Organizational knowledge in the making: how firms create, use, and institutionalize knowledge

Citation

Perkmann, M. (2003), "Organizational knowledge in the making: how firms create, use, and institutionalize knowledge", Information Technology & People, Vol. 16 No. 4, pp. 486-491. https://doi.org/10.1108/09593840310509680

What is organisational knowledge? The abstract nature of the concept itself has led to a plurality of views and concepts, each drawn up from within different paradigms existing within the organisational studies and in broader social science. Moreover, the recent proliferation of attempts to instrumentalise organisational knowledge for enhancing performance has not precisely brought more clarity to this conceptual jungle; interventions under headings such as knowledge management, intellectual capital and communities of practice often appear to draw upon diverging, and often contradictory, notions of knowledge.

Maybe the solution is not to ask what organisational knowledge is. This is what Patriotta does. Rather, his main interest is to explore what organisational knowledge does. In any case, this book is a bold attempt to bring some clarity to this embattled terrain. Indeed, no less than building a theory of knowledge in organisations is the objective of this impressive monograph that comes complete with literature review, methodological considerations, empirical investigation and implications for theory.

Its main claim is that knowledge is a constitutive element of the very process of organising, or organisational “becoming” in the phenomenologically inspired terminology used by the author. Knowledge is seen as a central category behind the generation and re‐production of organisational routines and, hence, organisations themselves.

Summary

The book comes in three parts. The first part lays out the epistemological and methodological foundations of the study. Here Patriotta discusses and critiques the existing approaches to organisational knowledge and introduces his own methodological approach to studying organisational knowledge. In the subsequent chapters, the framework is used to ethnographically explore the selected episodes of organisational life at two Fiat plants in Italy. In the concluding part, based both on his theoretical framework and the lessons drawn from the empirical studies, Patriotta then proceeds to develop his own theory of organisational knowledge. In the following, these steps are discussed in more detail.

Patriotta develops his analysis against a background of existing approaches to organisational knowledge, and identified them as follows:

1. 1.

   Cognitive approaches build on an understanding of knowledge as cognitive representation and underlies various well known frameworks, such as mainstream approaches to organisational learning, but also Weick's sense‐making perspective.

2. 2.

   Knowledge‐based views of the firm, embraced by many theorists in the fields of industrial dynamics as well as management strategy, conceptualises knowledge as an essential asset, variably as resources, (dynamic) capabilities, core competencies or intellectual capital, that can explain differential performances of organisations.

3. 3.

   “Situated approaches” claim that knowledge is immanent to people's practices and hence posits a close link between actors, practices and “knowing” in specific contexts. The theories of situated cognition and social learning therefore stress the role of socially constituted contexts for how knowledge is used and transformed, highlighting the function of narratives and social interaction.

4. 4.

   The “techno‐science” approach, rooted in science studies, draws on actor‐network theory (ANT) and laboratory studies, points to the contested and provisional nature of knowledge by shedding light onto the socio‐technical processes through which it is constructed and transformed.

Against this multi‐paradigmatic background, Patriotta's own choice is to adopt a syncretic, pluralist approach that combines elements of all four paradigms. However, he decides to draw mostly on theories of organisational sense‐making, situated learning and techno‐science, combined with a slight dose of New Institutionalism à la Powell and DiMaggio.

In epistemological and methodological terms, this turns out as an approach that advocates “phenomenology as the overarching intellectual perspective, ethnography as a strategy of investigation” and as set of “methodological lenses” deployed to operationalise and organise the empirical material (p. 54). In its appropriation by the social sciences, phenomenology is essentially concerned with the construction of meaning in social systems. Hence, Patriotta's concept of knowledge seeks to provide a link between knowledge and action, with particular emphasis on the subjective mechanisms that underlie the usage of knowledge within action and, in turn, generate knowledge through action.

Given the need to explore subjective meaning in the wider organisational context, ethnography is selected as the appropriate method for empirical research. Here Patriotta makes use of insights developed within anthropology, notably the method of “thick description” advocated by Geertz. Acknowledging that any descriptive account eventually needs to be guided by some analytical framework, he proposes the use of three “methodological lenses” for studying knowledge in organisations: time, break‐down and narratives.

These three – slightly overlapping and hence analytically blurred – meso‐concepts are then used for studying various episodes of knowledge creation and use within two Fiat manufacturing plants. The “time” lens is used to explore the construction of an avant‐garde car assembly plant that was established as a green‐field site with the active involvement of the future workforce. The “break‐down” lens guides the investigation of disruptive events and “bottlenecks” in this plant once operational. Finally, the “narrative” lens is deployed to study the use of narratives – specifically: “detective stories” – as carriers of knowledge as well as sense‐making devices within the social universe of a long‐established factory.

Patriotta subsequently uses this material to develop the building stones of his “processual model of knowing and organising”. The central assumption is that knowledge is co‐constitutive of “organising”. More precisely, the constitution and transformation of organisations is seen as concurrent with the creation, utilisation and institutionalisation of knowledge. By providing an interpretive scaffolding for individual action, it allows for the re‐production and continuation of organisations.

In this sense, valid knowledge acquires the quality of a black‐box – a term often used in ANT – that is a usually unquestioned entity that is only problematised in episodes of crisis. The construction of the black‐box is described by the knowledge cycle: the creation, utilisation and institutionalisation of knowledge. Once institutionalised, knowledge is represented in organisational charts and procedures and reproduced through uncontested routines and practices.

Against the background of these degrees of institutionalisation, Patriotta defines three types of “outcomes” associated with each stage of knowledge cycle:

1. 1.

   Blueprints: exemplified with the planning of an avant‐garde green‐field factory where the blueprint served as a contested starting point for building a new organization.

2. 2.

   Routines: through repeat utilisation of knowledge, organisations are able to secure and reproduce knowledge. This also involves the emergence of structures of signification, providing sense‐making devices for agents.

3. 3.

   Common sense: the unarticulated knowledge emerging in organisational settings that becomes explicit only in the face of breakdowns and problems; common sense tends to be embedded in narratives which are then passed on via a process of social learning.

Commentary

The main contribution of this book is that it proposes a framework for understanding the role of knowledge for organisational “becoming”, i.e. the emergence, transformation and reproduction of organisations. This is a rare undertaking within the various bodies of literature on organisational knowledge. Much of the existing literature – from cognitive approaches to the knowledge‐based view of the firm to approaches of situated learning – has a overt or latent bias towards an instrumentalist conception of knowledge that inherently considers the role of knowledge for organisational performance.

This is not what Patriotta intends to do. In a sense, therefore, his work does not directly confront much of the literature, but rather attempts to build bridges into general organisational theory.

My reading is that Patriotta uses the concept of knowledge to provide an internalist counterpart to largely externalist institutionalist theories of organisations. This distinction needs to be explained. Externalist views put the emphasis on empirically operationalised or theoretically posited “external” structures that are conceptualised as constraints and enablers of human action. By contrast, an internalist view focuses on the subjective, “internal” – cognitive, affective, normative or otherwise – constraints or enablers of action.

Many of the prevailing institutionalist frameworks covering the role of norms, routines, practices and conventions are biased towards the externalist dimension. This is true for evolutionary frameworks of organisational routines as “genes” (Nelson and Winter) as well as new‐institutionalist theories of organisational and institutional change (DiMaggio and Powell).

By contrast, Patriotta uses his phenomenologically inspired framework to shed light on the internalist dynamics of routinisation and institutionalisation. He hints at the externalist dimension of his account when he contends that organisations consist of “the division of labour, the production system, the standard operating procedures and interlocking routines” (p. 175) constituting a precariously stable system of activities.

His innovation lies in the decision to use the concept of knowledge to this purpose. For individuals, knowledge provides a framework for the anticipation, retrospection and repetition of activities. Knowledge is treated as a privileged part of individual mental disposition, presumably a legitimate assumption for modern organisations characterised by instrumental rationality. But this is also why knowledge cannot be a purely cognitive construct, but needs to encompass the production of meaning, legitimacy and attachment to values.

By appropriating knowledge in this way, Patriotta can explore the internalist dynamics of organisations, or organisational “becoming”, against the potentially disruptive effects of disorganised agency. In fact, knowledge not only informs action; but also it is seen as intertwined with action, in the sense that it provides cognitive closure to the indeterminate possibilities opened up through action. Not incidentally, this argument resonates with Luhmann's theory of social systems that also has some of its intellectual roots in the phenomenological works of Husserl and Schütz.

Of particular interest is the mechanics of back‐ and foregrounding identified by Patriotta as internalist key to understand processes of routinisation. Here he skillfully combines accounts of organisational crises, disruptions and break‐downs, such as those presented by Weick or Louis/Sutton, with concepts such as “formative contexts” (Unger) and the ANT‐inspired “black‐box”. Basically, when routinisation occurs, knowledge “retreats” in the background in the sense that it is no longer contested or held open for modification. This would imply that “foreground” knowledge strictly speaking does not exist, as this means it is still in the process of contested formation.

One of the challenges that Patriotta faces is to account for the role of agency in the creation, use and institutionalisation of knowledge, and hence, implicitly, organisations. He inherits this challenge from ANT‐inspired thinking that has an explicit intention to de‐center human agency in favour of heterogeneous networks of human and non‐human actants. Yet, there is a hint of intentionality inherent in the concept of the “blueprint” that he uses as the template for knowledge creation. Indeed, the very notion of blueprint implies a planned and strategically intended construction of a process or product, in this case an organisation. Obviously, this holds only as long as one does not conceptualise the very production of the blueprint as an emerging process with contingent outcomes … But this is the old crux with ANT.

Following on from this, an even more fundamental question is whether “knowledge” – particularly in this intentionalist sense derived from the knowledge cycle – is at the root of all processes of routinisation and institutionalisation. That might well be possible, but this implies that the concept is widened to encompass notions such as discourse or even ideology. So, in as sense, we are still left with the old question of what organisational knowledge is.

Summarising, this is a remarkable book relevant for everybody interested in how organisations emerge and change. Conceptually dense, and clearly written, it is definitely theory‐led, despite its commitment to the ethnographic method. Its main contribution is to use the concept of knowledge to inform an internalist, sense‐making account of what is at the heart of organisations: the generation of routines, procedures and practices and their transformation over time. Knowledge managers will be disappointed though.