketplaces such as those available through
the Internet, from the traditional physical marketplaces. It conveys the sense of a public, open space for conducting
commerce; yet recognizes that this space does not necessarily exist at one geographic location, or may be entirely a
virtual marketplace with no physical location for conducting commerce at all. (cf. Rayport & Sviokla, 1994)
1
embodied as intellectual capital, is increasingly a strategic resource for organizations in all areas
of human endeavor, including the work of governmental and not-for-profit organizations.
Development and execution of business strategies in a knowledge-centric economy can
present significant resource challenges, particularly intellectual capital challenges, to an
organization. Because of the limited resources within individual organizations, particularly
small entrepreneurial organizations typical of new or niche businesses, it is often necessary to
augment organizational resources with external resources in order to develop and execute
business strategies – a number of businesses have arisen to provide this assistance, ranging from
individual consultants and staff augmentation firms to providers of full solutions to business
problems. While individual consultants and augmented staff typically integrate directly into
projects within the organization, management services firms may take a more prominent role in
shaping the conduct and outcomes of a project, even, in some cases, taking the lead role, at least
from a technical perspective, because of their expertise.
However, in taking on this larger role, external management services and other providers
often are presented with significant challenges in developing effective solutions in partnership
with their clients. Many of these projects do not fully succeed – ranging from projects with
significant cost and schedule overruns or reduced functionality, to projects that are never
completed, are not accepted by the client organization, or are rejected or ignored by the ultimate
customers. As one example, Sears recently sued to end a major technology services contract,
citing failure to perform (Frauenheim, 2005). High profile examples can be found in the public
sector as well. As examples, the Federal Bureau of Investigation’s Virtual Case File project was
canceled after the delivered system did not meet agency needs (Associated Press, 2005;
Goldstein, 2005), and the Marine Corps terminated the Global Combat Support System contract
2
(Tiboni, 2006) for failure of the services provider to complete key documentation in the
requirements and design stages of the systems development life cycle.
Managers of both provider and client organizations are continually seeking ways to
achieve better outcomes from these solution projects. In addition to these immediate project
concerns, management services firms must remain competitive in order to garner new business.
Building capabilities and competencies, attracting and retaining knowledge workers, and
developing innovative approaches for projects are continual challenges. Means must be found to
enable effective sharing of knowledge, including organizational vision, goals, concepts and
image, as well as specific subject matter knowledge. And a particular concern is how to benefit
from the learning accomplished by each individual project team, especially as a project draws to
a close – it continues to prove difficult to replicate the successes of one project in another, even
if the project team (at least on the provider side) remains intact. The crux of the challenge may
be the management of knowledge – both the knowledge within individual projects, and the
knowledge maintained and used by the organizations involved in the project.
As a result, knowledge management has emerged as one of the central foci of both
practice and research with regard to organizational dynamics and performance. The shift from
the old, industrial economy to a new knowledge-centric economy requires companies to
maximize their use of knowledge, often embodied as technologies. Nevens, Summe & Uttal
(1990) and others (Wheelwright & Sasser, 1989) have found that even industrial companies
compete more effectively when their products and processes are well managed, even maximized
with respect to technological content. As a result, intellectual capital has become a strategic
focus for the most successful businesses and is widely discussed in both academic and
practitioner literature.
3
A large body of work exists with respect to knowledge management as it relates to
managing explicit, i.e. codified, knowledge, especially in the context of ICT systems to support
knowledge management, including so-called artificial intelligence. Another major research
stream has been the valuation of knowledge, particularly under the moniker of intellectual
capital, as well as development of various indices to aid in intellectual capital-related decisions,
especially with respect to national and regional development policies (Godin, 2003). A third
stream is focused on human behavior – these researchers, building on basic theories of needs and
motivation, are focused on such subject areas as leadership, creativity, and entrepreneurship. Yet
another stream of research is focused on business functions, where knowledge is treated in an
operational context. All of the different characteristics of knowledge perceived from each of
these viewpoints become fused within knowledge-in-use, which is embodied within various,
often technological forms. The concern then in this paper is with the creation and use of
knowledge within organizations, with what is being called the fusion process of knowledge
management for technological innovation. This fusion process can be viewed as including three
major integrative sub-processes, the first of which generates concepts to be applied, the second
of which generates technologies – both usually with an intent for use within specific application
contexts – and the third of which actually applies knowledge and technologies in decision
making and problem solving.
Popper (1963) has observed that there has been a long-running debate between two views
of knowledge and epistemology: (1) controlled observation – empiricism, which attempts to
develop knowledge from observation of nature and was the foundation of much of scientific
work during the late eighteenth through the mid-twentieth century, and (2) intellectual intuition –
rationalism, which posits reasoned theory that is viable until proven wrong. In actual practice,
4
especially in pragmatic knowledge use in organizations, knowledge is generated by an
integration of both perspectives. The fusion process being described, then, employs a pragmatic
view of knowledge – knowledge must be actionable and useful within a given context. The
mechanism for the creation of new knowledge is a dialectical process that integrates diverse,
sometimes conflicting, tacit and explicit knowledge into new forms – the key to knowledge
creation lies in mobilization and partial conversion of tacit knowledge through a process of
knowledge fusion: (1) integration of discipline-based knowledge, (2) integration of knowledge at
the intersection of related disciplines, (3) integration of socially acceptable beliefs, and (4)
integration of tacit and explicit knowledge through conceptual charts and other modeling
mechanisms (Sharif, 2005b). But, actionable knowledge that results from this first fusion
process is still only a potential resource.
In order to bring knowledge to the marketspace, in the next stage knowledge must be
integrated with other resources available to the organization, generating technological
innovations, both internally (organization) and externally (market) oriented. Sharif (1988) has
partitioned technological embodiments into tools, skills, facts, and procedures, and has coined
the terms technoware, humanware, inforware, and orgaware, respectively. Such a partitioning of
technology facilitates managing the fusion process, as well as ongoing assessment of
organizational knowledge creation – successful innovation can be measured by observing growth
and change in each technological type, as well as shifts in emphasis among them over time (e.g.,
relative levels of investment or use).
The focus in this paper is on how knowledge management involves a fusion process that
joins individual and group knowledge from many sources, and integrates this knowledge with
other resources to generate technological innovations, in ongoing cycles of organizational
5
learning, technological development, action, and assessment with the goals of sustainability,
competitiveness, efficiency and effectiveness – including, for commercial enterprises,
profitability.
1.2 Economic Sector Context
Before discussing in detail the knowledge fusion process, it is useful to establish a
specific economic sector context, knowledge-centric management service providers, which can
serve as a frame of reference for discussion and a source for examples.
1.2.1 Knowledge-Centric Organizations
Knowledge-centric organizations are a special subset of knowledge-intensive firms, a
term prevalent in the literature for firms whose focus of activity is on knowledge exploitation.
Starbuck (1992) defines a knowledge-intensive firm as one whose primary input resource is
knowledge, relative to other key inputs such as capital and labor. All firms are dependent on
knowledge (Prusak, 1998), but use of knowledge by firms can be considered as falling within a
spectrum from relatively low knowledge content (for example a firm involved in extraction
processes such as timber harvesting) to highly-intense knowledge content (for example a “think
tank”) – differentiation is manifest in how knowledge is used by the firm. But even the timber
company begins to move further along the knowledge continuum as soon as it progresses from
simple logging of existing forests to more sustainable strategies such as tree farming. Another
dimension of interest, closely related, is the knowledge content of the output of the firm, viewed
from the perspective of the customer’s ability to expand their stock of knowledge. It is from this
perspective of knowledge that the knowledge-centric firm is defined.
A knowledge centric firm is, then, a knowledge-intensive firm whose primary output to
the market has a high knowledge transfer component. In many cases, the primary economic
6
purpose of a knowledge-centric organization is to provide knowledge, often in the form of
subject matter expertise; some of the value propositions being the offering of experts, quality of
research, specific competencies, and innovative means of delivery. The most obvious examples
of such firms, considering commercial enterprises, are a subset of professional business service,
also known as management service, firms (McKaig-Berliner, 2001) – a subset because, while all
of these firms have knowledge-based outputs, some of them are merely conduits for individual
expertise, sometimes even at as primitive a level as staff augmentation for the customer.
Knowledge-centric firms, on the other hand, are posited to hold knowledge competencies at the
organizational level. Such firms may offer, in addition to expert consulting, other knowledge
outputs such as knowledge bases and associated services or publications.
Sveiby (1997, pp ix-x) observes that managing knowledge-centric companies differs
significantly from managing traditional manufacturing firms. He notes that this is reflected, for
example, in the inadequacy of traditional accounting to reflect accurately the value of a business.
Managers of knowledge-centric firms must be concerned with managing invisible knowledge-
based assets: experts, concepts, image, and networks.
1.2.2 Management Services Organizations
Management service organizations provide expert services to enterprises in order for
those enterprises to pursue management strategies and objectives that would otherwise be
unachievable without using external resources, or at a minimum, without the validation from
independent review. At the core of such business relationships is a sharing of knowledge,
sometimes as expertise of individual practitioners, but also as complementary competencies. It
is in this latter sense that these firms are of particularly interest; and, when looking for examples
during this research, selections primarily have been drawn from a specific subset of management
7
services organizations: ICT solution providers. ICT solution providers aid client firms in
applying information and communications technologies to solve business problems and exploit
opportunities in the market. Support may range from providing consultative advice to providing
full ICT solutions such as outsourcing of computing and communications infrastructure and
software applications.
1.2.3 The Organization as a System
Senge (1990, pp. 3-7) suggests that understanding an organization as a system is an
essential prerequisite to transforming the organization into a true learning organization;
otherwise, in concentrating on isolated phenomena, the full picture cannot be seen – knowledge
may remain incomplete or narrowly focused. And, if an attempt is being made at problem
solving, the solutions may become the problem through unintended consequences, often the
result of not understanding the intricacies and interplay of the full system. These observations
are echoed by Gharajedaghi (1999, p. 123): “We are less likely to be able to explain the behavior
of a complex whole by studying the behavior of the parts; contrarily, we are more likely to
explain the behavior of the parts by studying the behavior of the whole.” Gharajedaghi places
particular importance on understanding the interactions or relationships among the elements of a
system, suggesting that management of a system “is more and more about managing its
transactional environment…” (p. 51). He also emphasizes the importance of understanding the
system in context: “the behavior of living (open) systems can be understood only in the context
of their environment,” (p30) and “… a structure cannot completely explain its outcome and why
we need the additional concept of an environment as a coproducer. … Structure, function, and
process, along with the environment, form an independent set of variables. Together they define
8
the whole, or make possible the understanding of the whole” (p112) – “Neither problems nor
solutions can be entertained free of context.” (p116)
The idea of an organization as a living system is reflected in the work of Nonaka &
Toyama (2002), who treat the firm as a “dialectical being” that creates knowledge through a
process of resolving contradictions (p995). In the fusion model, this dialectical process is
expanded to encompass the fusion of varying perspectives of knowledge and technology as well
as diverse subject areas of knowledge.
1.3 Knowledge Sources for Management Services Projects
In order to better understand knowledge management, it is useful to consider the specific
knowledge context for management services during the ensuing discussion. As outlined in
Figure 1, the knowledge sources for providing knowledge-centric services transcend any
individual organization, drawing from sources both internal and external to the organizations
participating in the project. Particularly for small knowledge-intensive organizations, the breadth
and depth of knowledge areas required to support a typical customer engagement force many
organizations to look outside to supplement their own capabilities and competencies. As with
other organizational resources, growth of an organization may lead to increasing internalization
and integration of knowledge resources along both horizontal and vertical dimensions. Also, the
customer is a critical source of knowledge, and may even (probably ideally does) contribute
resources to the project team. It may be that under the ideal scenario, the provision of
knowledge-centric services involves mutual learning processes between the provider and the
client. The following summarizes the knowledge sources for the project:
(1) Project knowledge areas: the participants in the project team are the immediate source of
knowledge used in the solution. While the team may comprise mostly people from the
9
provider organization, usually there are representatives of the client organization who
carry knowledge specific to the client. There also may be independent specialists on the
team to provide knowledge in various technical, managerial or market subjects.
(2) Provider: The provider organization is the primary conduit for knowledge specific to the
management services being provided. They often take the lead or share in the project
management.
(3) Client: The client organization is the primary conduit for knowledge of context-specific
strategies and management and business requirements, including those coming into the
project from the customers of the client, the client’s industry cluster, and the economy
and society at large.
(4) Communities of interest: Many people involved in the project will be able to draw on
knowledge from networked sources such as peers and professional organizations.
(5) Customers of the client: The needs and desires of end customers are ultimately a critical
element in the project. These needs and desires may be conveyed to the project team by
the client organization, there may be direct representation of customers on the project
team, or there may be specific project activities to collect customer-related knowledge.
(6) Industry cluster(s) 3 of the provider: The provider organization will sit within one or
more industries from which knowledge will be drawn, such as standards, best practices,
and other norms as well as knowledge of evolving technologies, trends and other
information useful in developing innovations.
(7) Industry cluster(s) of the client: Similarly, the client organization will be drawing
knowledge from the industry cluster(s) within which it sits.
3
This concept comes from Porter (2000). See the discussion in 2.2.3 Environmental Conditions for Innovation.
10
(8) Economy and society: The overall economic, social and ethical context for the solution,
including opportunities and limitations, is defined by the economy and society at large.
Cultural norms will have a strong impact on project team behavior. The project team
may need to integrate disparate cultures, especially in a multinational context. And, in
the digital economy, especially business over the public internet, any organization may
have a global presence.
Figure 1. Knowledge context for management services projects
These diverse sources of knowledge, required to bring the project to a successful
conclusion, create a complex environment for executive and project managers. As an example,
11
consider a project where a provider is integrating a commercial off-the-shelf (COTS) software
product with other applications already implemented at the client firm; the provider is exploiting
specific technologies developed as a result of their prior experience with this particular COTS
product. Members of the project team may also be writing extension software to provide
features that are not present in the baseline COTS product. The project itself includes a number
of analysts, programmers and system integrators, some of whom are independent consultants
brought into the project for their subject matter expertise in specific technological or business
areas. Representatives from the client firm are also key participants in the project, providing
knowledge of the specific firm context. Given this scenario, it is easy to see the complexity of
the knowledge management problem with which managers are confronted on a daily basis –
knowledge must be managed at the individual, project group and organizational levels.
1.4 Research Question
As discussed earlier in this introduction, there are many research streams addressing
knowledge creation and use in organizations, flowing from various perspectives in disciplinary
and philosophical terms. The challenge is to make sense of these varied observations and
theories so that they can be applied effectively in managing organizations. So, the specific
objectives of this research project have been: (1) to develop an integrative framework that
merges many of the most important concepts related to organizational knowledge creation and
use, and (2) to provide a means for managers to apply this framework in an operational context
in order to improve efficiency and effectiveness in achieving desired organizational outcomes.
12
Chapter 2. Literature Review
“Innovation will be the single most important factor in determining America’s success
through the 21st century” – The Council on Competitiveness (2005, p.7)
“The capacity of a society to produce, select, adapt, and commercialize knowledge is
critical for trade, competitiveness, and for the sustained growth of the economy.” –
World Bank working paper on Innovation Systems (Goel et al, 2004, p.1)
“The role of intellectual assets in enterprise performance is of increasing interest to policy
makers. Intangible factors such as research and development, trade secrets, brands and
organizational capital are becoming the key to competitiveness.” – OECD Annual Report
2005 (p.34)
“Every company ranks the capacity to innovate – the transformation of knowledge and
ideas into new products, processes, and services – as a top priority.” – Going Global (van
Opstal, 1998, p.7)
“Innovation … is absolutely essential to safeguard and deliver high-quality jobs, successful
businesses, better products and services for our consumers, and new, more
environmentally friendly processes… The challenge … is to create the conditions where
all our firms put innovation at the centre of their strategies for the future.” – British Prime
Minister Tony Blair (2003, p.3)
Innovation continues to be at the forefront of discussion for nations, organizations and
individuals – its importance in the current dialogue on competitiveness and quality of life cannot
be overstated. Industry and government are searching urgently for ways to foster innovation and
entrepreneurship for economic advantage, seen as a core of sustainable development. As
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examples, the OECD has created the Centre for Entrepreneurship, Small and Medium
Enterprises and Local Development to “foster an entrepreneurial society, which seizes the
opportunities provided by globalisation and innovates to promote sustainable growth, integrated
development and social cohesion.” (OECD, 2005, p.32), and, in the United States, a consortium
of industry and academia, the Council for Competitiveness, has fostered the National Innovation
Initiative to “optimize our entire society for innovation.” And these initiatives are not limited to
the highly developed countries – fostering the conditions for innovation in emerging economies
is a key focus of organizations involved in developing countries, such as the World Bank. As
Sharif has observed (2005a), “the real difference between a developed and a developing society
is indeed the technological innovation capacity to better satisfy and restructure the human needs
set.” Most of these innovation initiatives, regardless of the particular source or context,
recognize some variant of a definition of innovation that combines knowledge and ideas with
entrepreneurship to generate new products, services, processes, capabilities or competencies in
competitive markets and social contexts. This chapter discusses five research areas that underlie
an understanding of the fusion process of knowledge management for technological innovation:
(1) knowledge (including its acquisition and formation); (2) innovation; (3) intellectual
entrepreneurship; (4) performance measurement, and (5) knowledge management and
intellectual capital. Some of the gaps and limitations in the literature are then highlighted.
2.1 Knowledge
If the foundation of technological innovation rests on knowledge, what then is
knowledge? From the perspective of an organization, knowledge exists in several forms. First,
all knowledge is based on personal knowledge (Polanyi and Prosch, 1974) – but, personal
knowledge is formed in a human social context. Tsoukas (2005, p.3) observes that “from a
14
knowledge-based perspective, the locus of individual understanding is not so much in the head as
in situated practice.” Organizational knowledge is a form of group or social knowledge which is
shaped by the particular lens of organizational purpose and action. Often, organizational
knowledge has become embodied in technologies in order to facilitate its sharing and use. This
section will discuss personal and organizational knowledge; this discussion will be expanded to
encompass the embodiment forms in the subsequent discussion of the fusion process.
2.1.1 Personal Knowledge
Much of the current body of research on knowledge in organizations, as represented by
intellectual capital, is grounded in the theory of tacit knowledge developed by Polanyi beginning
in the late 1940’s through the 1950’s. Addressing learning at the individual level, Polanyi (1957)
suggests that problem solving leads to knowledge; even identifying the problem may lead to
learning – he provides the example of unsolved mathematical puzzles, the search for a solution
for which has led to other discoveries. There is a need to solve problems that is based on a
“purposive tension” found in all intelligent animals (p102), which at a minimum, if the problem
can be successfully mastered, leads to heuristics that are later applied consciously or less so (i.e.,
tacitly).
This pragmatic view of knowledge extends throughout Polanyi’s work. Deep
understanding is gained through alteration of analysis and integration (1961, p460). But this
usually cannot be a purely intellectual exercise – better understanding is developed in conducting
this process in a context of real world experience. He provides the example of the pianist – a
person cannot learn the proper touch on the key board by learning each of the constituent
motions, but rather must apply the full series of motions in context. Part of the problem lies in
the inability to capture all of the necessary information in language. This is not unlike a common
15
exercise given to learning analysts and programmers where they are asked to write down all of
the steps in a common everyday task, such as driving to work from home – students can create
extensive lists of actions and results and still leave out significant pieces. Even the seemingly
simple task of giving directions can cause significant challenges for both provider and recipient.
Anyone who has ever written a user manual or a textbook has experienced the difficulty in
providing a sufficiently complete, actionable description of a subject. Polanyi suggests a
“structural kinship” of knowing and doing (p461) – understanding and mastery are similar
concepts and are often operating together when an expert is involved in work.
A key element of Polanyi’s theory of knowledge is the concept of tacit knowledge. Tacit
knowledge, which is the knowledge stored at a level below explicit awareness, relates closely to
the stored heuristics of the previous paragraph – and in Polanyi’s conception, tacit knowledge is
the basis of all knowledge (1962, pp159-160), tacit or explicit, as the explicit is only understood
through the operation of the tacit (1964, p144). Tacit knowledge is the basis of intuition. Sveiby
(1997, pp31-37), basing his thinking on Polanyi’s work, indicates four characteristics of
knowledge: (1) it is tacit, (2) it is action-oriented, (3) is supported by rules (but rules may act as
filters to impede acquiring knowledge that does not comply), and (4) it is constantly changing (in
context). Knowledge is personal, but at the same time it is socially constructed. He suggests a
useful working definition of knowledge to be “a capacity to act.”
2.1.2 Organizational Knowledge
The cyclical interplay of tacit and explicit knowledge becomes a key element of
Nonaka’s work (1994) on knowledge-creating companies. Echoing Polanyi’s discussion of
learning cycles of analysis and integration, Nonaka discusses organizational learning as cycles of
16
conversion of tacit to explicit knowledge and then back again, at both individual and group
levels.
Some have argued whether organizational knowledge even exists (see the discussion in
Ambrosini, 2003). At a minimum, it has been posited by a number of researchers and
practitioners that a shared vision, a sense of common purpose and aspiration, and shared goals
and objectives are essential for organizations to perform at the highest levels. It would seem that
such shared knowledge is not simply multiple instances of individual duplication of the same
“facts,” but, rather, an evolving conversation in a social context that reinforces and unifies
(Barrett, 2004; Kiehl, 2004), even becoming in organizations with some longevity, part of a
unique organizational culture. Nonaka & Toyama (2002, p1001-1002) use the concept of Ba, a
“shared context in motion,” shared, that is, among the individuals participating in a knowledge-
creating organization. 4 Friga (2003) has done recent work on the importance of fit between
knowledge strategies and the specific work context. It is argued in this paper that organizational
knowledge does exist, and is concretely evidenced by the presence of technologies created and
exploited by the organization.
Von Krogh and Grand (2000) discuss the importance of justification of knowledge in the
organizational setting. Justification involves processes of comparison to the dominant logic of
the organization and the resulting acceptance, rejection or modification of the new knowledge.
Dominant logic regulates what can be accepted into the body of organizational knowledge. 5
4
The concept of Ba is very similar to a concept of mental spaces for individuals that has developed in the course of
a series of conversations I have had over the past fifteen years with Walter Ellis and Timothy Brooks, two of my
peers. The notion of mental space is useful in describing the cost of context shifting when a knowledge-worker or
manager must alternate between different types of work or different projects. A similar concept also appears in
general use in varying applications using terms such as “frame of mind.”
5
Closely related may be such bodies of knowledge as industrial standards, or the knowledge developed in an
academic or religious community.
17
Much of the current body of research on organizational knowledge and learning
continues to be grounded in Polanyi’s concepts of personal knowledge, which were discussed
above. Of particular importance is the differentiation between tacit and explicit knowledge.
Tacit knowledge is held, mostly unconsciously, by individuals, or in relationships among
individuals in a social network. Such knowledge is developed in experiential contexts and is
reinforced by interaction and integration between mind and body – such knowledge is difficult to
transmit and is best conveyed through personal relationships such as those between master and
apprentice. Explicit knowledge, that which can be expressed in words and other concrete forms,
is more readily transferable among people, but is limited in that it is, in many respects, a form of
information that is subject to reinterpretation by the receiver, and lacks the mind-body bond that
is essential to tacit understanding (Sveiby, 1997). Yet, organizational knowledge must rest on
these forms; otherwise, the capacity for action, which involves individual agency, cannot exist.
Scharmer (2000) suggests that “not-yet embodied knowledge”, e.g., imagination and
understanding of the sources of new knowledge, is critical to sustaining competitive advantage.
It is the ability to foresee where the market is headed, or even to envision a new configuration for
the market that can be influenced by the organization’s actions, that may differentiate the
successful from the unsuccessful innovations. Certainly, this ability to conceive of that which is
yet to be, and to devise a path to realize the conception, becomes an essential characteristic of
entrepreneurship.
In order to describe the interactions between tacit and explicit knowledge in knowledge
creation, Nonaka (1994) developed a spiral model of organizational knowledge creation. In this
model, explicit processes of combination and externalization of knowledge interact with
processes of socialization and internalization related to tacit forms of knowledge. Knowledge
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evolves in a conversation among individual, group, organizational, and inter-organizational
entities. Knowledge becomes explicit to be shared, and then is internalized to be processed, then
externalized in a more mature or enriched form, and the cycle continues. At the firm level, if
these various levels of knowledge processing are operating effectively, there is a growing body
of knowledge that can be applied in invention and innovation (cf. Biddle, 2004).
Leonard and Sensiper (1998) discuss three ways in which tacit knowledge is applied in
innovation: (1) in problem solving (unconscious pattern matching cognition), (2) in problem
finding (framing), and (3) in prediction and anticipation (intuition/hunches). Innovation occurs
through creativity and social interaction. Observations of this behavior have recently been
reconfirmed by Biddle (2004). Innovation is dependent on divergent inputs and “intellectual
ferment,” and requires a variety of alternative ideas. The conflict inherent in resolving divergent
views is a key element in generating new ideas. Intellectually heterogeneous groups tend to be
more innovative than homogeneous groups. Ultimately, convergence occurs on a viable
outcome of the group conversation that becomes the innovation. Three types of tacit knowledge
need to be managed: (1) overlapping specific knowledge (between individuals), (2) collective
system knowledge, and (3) guiding tacit knowledge.
Blackler (1995) has criticized the view of knowledge as a resource, and the emphasis in
the academic and management literature on such concepts. Instead, it is suggested that knowing
as a process is a more useful object of study to understand the workings of knowledge in a firm.
Blackler based this critique on emerging theories of the nature of knowledge (also to be reflected
in Sveiby (1997)): that it is socially constructed rather than disembodied (Blackler, 1995, p. 55).
Knowledge cannot “be divorced from context and transmitted either as abstract data or as
universally applicable approaches to problem solving; learning is not a passive process ... but an
19
active one.” Such thinking has been reflected in much of the literature on learning organizations,
and is incorporated into this view of the fusion process.
Another split in the streams of research occurs along the dimension of the role of the
firm. Dominant strands include the evolutionary theory of the firm, rooted in Schumpeterian
views of economic activity, and the resource-based view of the firm, the current stream
beginning with the work of Penrose. Nonaka has attempted integration by extending the
information processing view to the idea that firms exist to resolve conflicts that cannot be
resolved by markets alone, which he calls the dialectical view of the firm. In this conception, the
firm is perceived as being the most efficient locus for the resolution of conflicting ideas,
discontinuities and dissonances, to develop new ideas that better reflect operational reality. The
entrepreneurial firm itself also can be seen in some sense as a thought experiment (Block and
MacMillan, 1985). These concepts of the firm as a dialectical being and as a thought experiment
form key underpinnings of the idea of knowledge fusion.
2.1.3 Typology of Knowledge
The nature of knowledge can be described in a number of complementary perspectives.
One perspective is concerned with the subject-matter of knowledge. For example, Simon
(1945/1997, pp. 54 & 347) suggests that invention and product development require two types of
knowledge: “knowledge about needs to be filled and knowledge about things that can be done
(i.e., about the laws of nature and what they make possible).” (p. 347)
Another perspective describes a progression of increasingly meaningful and actionable
states of knowledge, beginning with the capture of raw stimuli or sequences of symbols as data
and progressing through a series of integrations and distillations to eventually achieve wisdom
(Rehäuser & Kremar, 1996, p6; Bell, 1999; Sharif, 2005a). Sveiby (1997, pp41-43), building on
20
work by Shannon, notes that information (and by implication data) has no intrinsic meaning –
rather, meaning is given to information by the receiver, so that information has different
meaning, albeit sometimes subtly different, for each person receiving the message, based on
individual structures of mostly tacit knowledge that provide the basis for understanding. These
differences in interpretation play out in sometimes significant ways. For example, Carlson and
Gorman (1990) describe the effects, both supportive and limiting, of different mental pictures
between Thomas Edison and William Dickson on the development of the motion picture. Sveiby
(1997, pp37-38) describes a progression “with ability at the bottom (being most common,
competence next, and expertise at the top (being most rare).” He suggests expertise is non-
transferable as it is highly dependent on personal knowledge at tacit levels.
2.2 Innovation
“Every organization – not just businesses – needs one core competence:
innovation.” (Drucker, 1995, p. 17)
Innovation, especially technological, has been at the heart of economic activity throughout
history, but with increasing sophistication since the advent of the industrial revolution. Writers
at least as early as Adam Smith (1776, pp 5-6) noted the importance of technological innovation
to improving efficiency and effectiveness of economic activity, as well as the basis of
technological innovation in the actions of individual workers striving to improve the quality and
productivity of their work while reducing the amount of manual labor required to achieve the
desired outputs. Schumpeter (1942), who as an economist was interested in long cycles of
business and causes of deviation from perfect competition (at least to the extent that such a state
could even be approximated), recognized the significance of innovation in changing the
trajectory of industry and described it as “creative destruction,” an idea that has captured the
21
imagination of both researchers and practitioners at various times since. Schumpeter (1947)
describes a close relationship between entrepreneurship and innovation. He differentiates
innovation, which involves bringing something of value to market, from invention, which is the
generation of new ideas or things, not yet realized in the social milieu. This distinction between
invention and innovation is important, as many inventions languish or “die on the vine” if they
do not become viable through realization in the market through innovation.
Penrose built on the premise that long-term success of a firm was built on innovation, on
adaptation and extension of the firm’s resources and capabilities, especially technological
(Penrose, 1959 cited in Cantwell, 2000/2001). Penrose (1959) is often cited in the literature on
innovation and intellectual capital as the basis of the resource view of the firm, a prevalent theme
in these research areas.
Nelson and Winter (1982) describe innovation in terms of evolutionary processes. Their
theory involves the following components (Nelson, 1987, pp12-13): (1) “a mechanism that
introduces novelties to the system … its workings … involve a significant random element,” and
(2) a mechanism for selection … “expanding the relative importance of some (entities) and
diminishing that of others.” Nelson also suggests the possibility of a radical introduction of a
new entity into the system not previously present.
The growth of scientific knowledge in many fields coupled with increased competitive
pressures from many sources has led to higher theoretical content of inputs to innovation. For
example, Senge (1990, p. 336) suggests that increasing the application of theory-based strategies
improves business performance. Drucker (1969, pp38-39) suggests that the new industries that
will expand and even drive the future economy will be based on technologies derived from
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knowledge – but knowledge “in its entirety.” Not just scientific knowledge but also cultural
knowledge. Civilization and technology are intertwined and mutually shaping.
From a research perspective, two major loci of activity can be observed, one concerned
with innovations as the object of study, and the other concerned with the processes necessary to
create these innovations. These two areas are discussed in more detail in the following sections.
2.2.1 Innovation as Object
A considerable body of literature has been written about the genesis and development of
innovations as objects (often technological in nature), and then the subsequent diffusion of those
innovations over time and space. Most of the discussions of innovation, certainly as early as
Schumpeter (1947), differentiate between improvements in existing society and technologies
(incremental innovation) and more radical changes resulting in disruption or replacement (radical
innovation). The research interest in this distinction between radical and incremental innovation
has continued to generate new work (e.g., Nitenson (2005) discusses how perceptions of radical
vs. incremental innovation affect acceptance of innovation in ICT services).
While many of the discussions of innovation focus on specific technologies – usually
“hard” technologies such as tools – or on technology in general, Sharif (1986, 1988, and 1995)
has suggested that it is useful to view technologies as manifest in four distinctive embodiment
forms:
(1) Technoware (Tools) – Object-embodied physical facilities, like artifacts, implements,
machines, vehicles, and structures (Note that this is often the category associated with
discussions of technology). This component of technology is the necessary core for
every management function and transformation or/and services related activities.
Technoware represents the physical facilities of technical performance that amplify
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human capacities (both muscular and brain related) for producing different kinds of
goods or/and for providing services through various types of physical transformation
activity (that systematically converts available inputs to desirable outputs, or uses
available platform to give a service sought). Technoware is also used as operation
enhancers for process restructuring and all other management functions (for increasing
efficiency and effectiveness), including: to provide information systems; to enable
supplier/user cooperation; and customer/client value addition activities;
(2) Humanware (Skills) – Person-embodied human ingenuity, like craftsmanship, dexterity,
and talent. This component of technology is essential for accomplishing any tool-assisted
task. Humanware is everything that helps people do things, which manifests in what
people really do with their technoware by applying acquired qualifications (which comes
from their education and training) and experiences (successes and failures). Most
importantly, it is their problem solving ingenuity and creativity. It includes tacit
knowledge (which is knowledge that is not documented, recorded, or codified). It is used
for transformation activities and services activities as well as for managing various
processes/functions. Without relevant humanware, any technoware is simply non-
functional or just useless for actual performance of the primary activities or for specific
support activities;
(3) Inforware (Facts) – Record-embodied codified knowledge, like systematized concepts
and technical specifications (parameters, diagrams, theories and manuals). This
component of technology is the fundamental source of human creativity related to a tool-
based task of primary and supportive activities. Inforware is the codified (explicit and
documented) knowledge and information base related to work-convention that is
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underpinning a technological system for a transformation operation, or services platform,
or the specific management processes in effect. Good inforware enables quicker skill
development and also results in savings in terms of time and resources utilized for any
organized endeavor; and
(4) Orgaware (Procedures) – Organization-embodied operational schemes, like recipes,
operational steps and methods. This component of technology essentially refers to the
framework of organized collective work that makes the task-tool relationship useful and
rewarding. Orgaware is the implemented process for producing quality outcomes by a
team, at a particular time with a permissible cost. Orgaware is like a project management
routine related to a team endeavor. Orgaware includes the logic of systematized method
for integration and coordination of activities and resources for achieving desired goals of
an organization in producing goods or providing services. Orgaware also includes the
practiced procedures of value networking and coordination/cooperation among
stakeholders.
In practice, these types of technologies are often found in various combinations –
technological systems are used by organizations as transformation mechanisms for goods
production, as infrastructural platforms for services provision, and as drivers of operational
efficiency and effectiveness. For example, in a software development project, a subset of the
technologies in use includes computer workstations, communication networks and servers
(technoware); software standards, requirements and other documentation, and databases
(inforware); various subject matter experts, both business and technical, such as database
administrators, business and systems analysts and programmers (humanware); and
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methodologies and “best practices” (orgaware). All of these technological elements are
interwoven and interacting in the accomplishment of the project.
2.2.2 Innovation as Process
A second area of considerable research has been the process of innovation – that is, the
processes, factors, conditions, etc. that lead to innovation. Utterback (1971, p. 78) proposed a
model of a technological innovation process that shows the driving force of customer needs and
technical means leading to innovation and eventual delivery of new offerings to the marketplace.
The overall innovation process involves three sub-processes: (1) idea generation – needs are
recognized and technical means identified to meet needs. This information is then synthesized to
create an idea or proposal for development; (2) problem-solving – the idea or development
proposal is partitioned into constituent sub-problems, technical goals and priorities are set,
alternatives are identified and evaluated; all of this leading to an original solution or invention;
and (3) implementation and diffusion – “manufacturing, engineering, tooling and plant startup
required to bring the prototype solution, or invention, to its first use (process) or market
introduction (product).” These processes operate in the context of and influence the ongoing
state of technical knowledge as well as economic and social utilization. Burgelman et al (2004,
p. 3) expand the model of the elements involved in technological innovation. Technological
entrepreneurship is portrayed as the linkage between the technical and the commercial world. A
number of interrelated activities are shown as producing inventions, discoveries, and
technologies (generated from tinkering, experimenting, research and development) as well as
technological innovations (generated from product and process development or market
development). Administrative capabilities are viewed as an essential element in managing these
26
productive activities. There are knowledge flows and feedback among the various activities
encompassed by technological innovation..
These models often treat, or at least describe as such for simplicity, innovation as a linear
process with some degree of feedback – often resembling related models for product engineering
processes. Of course, these activities do play out over time in any given development activity,
and in a macro sense can be discussed usefully in the sequence shown, but the actual sequence of
individual events and activities is less clear, and may vary considerably among specific cases of
innovation. This tendency towards linearity shows up in discussions of the primacy of market-
pull versus technology-push that recur in the conversation on innovation (e.g., Gumbau-Brisa,
2004) – a key difference between these two conceptions is the source of requirements: (1) in
technology-push, invention creates the possibility of new products, or (2) in market-pull,
customer needs and desires generate requirements that spur the search for means of satisfaction.
In actuality, both forces may be at work simultaneously in a messy back and forth as ideas,
processes, and outcomes evolve.
Another train of discussion in the literature is described by von Hippel and von Krogh
(2003), contrasting two modes of innovation: (1) a “private investment” mode where intellectual
capital is closely held (e.g., through intellectual property protection regimes) to maximize return
to the innovator, typified by most businesses, and (2) a “collective action” mode “where
innovators collaborate to produce a public good” not being provided by the market, for example
academic research. Their recent work suggests that new “private-collective” modes, such as
open source development, are emerging that combine elements of both models. Von Hippel and
von Krogh suggest that study of private-collective modes may offer new insights into innovation,
especially given the messiness and richness of the hybrid model – even leading to substantial
27
reconsideration of current models of innovation processes. Study of such models may provide
insight into the workings of internal markets for innovation (i.e., those mechanisms for stocks
and flows of information within the organization), where there is a need for both personal reward
and collective achievement – as an example, there may be implications for devising incentive
models for knowledge workers. Similar dynamics may be at play in exploiting the fruits of
academic research – intellectual entrepreneurship, described in Section 2.3 Intellectual
Entrepreneurship, has been described as one means to achieve this realization.
2.2.3 Environmental Conditions for Innovation
Wallace (1982, pp. 151-154), studying innovation in the early industrial age, observes
that institutional and societal characteristics influence whether successful innovation can occur.
He observed that institutions that had an opportunity to exist for a span of time permitted internal
“transfer and concentration of technical information in a small paradigmatic community.”
Successful innovation also required access to resources, including skilled labor, and willingness
on the part of the institution to support innovation and invest in best practices. Externally,
innovation was more prevalent in societies that had “a general ambience of encouragement of
technological … innovation as a contribution to social progress,” as well as a certain degree of
social mobility that allowed entrepreneurs to perceive the possibility of personal gain from their
activities. From a structural standpoint, chartered legal entities evolving from extended families
and partnerships – in some senses a nascent form of corporation – can be seen emerging for such
reasons as to protect patent rights (pp. 66-67).
According to Porter (1990, 2000), the companies that will do best in the global market
are those that have ideal conditions "at home" for fostering companies with a high competitive
advantage. Porter observes that a comprehensive combination of production factors, demand
28
conditions, related and supporting industries, and firm strategy, structure and rivalry are needed
to create an environment within which a competitive advantage can be created. And these
conditions must be created by the nation and by the industrial cluster. Even so, any advantage
gained must be sustained through “relentless improvement.” Ultimately, even given the ideal
environment, companies themselves are responsible for creating and sustaining a competitive
advantage.
Nations do best in those areas they value -- "where their heroes come from." The best
and the brightest have to be attracted to an industry. This has implications for industry and
government in creating a public image for certain occupations, investment, policy, etc.
A cluster of industries and institutions is proving to be a useful construct for examining
competitive advantage (Porter, 2000). Companies do not exist in a vacuum, but instead grow
and thrive in a network of suppliers, customers, universities, governments, and other institutions.
The cluster, in the best conditions, is mutually reinforcing. Innovation is fostered through the
exchange of ideas and through competitive pressures -- the more so if local rivalries are intense
(as long as they are not destructive). New businesses often materialize in the context of the
cluster through spin-offs, those who have a better idea, and other ferment of knowledge and
ambition. Clusters also offer resource alternatives to companies' vertical integration. For
example specialized skills, manufacturing, and other applications of knowledge and technologies
can be outsourced to other firms in the cluster, allowing a company to maintain its focus. (An
example of the cluster behavior, although domestically focused: In the Federal ICT industry,
there is a constant interweaving of corporations and consultants to gain the specific expertise to
be able to perform various projects. The shortage of qualified technical resources usually means
that even the largest firms must seek at least some of the best talent and knowledge from outside
29
sources. Local universities also are a part of the equation -- with educational services targeted
specifically to the needs of this cluster. Dozens of associations and trade groups help foster the
exchange of ideas and healthy competition as well as cooperation.)
Government's role in general factor creation (e.g., education, basic infrastructure) is
necessary but not sufficient to create competitive advantage. There must be ways to encourage
or stimulate specialized (industry specific) factor creation. Government must avoid
protectionism and apply pressure where needed – e.g., in fostering anti-trust, safety &
environmental standards.
2.3 Intellectual Entrepreneurship
Recognizing the importance of intellectual capital, it was a logical step to develop the
concept of intellectual entrepreneurship, an evolving area of study championed in particular by
Kwiatkowski in Poland and Cherwitz in the United States, each with their unique perspectives –
Kwiatkowski has been concerned with entrepreneurial activity in general and how knowledge
transformation, including knowledge developed in academia, is a key focus in the economy
(Johannisson et al, 1997; Kwiatkowski, 1998/1999) while Cherwitz is more focused on shifting
academic focus to create “citizen-scholars.” (Cherwitz & Darwin, 2001). In either case, at the
core of the idea is entrepreneurship applied to the conversion of knowledge to wealth, i.e.,
developing and exploiting intellectual capital that is based on a solid foundation of theoretical
knowledge. That this idea is gaining some traction even outside of academic circles is evidenced
by a number of non-academic articles including a recent editorial in the Washington Post citing
Cherwitz’ work at the University of Texas (Raspberry, 2005). Sharif (2005a), building on
Mintzberg (2004), discusses the importance of balancing science, art, context (craft) and courage
in intellectual entrepreneurship. At the project level, Hollandsworth-George (2004) has looked
30
at the specific dynamics of the project team learning environment, with particular emphasis on
the key role the project manager plays in the learning processes. The project manager guides the
learning processes within the team and is an important source of knowledge, echoing the
characteristics of the intellectual entrepreneur.
Part of the capacity of the intellectual entrepreneur must be for critical thinking and
reflection. This is congruent with Senge’s (1990) observation that effective managers in a
learning organization must have time to reflect on the successes and failures of their
organizations in order to be able to learn – leading to better strategies for the future.
2.4 Performance Measurement
Drucker (1995, pp 6-7) proposed in 1995 that effective methods for assessing costs and
outcomes of most knowledge-based and service work, with the possible exception of laboratory
research, would be developed within 10 to 15 years. From the cost side, Drucker saw activity
based costing emerging as a new model for assessing the complete value chain of a given service
offering. 6 He points out (p. 8) that, at least in economic terms, the individual company is
essentially a fiction – the customer is concerned with the total value versus cost of the received
good or service, and is less concerned with the details of the value chain that contributes to the
ultimate delivery (with the notable exception of customers that impose restrictive, anti-
competitive rules such as percentage of domestic versus foreign content). This leads pricing to
drive the consideration of costs, rather than deriving price based on costs – a significant shift in
business thinking.
6
Costing the complete value chain was only a new concept in terms of application broadly within industry and
government – a number of companies such as Sears Roebuck, Marks & Spencer, and General Motors had applied
value chain concepts beginning in the early 1900’s. Drucker credits Alfred Marshall (England) and Eugen Böhm-
Bawerk (Austria) with recognizing the importance of assessing the entire economic chain as early as the 1890’s.
(Drucker, 1995, pp. 11, 24).
31
Drucker (1995, 12-23) suggested an integrated combination of measures or information,
both internal and external, that were important to understanding how well an enterprise was
functioning as an agency for wealth creation including: (1) foundation information – cash flow,
liquidity and other base measurements – most useful in flagging problems when readings are
abnormal, (2) productivity information – economic value added and benchmarking, (3)
competence information – understanding core competencies of the organization (from Prahalad
& Hamel, 1990) and where the organization stands relative to competitors and other
organizations in terms of its own contribution to industry knowledge and innovation, (4)
resource-allocation information – understanding how capital and performing people are allocated
in wealth generation, and (5) environmental information – understanding the markets, customers
and non-customers, evolving technologies, the changing economy, regulatory climates, labor
trends and other external factors. The first four areas tell us much about the current state of a
business (Drucker observes that inside an organization, there are only cost centers – “The only
profit center is a customer whose check has not bounced.” (p. 20)), but the fifth area is needed in
order to be able to develop foresight and strategy for decisions about the organization’s future.
Eccles (1991, 25-29) suggests that traditional financial measures are insufficient or even
misleading indicators of organizational performance – other indicators such as customer
satisfaction, market share, and innovation may be more reflective of a company’s condition and
potential for future success.
2.4.1 Balanced Scorecard
Starting from a premise that traditional financial accounting measures may not give the
information needed to measure such elements of organizational performance as innovation,
Kaplan & Norton (1992, 1993, 1996) have developed a “balanced scorecard” that combines both
32
financial and operational measures of performance – the operational measures cover customer
satisfaction, internal processes, and innovation and continuous improvement activities (1992, p.
125). The balanced scorecard provides four perspectives of performance: (1) customer, (2)
internal (what the organization does well), (3) innovation and learning, and (4) financial. The
scorecard is intended to meet at least two managerial purposes: (1) combining alternate
perspectives of an organizations competitive health, and (2) avoiding sub-optimization by
allowing visibility of the mutual effects among the different measures (1992, p. 126-128) – this
helps place management emphasis on strategy rather than control (1992, p. 139) and echoes the
systems view of the organization. In this vein, Kaplan & Norton suggest that the balanced
scorecard is most successful when used as a driver of change, when it is used “to motivate
breakthrough competitive performance.” (1993, p. 163).
The natural outgrowth of the use of the balanced scorecard to drive strategic change is its
transformation to use as a strategic management system (Kaplan & Norton, 1996, pp. 184-189).
Four management processes build on the balanced scorecard: (1) translating the vision – making
the corporate vision actionable; (2) communicating and linking; (3) integrated business planning;
and (4) feedback and learning – these processes allow the organization to modify strategies in
response to changing conditions internally and externally.
For the purposes of assessing the effectiveness of management decisions, Sharif (2006)
has suggested a balanced scorecard of competitiveness, innovativeness, attractiveness and
responsiveness to the marketspace. Such a scorecard acknowledges the complexity of
management decision-making: (1) Economists and business finance specialists have learned over
the years that investments option selection involves multiple evaluations – cost minimizing,
benefit maximizing, and solutions satisficing – for choosing the best of available alternatives
33
(Simon, 1945/1997); (2) operations research and systems science specialists have learned that
decision makers consider multiple perspectives – technical/analytical, organizational, personal,
and spiritual – to arrive at a major management decision (Linstone, 1999); (3) guideline and
policy planning specialists have learned that policy makers face multiple constraints –
cognitive/complexity, affiliative/acceptability, ego-centricity/self-esteem – that may result in
unsuccessful outcome of crucial decisions (Janis, 1989); and (4) development and legislation
specialists have learned that achieving a compromise of individual freedom with collective well-
being of a community involves multiple aspects – moral/ethical, just/fair, and
ecological/environmental – of sustainable development (Sen, 1998, 1999).
The balanced scorecard and its derivatives address performance at the organizational
level. But, Meyer (1994, pp. 100-101) observes that teams need to construct different
measurement systems than those in use to assess overall organizational performance. Team
members have different concerns, such as percentage of work complete and percentage of work
remaining, project budgets and “burn rates,” and earned value. Of particular importance are two
concerns: (1) obtaining expertise and resources from the organization as they become needed by
the team, and (2) ensuring common goals and language among diverse participants in the team –
both of which may be seen in part as knowledge management concerns. Measurements need to
help the team understand the performance of the various cross-functional processes involved in
producing outputs, and ideally must be developed, at least in part, with the full participation of
the team itself, which is in the best position to understand the specific measurement needs of the
project – senior managers need to establish the strategic context within which the team must then
perform and define measures (p. 109). Meyer describes developing a “dashboard” with gauges
that show the current status of the key measures – gauges should be tested against a number of
34
criteria: “(1) Are critical team objectives tracked? (2) Are all out-of-bounds conditions
monitored? (3) Are the critical variables required to reach the goal (e.g., resource levels)
tracked? (4) Would management approve the system as is or seek changes? (5) Is there any
gauge that wouldn’t cause the team to change its behavior if the needle swung from one side to
another? and (6) Are there too many gauges?” (p. 113)
Measurement presents challenges in looking at knowledge-centric organizations. Sveiby
et al (1989 cited in Sveiby, 1997, pp186-189) proposed methods for reporting intangible assets
that served as the ground for a number of efforts to develop extended balanced scorecards
(building on the work of Kaplan and Norton, 1996) and associated information collection and
reporting systems, especially in Scandinavia. A specific example of the problems that arise can
be found in attempting to measure innovativeness. A large body of academic work has used
patents in an attempt to quantify innovation (a recent example is Erickson, 2003), but such
methods, while perhaps having some utility in looking at firms involved in “hard technologies,”
become less useful in firms that trade primarily in soft technologies or knowledge, although
recent patent cases have shown the possibility of applying patent regimes to such outputs, in
some cases (e.g., Amazon.Com, Inc. v. Barnesandnoble.Com, Inc., 2001; Bezos et al, 2000).
2.4.2 Measuring Organizational Competence and Capability
All organizations use knowledge. What differs is the level of sophistication of its content
and use, and of the associated processes for knowledge accumulation, creation and management.
Scharmer (2000) proposes one scheme for differentiating organizational capabilities in
knowledge management by discussing stages of maturity in an organization’s understanding and
use of knowledge:
35
(1) Stage I – the focus is on managing already codified explicit knowledge. This stage is
most associated with what is typically observed as knowledge management.
(2) Stage II – processes are developed to manage knowledge creation – there is an
understanding of the cycles of interaction between explicit and tacit knowledge to
generate new knowledge.
(3) Stage III – the ability is emerging to tap into sources of new knowledge – there is a
willingness to experience the ambiguity inherent in attempting to predict or even mold
the future.
This suggests a multi-tiered reference model can be devised for assessing the maturity of the
knowledge management within an organization. One such scheme is as follows:
(1) Level 1: Passive – the organization capitalizes on individual knowledge. Managers do
not overtly manage knowledge in any formal manner. Processes for knowledge
management are non-existent or at best haphazard.
(2) Level 2: Active – the organization manages existing codified knowledge, and collects
same from work outcomes. Most of the managerial effort is on existing knowledge and
reuse from project work. Reuse is primarily viewed as making previous work products
and lessons learned available for new projects. Opportunities are provided for
information sharing among organizational members.
(3) Level 3: Creative – the organization overtly invests in and manages the creation of
knowledge, often in the context of current products, processes and markets.
(4) Level 4: Visionary – the organization has become visionary, trying to anticipate and
create new futures.
36
MacKenzie (2005) has proposed a Technology Integration Maturity Model (TIMM) that
is structured similarly to the Capability Maturity Model developed by the Software Engineering
Institute at Carnegie Mellon University, and based on the premise that the most successful
organizations are those that best manage the integration of technologies to develop capabilities
and competencies. The model levels range from low to high maturity in technology
development and use: (1) opportunistic, (2) product specific, (3) capitalizing, (4) strategically
focused, to (5) optimizing.
2.5 Knowledge Management and Intellectual Capital
Various managerial and technological perspectives have evolved to encompass a systems
view of organizational knowledge creation and use. This section highlights these research
streams.
2.5.1 Computer and Information Science, Knowledge Management (IT Perspective), and
Artificial Intelligence
Computer and information sciences coupled with cognitive science have spawned at least
two interrelated areas of activity focused on knowledge capture and use: knowledge management
and artificial intelligence. Knowledge management from an information technology perspective
often has been concerned with codifying knowledge in forms that can take advantage of
computer-based information processing, especially storage, retrieval and search. This stream of
research is rooted in information processing and information management (cf. Simon,
1973/1997) and at times treated synonymously with those terms.
Artificial intelligence is concerned with imitating natural intelligence, the ideal being
creating a system that is indistinguishable from a human being in its reaction to stimuli. Simon
(1945/1997, 133) notes that cognitive science and artificial intelligence research have acted as a
37
complementary pair, the former concerned, in part, with modeling human processes of expert
problem-solving and decision-making and the latter with building expert systems – this pairing
has resulted in insights into the nature of expertise that have fed back into other areas of research
such as organizational learning.
The complementary disciplines of knowledge management and artificial intelligence
intersect in such areas as developing intelligent agents to extract knowledge from databases and
using neural networks to perceive data patterns – much of this interplay occurs in the areas of
data mining, especially attempting to recognize heretofore undetected patterns in data, and in
improving the ability to efficiently and accurately search information or knowledge bases. At
the most sophisticated level, systems using these capabilities can be powerful tools for
manipulating codified knowledge. Simon (1997, 21-23) lists five metaphors that have been used
to describe computers, especially as they apply in decision making processes: (1) “powerful
number cruncher”, (2) “large memory”, (3) “expert” – using techniques developed in artificial
intelligence research, (4) “core of a worldwide network of communications”, and (5) “giant
brain” – capable of problem solving and decision making (at least to the extent that the
associated rules can be codified and programmed – Drucker (1995, pp. 2-3) observes that the
possibility of computer-generated business models to make economic decisions has been
overrated). But because computer-based knowledge management and artificial intelligence still
live in the realm of automata and finite state machines, utility is mostly in stage I of the
organizational understanding and use of knowledge.
2.5.2 Knowledge Management (Organizational Learning Perspective)
Knowledge management, from an organizational learning perspective, is overtly
managing the creation and use of knowledge in both tacit and explicit forms, particularly
38
fostering the conditions for organizational learning and innovation. This use of the term is
differentiated from that in use by many technologists as described in an earlier section of the
literature review – knowledge management, from an IT perspective, traditionally has been
concerned mostly with the management and use of codified, explicit information using
computer-based systems. The organizational learning perspective of knowledge management,
which encompasses a broader view, is reflected in the title of this dissertation, which is focused
specifically on knowledge management for technological innovation.
2.5.3 Intellectual Capital
In the early 1970’s, the term ‘intellectual capital’ appeared to refer to knowledge of
economic or academic interest, primarily knowledge held by individuals. For example, Gray
(1974, p403) credits Anatol Rapoport with using the term at the funeral of Ludwig von
Bertalanffy: “Bertalanffy supplied the new intellectual capital for scientific thought that
sociologist Alfred North Whitehead had years before warned the Western world it needed if it
were to avoid sterility”. Sveiby is credited with initiating the current research (and practitioner)
stream circa 1986, with his first work, Kunskapsfőretaget (The Know-How Company) (Sveiby,
1997, p x), observing that successful companies are managed with a focus on knowledge.
Sveiby attributes the sometimes wide disparities between market valuation and book value of
publicly traded companies, especially in emerging non-manufacturing sectors but in
manufacturing as well, to mostly invisible knowledge-based assets, categorizing them into three
main types: (1) employee competence, (2) internal structures, and (3) external structure. All
three of these types are based fundamentally in on the knowledge and agency of individual
people. In building his model, Sveiby discusses the importance of differentiating knowledge
39
from mere information, emphasizing that companies need to develop an actionable theory of
knowledge, i.e., an epistemology, in order to be able to manage intellectual assets effectively.
A major focal point of work in this area has been the valuation of intellectual capital (as
an intangible asset), and on expanding the concept to notions of the intellectual capital of
geographical regions or nations, often associated with concepts of stocks and flows of knowledge
(Machlup, 1962 & 1979; Bontis, 1999). Sveiby is credited with developing a form of balanced
scorecard that incorporates measures intended to capture some of the dimensions of managing
intellectual capital. This expanded balance sheet was amplified by Edvinsson at Skandia; the
expanded balance sheet was also used by a number of other northern European companies in the
mid-1990’s (Sveiby, 1997). Intellectual Capital (Edvinsson and Malone, 1997) is widely cited in
articles on the topic of IC. This book, written for a practitioner audience, focuses on IC concepts
related to establishing an accounting regimen. The authors, building on the work of Sveiby,
divide IC into human capital, knowledge held in the individuals working for a firm, and
structural capital, which are embodiments in the firm itself in the form of systems, procedures,
etc. Roos et al (1998, pp. 35-52) further parse these two concepts into pseudo-formuli as
follows: (a) human capital = competence & attitude & intellectual agility, and (b) structural
capital = relationships & organization & renewal and development. The combination of
intellectual capital and financial capital equate to the total value of a firm (p. 57). (Note that in
this conception, financial capital represents all items that traditionally appear on a financial
balance sheet, including fixed assets. This formulation appears to subsume all intangibles into
intellectual capital, other than those already accounted for in a traditional balance sheet.) Like
other assets or resources, intellectual capital may appreciate or depreciate in value over time
(Argote et al, 1990).
40
2.6 Gaps and Limitations in the Literature
As is evident from the discussion above, the literature that addresses knowledge in
organizations is scattered across a number of research streams, each with its own particular focus
of interest. It is much like the proverbial tale of the blind men and the elephant – each perceiving
the system on the basis of conditions local to the particular frame of observation. While it is
entirely valid to take slices of a specimen under study in order to discover various aspects of
structure and content, what is lacking is a coherent map of the whole. If we take a systems view
of organizational learning and apply it to the concept of intellectual capital innovation, then
perhaps a picture of the whole will begin to emerge.
Even within the individual subject areas, concepts are not always understood to mean the
same thing by all participants in the conversation. As an example, Alvesson and Kärreman
(2001) point out that the concept of knowledge management is problematic. Writers on the
subject tend to gravitate to treating either knowledge or management, or address another topic
altogether (e.g., creating community). Within the literature survey included in this paper, two
distinct uses of the term are documented. Similar definitional and utililization issues arise with
other key terms of this investigation (e.g., intellectual entrepreneurship, organizational learning).
Some of this is undoubtedly part of the evolution of the conversation, which is still in early
stages of development. Choo and Bontis (2002, p. vii) suggest “The field of intellectual capital
poses special challenges. It has no legacy, few world-renowned researchers, and a modest
literature.” The body of work continues to evolve and it is hoped that the conceptual framework
presented in this dissertation will aid in developing a more holistic view of knowledge
management.
41
Chapter 3. Conceptual Framework and Research Method
Knowledge fusion is at the heart of the theory of organizational knowledge creation being
presented in this paper. It is proposed, based on integrating the diverse themes and findings of a
number of research streams on technological innovation and knowledge, that both new
knowledge and technological innovation within and by organizations result from complex fusion
processes that integrate knowledge, technologies and other organizational resources. In the
process of creation, these fusion processes resolve conflicting ideas and other forces, and
generate changes to the organizational environment and to characteristics of the organization and
its components. Organizations become capable of such creative behavior by learning to learn.
In this chapter, the conversion of knowledge from tacit to explicit forms is described,
followed by a discussion of how knowledge is fused with other organizational resources to create
technologies used in generating wealth. These fundamental underlying processes are then
integrated with organizational processes of acting and reflecting in a framework for knowledge
management. Finally, there is an overview of the research methods used in this project.
3.1 Knowledge Fusion
Processes of knowledge fusion are at the core of the formation and use of organizational
knowledge. This section discusses the transformation or extraction of tacit knowledge to explicit
forms. While knowledge by itself may be useful, primarily for the individual, organizational
knowledge is represented by the fusion of knowledge with other organizational resources to form
technologies, a typology for which is outlined here.
42
3.1.1 Transforming tacit to explicit knowledge
For knowledge management within an organization, it has proven useful to both
managers and researchers to think of knowledge in terms of tacit and explicit forms. A major
challenge in creating actionable knowledge is the transformation of knowledge from tacit to
explicit forms that is essential to enable knowledge sharing within the organization. The goal is
to draw from the human participants (and maybe in the future the artificially intelligent
participants) in the process some amount of their tacit or implicit knowledge and convert this
knowledge into an explicit form. Often, this is done through a process of dialog and modeling,
the outcomes of which are conceptual diagrams (such as those in this paper), accompanying
explanatory descriptions, and possibly codification in other forms or media, as shown in Figure
2. Examples in common use include brainstorming diagrams and concept diagrams, both of
which have proven useful for this purpose – Ambrosini (2003) provides extended examples of
the use of concept diagrams as a tool to surface tacit knowledge within an organization in order
to make that knowledge sharable among the group.
But this conversion from tacit to explicit knowledge is seldom facile, for a number of
reasons (Sharif, 2005b):
(1) The context is complex and it is difficult to observe knowledge in use (although one
can see the effects of knowledge reflected in outcomes). At the current state of
science, little is understood of how knowledge is created, stored; and retrieved by the
brain;
43
Figure 2. Knowledge Transformation from Tacit to Explicit Form [Source: Sharif, 2005a]
(2) There is tension between the value of knowledge and its elusiveness – this reflects, in
part, the epistemological tension observed by Popper (1963) between empirical and
rational knowledge, i.e., between controlled observation as a means of knowledge
creation (perhaps extraction is a more accurate terms in this instance), and intellectual
intuition. This is also the area where the integration of socially accepted beliefs
becomes particularly important. Knowledge generally must become accepted by the
group to have validity in practice, requiring processes of justification to establish
value. New knowledge often must overcome resistance from individuals and groups
that have incorporated conflicting knowledge into their belief systems, or, at least,
have a vested interest in sustaining the older knowledge. There is a certain inertia to
shared belief systems that makes change difficult in any organization – the
44
introduction of change is often cited as one of the major roles of managers in
managing the intellectual (and other) assets of an organization;
(3) Knowledge cannot be explicated fully, even by experts. There are tacit components
of knowledge that are not understood, perhaps not even perceptible at the conscious
level, even with the deepest self-reflection. This is manifest in the phenomenon of
intuition – humans, and especially those with particular expertise, even wisdom, in a
given subject, often know or feel the answer to a problem, or perceive a possibility or
opportunity that does not yet even exist, without being able to articulate an empirical
(or even a rational) basis. Despite all best efforts to articulate and codify knowledge,
there are nearly always portions of individual knowledge that will remain tacit (hence
the continuing value of experts in all fields, despite some intensive efforts to codify
best practices and critical knowledge); and
(4) Words are insufficient to describe one’s intellect. As noted in the previous point, not
all aspects of knowledge are at the conscious level, or, perhaps, expressible in verbal
language. And some languages do not contain words or other symbols for certain
concepts – we may be limited in our ability to express and ultimately realize ideas by
such omissions or deficiencies. And our intelligence is not fully independent of our
physical selves – some of our knowledge, our memory, seems to be distributed
throughout various parts of our physiology. As a practical limitation, even when
language is available to describe most of the knowledge, the sheer volume of words
required to describe even the most elementary knowledge is a barrier to effective
knowledge capture and transmission. The practical effect here is that the use of all
senses in knowledge transmission improves the transfer of knowledge among the
45
group. Certainly, this has been reflected throughout history in the many means by
which knowledge is actually transferred in practice – almost every field of human
endeavor makes extensive use of techniques such as total emersion, “hands on
training”, repetitive exercise, and apprenticeships, all of which incorporate elements
of learning by doing and learning to learn. This point is at the core of this conception
of the fusion process within organizations. In order to generate new knowledge,
organizations have to learn to learn. That is, to be able as an organization to foster
group learning by doing, knowledge integration, reflection and refinement – all of the
creative learning processes discussed in this paper.
Tacit and explicit forms of personal knowledge are acquired or formed in interaction with
stimuli and available codified knowledge in forms of data, information and general knowledge.
In turn, wisdom develops in complex interactions between these forms, formed within and
shared among individuals in a specific learning and doing context. Technical wisdom, bonded
with other resources, including natural resources which are being termed natureware, in turn
becomes embodied in technology, as illustrated in Figure 3. This process may involve
simultaneity in the sense that the learning and doing context for development of wisdom may in
fact be the technological development environment. And yet, as will be illustrated later, the use
of the resulting technologies in innovation in turn provides the impetus for new creativity and,
hopefully, a never-ending cycle of organizational learning. All of these dynamics are part of
what is being called the fusion process of knowledge management for technological innovation.
46
Figure 3. Transforming Knowledge and Natureware to Intellectual Resources for Wealth
Creation [Source: Sharif, 2005]
The essence of this process is the mobilization and conversion of tacit knowledge through
processes of knowledge fusion that encompass: (1) integration of discipline based knowledge;
(2) integration of knowledge at the intersection of related disciplines, (3) integration of socially
accepted beliefs, and (4) integration of tacit and explicit knowledge through conceptual charts
(Sharif, 2005b). So, the fusion process provides a means for integrating all of the various
sources of knowledge (cf. Figure 1).
Before continuing, an additional observation on organizational epistemology: as noted
previously, Popper (1963/1968) has described a tension between the empirical and the rational
perspectives of knowledge. But in the real world, knowledge in use is generated as a result of
both forces – humans observe phenomena, draw conjectures, reflect on what they have learned,
dream, create visions, and look for concrete evidence of their ideas in a never-ending interplay
47
between the observed and the reasoned. Furthermore, it is important to recognize that the
epistemology of an organization in the context of knowledge creation and innovation must differ
in some respects from that which is usually associated with science, especially natural science,
which is often closely aligned with the empirical perspective. For in business, especially
entrepreneurial endeavors, people often are trying to create that which heretofore has not existed.
Of course, there is the philosophical argument that this is merely a constraint of time – otherwise,
people are, in creating the new, merely discovering that which will be, and was always potential
in the present (and hence at all times in the past); but this returns us to Scharmer’s conception of
visionary knowledge. At the pragmatic level, then, organizational epistemology must seek a
balance between rationalism and empiricism.
3.2 The Guiding Framework for Knowledge Management
Given this discussion of innovation and knowledge, as well as the fusion process, how do
these concepts actually appear to an organization? How can management organize this complex
series of processes so that they may be managed effectively and efficiently? This conceptual
framework has been developed to illustrate, at a high level, the interactions of knowledge,
especially knowledge-in-use, with organizational resources and capabilities in a cycle of
technological innovation. Development and delivery of innovative management services
involves dynamic, complex processes. The framework is conceived as a cycle of organizational
learning interacting with four major process areas, as illustrated in Figure 4.
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Figure 4. Knowledge fusion process for creating intellectual capital.
3.2.1 Acquiring Knowledge and Wisdom
Managers must be concerned with leading transformation processes to acquire knowledge
and wisdom: data obtained from observing natural phenomena and stimuli experienced within
the environment serve as raw inputs for the eventual development of knowledge, and should
49
holistic understanding emerge, wisdom. In turn, knowledge and wisdom are critical raw material
for innovation. In this area of the model, much of the focus is on individual knowledge. Each
level of discrimination and integration may draw from all of the underlying levels of knowledge
development as well as pre-existing knowledge to gain eventual insight. For those parts of these
transformations that can be codified, it may be technically feasible to replace the activity of
natural brains with quasi-intelligent artificial systems. Modeling and simulation are used to test
possible future states without building physical actualities. Engines have been built to generate
conjectures in order to stimulate ideas. Details of the creative processes that can lead to new
knowledge and to the conversion of tacit to explicit knowledge have been discussed in detail in
earlier sections of this paper (see Figure 2).
3.2.2 Fusing Knowledge with Resources
As discussed earlier in this paper, various forms of knowledge are integrated with other
types of resources to develop technologies (see Figure 3). Knowledge and technologies are
integrated through the agency of intellectual entrepreneurship to develop organizational
capabilities and competencies. In building an organization’s intellectual capital, technologies,
capabilities and competencies, and ultimately delivering products and services, the
organizational draws from prior art, complementarities, inventions, wild cards, new art,
accidents, new connections and combinations, crises, stresses, fractures, etc. – all of these go into
the mixing bowl of ideas that leads over time, through the application of insight in refining and
reforming resources, to innovation.
50
3.2.3 Executing Projects
Managers are concerned with the day-to-day actualization of business strategy and
performance of services – in the case of management services firms often through the agency of
project teams. Art represents the need for insight, vision and creative imagination – art may be
seen in one sense as fusion of ideas at the tacit level; courage the need for mettle, spirit,
resolution & tenacity – the will to act; science the application of analysis and systematic
knowledge; and craft the application of experience in context (Mintzberg, 2004; Sharif, 2005a).
Art, craft, and courage encompass the tacit , especially the creative elements, that can be fused
with explicit science, often through various means of visualization, to bring innovations to
fruition. As discussed earlier, the decision making, problem solving and opportunity realizing
environment for managers is complex. In this context, the spirit of the intellectual entrepreneur
may be critical for success.
3.2.4 Assessing Performance
In practice, managers need a means to assess organizational activities and outcomes on an
in-process basis. It should be practicable to develop assessment instruments that measure levels
of investment and observable changes in factor utilization by the organization, which can be
organized by four balanced scorecard dimensions (Sharif, 1995 and 1999):
(1) Competitiveness – Resources-driven dimension. These are objective or explicit
factors, including natureware, technoware, humanware, inforware, and orgaware;
(2) Innovativeness – Productivity-driven dimension. These are subjective or implicit
factors, including opportunity (risk/benefit), capability (efficiency), competency
(effectiveness), novelty (creativity), and entrepreneurship (venturing);
51
(3) Attractiveness – Pragmatism-driven dimension. These are intangible factors such
as implementation concern, commitment assurance, balance between short and
long views of time, self-reliance and self-sufficiency, and stakeholder
acceptability; and
(4) Responsiveness – Humanity-driven dimension. These are altruistic factors such
as sustainability, eco-nature conservation, moral and ethical issues, fairness and
justice, and assurance of freedom and continuity.
3.2.5 Building an Actionable Knowledge Base
At the hub of this model is a learning cycle, the fusion processes discussed in some depth
earlier in this paper, encompassing knowledge acquisition, discrimination, distillation and
integration – ongoing learning is essential in all of the stages of delivery of knowledge-intensive
services. Knowledge accumulation, flows and feedback occur among all of these processes. In
this area of the model, the dynamic processes of organizational learning are the emphasis – the
fusion process is the mechanism by which new knowledge arises in the organizational context.
Organizational technological wisdom develops from not fully understood processes of
sensing, knowing, making and learning. Reasoning uses logic, structure, relations and purpose to
organize knowledge. These two, in combination, lead to action, which embodies leading,
managing, doing, assessing. These dynamic processes are occurring throughout the cycle.
3.3 Research Method
The research methods used in this project can be categorized as pragmatic (Creswell,
1994; Creswell & Miller, 1997) – such studies offer the potential to benefit from use of mixed
qualitative and quantitative methods in several ways: (1) use of more than one method provides a
cross-validation of results (Creswell & Miller, 2000) (in the social sciences sometimes called
52
“triangulation” to evoke the surveying concept where a position is located by bearings from two
known points using trigonometric methods), (2) application of more than one method or
perspective may uncover complimentary or contradictory aspects of the object under study, (3)
one method may expand or otherwise supplement or strengthen the findings garnered from
another method, (4) application of additional methods may initiate new directions within the
study, and (5) a deeper and broader picture may be drawn of the subject (Creswell, 1994, p175).
As a study focused on improving management practice, the project was focused on integrating
existing knowledge, but recasting this knowledge in a form that may be more amenable to
application in an operational context.
The objective of the study has been foremost to develop a rich picture of knowledge
creation and use in organizations – this picture being organized in a framework that is
approachable and operationally useful. As Mintzberg (2005) has observed, theory describes but
simplifies reality – it is not itself the reality. So in a management context, theory is valid to the
extent that it can be useful in practice – in understanding the nature of managerial and
operational problems and opportunities, in crafting solutions to these, and in making decisions.
The theory presented in this dissertation has been developed in the spirit of contributing
another, integrative perspective, which can be applied, perhaps in concert with other perspectives
of organizational knowledge, to improve management practice. In this vein, the study has been
constructed to address some fundamental questions: (1) What is it that consulting firms actually
do, and how can the projects they participate in be more successful? (2) How can we describe, in
a useful way, the knowledge-related factors that contribute to success? (3) How might a model of
knowledge management be operationalized so that it may be applied in practice?
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The overall approach for this research project has been to use field study methods to
validate and refine the integrated model, and to test the potential use of this model in
management decision making and problem solving processes through application of the Analytic
Hierarchy Process to develop a prioritization of model factors within each studied organization.
This approach is best viewed, methodologically, as mixed, with (1) a qualitative component, a
field study broken into two separate activities: interviews with professionals in management
services firms and a participant observer case study, combined with (2) a quantitative component
embodied in the AHP, recognizing that the AHP process itself may be considered to have mixed
qualitative and quantitative characteristics (Haines, 2004, p47).
3.3.1 Specific Conduct of the Study
The following specific activities were conducted under the research project:
(1) Field Study Cases and Interviews: interviews were conducted with individuals
selected from several organizations. Each participant was provided a copy of the
conceptual model prior to the interview, and then the framework was used to guide
the conversations. Each individual selected to interview hailed from a different
organization, and held varied roles ranging from Chief Knowledge Officer to Lead
Developer. From each of the interviewee’s organizations, observations and artifacts
were collected to supplement the interview results and to develop examples of
knowledge-in-use.
(2) Participant Observer Case Study: In parallel with the Field study cases and
interviews, I was a participant observer on an ICT solution project. Detailed notes of
observations and interpretations were prepared based on the various events and
activities occurring on this project. Approval of my participation in this project and
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use of project observations as a case study for this dissertation research project was
sought and obtained from the president of a small ICT solution provider located in
Northern Virginia.
(3) Model Refinement: Based on the findings from the interviews, the framework and
accompanying models were refined.
(4) Pilot Test Operationalization: A pilot test was conducted of using the Analytic
Hierarchy Process to operationalize the framework. Interviewees were asked to
complete a comparison matrix that was then used to develop a prioritization of model
factors using the AHP techniques.
3.3.2 Methodological Considerations
Because much of the most valuable organizational knowledge may be held in tacit forms,
direct observation of the creation, nature, content and use of this knowledge is at best difficult.
Also, the study inherently suffers from the self-referential problem that in studying knowledge
and processes for its creation and use, it is necessary to apply knowledge and processes for
creation and use. Knowledge, especially socially constructed knowledge thought to be typical of
technological innovation, is subjective, subject to prejudices and filters of participants and
observers. Researchers have addressed this problem using various non-quantitative methods –
for example, Ambrosini (2003) used causal maps in an attempt to capture (i.e., make more
explicit) the organizational knowledge of selected knowledge-intensive firms.
In order to overcome the inherent difficulties in examining knowledge creation and use in
organizations, a “triangulation” of data and observations is being used to test the validity and
applicability of the framework to management use. Three different collection methods have
been used during this research: (1) a quasi-Delphi study, (2) a participant observation case study,
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and (3) the Analytic Hierarchy Process (AHP). The following subsections provide information
on each of these methods as they were applied in this study.
3.3.2.1 Delphi Method
What the Delphi method brings to the examination of the knowledge-centric organization
is a well-established technique for conducting and recording the results of a focused conversation
(Linstone & Turoff, 1975, p 3). Under the best results, the outcome is similar to that of a group
discussion, but without the disadvantages that may occur from group dynamics (e.g., inter-
personal conflict). While initially used for forecasting, the Delphi techniques have been adapted
by Scott and others to be used as a research tool to develop a rich picture of a current situation or
issue (Scott, 2001a). The Delphi method has been used extensively in studies of health-care
(Mullen, 2003; Greatorex & Dexter, 2000; Kennedy, 2004), and has been applied to management
and technological studies as well (e.g., Anderson et al, 1994; Schmidt et al, 2001; Scott, 2001a &
2001b; Loo, 2002; Holsapple & Joshi, 2002; Scholl et al, 2004).
For the first part of the current study, a method with similarities to the first stages of a
Delphi study was used to validate the conceptual framework. First, a questionnaire was used to
obtain feedback from researchers and practitioners in attendance at the IDBA. An expanded
paper intended for journal publication was then prepared incorporating the feedback from the
conference paper, as well as ongoing literature review. The journal paper, or selected portions
thereof, was given to a selected group of expert managers, knowledge-workers and researchers to
respond in a series of open, in depth conversations, referencing the framework. Detailed notes
were recorded of the conversations and the results were used to further refine the conceptual
framework.
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The participants in the study were selected with the intent to obtain input from a diverse
set of roles, as well as multiple organizations.
3.3.2.2 Participant Observer Case Study
In order to validate the conceptual framework from a second vantage point, a participant
observer case study was used. The observations were conducted during a series of project
meetings and development activities on an IT solution project involving the services of a multi-
corporate team providing support for a company which provides an Internet-based reverse
auction service for government use. Standard field study methods were used to gather and
interpret data. The conceptual framework presented in this paper was used as a reference model
for interpreting data collected in the field, but data collected in the field were also used
reflexively to validate or modify the framework as appropriate. As such, the conduct of the field
study evolved over time as changes occurred to the model. It should be noted that, although
permission was received from the organization in question to observe and record for use in this
dissertation, the subject organization was not provided a copy of the framework. This was done
in order to avoid, to the extent possible, unduly influencing the behavior of project participants in
favor of the reference model.
3.3.2.3 Field Study Techniques
The general techniques applied to both the interviews and the case study were based on
accepted practices for field studies. A multi-step process was observed as follows:
(1) Clearance was obtained from the subject to participate in the interview or case study;
(2) Detailed notes were kept (by hand) during the course of the interview or observations;
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(3) Reflections on the interview or case study were prepared, based on a combination of
the notes taken in step 2, and on the personal perspective of the observer;
(4) The notes and reflections were examined against the framework and findings and
conclusions derived as appropriate; additional supporting research as well as
examination of artifacts from the respective organizations might be done during this
process; and
(5) Findings and conclusions were integrated back into the framework and supporting
discussion as appropriate.
3.3.2.4 Analytic Hierarchy Process
The Analytic Hierarchy Process (AHP, developed by Saaty (1980, 1982), provides a
means to combine disparate criteria under a multi-criteria decision problem. The method
involves identifying criteria and organizing them in a hierarchical structure, and then using
comprehensive pair-wise comparisons to develop relative priorities for each criterion in the
decision model. While many people may have difficulty in prioritizing a long list of elements,
they typically can more easily decide the relative importance, even the magnitude, between two
choices – the AHP takes advantage of this simplification. Additional information on applying
the AHP is provided in the following discussion of operationalizing the framework and in the
illustrative example.
3.3.2.4.1 Operationalizing the Framework
In order to test applying the framework in an operational context, the AHP was used to
develop a prioritization of the model factors by several of the interviewees. Under the AHP,
information about the system under study is organized into a hierarchical tree structure to
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facilitate analysis and decision making. Figure 5 illustrates the framework organized in such a
structure.
Figure 5. The framework restructured as an analytic hierarchy.
Given this structure, it then becomes possible to apply specific methods to the members
of the tree in order to aid decision making. For example, managers can weigh the relative
importance of various branches of the tree, and collapse those branches of lesser interest,
concentrating on the remaining detailed structures. Pair-wise comparisons are made between
elements at each level of the hierarchy in order to establish the relative importance, priority or
other relative weight of interest for each of the various elements. Table 1 illustrates a typical
scale that might be used to perform such a comparison. The results of the comparisons are
recorded in a matrix – for each pair of comparisons, two entries are made in the table (i.e., if A
compared to B gives a score of 3, then the corresponding cell for B compared to A is assigned
the inverse 1/3). Scores within each column are then normalized so that the score for each
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column sums to one. Then the scores for each alternative being compared are normalized, using
the computed weights at each level of the hierarchy for each criterion, and summed to produce a
relative dominance table.
In order to test the consistency of responses, a consistency index is computed by
multiplying each row in the pair-wise comparison matrix by the overall score for each factor, and
then dividing by the overall factor for the row being examined 7 . If the scores are consistent, then
the consistency index will equal the number of alternatives in the comparison set (Searcy, 2004).
Table 1. Scale for pair-wise comparison under the Analytic Hierarchy Process.
Result of comparison Numerical score Inverse Inverse Decimal
Equally preferred 1 1 1
Equally to moderately 2 1/2 .5
Moderately preferred 3 1/3 .333
Moderately to strongly 4 1/4 .25
Strongly preferred 5 1/5 .2
Strongly to very strongly 6 1/6 .16667
Very strongly preferred 7 1/7 .142857
Very strongly to extremely 8 1/8 .125
Extremely preferred 9 1/9 .1111
3.3.2.4.2 Illustration of the Analytic Hierarchy Process
As an example, a manager may be attempting to determine where efforts should be
concentrated for knowledge management. Using a panel of experts, which may be made up of
members of the firm as well as external consultants, pair-wise comparisons may be made of the
relative importance of each of the factors in Figure 5 with respect to providing services to client
7
The matrix multiplication function MMULT is used in the Microsoft Excel spreadsheet application for this
computation.
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firms. In our hypothetical example, scores have been assigned as shown in Tables 2 and 3 for
the pair-wise comparisons of Level 1 and of the Level 2 factors under Fusing Knowledge with
Resources. For each factor, the first column represents the raw comparison, using the scale in
Table 1; the second column shows the normalized score, computed by dividing the raw score by
the sum of the column. The resulting relative rankings can aid the decision maker in assigning
priorities for strategic investment. For illustration, Table 4 shows the scores of the various
technological types, shown in rank order (for this example, only the technological types were
evaluated, all other factors were excluded) – the scores are the sum of the normalized values for
each comparison across all columns of the comparison table. The result shows inforware as
being most important to the organization, followed closely by humanware.
Table 2. Pair-wise comparison of Level 1 factors.

Acquiring Fusing Executing Assessing Building an
Knowledge & Knowledge Projects Performance Actionable
Wisdom with Knowledge
Resources Base
Acquiring 1.00 0.083 0.20 0.052 0.20 0.085 2.00 0.200 2.00 0.200
Knowledge &
Wisdom
Fusing 5.00 0.417 1.00 0.259 0.50 0.211 3.00 0.300 3.00 0.300
Knowledge with
Resources
Executing Projects 5.00 0.417 2.00 0.517 1.00 0.423 3.00 0.300 3.00 0.300
Assessing 0.50 0.042 0.33 0.086 0.33 0.141 1.00 0.100 1.00 0.100
Performance
Building an 0.50 0.042 0.33 0.086 0.33 0.141 1.00 0.100 1.00 0.100
Actionable
Knowledge Base
Total 12.00 1.000 3.87 1.00 2.37 1.00 10.00 1.00 10.00 1.00
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Table 3. Pair-wise comparison of Level 2 factors for Fusing Knowledge with Resources
Technoware Humanware Inforware Orgaware
Technoware 1.00 0.07 0.13 0.03 0.20 0.12 8.00 0.38
Humanware 8.00 0.57 1.00 0.23 0.33 0.20 5.00 0.24
Inforware 5.00 0.35 3.00 0.69 1.00 0.60 7.00 0.33
Orgaware 0.13 0.01 0.20 0.05 0.14 0.09 1.00 0.05
Total 14.13 1.00 4.33 1.00 1.68 1.00 21.00 1.00
Table 4. Subset of the relative dominance table for the factors under Fusing Knowledge
with Resources.
Factor Score Percentage
Inforware 1.98 49.5%
Humanware 1.23 30.8%
Technoware 0.60 15.0%
Orgaware 0.19 4.8%
Figure 6. Comparison of plan vs. actual investment profile for Fusing Knowledge with
Resources.
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As a further step, comparison can be made of actual organizational behavior against the
profile developed using the Analytic Hierarchy Process. A spider or radar diagram is a useful
visualization for this comparison. For our hypothetical example, Figure 6 illustrates the desired
or plan state, shown as diamond points, against the current state of corporate investment, shown
as square points.
3.3.3 Limitations
All participants in the interview portion of the study were selected from management
services organizations, primarily serving government clients. Historically, the firm selected for
the case study also has focused on government clients, the main exception being the specific
project that was used for this case study, which is a project in support of a commercial client –
however, the client firm itself serves government clients. To compensate for possible
mismatches between the two vantage points, some historical information about projects in each
of the studied firms was used, based on the interviews (which may be influenced by exposure to
the framework).
The portion of the AHP process conducted in concert with the interviews is only the first
step of what would ordinarily be a much more intensive process. As will be seen from the values
provided by the respondents in the comparison matrices, there are inconsistencies in scoring
which would ordinarily require resolution. Also, in actual operationalization, multiple expert
respondents would be involved in the AHP in multiple rounds to derive as credible a model of
organizational priorities as possible. Also, a follow-on step would be to perform an assessment
of the current state of the organization against the perceived organizational priorities. For the
purposes of the current research project, it was deemed sufficient to demonstrate that the
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conceptual framework could be operationally used in organizations through viable techniques
such as the AHP.
The participant observer case study is a single case – there is no basis for generalizing,
from any specific observations, findings that can be applied prescriptively in other contexts.
Instead, the case study is intended to illustrate the applicability of the conceptual framework as
an analytic tool by either researchers or managers in examining an organization. Similarly, the
AHP scorings collected in the field study cases represent the opinions of individual respondents
and only serve to demonstrate that operationalization of the framework can be achieved – again,
no generalizations should be assumed from the resulting prioritizations.
Interviewees work at varying levels and roles within their respective organizations. Also,
they have different educational backgrounds and work experiences. No attempt is being made as
a part of this study to correlate any particular characteristics of the respondents to the results of
the AHP, or to treat these characteristics as controls.
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Chapter 4. Discussion, Results and Conclusions
The results of a project to validate the conceptual framework and apply it within an
operational context are presented in the chapter. Selected observations and reflections are
provided for each of the interviews and field study cases as well as the participant observer case
study. These are followed by a summary of the results and conclusions.
Overview of the Cases
All of the firms studied for this paper do business primarily for U.S. federal or state
governments, in some aspect of ICT services and products. The firms in cases 1, 3 and 5 (the
participant observer case study) consider themselves IT Solution providers, the firm in case 2 is
split between an information service and a consulting practice that specializes in acquisition and
program management, and the firm in case 4 is a very large systems integrator, of which the
project described is less than 1% of the overall business, at least in terms of employees, and is
part of just one business unit which has formed within the past two decades to provide ICT
services, complementary to the main business of the company which is large aerospace systems
manufacturing and integration. Again, for the purposes of this study, all of the firms, or the
business units thereof, can be considered as being part of the ICT services industry.
4.1.1 ICT Services Industry Description
Firms within the ICT services industry may be solely in the ICT services business, under
various monikers such as IT solutions providers, system integrators, etc.; or they may be
involved in other related business as well. For example, one of the firms studied in this paper is
a relatively small part of a large systems integration and manufacturing concern. A number of
related business types may provide ICT solutions to complement their main line of business. For
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example, a major type of firm in this industry is the value added reseller (VAR), which, while
primarily focused on providing off-the-shelf hardware and software, may also be involved in
providing ICT services as part of their value-added portfolio.
Within the overall ICT services market, the firms contacted in this study all participate in
the government sector, serving U.S. federal, state and local governments. Because of the
mixture of services and products included in typically reported numbers for ICT, it is difficult to
separate ICT services numbers from others. Given this, it has to be assumed that ICT services
provision is some subset of the overall U.S. federal IT budget, which for fiscal year 2007 is
projected to be $64.3 billion (Input, 23 Feb 2006). For state and local governments, the
projected IT outsourcing budget, which is a different cut of budget data that also may include
ICT services as a subset, was $10 billion in FY 2005 and is projected to reach $18 billion by
2010 (Input, 23 Jan 2006).
4.1.2 The Nature of Work in the ICT Services Industry
Work arrangements often fall into two main categories: (1) projects, which encompass a
particular scope of work over a finite span of time and resources, and (2) ongoing support, such
as maintaining a computer networking infrastructure or providing an internet-based application
service. Within these projects or ongoing support, a wide range of managerial, technical and
subject matter expertise are required. A typical project may have a mixture of analysts,
programmers, hardware and communications specialists as well as managers and support staff.
Both projects and ongoing support are provided by integrated teams (integration referring
both to technical integration and, often, organizational integration). Many of these teams may
involve multiple organizations or firms, and may include individual consultants. It is not unusual
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for team members to have more than one managerial reporting chain – one or more for technical,
and another for administrative matters.
The work itself is often technically, even intellectually challenging, especially if the
project involves development of new technology, such as a custom software application. Glass
(1992, p3) notes that “some say software is the most difficult mental task humanity has ever
undertaken. Others … say it more simply: “Software is hard” (to create).” In order to reduce the
complexity of these efforts, work often is conducted under a guiding framework or methodology.
Several models or standards in wide use include ISO 9000 (a quality improvement model), the
Capability Maturity Model Integrated (CMMI) (a process model for systems and software
engineering developed by the Software Engineering Institute of Carnegie Mellon University
under contract to the Department of Defense), the Project Management Body of Knowledge (a
framework for knowledge about project management and specific tools developed by the Project
Management Institute), the Institute of Electrical and Electronics Engineers (IEEE) Software
Engineering Standards and Guidelines (primarily in the United States), and the IT Infrastructure
Library (ITIL®) (a body of knowledge for information technology services promulgated by the
British Office of Government Commerce). Many corporations have their own proprietary
methodologies, or adaptations of established models, that are used in performing this work.
Also, there is wide use of supportive technologies such as project management tools,
“desktop” applications for word processing and other basic office functions, applications
development tools, system monitoring tools, and modeling and simulation applications. In some
cases, methodologies have been integrated with development tools, either by technology vendors
or methodology vendors (arguably these are all technologies – see the separate discussion of
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technoware, humanware, inforware, and orgaware – so there is a differentiation of “hard” from
“soft” technologies in this instance).
Professionals often work long hours in support of “crunch” projects, as well as “24 by 7”
operations. In fact, this has become a point of contention in the industry and government, with
some cases settled in favor of workers who claimed uncompensated overtime (cf. O’Hara, 2001)
– it is often the case that ICT professionals have been classified as exempt employees. In many
cases, professionals are working managers who are responsible for both managerial and technical
activities.
A knowledge-related trend in the industry has been for both employers and clients to
require various types of certifications, ranging from the general Project Management
Professional to vendor-specific certifications such as the Microsoft Certified Professional.
4.2 Interviews and Field Study Cases
This section provides the results of the interviews and associated field study cases
conducted for this research project. For each case, an overview of the organization and the work
context is provided. Then, results of the interview and AHP are provided under the following
headings:
(1) Interview Discussion – this sub section contains a paraphrase of highlights of the
conversation held with the interviewee. The sequence of the interview has been
preserved to a large extent in order to convey a sense of the train of thought of the
conversation.
(2) Examples – this sub section contains examples from projects and activities within
the organization in question, or from background of the interviewees.
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(3) AHP Scoring – the sub section contains the results of the AHP scoring performed
by the interviewee.
(4) Reflection – this sub section contains reflections on the interview and AHP
scoring in light of the framework presented in this dissertation. (Note: further
discussion of the interviews and scoring is provided in the section on results,
which integrates findings from the interviews and case studies with the current
science as outlined in the literature review and the framework.)
4.2.1 Case 1: IT Solution Provider
The IT solution provider discussed in this example provides products and services
primarily to the United States federal government, or to other firms in the IT industry. The firm
is small, with fewer than 100 employees. The company is privately held, with financial
information considered to be proprietary, and hence not made available for inclusion in this
document, which is going to be in the public domain.
As a result of their IT services work, the company has developed a number of ‘pre-
packaged’ services and solutions, including the following:
(1) Business automation solution to support managing contracts and task orders
(2) Website management software and associated process – several offerings are built on
a base product that helps customers manage content and development for large
websites
(3) Visitor management software and associated process
(4) Usability testing service
(5) Knowledge management consulting services
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These products and services are a direct outgrowth of the company’s IT services work. There
are a number of ongoing projects to create saleable technological offerings for government and
businesses.
The interviewee serves in several roles in the company, as is typically the case in small
companies. In this particular discussion, the interviewee indicated that they were speaking
primarily from the vantage point of their role as a consultant providing support services to a
client. The interviewee has also been a key member of several of the teams that have developed
the aforementioned products and services. Officially, they are a Technical Director for the
company. The interviewee has background as a systems analyst and programmer, with a degree
in computer science, as well as an MBA. They have spent the past seventeen years in various
positions in IT service firms doing business primarily with the U.S. federal government, and
have held several senior management positions in small businesses, with a primary role as a
program manager for portfolios of projects serving clients.
4.2.1.1 Interview Discussion
The following provides highlights of the discussion, which spanned more than three
hours.
Courage is a surprising addition … very necessary. When I first looked at the model,
courage jumped out (as something different). (A recent example) I had an idea for
improving the relationship with our client, but didn’t do anything (deferring to company
executives) … (perhaps this is an example of) not actionable. Successful projects …
there is that leadership (that is so necessary). Courage takes on so many forms … we
typically look at larger-than-life figures for inspiration.
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But what if we are talking about a think tank? Managing or leading seems less
important, or would be weighted lower (than for a solution provider). The work is much
more self-driven.
It is amazing that we even have definitions for what we don’t understand, for
intangibles. Looking at the discussion of transforming tacit to explicit knowledge (cf.
Figure 2), the end points are easy to see. But why the need to be beyond subconscious?
There is confidence in the subconscious. (But how does this really happen?) Returning
to a musical example, when you are being taught piano … there is an instructor who is
observing and correcting … (in performing ourselves) there is no way of knowing … of
observing the behavior. And the goal is to do as much as possible subconsciously.
Knowledge grows in a context … otherwise a jumble. We respond to stimuli … (again
using the piano as an example) having received it, we now have to confront the
instructor’s observation. Even the best musicians have coaches. Coaches may never be
as good as the best players. Maybe you can’t observe yourself. Learning may imply
group, if we are talking beyond tacit.
At the tacit level, how do we learn anything? I am reminded of a recent
conversation in our soccer group. How did it all start? One of the engineers is a
creationist – he sees this as the simplest explanation, others see it differently. And why
do we take so long to learn?
I liked the discussion of time as a constraint to knowledge.
(I) worry about the tacit. There are things you want to express, but can’t. We are
constantly reacting to things. It is elusive – how do you leverage what you don’t
understand? At that point, I think you cross over into pure psychology. Brainstorming
techniques, regardless of whether it is being used for tacit or explicit, help tap into tacit
knowledge.
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Drawings are essential. Don’t know why. The diagram is the best possible
communication tool. Studying drivers in the United States, they found that people slow
down to read electronic text displayed on signs on highways. In Europe, it wouldn’t even
be possible to do this – different languages; instead they have developed pictures to
convey messages. I usually draw before writing a description. This is faster than trying
to write about it. There may be answers in psychology.
Tacit knowledge is very individual. It is difficult to repeat success in groups … a
lot of what ifs. One project shines, another bombs. Perhaps whatever was in the
subconscious fit one, another, maybe not. Is technical wisdom held only by a person, or
can it be held by a group? There is a distinction between behavior and knowledge. A
group itself could only hold explicit knowledge or wisdom – there is no repository other
than individuals for tacit knowledge. Humans are the repositories for all forms of
knowledge. A collection of people is not much use for knowledge until a process is
initiated to cull something explicit out of it. Interactions with other people seem to be
part of what is going on.
In Figure 3, “implicit” should be relabeled “tacit” to be consistent with the rest of
the discussion – otherwise, implicit is a natural counter to explicit. 8
(In reaction to the technology typology) Never tried to split it up before. Some come
off as reasonable … word doesn’t necessarily convey its meaning … but maybe because
it is a different concept (than I am used to). (Haven’t internalized) so still need to have
definitions to reference … not part of my tacit knowledge yet. (I see a risk) that someone
may internalize a different meaning than the originator was expressing.
The need for craft (on the part of the manager) gnaws at me all of the time. A
manager should know the business. General management is still at some level of
8
The recommended change has been made and is reflected in the revised version of Figure 3 that is included in this
document.
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abstraction. Obviously, it is possible to make decisions without being an expert yourself.
County councils routinely make decisions on subjects beyond their expertise. This is the
point of testimony. Judges operate in a discipline of developing knowledge. [There
ensued a brief discussion of the Leadership Maryland program, in which the CEO of the
company is participating.]
Assessment is important – have to have measurement. Doesn’t make much sense
to have discipline and then not force feedback.
Our company has tried marketing a knowledge management process, but it is
hard to compare this with one of the major players – they have websites that evidence
deep knowledge that evidences the capability to learn to learn. (One senses) that it was
important to them to demonstrate knowledge to their (market). Something this rich
wasn’t acquired overnight – looking at such an asset is a clue to how long they have been
around. Of course, there is cheating by buying up other companies that have knowledge.
We are up against this when our company does high end work. There is always the
(social) network – there is a large trust factor. As one former manager put it, this is an
amazing business – you can get a million dollar deal on a handshake, based on the
thought that you can do it. I liked the observation in the introduction that solutions must
be developed in partnership with the clients.
Looking at the specifics of the project in which I currently am involved, our role
is staff augmentation for a federal agency. Resources are hired as directed by the agency
– we have task teams that are basically resource pools with nothing to do until a need is
identified and then a project staffed to address it. The agency itself is very dependent on
tacit knowledge – the systems and processes are so integrated and complex that maybe
implicit knowledge is the most efficient form, but there is no backup.
A few final observations:
(1) As soon as there is a group, you have to resolve different opinions.
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(2) Entrepreneurial is very much ‘gut’. I know one entrepreneur who is working on
developing new power transmission technology. He has gotten the project
started mostly by stating a goal and providing funding, and then leaving his
project team to try to think it through – to consider the “what ifs.” He is really
only interested in the idea and the possible outcomes, and does not involve
himself in the day-to-day details of how they are going to get there.
(3) When I was considering the idea of maximizing knowledge content, I thought of
the difference between the iPod®9 and some of its competitors. The excellence in
the iPod® is in the interface – in the understanding of how people use things; the
competitor products have equivalent functionality, but they are less ‘friendly’ to
use.
(4) From my understanding of intellectual capital, I have had limited exposure to real
intellectual capital… a few ‘stolen’ proposals and spreadsheets. In my next job, I
want to work somewhere where people come to a project with knowledge and
experience.
(5) Firm profitability and impact have to fit into the assessment..
(6) Why the interest in intellectual capital and knowledge management (in the
industry) now? Looking back historically, it is useful to look at the original
consultancies, such as the accounting firms. They went from accounting to
advising – to practice. Very much a matter of knowledge management.
(7) The U.S. founders were aware of these knowledge concepts … effects of a
classical education, and influence of philosophers of the time such as Locke.
9
A portable device for storage and playback of media images (e.g., digitized music or photographs) manufactured
by Apple Corporation.
74
(8) A final point, that the model was validated in part by the fact that it could even be
expressed as an AHP diagram. In looking at the diagram, it seemed that the
factors were mutually exclusive.
4.2.1.2 Examples
(1) Internet based project management technology: One of the offerings of the firm to the
marketplace is a suite of internet-based project management applications. This suite
of tools came into existence initially as a support mechanism for the company’s
internal use managing the various contracts being performed for clients. The first part
of the tool set was initiated by one or more of the project managers in the company,
including the interviewee, who needed resource information not available in real time
from the company’s accounting system. Once this capability was in place, it
provided a basis for other project management applications. Each part of the
application has been honed in use on real projects for the company, and has
incorporated knowledge that is specific to the context of performing projects. As the
tool set has become viable and a client base is growing, the company has begun to
search the market for competitor application suites and has tried to incorporate
additional features into the tool. Also, the applications are increasingly incorporating
knowledge from such sources as the Project Management Institute, attempting to
reflect the best intellectual work available in the subject areas covered by the
application.
(2) Assessment Project: On an assessment project for a client, the entire project was
constructed around completing a set of templates that had similarities to those used on
a previous assessment project for another client. The template reflects a cumulative
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knowledge of assessment gained through a number of projects that the interviewee
has experienced at the current company as well as earlier positions with other firms in
the same industry. The template served as a framework for working sessions,
discussions, and data collection efforts on the project – both internal to the project
team and in external meetings with the client. Completion of worksheets for each
object under study ensured comprehensive knowledge capture about the system under
study. The template also provided a convenient means for partitioning the work
among the various project participants. Contrasted to this was a separate part of the
assessment effort, which was to develop revisions to the ‘look and feel’ of the client’s
website. This part of the project was much more freeform in its organization and was
very dependent on the expertise, artistry, and performance of the designer, who was
trained in fine arts and graphic design – this person also had a reputation within the
company as having an intuitive sense of how to improve the interaction between the
users and the software via a properly designed interface.
4.2.1.3 AHP Scoring
The tables in this section show the results of the AHP scoring for Case 1 as follows:
(1) Table 5 shows the raw scores for Level 1 of the hierarchy as structured in Figure 5.
(2) Table 6 shows the normalized scores for Level 1, using the geometric mean. A
consistency index is also derived. The weight at this level duplicates the geometric
mean, and will be used to compute the relative weights for Level 2 elements.
(3) Table 7 shows the relative dominance of the factors at Level 1, in descending order of
perceived importance.
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(4) Tables 8 through 17 present raw scores and normalized scores, consistency indexes,
and weights for each set of elements at Level 2 of the hierarchy.
(5) Table 18 shows the relative dominance of the factors at Level 2, in descending order
of perceived importance.
Further analysis of these results is presented in Section 4.4 Results.
Table 5. Case 1 pair-wise comparison of Level 1 factors: raw scores.

Resources Base
Acquiring Knowledge 1 8 1/9 1/5 1/7

& Wisdom
Fusing Knowledge 1/8 1 1/9 1/5 1/7

with Resources
Executing Projects 9 9 1 4 5
Assessing Performance 5 5 1/4 1 3
Building an Actionable 7 7 1/5 1/3 1

Knowledge Base
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Table 6. Case 1 pair-wise comparison of Level 1 factors: normalized scores.
Acquir- Fusing Executing Assessing Building Geo- Con- Weight

ing Know- Projects Perfor- an Action- metric sistency
Mean Index
Know- ledge with mance able Nor-
ledge & Resources Know- malized
Wisdom ledge
Base
Acquiring 0.045 0.267 0.066 0.035 0.015 0.0589 5.329 0.0589

Knowledge &
Wisdom
Fusing 0.006 0.033 0.066 0.035 0.015 0.0257 5.259 0.0257

Knowledge
with
Resources
Executing 0.407 0.300 0.598 0.698 0.538 0.5388 6.350 0.5388

Projects
Assessing 0.226 0.167 0.150 0.174 0.323 0.2209 6.831 0.2209

Performance
Building an 0.316 0.233 0.120 0.058 0.108 0.1557 6.921 0.1557

Actionable
Knowledge
Base
Table 7. Case 1 relative dominance of Level 1 factors.
Factor %
Executing Projects 53.88%
Assessing Performance 22.09%
Building an Actionable Knowledge Base 15.57%
Acquiring Knowledge & Wisdom 5.89%
Fusing Knowledge w/ Resources 2.57%
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Table 8. Case 1 pair-wise comparison of Level 2 factors for Acquiring Knowledge &
Wisdom: raw scores.
Tacit to Technological General Information Data

Explicit Wisdom Knowledge
Conversion
Tacit to Explicit 1 2 4 6 8
Conversion
Technological 1/2 1 2 5 7
Wisdom
General Knowledge 1/4 1/2 1 2 6
Information 1/6 1/5 1/2 1 5
Data 1/8 1/7 1/6 1/5 1
Wisdom: normalized scores.
Tacit to Techno- General Infor- Data Geo- Con- Weight

Explicit logical Know- mation metric sistency
Mean Index
Conver- Wisdom ledge Nor-
sion malized
Tacit to 0.049 0.520 0.522 0.423 0.296 0.4539 5.370 0.0268

Explicit
Conversion
Technological 0.245 0.260 0.261 0.352 0.259 0.2811 5.421 0.0166

Wisdom
General 0.122 0.130 0.130 0.141 0.222 0.1497 5.273 0.0088

Knowledge
Information 0.082 0.052 0.065 0.070 0.185 0.0840 5.136 0.0050
Data 0.06 0.037 0.022 0.014 0.037 0.0313 5.049 0.0018
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Table 10 . Case 1 pair-wise comparison of Level 2 factors for Fusing Knowledge with
Resources: raw scores.
Technoware 1 1/7 1/5 5
Humanware 7 1 6 7
Inforware 5 1/6 1 5
Orgaware 1/5 1/7 1/5 1
Resources: normalized scores.
Techno- Human- Infor- Orga- Geo- Con- Weight

metric sistency
ware ware ware ware
Mean Index
Nor-
malized
Technoware 0.076 0.098 0.027 0.278 0.0952 4.663 0.0024
Humanware 0.530 0.689 0.811 0.389 0.6411 4.574 0.0164
Inforware 0.379 0.115 0.135 0.278 0.2212 4.597 0.0057
Orgaware 0.015 0.098 0.027 0.056 0.0426 4.638 0.0011
Table 12. Case 1 pair-wise comparison of Level 2 factors for Executing Projects: raw
scores.
Art Craft Science Courage
Art 1 3 5 1/4
Craft 1/3 1 4 1/7
Science 1/5 1/4 1 1/7
Courage 4 7 7 1
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Table 13. Case 1 pair-wise comparison of Level 2 factors for Executing Projects:
normalized scores.
Art Craft Science Courage Geo- Con- Weight

metric sistency
Mean Index
Nor-
malized
Art 0.181 0.267 0.294 0.163 0.2287 4.141 0.1232
Craft 0.060 0.089 0.235 0.093 0.1086 4.271 0.0585
Science 0.036 0.022 0.059 0.093 0.0478 4.364 0.0257
Courage 0.723 0.622 0.412 0.651 0.6149 4.267 0.3313
scores.
Competitive- Innovative- Attractive- Responsive-

ness ness ness ness
Competitiveness 1 1/3 1/7 1/5
Innovativeness 3 1 1/3 1/2
Attractiveness 7 3 1 3
Responsiveness 5 2 1/3 1
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normalized scores.
Compe- Innova- Attrac- Respon- Geo- Con- Weight

metric sistency
titive- tiveness tiveness siveness
Mean Index
ness Nor-
malized
Competitive- 0.063 0.053 0.079 0.043 0.0587 4.051 0.0130

ness
Innovative- 0.188 0.158 0.184 0.106 0.1580 4.035 0.0349

ness
Attractive- 0.438 0.474 0.553 0.638 0.5294 4.110 0.1169

ness
Responsive- 0.313 0.316 0.184 0.213 0.2539 4.096 0.0561

ness
Knowledge Base: raw scores.
Acquisition Discrimination Integration Distillation
Acquisition 1 5 3 3
Discrimination 1/5 1 1/4 1
Integration 1/3 4 1 3
Distillation 1/3 1 1/3 1
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Knowledge Base: normalized scores.
Acquisi- Discrimi- Integra- Distilla- Geo- Con- Weight

metric sistency
tion nation tion tion
Mean Index
Nor-
malized
Acquisition 0.536 0.455 0.655 0.375 0.5124 4.220 0.0798
Discrimination 0.107 0.091 0.055 0.125 0.0936 4.064 0.0146
Integration 0.179 0.364 0.218 0.375 0.2798 4.173 0.0436
Distillation 0.179 0.091 0.073 0.125 0.1142 4.131 0.0178

Factor %
Courage 33.13%
Art 12.32%
Attractiveness 11.69%
Acquisition 7.98%
Craft 5.85%
Responsiveness 5.61%
Integration 4.36%
Innovativeness 3.49%
Tacit to Explicit Conversion 2.68%
Science 2.57%
Distillation 1.78%
Technological Wisdom 1.66%
Humanware 1.64%
Discrimination 1.46%
Competitiveness 1.30%
General Knowledge 0.88%
Inforware 0.57%
Information 0.50%
Technoware 0.24%
Data 0.18%
Orgaware 0.11%
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The following comments were provided by the respondent with the completed matrix:
I found it difficult at times to be sure how to view each category when doing the
assessment, so the results could be misleading.
Generally, though, my sense is that consulting services firms, such as (mine and
other small companies) are wholly dependent on the people. Even larger firms that
promote the value of processes are still dependent on the people but can be more efficient
(competitive) through standardization. So, in my humble opinion, all of this knowledge
management has the effect of enhancing human performance.
4.2.1.4 Reflection
The importance of context and the necessity for action are apparent in this case. This
respondent was particularly focused on the human-related factors in the model, especially the
importance of humanware and courage. Underlying themes which seem to emerge from the
conversation are the large role tacit knowledge plays in daily work activities and the difficulty of
moving tacit to explicit forms of knowledge.
One of the more interesting observations was that knowledge formation and adjudication
processes are part of the general polity in the United States. Questions that arise include: to what
extent does this general cultural theme of rationality affect knowledge processes in U.S.-based
organizations? What are the implications for innovativeness of these norms, and are different
norms in other societies affecting organizational innovativeness in kind?
The earlier discussion of the importance of models and frameworks, especially
visualizations, in formulating knowledge seems to be validated in this discussion.
The web-based project management software is a good example of how an organization
produces technologies in order to both capture knowledge gained through experience, and to gain
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efficiencies – in this case the project has led to a market offering, further leveraging these
intellectual assets.
Execution is ultimately necessary to produce economic benefit from intellectual capital.
But in order to execute effectively, professionals must re-assimilate the changed or newly
acquired knowledge, and understand the usage of and relationships among the technologies
available to them in performing the services or delivering products, including knowledge
products.
Assessment occurs in several ways, depending on the area of work. Certainly for
products and service lines that are well-defined, the client satisfaction as expressed in feedback
and continued use is a key source of assessment information. For the consultants who merge
into other companies’ or clients’ project teams, assessment is more of a challenge. Again, client
and peer feedback are important to assessing the effectiveness of knowledge management
activities as they may be applied in these work situations.
In terms of the overall learning cycle, the organization is aware of knowledge
management. They are effective in incorporating knowledge into product and service offerings.
However, in executing, knowledge use, beyond the use of individual expertise, remains a
challenge, as much of the work of the company remains staff augmentation, often in sub-contract
relationships to other, larger firms.
85
4.2.2 Case 2: Consulting Practice
The consulting practice discussed in this example began life as a newsletter publisher in
the mid-1990’s. They have always viewed themselves as thought leaders attempting to change
the manner in which the United States federal government does business. Building on the base
of the newsletter, and the personal reputations of the founders, the firm expanded within the last
few years to provide consulting services based on the same subject areas of expertise. During
the same period, the firm expanded in size from four employees to just over a hundred within the
past year 2005; gross revenues also have expanded correspondingly. While the newsletter
continues, the subscription service has expanded to include other knowledge-based services such
as responding to client questions, using an extensive network of subject matter experts as well as
an integrated knowledge base.
The firm has several initiatives to feed the experiences gained in consulting work back
into the knowledge bases that are the core technological base for the company. Knowledge
capture and transmission processes are overtly encouraged and managed, with participation in
knowledge capture and active use of company knowledge resources reinforced through
employee performance measures, outreach, and other organizational processes. Communities of
practice are being established for key knowledge areas to foster knowledge creation and transfer.
The interview was conducted with the Chief Knowledge Officer. The CKO has been
involved in a number of knowledge management projects at the current company, as well as
previous positions. Their immediate prior position was working for the chief knowledge officer
at an ICT services provider. Currently, they are working on a doctoral degree at George
Washington University.
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The following provides highlights of the discussion, which spanned half an hour.
(In looking at the conceptual framework) The secret lies in (1) acquiring
knowledge and wisdom, and (5) building an actionable knowledge base. Very few
people have been successful at transforming (using conscious organizational means) tacit
to explicit knowledge. (But I have worked on projects where this has been successful.)
When people look at this (framework), they will think this is (just) about
technology. It will be important in explaining this model that it is clear that this is not just
about technology.
You may want to look at the Knowledge Management on our corporate website.
I am using a process that was developed by Kent Greenes. You should also look at
George Washnigton University’s knowledge management website.
Creating intellectual capital involves four parts. Information in an organization.
Experience in an organization. These welded together…
You may want to consider placing the circle outside to make this clearer. Could
also make an equation in the picture. Pretty straightforward (to show this).
It is very hard to deliver knowledge management for an organization.
You need to address some key questions: Why are you building knowledge?
How does it support strategic objectives? Look at the model developed at GW: it
follows a pretty much standard input/process/output flow. You are trying to improve
efficiency and effectiveness. (You need to reflect that the ultimate goal is to make a
profit.)
Tacit to explicit is very difficult. Few can pull this off. Creating intellectual
capital involves information, experience, organization, and enabling technologies.
Where does knowledge sharing go in this model?
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Knowledge Fusion and Intellectual Capital may be reversed. 10
How are you defining wisdom? You need to be clear about this.
4.2.2.2 Examples
(1) Explicit knowledge capture: Participants in consulting projects are encouraged, in part
through performance incentives, to contribute to the corporate knowledge base. By
policy, all deliverables and key working papers are submitted for inclusion in the
corporate knowledge base. Once a document has been submitted, it is reviewed by one
of the corporate principles and “scored” for its overall quality. Descriptive text is
included in the index entry for each document to aid subsequent users in understanding
the specific context for the document’s initial creation and use.
(2) Tacit knowledge capture: The company encourages capture of contextual, and, hopefully,
tacit knowledge from participants in each of the client engagements. Capture of such
knowledge is accomplished through several mechanisms. One is a post-mortem review
where the project team is involved in a discussion of “lessons learned” and other
knowledge gained during the engagement. These discussions touch on a number of
topics, including what did or did not go well during the project, why, and what might be
done in the future to promote a better outcome, or to sustain or improve successful
performance. These sessions also serve as an opportunity to make certain that the key
tangible outputs of the project have been captured in the knowledge base so that they may
be knowledge sources for future projects. A second mechanism for knowledge capture is
individual interviews, which are recorded, with the permission of the interviewee, in
10
The entire framework was originally called the Knowledge Fusion Process, and Crreating Intellectual Capital was
expressed as the portion of the model which addressed the formation of Techno-, Human-, Infor-, and Orga-ware.
The model has since been re-framed – see further discussion in Section 4.4 Results.
88
audio and possibly video format. A transcript of the interview is prepared, and, in some
cases, selected extracts are made of the audio or video for inclusion in the knowledge
base.
(3) Knowledge use: All employees in the company have access to and are encouraged to use
and contribute to the corporate knowledge base as the corporate repository for expert
knowledge, exemplar deliverables, templates and other knowledge useful in their daily
work. The Chief Knowledge Officer also has initiated a process where part of the
preparation for a new services project is a team meeting where subject matter experts
weigh in on the upcoming engagement, making suggestions on how best to achieve a
successful outcome and what key sources of knowledge may be useful in performing the
project.
4.2.2.3 AHP Scoring
89

Knowledge Knowledge Projects Performance Actionable
& Wisdom with Resources Knowledge
Base
Acquiring Knowledge 1 1 3 3 1/7

& Wisdom
Fusing Knowledge 1 1 2 2 1
with Resources
Executing Projects 1/3 1/2 1 1 1/3
Assessing Performance 1/3 1/2 1 1 1/3
Building an Actionable 7 1 3 3 1
Knowledge Base
90

Mean Index
Wisdom ledge
Base
Acquiring 0.103 0.250 0.300 0.300 0.051 0.1818 5.236 0.1818

Knowledge &
Wisdom
Fusing 0.103 0.250 0.200 0.200 0.356 0.2282 5.369 0.2282

Knowledge
with
Resources
Executing 0.034 0.125 0.100 0.100 0.119 0.0970 5.206 0.0970

Projects
Assessing 0.034 0.125 0.100 0.100 0.119 0.0970 5.206 0.0970

Performance
Building an 0.724 0.250 0.300 0.300 0.356 0.3960 6.704 0.3960

Actionable
Knowledge
Base
Factor %
Building an Actionable Knowledge Base 0.39601
Fusing Knowledge w/ Resources 0.22816
Acquiring Knowledge & Wisdom 0.18183
Executing Projects 0.097
Assessing Performance 0.097
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Wisdom: raw scores.

Conversion
Tacit to Explicit 1 6 7 7 7
Conversion
Technological 1/6 1 1/3 3 5

Wisdom
General Knowledge 1/7 3 1 5 5
Information 1/7 1/3 1/5 1 5
Data 1/7 1/5 1/5 1/5 1

Mean Index
sion malized
Tacit to 0.627 0.570 0.802 0.493 0.304 0.5884 6.283 0.10699

Explicit
Conversion
Technological 0.104 0.095 0.038 0.211 0.217 0.1234 5.522 0.02243

Wisdom
General 0.090 0.285 0.115 0.211 0.217 0.1856 6.056 0.03375

Knowledge
Information 0.090 0.032 0.023 0.070 0.217 0.0696 5.052 0.01265
Data 0.090 0.019 0.023 0.014 0.043 0.0330 5.246 0.006
92
Technoware 1 1/8 1/4 1
Humanware 8 1 1 1
Inforware 4 1 1 1
Orgaware 1 1 1 1

metric sistency
ware ware ware ware
Mean Index
Nor-
malized
Technoware 0.071 0.040 0.077 0.250 0.093 4.719 0.021
Humanware 0.571 0.320 0.308 0.250 0.372 4.435 0.085
Inforware 0.286 0.320 0.308 0.250 0.313 4.086 0.071
Orgaware 0.071 0.320 0.308 0.250 0.221 4.516 0.051
scores.
Art 1 1 1/2 1/2
Craft 1 1 2 2
Science 2 1/2 1 2
Courage 2 1/2 1/2 1
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normalized scores.

metric sistency
Mean Index
Nor-
malized
Art 0.167 0.333 0.125 0.091 0.170 4.435 0.017
Craft 0.167 0.333 0.500 0.364 0.341 4.371 0.033
Science 0.333 0.167 0.250 0.364 0.286 4.198 0.028
Courage 0.333 0.167 0.125 0.182 0.203 4.230 0.020
scores.

ness ness ness ness
Competitiveness 1 1 4 1/3
Innovativeness 1 1 4 2
Attractiveness 1/4 1/4 1 1/3
Responsiveness 3 1/2 3 1
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normalized scores.

metric sistency
Mean Index
ness Nor-
malized
Competitive- 0.190 0.364 0.333 0.091 0.234 4.431 0.023

ness
Innovative- 0.190 0.364 0.333 0.545 0.366 4.275 0.036

ness
Attractive- 0.048 0.091 0.083 0.091 0.083 4.092 0.008

ness
Responsive- 0.571 0.182 0.250 0.273 0.317 4.573 0.031

ness
Acquisition Discriminatio Integration Distillation

n
Acquisition 1 2 1/3 1/8
Discrimination 1/2 1 1/4 1/5
Integration 3 4 1 1
Distillation 8 5 1 1
95

metric sistency
Mean Index
Nor-
malized
Acquisition 0.080 0.167 0.129 0.054 0.101 4.220 0.040
Discrimination 0.040 0.083 0.097 0.086 0.075 4.111 0.030
Integration 0.240 0.333 0.387 0.430 0.350 4.072 0.139
Distillation 0.640 0.417 0.387 0.430 0.474 4.240 0.188
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Factor %
Distillation 18.75%
Integration 13.88%
Humanware 8.50%
Inforware 7.14%
Orgaware 5.05%
Acquisition 4.01%
Craft 3.30%
Science 2.78%
Technoware 2.12%
Courage 1.96%
Art 1.65%
Information 1.27%
Data 0.60%
4.2.2.4 Reflection
This organization has made a major commitment to knowledge management, building the
knowledge management system into the daily work of the company. The Chief Knowledge
Officer emphasizes two processes: extracting tacit knowledge, and sharing knowledge.
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In discussing the extraction of tacit knowledge, the CKO notes the difficulty in extracting
tacit knowledge. Processes to aid in extracting this knowledge have been developed, based on
work the CKO did at previous firms. Several different mechanisms are used in combination to
extract knowledge: group sessions, individual interviews, and newly established Communities of
Practice, which are dedicated to developing or sharing knowledge in specific subject areas of
interest to the firm.
From a knowledge management technology standpoint, this is probably the most
sophisticated organization examined in this dissertation project. The company was founded as
an information service, so there are fairly sophisticated core knowledge management
technologies including a document management system that is accessible and searchable through
an internet-based interface. This document knowledge base is accessible to all company
employees, as well as certain segments of the knowledge base by subscription to clients.
Complementing this database technology is a research service, which takes advantage of
professional researchers as well as subject matter experts within the firm (including its
consultants). Both company employees and client subscribers may use this service to obtain
answers to questions or problems that are posed in subject areas of the company’s expertise.
Extensive use is made of the company’s proprietary frameworks in providing services to clients.
The company also provides training in these models, with alternative versions for clients versus
employees of the firm – a major investment was recently made in opening a new headquarters
with a major percentage of the square footage devoted to a training center. Numerous other
knowledge sharing features are built into the design of the offices – there are many meeting
rooms of various sizes, as well as a “café” where employees can gather and discuss or share
experiences on topics of interest. Knowledge is also infused into deliverables through peer
98
review processes that take advantage of the organizational structure which encompasses practice
groups and cross-cutting subject matter experts and Communities of Practice. So, there is a
sophisticated implementation of knowledge management that uses all of the technology types:
technoware, humanware, inforware and orgaware.
Execution is highly dependent on talented professionals working closely with clients, yet
taking advantage of corporate resources, especially knowledge resources. Managers are
typically experts in one or more of the company’s business lines, and also have many years of
experience in management. Hiring and promotion practices reinforce the importance of
knowledge to the firm – interview processes require candidates to recount stories about their
experiences in specific contexts.
Assessment of projects and the professionals performing those projects is accomplished
using a balanced scorecard that includes multiple perspectives. Effective use of and contribution
to the knowledge sources in the company is a key evaluation element. The knowledge base itself
contains a scoring system and comments area that allows users of the documents to rate the
usefulness and quality of the content.
A key point, which was reemphasized by the CKO, is that all of these elements act as a
system, not in isolation. The CKO observed that information, experience, organization, and
enabling technologies all are needed in combination in order for effective knowledge
management to occur. But, it is important to recognize that knowledge is only useful if once
developed, it is in turn infused back into the work of the organization.
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4.2.3 Case 3: Consulting Practice of a Public University
The organization in this case is the consulting arm of a research institute associated with
a public university. The organization was virtually independent until the past two years, during
which time the institute has been brought under more direct university administration. During
this time period, the organization has suffered significant attrition of human capital. The
consulting practice currently has fewer than fifty employees.
Most of the clients for the organization are state government agencies. In addition to
providing consulting services, the organization is maintaining several websites for various
internet-based government to citizen services. The organization also maintains servers and kiosks
for a statewide system, which uses technologies similar to those used in banking ATMs in order
to provide interactive registration services to the public.
The interviewee was the Senior Database Administrator and a lead developer for the
organization. They have more than twenty years of experience in business management and
software development.
The following provides highlights of the discussion, which spanned more than three
hours.
(Talking about tacit knowledge) Perhaps there is conditioning from childhood?
There is a catalog of things that parents told you (that you assume to be true). You have
to question your assumptions every day. But challenging beliefs can be traumatic. One
of my co-workers views things in absolute terms – for him truth is non-situational, he
cannot compromise. This makes his behavior predictable, but he is difficult to work
with. His view of ethics is the same – that there are absolutes. How do we avoid dogma?
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I go back to Spinoza – if everything that is God is the Universe, then that which harms
the Universe is unethical.
We have to be able to make certain assumptions. The receptionist has to use the
user manual. A cookbook doesn’t tell you how to hold the knife. But someone has to
have taught you this (unless you figure it out yourself) – I have a friend that does not
know how to hold a knife, so it flops over when they try to cut something.
Transforming tacit to explicit knowledge is difficult, even under ideal situations.
The person you are talking to may be reluctant. Someone who has been doing something
for ten years can’t do it (too deeply buried). I became a better guitarist when I started
having to teach others. Knowledge defines itself in the transfer process. Need a good
question.
At our organization, we have a massive SDLC (system development life cycle)
that defines a number of artifacts, some important to the project outcomes, others for
management. Important part is as a developer, have to gather requirements – these have
to come from the client, the people with a problem. Analysis then leads to a solution.
Design Æ specifications Æ code Æ then integrated.. Then tested back against the
requirements.
(The difficulty is that) unlike many engineering processes, such as building a
bridge, we don’t work with materials whose nature is documented, we don’t know things
the same way that an engineer knows the tensile strength of a certain type of steel. We
are often guessing, for example at the size of the internet pipe. We tend to be optimistic.
We build out of unknown materials. We tend to build one-of-a-kind artifacts.
Given this one-of-a-kind nature of the work, I am experimenting with using a
machine shop model, rather than the more traditional model we have been using before.
Instead of the developers and other technical experts working directly for the project
manager, they instead work for the equivalent of a shop superintendent – someone who
101
understands the nature of their work and can schedule resources according to availability
and need for specific expertise. The shop becomes a black box to the project manager.
Of course, this requires good specification of what is to be built.
Almost all of the institutional knowledge at my organization is held in people’s
heads. There has been institutional chaos and downsizing over the past couple of years.
We had better processes prior to that. But all of the conscious knowledge management
processes fell apart when resources got tight – documentation was not maintained. In the
downsizing, people whose jobs were perceived as indirect, such as configuration
management, were considered expendable – short sighted decisions by managers that did
not understand. We have devolved to a collection of one-man shops. We are now
working to change that – it is not scalable in its current form, and it is high risk. Also, we
are too dependent on the individual programmer’s talent as a designer – no division of
labor is possible under the current model. This is actually inefficient – fractional
availability is not enough to work on a second project, so instead there is idle time. (A
first step) is to separate technical resources from reporting to the project manager. The
project managers are resistant – they are currently measured by the number of reports –
we need to move to outcomes (as a measure of success).
Project manager is a horrible job – stuck between competing interests.
Responsible to client for timely delivery of quality product, but obligated by the
organization to make money. This results in bad tradeoffs – there is a desire to treat
employees fairly, but when the chips are down, the employees lose. So we need to get
them out from under the project managers. Among the advantages, we remove a non-
technical project manager from having to settle technical differences. Can’t be sure using
the universal PMP (Project Management Professional) concept.
102
Knowledge is a two-edged sword. It is the number one inhibitor of creativity –
go for what you know. Trick is to know when to know nothing – to look at the problem
with fresh eyes.
Thinking through how we acquire knowledge at the personal level (and I think
organizations behave similarly), we first stuff our heads full of facts. At some point, as
we begin to organize the facts and understand the interrelationships, the structure they
hang on becomes visible. Now you own the facts. Once we have a framework, it gives
the ability to extrapolate. This to me is understanding, (which) trivializes the facts. The
ability then to use understanding to accomplish things is wisdom, to which we should all
aspire.
Returning to the model, and to the comparison matrix, some additional
comments:
(1) Intellectual capital causes a problem – not very quantifiable.
(2) Looking at art and courage – always considered courage to be a part of art. I
have always considered myself a ‘software artist.’
(3) The best work experience I ever had involved a certain Gestalt that existed
working with another developer. Some people study engineering, some are
engineers. (In working with this individual, who I consider the exemplar of the
engineer) we had a (systematic) stepper and a quantum leaper.
(4) Information happens if I offer it, and you choose to accept it. Validity is in use.
We can work from incomplete data (often need to – we can become ineffective
otherwise if we keep waiting for complete knowledge). Some people aren’t
comfortable with this.
(5) We have to be willing and able to reevaluate. I get up every morning and start by
figuring out what’s true today. There is no universal knowledge – refusing to
recognize this and acting otherwise (as though there are absolute truths) is a cop
103
out. Acting on incomplete knowledge is the hall mark of the businessman. (The
entrepreneur) must be a master of fuzzy logic. Also, there is the allure of the
beautiful or the motivation to achieve wealth. But have to go beyond thinking to
actually doing.
(6) We have to avoid caste-system management.
(7) Cross-cultural conflict can be a problem between a provider and a client.
(8) Must be able to self evaluate. If managers can’t assess, they can’t see reality,
then they can’t do the right thing.
(9) Not certain one can proactively create intellectual capital – it happens from
Gestalt of many intangibles. You can perhaps foster this by getting smarter – in a
room of smart people, if we can get the creative process going, such as with
brainstorming.
(9) To me, craft is art to spec. Constraints can actually aid the process by helping to
define the problem. They can also limit the viability of an outcome (by bounding
solutions to certain rules that are strong determinants of the form of an outcome).
I was thinking about how good contrapuntal writing doesn’t occur much in
classical music – there are inherent limitations there that make the results less
satisfying than with baroque music.
4.2.3.2 Example
(1) Developing Requirements and Design for an Internet Application: This project
followed the organization’s standard system development lifecycle methodology.
Documentation produced during the project followed standard templates used on
many of the projects. Corresponding deliverables from other projects were available
to the project participants to help visualize the required outputs. The process makes
104
extensive use of various system diagrams to aid in eliciting requirements and in
describing the design for the system to be developed. Mock-ups were created of the
various web pages intended to be used in the application to aid in client review of the
design. Commercially available database design software was used to develop the
specification for the database.
4.2.3.3 AHP Scoring
105

Resources Base
Acquiring Knowledge 1 3 1/4 1/5 3

& Wisdom
Fusing Knowledge 1/3 1 1/5 1/5 1/3

with Resources
Assessing Performance 5 5 1/4 1 3
Building an Actionable 1/3 3 1/4 1/3 1

Knowledge Base
106

Mean Index
Wisdom ledge
Base
Acquiring 0.094 0.176 0.128 0.035 0.265 0.1260 5.358 0.1260

Knowledge &
Wisdom
Fusing 0.031 0.059 0.103 0.035 0.029 0.0500 5.305 0.0500

Knowledge
with
Resources
Executing 0.375 0.294 0.513 0.698 0.353 0.4685 6.073 0.4685

Projects
Assessing 0.469 0.294 0.128 0.174 0.265 0.2656 6.097 0.2656

Performance
Building an 0.031 0.176 0.128 0.058 0.088 0.0899 5.157 0.0899

Actionable
Knowledge
Base
Factor %
107
Wisdom: raw scores.

Conversion
Tacit to Explicit 1 1/5 1/5 4 4

Conversion
Technological 5 1 5 3 5
Wisdom
General Knowledge 5 1/5 1 1/2 5
Information 1/4 1/3 2 1 2
Data 1/4 1/5 1/5 1/2 1

Mean Index
sion malized
Tacit to 0.087 0.103 0.024 0.444 0.235 0.1399 5.848 0.01763

Explicit
Conversion
Technological 0.435 0.517 0.595 0.333 0.294 0.5005 6.888 0.06306

Wisdom
General 0.435 0.103 0.119 0.056 0.294 0.1837 7.507 0.02315

Knowledge
Information 0.022 0.172 0.238 0.111 0.118 0.1228 6.278 0.01547
Data 0.022 0.103 0.024 0.056 0.059 0.0530 5.519 0.00668
108
Technoware 1 1/2 1 1
Humanware 2 1 5 5
Inforware 1 1/5 1 1/3
Orgaware 1 1/5 3 1

metric sistency
ware ware ware ware
Mean Index
Nor-
malized
Technoware 0.200 0.263 0.100 0.136 0.172 4.232 0.009
Humanware 0.400 0.526 0.500 0.682 0.544 4.243 0.027
Inforware 0.200 0.105 0.100 0.045 0.104 4.279 0.005
Orgaware 0.200 0.105 0.300 0.136 0.180 4.292 0.009
scores.
Art 1 1 3 1
Craft 1 1 4 2
Science 1/3 1/4 1 2
Courage 1 1/2 1/2 1
109
normalized scores.

metric sistency
Mean Index
Nor-
malized
Art 0.300 0.364 0.353 0.167 0.303 4.272 0.142
Craft 0.300 0.364 0.471 0.333 0.387 4.143 0.181
Science 0.100 0.091 0.118 0.333 0.147 4.558 0.069
Courage 0.300 0.182 0.059 0.167 0.163 4.502 0.076
Table 42. Case 3 pair-wise comparison of Level 2 factors for Assessing Performance: raw scores.

ness ness ness ness
Competitiveness 1 5 4 1
Innovativeness 1/5 1 3 1/4
Responsiveness 1 4 5 1
110
normalized scores.

metric sistency
Mean Index
ness Nor-
malized
Competitive- 0.408 0.484 0.308 0.408 0.406 4.151 0.108

ness
Innovative- 0.082 0.097 0.231 0.102 0.119 4.261 0.032

ness
Attractive- 0.102 0.032 0.077 0.082 0.069 4.226 0.018

ness
Responsive- 0.408 0.387 0.385 0.408 0.406 4.027 0.108

ness

n
Acquisition 1 1/7 1/7 1/7
Discrimination 7 1 5 5
Integration 7 1/5 1 1
Distillation 7 1/5 1 1
111

metric sistency
Mean Index
Nor-
malized
Acquisition 0.045 0.093 0.020 0.020 0.038 4.574 0.003
Discrimination 0.318 0.648 0.700 0.700 0.602 4.438 0.054
Integration 0.318 0.130 0.140 0.140 0.180 4.164 0.016
Distillation 0.318 0.130 0.140 0.140 0.180 4.164 0.016
112
Factor %
Craft 18.14%
Art 14.19%
Courage 7.63%
Science 6.89%
Humanware 2.72%
Integration 1.62%
Distillation 1.62%
Information 1.55%
Orgaware 0.90%
Technoware 0.86%
Data 0.67%
Inforware 0.52%
Acquisition 0.35%
113
4.2.3.4 Reflection
The respondent raised some important issues with respect to organizational knowledge –
in particular, the conflict of pragmatism versus absolutism and the effects this conflict can have
on work. Validity of knowledge was important to the respondent in this case – the view
expressed is that validity is defined in use – a situational or pragmatic perspective.
This case points to the tenuous nature of organizational knowledge. The recent turmoil
experienced within the organization has disrupted the normal procedures and structures for
knowledge management. And important intellectual capital, especially tacit knowledge held by
long term employees, has been lost with their exodus. The organization is not able to use
intellectual capital very effectively at this point. A brief conversation with one of the former
directors of the organization suggested that one of the problems facing the organization has been
a loss of understanding of the organization’s operational context since the departure of several
key managers – this lack of understanding, particularly with respect to the political context, led
to the assumption of more direct control of the organization by the university.
On the positive side, the organization has recognized limitations in its current operating
model, which is heavily reliant on individual effort rather than managed group effort – this
model has been referred to as the “hero model” (Humphrey, 1992). An attempt is being made to
restructure the operational model to better manage the knowledge of the organization and the
individual performers.
The respondent also notes that “knowledge is a two-edged sword.” Especially tacit
knowledge can be both enabling and limiting in developing solutions to problems or in creating
new knowledge (e.g., invention). A case in point is cited in a study of the work of Edison in
developing the motion picture (Carlson & Gorman, 1990). It shows Edison’s solutions to
114
technical problems as well as his conception of the business model for infusion of the invention
into the market being limited by his previous experiences with other innovations.
115
4.2.4 Case 4: Large Systems Integration Contractor
The context is a large IT services support contract for an independent U.S. federal
government agency. The contract itself employs more than 700 people, and has grown to this
level from less than 150 a decade ago. The current contract was recently “re-won” in a
competitive acquisition, and is the successor to four previous contracts.
The contract is one portfolio held by the IT services division of one of the largest Federal
systems integration contractors, a multi-billion dollar company. The contract is organized into a
number of more or less autonomous groups, with tasks teams within these groups that are
responsible for servicing either one or more offices within the client agency, or for a major
technology area (such as mainframe system support).
The interviewee holds the title of Task Manager, which is a position equivalent to the
more general term Program Manager. He has multiple projects in process for the same client.
His background includes a number of years as a production manager for a manufacturing firm
with contract facilities in mainland China, as well as extensive experience as a programmer.
The following provides highlights of the discussion, which spanned one and a half hours.
We’re talking about a fusion model, where knowledge becomes actionable. This
involves processes by which tacit knowledge is extracted to become explicit, which in
turn allows the knowledge to be transferable. (But there are limitations.) Translation is
imperfect and incomplete. In terms of dissemination, how actionable the knowledge is
depends on the capacity of a recipient. Mere codification is not sufficient. Recipients
must be developed in order to act on the knowledge.
116
(A case in point) I have a book on Einstein’s theory of relativity … every few
years I take it out to read … I still don’t understand it … but it doesn’t matter – I don’t
need it to do my work. But organizational knowledge is different – the knowledge
transfer has to be successful.
The concept of wisdom transcends the constructive process – it melds the various
forms of knowledge with experience. With respect to the tension between the rational
and the empirical, I am not certain that this is what is really happening. Even in
empirical method, the questions and the controls are rational. Of course, chance can lead
to a discovery (it is often the unexpected that is interesting – see Mintzberg). But in
science, there is a desire to understand in order to be able to predict (what will occur
given a set of conditions).
It is my impression that the project organization lacks a formalized, consistent
approach to knowledge. For example, many of the tasks on the project produce “white
papers” on various subjects, but there is no central, searchable repository (where one
could go to find what has been done in a particular subject area). There is a repository
for process definitions – but this is more of a set of controls or dictates than a knowledge-
sharing mechanism (very top down in its conception). There is other reference
information that can be useful in performing and reporting work, but not much currently
in the way of knowledge capture and reuse (from learning processes instituted within the
project itself).
In our organization, execution and assessment primarily are the areas that matter.
There currently is no business incentive to invest in knowledge creation, acquisition or
fusion, other than the minimum necessary to do the job. Primarily we exploit hiring
people who have already the necessary technical expertise. We do train them in some
client-specific subject matter (so that they understand the main business context). There
also are some commercially available online training units available.
117
For the future, the project is moving toward Centers of Excellence (COEs), but
very slowly. So far (over the past three years) there is a start on COEs for batch
development and web development. These are mostly based on work for this client (and
may or may not be transferable to other projects). There is not much sharing between task
teams. Some of this is driven by personalities of the top managers. One project has some
meetings to share information. Another is very much top down (the manager likes to
promulgate their knowledge and is not much interested in what others have to offer).
There is no project-wide structure for knowledge sharing.
There is dogmatic collection of metrics. Not convinced that these have any use
… pretty bogus. The question that comes to mind: There is an organizational directive to
improve processes for productivity, efficiency, and return on investment capital. But we
are contractors (who augment client staff) and work (and are paid) by the hour. What
business metric (actually can be used) for improvements – we are selling hours. We have
bureaucratic, inefficient processes for which we have no problem billing the client.
There is no funding for better tools. An impediment to taking knowledge management
seriously is that it doesn’t go to the bottom line very obviously. Tools and processes that
we do have (such as CMMI) are primarily for box checking … we have a commitment to
passing assessments when they occur … (then return to usual/old ways of doing
business). The question remains: Is the repository there to use, or to be compliant? The
financial environment is definitely a factor … knowledge management (as conceived in
the conceptual framework) may not fit (this) non-competitive environment. If no
(perception of financial) reward … not going to do.
There are leadership development programs for selected employees (who are
deemed promising by the organization in terms of potential as future leaders / managers).
(While much of the technical knowledge can be hired), we can’t hire institutional
knowledge, hence the classes on client-specific subject matter.
118
(All of this being said) I believe the organization suffers from not using better
tools. My joke (in an e-mail when setting up the interview) about Excel (being our chief
knowledge creation tool) is symptomatic of a real problem. (For all practical purposes)
e-mail folders are the knowledge repository for the organization. We spend much time
(as managers) searching e-mail (with primitive search tools). (Also the lack of shared
knowledge leads to) individual interpretation of metrics (so the metrics aren’t useful since
each set of numbers has different meaning – or may be fabricated altogether to meet the
reporting requirement).
In summary, I see three impediments to knowledge management: (1)
receptiveness (or lack thereof) of target (individuals for receiving and interpreting
correctly communications), (2) economic environment, and (3) culture (particularly
arrogance – closes door to options, creation of new knowledge).
4.2.4.2 Examples
(1) Resume Preparation: 11 As an example of a typical knowledge management process
here, we had to produce revised resumes for all employees at the inception of the
current contract, which replaced a prior contract with the same client. The process
proceeded as follows:
a. A template was sent to all task managers via e-mail;
b. Technical area overseers set up e-mail folders (to manage resumes as they
were received from preparers);
c. Task managers e-mailed templates to their direct reports (staff), who
completed and e-mailed back to the task managers;
11
This example was provided by the interviewee.
119
d. The task managers (once they were satisfied with the resume) e-mailed the
resumes to the technical area overseers;
e. The technical area overseers reviewed and sent comments (back down the
chain);
f. Contract staff, in parallel, made revisions to the templates, which were then
resent to all using the same chain of command as the original templates;
g. Progress of the process was tracked at various levels (of the organizational
hierarchy) using Excel spreadsheets.
The end result was confusion as to which versions were correct for templates and
resumes. These inefficiencies could have been avoided if a central repository for the templates
had been available and populated ahead of time with approved templates.
4.2.4.3 AHP Scoring
120

Wisdom with Resources Knowledge
Base
Acquiring 1 1/4 1/3 4 3

Knowledge &
Wisdom
Fusing Knowledge 4 1 1/3 4 4

with Resources
Assessing 1/4 1/4 1/5 1 1/2

Performance
Building an 1/3 1/4 1/5 2 1

Actionable
Knowledge Base
121

Mean Index
Wisdom ledge
Base
Acquiring 0.117 0.053 0.161 0.250 0.222 0.1500 5.156 0.1500

Knowledge &
Wisdom
Fusing 0.466 0.211 0.161 0.250 0.296 0.2766 5.760 0.2766

Knowledge
with
Resources
Executing 0.350 0.632 0.484 0.313 0.370 0.4431 5.603 0.4431

Projects
Assessing 0.029 0.053 0.097 0.063 0.037 0.0544 5.207 0.0544

Performance
Building an 0.039 0.053 0.097 0.125 0.074 0.0760 5.129 0.0760

Actionable
Knowledge
Base
Factor %
122
Wisdom: raw scores.

Conversion
Tacit to Explicit 1 1/4 1/4 1/4 1/4

Conversion
Technological 4 1 4 1/3 4
Wisdom
General Knowledge 4 1/4 1 1/3 4
Information 4 3 3 1 4
Data 4 1/4 1/4 1/4 1

Mean Index
sion malized
Tacit to 0.059 0.053 0.029 0.115 0.019 0.0507 5.293 0.0076

Explicit
Conversion
Technological 0.235 0.211 0.471 0.154 0.302 0.2833 6.276 0.04249

Wisdom
General 0.235 0.053 0.118 0.154 0.302 0.1627 5.804 0.02441

Knowledge
Information 0.235 0.632 0.353 0.462 0.302 0.4151 5.958 0.06225
Data 0.235 0.053 0.029 0.115 0.075 0.0882 5.240 0.01323
123
Technoware 1 1/5 1/4 1/3
Humanware 5 1 4 3
Inforware 4 1/4 1 3
Orgaware 3 1/3 1/3 1

metric sistency
ware ware ware ware
Mean Index
Nor-
malized
Technoware 0.077 0.112 0.045 0.045 0.069 4.170 0.019
Humanware 0.385 0.561 0.716 0.409 0.533 4.356 0.148
Inforware 0.308 0.140 0.179 0.409 0.252 4.353 0.070
Orgaware 0.231 0.187 0.060 0.136 0.146 4.217 0.040
scores.
Art 1 5 4 1
Craft 1/5 1 1/3 1/5
Science 1/4 3 1 1/3
Courage 1 5 3 1
124
normalized scores.

metric sistency
Mean Index
Nor-
malized
Art 0.408 0.357 0.480 0.395 0.412 4.072 0.183
Craft 0.082 0.071 0.040 0.079 0.066 4.097 0.029
Science 0.102 0.214 0.120 0.132 0.138 4.117 0.061
Courage 0.408 0.357 0.360 0.395 0.384 4.016 0.170
scores.

ness ness ness ness
Competitiveness 1 1/3 3 1/3
Innovativeness 3 1 3 3
Responsiveness 3 1/3 3 1
125
normalized scores.

metric sistency
Mean Index
ness Nor-
malized
Competitive- 0.136 0.167 0.300 0.071 0.158 4.309 0.009

ness
Innovative- 0.409 0.500 0.300 0.643 0.475 4.309 0.026

ness
Attractive- 0.045 0.167 0.100 0.071 0.092 4.309 0.005

ness
Responsive- 0.409 0.167 0.300 0.214 0.275 4.309 0.015

ness

n
Acquisition 1 1/4 1/4 1/3
Discrimination 4 1 3 3
Integration 4 1/3 1 3
Distillation 3 1/3 1/3 1
126

metric sistency
Mean Index
Nor-
malized
Acquisition 0.083 0.130 0.055 0.045 0.076 4.209 0.006
Discrimination 0.333 0.522 0.655 0.409 0.490 4.283 0.037
Integration 0.333 0.174 0.218 0.409 0.283 4.264 0.021
Distillation 0.250 0.174 0.073 0.136 0.152 4.195 0.012
127
Factor %
Art 18.27%
Courage 17.00%
Humanware 14.75%
Inforware 6.98%
Information 6.23%
Science 6.11%
Orgaware 4.03%
Craft 2.94%
Integration 2.15%
Technoware 1.90%
Data 1.32%
Distillation 1.15%
Acquisition 0.58%
128
4.2.4.4 Reflection
The organization is only in the early stages of developing the capability to leverage tacit
knowledge, beyond the daily efforts of professionals on individual work activities. One step in
this direction is evidenced by the nascent Centers of Excellence.
In terms of technology, much of the emphasis has been on orgaware. From the
perspective of the respondent, the command and control model followed by the organization
mirrors the large bureaucracy that is the client, so there is a comfort level between provider and
client. But, this same structure stifles creativity and is inefficient. However, as noted by the
respondent, there may be no economic incentive for improvement as the client has so far been
willing to pay the price for inefficient but predictable or low risk performance. Some investment
has been made in an internet-resident repository for organizational standards and guidelines.
The organization recognizes the importance of leadership and places considerable
emphasis on development of selected individuals. However, the strictures imposed by the
organizational procedures seem to be stifling.
There was little evidence of assessment of knowledge use. There are some metrics, but
these have been imposed on the program from a higher level in the corporation and do not appear
to be useful in practice.
Surprisingly, this organization seemed to be making the least commitment to “real”
knowledge management processes – much of what is in place appears to be there in order to
achieve contractual or corporate compliance rather than to drive performance and innovation.
129
4.3 Participant Observer Case Study (Case 5): IT Solution Provider for Commercial Client
Serving the Government Sector
The case study was conducted by me as a participant observer in a major project.
Organizationally, the project was being conducted by an IT solution provider in support of an
internet service provider, which in turn is a solution provider to national, state and local
governments. 12 Some members of the IT solution provider team, including myself, have worked
together on several projects at various times over the past decade. The complexity of the project
team is typical of projects in the ICT services industry. For the overall project, participants
included members from both the provider and client firms, as well as several independent
consultants. My portion of the project was shared with another consultant with whom I have
worked on similar assignments for other clients of the same provider, so we have a shared
history of work norms and experiences.
The purpose of the project was to develop a detailed functional description and design to
be used during a major technology upgrade to an existing system. This project is one in a series
of projects in support of this client over the past five years. The IT solution provider has been
providing the underlying technology platform for the client, as well as various management and
technical consulting. The team of which I was a part was brought in specifically to develop
those portions of the upgrade documentation related to the Operations Group of the client
company. The Operations Group is responsible for all manual intervention that may be required
to complete a transaction between a buyer and a seller. Most of the initiation activity for a
transaction can be done through the client’s website. However, if a transaction is complex, or
“kicks out” of the system for some reason, then the Operations Group must help the transaction
12
It should be noted, in the interest of full disclosure, that, since this project began, the solution provider with which
I was participating in the project decided to acquire the client firm and integrate the project staff.
130
through the process. The Operations Group also serves as an intermediary for any
communications between the buyer and seller, who are supposed to remain anonymous to each
other until a deal is “sealed.”
4.3.1 Sample Extract from Observations
The following is a sample extract from observations collected during the project.
Selected observations from this and other activities will be highlighted in the discussion in
Section 4.3.3 Reflection.
Opening Meeting – 10 November 2005: This meeting was held to “kick off” project
activities for the current project, which is one of an ongoing series of support projects which
began as early as 2002. The meeting agenda covered: (1) introduction to the project, (2) project
goals and objectives, (3) current status of related activities, and (4) a discussion of plans for near-
term activities.
We are redoing the underlying infrastructure so that (our applications) are
scalable. We are also restructuring our software … mostly retaining current
functionality, but needs to be scalable. The current phase is focused on getting the
business model done – to know what is the ideal platform (we need to understand) the
requirements.
We operate in a buyer-driven marketplace where the buyer defines the rules of
the engagement.
The current system is operated with much manual intervention. Incoming
transactions are monitored and a decision made whether we need to “touch them.” All of
the work being done by the Operations Group (which is responsible for the manual
131
shepherding of transactions through the work flow) needs to be integrated with (our) core
systems. This is the big pain point.
Also, we need to determine what features will lead our customers to “live on our
site.”
(The report should) focus on the next couple of years, but keep the future in
mind.
[A discussion of some specific features and requirements occurred at this point]
What is being done (currently by the Operations Group) is an art – requires much
hand crafting. We need to move more from art to assembly line (if we are going to meet
the high transaction volume we anticipate due to projected growth). The business has
broad scope … look at long term … but break down into manageable chunks.
We need a draft (soon in order to meet target milestones in our project plan) …
the (future business) model is in our heads, need (your help) to pull it out. (Also)
revalidate the restructuring plan … risk (to the business and to perceptions of investors) if
effort doesn’t produce results.
[A further discussion of specific requirements occurred at this point.]
We don’t just want to document (the current process) but rethink. Need to drive
to detail. We have a general architecture … then drive to detail. We know pretty much
what we want to do. Need to understand (business) rules … why and how. Top-down
and bottom up at the same time. Need to look for efficiencies … less art, more process.
[A side discussion occurred at this point.]
Try to align with vision as much as possible. Have never done a long term
strategic (document).
We need to build more decisions into the automated systems. May be too
ambitious (for the next release), but we need to have (the flexibility and capability to
implement later). Need everything looked at.
132
Operations is the heart of the process. Ninety percent of the complexity is in
Operations. We need to look at process vs. business complexity – how complex is it to
the customer?
[The discussion closed with a discussion of the project plan, including
identification of other teams working in parallel on different aspects of the project, with
whom coordination may be required in the future.]
During the course of the discussion, a simple block drawing was developed to show
relationships between the various users and the systems. This drawing was shown to the Chief
Executive Officer (CEO) who commented that additional functions should be represented in the
diagram. Subsequent to the kickoff discussion, a separate conversation was held with the CEO.
For the past several years I have been struggling to find an existing model that fit
the model of this business. Until I could find one that fit, I was puzzled by what I was
seeing. And then I realized that I was looking at an electronic version of the business
model for (a major retailer). Once I realized this, everything fell into place and I could
see where this was leading.
4.3.2 Activities Observed
Table 61 lists the project group activities observed during this case study. In addition to
these group activities, there were a number of one-on-one conversations, both within the project
team and between project team members and members of the client firm – some of these
conversations were not attended by the participant observer, but discussed in team meetings or
conversations during the course of the project.
133
Table 61. Group activities attended by the participant observer.
Date of Activity Activity Notes
2005
10 November Kick-Off for Operations Group Study Meeting with project team members and
executives from the provider and client firms:
President of the Provider, Chief Operating
Officer (COO) of the Client. VP Operations of
the client (also the Program Manager (PM) for
the upgrade). Brief post meeting with the Chief
Executive Officer of the client firm.
11 November On-site Data Collection Activity at Met with: Chief Executive Officer (CEO),
Client Firm Director of Procurement Services, and VP
Technology
19 November Team Discussions
22 November Project Status Meeting Large group meeting with multiple project teams
held at the client firm to report progress to the
PM.
23 November Telephone Discussion (Team)
29 November Team Work Session
30 November Team Work Session
9 December Team Work Session
2006
10 February Client Meeting Met with CEO
4.3.3 Reflection
Use of models was prevalent in the project in order to capture and validate knowledge.
Various diagrams were also used to convey concepts that were under development – for
example, our team used a four-quadrant model to illustrate some of the possible scenarios for the
future state of the company to the client project manager.
Looking across an entire project, with multiple teams, the effects of multiple perspectives
can often be seen. They materialize as conflicting objectives or different “castings” for
deliverables. It is not unusual during discussions (if the team members are sufficiently
comfortable to lodge objections) to hear comments like “I don’t understand what you’re saying”
134
– this leads to further discussion and attempts to resolve the encoding of knowledge until a
shared understanding of the subject is achieved.
Knowledge capture is viewed as critical by senior management at both the provider and
the client firm. This is driven in particular by the necessity to codify knowledge in order to make
transaction processing scalable to large volumes of activity that are anticipated for the coming
years.
The provider organization is in the process of evolving from a firm whose model was
primarily staff augmentation to a more sophisticated level of capability and competency. As a
part of this, the firm is adapting portions of the Capability Maturity Model Integrated for use in
providing software development and system engineering services to their clients. Use is also
being made of formal project management methods, in particular to mitigate risk.
4.4 Results
This section presents the results of this research project with respect to the stated
objectives: (1) to develop an integrative framework, and (2) to operationalize this framework in
an operational context. Additional observations from the study are highlighted.
4.4.1 Validation of the Integrative Framework
As a result of feedback from the presentation of the model at a conference, several
enhancements were made to the model and the accompanying text. Elements of the model were
revalidated to ensure that the model was comprehensive, and that sub-elements were, to the
extent possible given the complexity and interwoven nature of individual and organizational
learning proceses, mutually exclusive. This meant clarifying the separation of various elements
of the model, strengthening the description of knowledge formation and distinguishing this from
the development of technologies, and describing or making recognizable the difference between
135
the individual sub-processes of the learning cycle and the meta-process of organizational
learning that applies throughout the cycle.
While, in general, the framework withstood scrutiny during the interviews and participant
case study, some suggestions where made for improvements, which are reflected in the version
of the framework as it has been presented in this paper. Specific changes to the framework
included the following:
(1) The original model shown in Figures 4 and 5 used the label “Knowledge Fusion
Process” for the overall framework and “Creating Intellectual Capital” as the label for
the second process, which encompassed the creation of Techno-, Human-, Infor- and
Orga-ware (THIO). In the revised version, these concepts, to some extent, have been
exchanged so that the overall model is now called “Creating Intellectual Capital” and
the THIO portion of the model is called “Fusing knowledge with resources.”
(2) The top box in the learning cycle shown in Figure 3 was originally labeled “Implicit
Knowledge” and the corresponding lemma read “Part of knowledge that is tacit and it
difficult to share.” The words “implicit” and “tacit” have been exchanged in the
revised version of this diagram to correspond better to the description and discussion
of the framework presented in this study.
4.4.2 Applying the Framework in an Operational Context
Applying the framework operationally was tested through application of the Analytic
Hierachy Process (AHP), which itself can be viewed as a means for fusion of disparate concepts
such as are reflected in the integrative framework. For each of the field case studies, it has been
possible to develop a prioritization of model factors using the AHP. The following discussion
illustrates that it is also feasible to compare results across and between organizations.
136
60.0%
50.0%
40.0%
Case 1
Case 2
30.0%
Case 3
Case 4
20.0%
10.0%
0.0%
Knowledge & Knowledge w/ Projects Performance Actionable
Wisdom Resources Knowledge Base
Figure 7. Comparison of AHP Scores for Level 1 Factors.
The scoring of the Level 1 factors, illustrated in Figure 7, was similar for Cases 1 and 3,
which differed considerably from Case 2. This is an interesting result, as it could indicate a
nearly inverted perspective between the practicing consultants and the knowledge management
professional. While generalizations cannot be made from such single data points, it would be
interesting to pursue further this difference – it may indicate a potential mismatch between
perspectives of the knowledge management community from the practitioner community. Case
4 lay somewhere between: like Cases 1 and 2 they also indicated that Executing Projects was the
most important priorities for their organization, but differed somewhat in the order of the other
priorities.
137
35.00%
30.00%
25.00%
Case 1
20.00%
Case 2
Case 3
15.00%
Case 4
10.00%
5.00%
0.00%
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Figure 8. Comparison of AHP Scores for Level 2 Factors.
For the Level 2 factors, illustrated in Figure 8, there is no so obvious pattern in the
overall data. Some patterns emerge within the subcategories, with general agreement on the
relative ascending importance of data, information and general knowledge. There is agreement
that humanware is the most important of the “wares.” The views on relative importance of
execution, assessment and actionable knowledge base factors are quite divergent.
No generalizations may be made from these sets of observations – they represent
personal opinions that have not been subjected to any rigor in ensuring consistency (although
most of the consistency indices from the AHP show reasonably good results), and represent in
each case a different context. However, Figures 7 and 8 illustrate that it is possible to make
comparisons among data sets developed by applying the AHP to the conceptual framework in an
operational context.
138
4.4.3 Other Observations
A number of other themes emerge from the observations made during this project:
(1) Reabsorbing of knowledge by individuals is critical to success of knowledge
management in organizations. Ultimately, these service organizations remain
dependent on the competencies and capabilities of individual contributors.
(2) Organizational success is dependent on many factors, of which the various aspects of
knowledge management are a subset.
(3) In looking at various organizations, the areas of knowledge and the degree to which
there is overt knowledge management vary widely. In some organizations,
relationship building was the major emphasis as opposed to developing “hard”
technological capabilities. In other organizations, a knowledge management system
is a key organizational resource. All of the organizations looked at in this study
acknowledged through some technological capability the importance of investing in
knowledge management.
(4) The perceived importance of extraction of tacit knowledge varied among the firms,
depending, in part, on the specific project context. In the participant case study, the
CEO of the client firm, while using different words, stated the extraction of tacit
knowledge as an explicit goal of the project. At the other end of the spectrum, the
large project, which was conceived primarily as staff enhancement for the customer,
did not place much emphasis on capturing tacit knowledge. However, even in this
case, there were some local (i.e., specific project team) efforts to bring tacit
knowledge into play within the project. For example, in the example project …,
several diagrams were developed and refined through a series of open discussions
139
with the client in order to develop a complete picture of the information flow in the
system under study. Also, as noted by the (interviewee), the high dependence on tacit
knowledge led to a necessity for a high degree of client staff participation in meetings
to compensate for the lack of explicit or codified knowledge.
(5) The use of sketches, diagrams, even formal models was evident in all of the
organizations that were studied. In the case of the consulting firm, almost all of the
client engagements are structured around one of three models: (a) a life cycle process
model for acquisition of goods and services, (b) a conceptual framework for
performance management, and (c) a proprietary conceptual framework supporting a
specific business line. These models are also used to aid in structuring the corporate
knowledge base.
(6) The framework provides a meta-view of the knowledge processes, each of which can
be complex. For example, in order for individual knowledge to become
organizational knowledge, it must be shared. But sharing implies mutual
understanding of content and context, so other group or shared knowledge is
prerequisite.
(7) Even in these conversations, there is much that goes unspoken. Communication
among peers, especially those who have worked together over a long period of time,
takes advantage of established understandings and definitions – perhaps for no other
reason than to make the communication more efficient. Certain catch phrases can
become shorthand for more extensive concepts. And certain shared experiences can
be summed up in very short references (e.g., by referring to a previous event). As
140
words themselves are abstractions, it is important that senders and receivers develop
shared meanings.
(8) It is the sense of this observer that much goes unspoken in the interactions that occur
in ICT projects – many of the technical professionals are introverted and intuitive.
Also, there are significant dictionaries of industry-specific jargon which, while
helping to condense any technical discussions that need to occur, also create a barrier
to understanding by outsiders. All of these dynamics are details that affect the
actualization of the concepts of knowledge management. Surfacing of tacit
knowledge seems dependent, at least in part, on a problem context, which might be
“artificially” generated through the use of probing questions.
(9) Certain work modes are not well understood. For example, Robert Glass has
observed that the best programmers are those who can fit a given problem into their
head and exercise the design of their software as though they are themselves a finite-
state machine. This may echo the personality type observations mentioned in the
previous point. But again, if this is one of the talents or skills that need to be
promulgated among the ICT staff, how can managers actually accomplish this? At a
minimum, there are probably implications for work conditions, etc. (and these may
conflict with other goals that are often promoted in work space design, such as open
office space).
(10) In general, the view of knowledge in these organizations is pragmatic. Validity is
tested by effectiveness of knowledge-in-use. A theme that emerges is that knowledge
forms in context, and that learning is an outcome of social processes as well as critical
141
thinking processes. This may present challenges for those attempting to introduce
new theories into an organization.
(11) The tools we use for intellectual work differ is some respects from traditional
physical tools, such as knives and probes, in the sense that we do not as easily “feel”
the interaction of the tool with the object being manipulated. As Polanyi notes
(1961), when we use a knife to cut, we can “feel the blade cutting.” It is not so easy
to feel the results when using tools to manipulate intellectual objects. Perhaps this is
one explanation for the effectiveness of visual aids to conceptualization. Tools such
as concept maps and work flow doagrams allow us to physically sense the changes
we are effecting. Also, to the extent that we have a tacit aesthetic sense for a “good”
or a “bad” diagram, we can, at times, “feel” the correctness of the drawing, and
possibly even the concept, even before we have all of the supporting knowledge. Of
course, there is risk in this – drawings can easily portray impossibilities.
4.5 Conclusions
This research project was successful in achieving the stated objectives:
(1) to develop an integrative framework that merges many of the most important concepts
related to organizational knowledge creation and use – by developing such a
framework and validating it with both researchers and practitioners, and testing its
usefulness in a case study of an IT solutions project; and
(2) to provide a means for managers to apply this framework in an operational context in
order to improve efficiency and effectiveness in achieving desired organizational
outcomes – by developing an operational application of the framework using the
Analytic Hierarchy Processand conducting preliminary tests of its use in assessing the
142
perceptions of practitioners of the relative importance of elements of the framework to
their organization.
The integrated model proved useful as a framework for organizing discussions of
organizational knowledge with professionals, as well as in conducting a case study involving
participant observation. In the case study, it was useful to organize observations and analyses of
the project activities using the structure of the framework. The framework also made sense in
organizing the study findings, and offers possibilities as a basis for organizing thinking about
technological improvements to the organization.
A preliminary test of the transformation of the framework into an analytic hierarchy for
use in management decision making processes also proved successful in terms of showing it was
possible to operationalize the framework. However, the details of the model, especially the
underlying fusion processes, are complex, and there are disagreements as to the value of given
concepts, as well as the specific means for implementing a given concept. This research project
has shown that perceptions of the importance of various components of knowledge management
vary, in some cases considerably, among respondents in the same industry. This seems, based on
the interviews conducted during this project, to result from combinations of project and
organizational context, professional position, and personal experience and perspectives. This is
not a surprising result, but several issues arise. It suggests that much of the overt knowledge
management activity occurring in firms in this industry, and all of these firms had some
investment in knowledge management technologies as well as associated policies, is having
mixed impact on the daily work of practitioners. As noted by at least one interviewee,
knowledge management can be put in place more for appearances than for practical use
(although it needs to be acknowledged that image is also an important competitive factor).
143
However, at the other end of the spectrum, at least one of the firms studied has made a major
commitment to knowledge management as a basic resource for its work activities (arguably with
mixed results – not all employees of this firm seem to be “on board” with the program).
Interestingly, this company began as a knowledge-based company, whereas the other companies
studied had different origins.
Individual contributions to work activities are of continuing importance. To be
actionable, knowledge developed in the organizational context must be re-assimilated by
individuals, who remain the main repository for all but the simplest expressions of knowledge,
i.e., those that can be adequately captured in explicit forms. Even technologies become useless
unless individuals understand their application within appropriate problem spaces.
The questions linger: How dependent are we on unique, special talents and how much of
what is needed in business can be taught? And, if transfer of technological knowledge and
development of wisdom, which must be personally attained, are essential, then how may
receivers be sufficiently prepared to be able to assimilate and actuate the knowledge received in
a manner that is coherent with the intent of the sender? All of this suggests that there is much
opportunity for further research and reflection on practice, some of which is outlined in the final
chapter of this study.
144
Chapter 5. Recommendations for Future Work
This research project has developed and validated a framework for understanding and
managing the fusion process of knowledge management for technological innovation in
organizations. A method for determining the relative importance of various components of the
model has been presented; and tests have been conducted of the operational use of this method in
several organizations, primarily ICT solution providers.
5.1 Avenues for Further Research
The current project has been focused on validation of the model and its use in the
industrial context of for profit information technology service providers. While some input has
been received from researchers and practitioners with awareness of other organizational contexts,
formal validation of the concepts presented in this paper in other contexts has not been
conducted at this time. Revisiting one of the original premises of this study, knowledge
management for technological innovation should be a concern for all organizations, regardless of
their economic sector or type (e.g. for profit, not for profit, government). At least three
extensions of the current research are feasible:
(1) Other management services organizations:
(2) Other knowledge-intensive organizations: and
(3) Other types of organizations.
It may also prove useful to investigate integrating this framework and associated
assessment method with other tools for organizational management and improvement. For
example, what are the implications of this model when considered in the context of a continuous
process improvement or total quality management model such as the Capability Maturity Model
145
Integrated (CMMI) promulgated by the federally-funded Software Engineering Institute at
Carnegie-Mellon University? Similarly, what are the implications of portions of the model for
specific disciplines such as project management – for example can the model be integrated with
the Project Management Institute’s Organizational Project Management Maturity Model
(OPM3)? Another related expansion of the research would be to examine how this model can be
integrated with organizational planning processes at the strategic and operational levels. In order
to begin to provide insight into these types of integration of the model, it also may be useful to
study the model under tighter controls, such as using the model analytically in examining the
differences between successful versus failed cases of projects or organizations.
In another direction, research can be conducted into the implications of this model for
intelligent artificial systems. For example, are there aspects of this model that can be applied to
reduce the false positives that occur in such applications as search engines, pattern recognition,
and expert agents? Are there implications as well of the social characteristics of knowledge
formation for networks of intelligent agents?
Only a preliminary test of the application of the Analytic Hierarchy Process to
operationalize this framework in practice has been conducted in this project. Further work is
needed to understand the implications of developing a full scoring of the model using multiple
respondents from the same organization. Also, work is needed to understand the implications of
different techniques for developing the organizational score such as tradeoffs between Delphi-
like methods, and transparent group methods such as facilitated sessions. Also, are there any
generalizations that may be made about relative priorities of any of the factors for a given
industry, or is it likely that no generalizations may be made as each project and organizational
context is too unique?
146
Another question that might be examined is: what are the similarities and differences
between this knowledge fusion process and other knowledge formation and use processes. For
example, how does this process compare to academic research or more historical knowledge
management structures (such as formation and use of the Talmud)?
Two areas of the model that beg for further in depth research are ‘executing projects’ and
‘assessing performance’. For example, what specific metrics associated with the indicated
measures of success will aid managers in continually improving performance with respect to
effective exploitation of knowledge and technologies.
5.2 Use in Management Practice
Managers may be able to adapt the results of this research to the specific context of their
own organizations to better manage knowledge formation and use. Also, as outlined in the
previous section, managers may be able to use these concepts to improve the results of other
organizational initiatives such as CMMI or OPM3. 13
In order to operationalize these models within a given economic or organizational
context, a general outline of the process is as follows:
(1) Developing an assessment instrument and procedure;
(2) Conducting the assessment of the organization;
(3) Benchmarking knowledge management in the industry within which the organization
operates; and
(4) Planning, based on differences between assessment outcomes and associated desired
targets, which are based on a combination of industry benchmarks and specific
organizational vision and goals.
13
A parallel research effort under the direction of Nawaz Sharif of the University of Maryland University College is
underway to develop a model for assessing the level of maturity or sophistication of technology use within an
organization.
147
Planning requires managerial judgment and decision making, which necessarily involves
a heavily constrained problem space that exhibits complexity, uncertainty, ambiguity and
volatility. Use of the presented conceptual framework and the associated assessment procedures
should simplify this problem space.
148
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Curriculum Vitae
Michael Clifford Heffner earned a Master of Science in Computer Science from the
G.W.C. Whiting School of Engineering at The Johns Hopkins University in 1989, a Bachelor of
Science in Computer Science and Information Systems Management from the University of
Maryland University College in 1982, and a Bachelor of Music in Theory and Composition from
the University of Maryland at College Park in 1976.
He has twenty six years of professional experience in systems and management
disciplines, including holding a number of management roles, from serving as a site manager for
government contracts through profit and loss responsibility as a program manager for an
operating division of an IT services firm. He has been involved in strategic planning, all phases
of project management from project mobilization through post-implementation evaluation,
cost/benefit analyses, management studies, business process improvement, systems integration,
acquisition consulting, application development, and independent evaluation projects.
158

KNOWLEDGE Management For Technological Innovation in Orgns - For Creating Intellutural Capital

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ABSTRACT

Title of Dissertation: KNOWLEDGE MANAGEMENT FOR

Michael Clifford Heffner, Doctor of

Dissertation Directed By: Dr. Nawaz Sharif, Graduate School of

In a knowledge-centric economy, knowledge, embodied as intellectual capital, is increasingly a

operations and management.

The theoretical foundations of the framework include multiple perspectives of knowledge

formation and technological innovation, with a particular focus on conversion of knowledge

process, which encompasses sub-processes for knowledge acquisition and formation,

technological embodiment of knowledge, entrepreneurial application of technologies, and

assessment of knowledge-in-use by an organization, in order to create or form intellectual

practitioner professionals as well as application of the framework as an analytical framework in

Operationalization of the framework as a management tool is demonstrated by applying the

Analytic Hierarchy Process, using comparison matrices prepared by the interviewees.

between knowledge management professionals and practicing consultants; and (3) to be

actionable, knowledge developed in the organizational context must be re-assimilated by

individuals, who remain the main agents of action.

Keywords: technological innovation; intellectual capital; knowledge management; knowledge

Michael Clifford Heffner

Dissertation submitted to the Faculty of the

All rights reserved.

UMI Microform 3213465

ProQuest Information and Learning Company

And to my brother, Jim, for demonstrating the courage of entrepreneurship.

complete this project.

Figure 1. Knowledge context for management services projects ................................................ 11

A knowledge-centric economy presents many challenges to organizations, whether they

chapter outlines the challenges of a knowledge-centric economy, describes an economic sector

1.1 Challenges of a Knowledge-Centric Economy

A shift towards a knowledge-centric economy, from a primarily industrial-age economy

encoding of knowledge because there may be little or no “face-to-face” personal interaction,

of human endeavor, including the work of governmental and not-for-profit organizations.

Development and execution of business strategies in a knowledge-centric economy can

present significant resource challenges, particularly intellectual capital challenges, to an

organization. Because of the limited resources within individual organizations, particularly

small entrepreneurial organizations typical of new or niche businesses, it is often necessary to

from a technical perspective, because of their expertise.

requirements and design stages of the systems development life cycle.

knowledge maintained and used by the organizations involved in the project.

the old, industrial economy to a new knowledge-centric economy requires companies to

knowledge management, including so-called artificial intelligence. Another major research

capital, as well as development of various indices to aid in intellectual capital-related decisions,

another stream of research is focused on business functions, where knowledge is treated in an

making and problem solving.

of knowledge and epistemology: (1) controlled observation – empiricism, which attempts to

knowledge fusion: (1) integration of discipline-based knowledge, (2) integration of knowledge at

process is still only a potential resource.

integrated with other resources available to the organization, generating technological

technology facilitates managing the fusion process, as well as ongoing assessment of

organizational knowledge creation – successful innovation can be measured by observing growth

relative levels of investment or use).

other resources to generate technological innovations, in ongoing cycles of organizational

competitiveness, efficiency and effectiveness – including, for commercial enterprises,

1.2 Economic Sector Context

Before discussing in detail the knowledge fusion process, it is useful to establish a

serve as a frame of reference for discussion and a source for examples.

1.2.1 Knowledge-Centric Organizations

Knowledge-centric organizations are a special subset of knowledge-intensive firms, a

perspective of knowledge that the knowledge-centric firm is defined.

outputs such as knowledge bases and associated services or publications.

Sveiby (1997, pp ix-x) observes that managing knowledge-centric companies differs

Managers of knowledge-centric firms must be concerned with managing invisible knowledge-