Introduction: Knowledge management in professional service firms

Transcription

1 Human Relations [ (200107)54:7] Volume 54(7): : Copyright 2001 The Tavistock Institute SAGE Publications London, Thousand Oaks CA, New Delhi Introduction: Knowledge management in professional service firms Laura Empson Knowledge represents a highly valuable organizational resource. Organizations should pay careful attention to how they manage knowledge. Professional service firms (PSFs) have much to teach other organizations about knowledge management. In the course of the 1990s these assertions progressed from being novel ideas to becoming well-worn clichés. Learned academic journals and airport bookshelves are now crowded with works which seek to define the nature of knowledge and identify how it can be managed. Librarians and IT support staff, traditionally marginalized within organizations, have found themselves re-branded as key information resources and chief knowledge officers. Accountants and consulting firms, typically relegated to a professional services ghetto within the management literature, have been thrust into the foreground as exemplars of best practice in the field of knowledge management. Such is the interest in the topic of knowledge management that a backlash is almost certainly imminent. Bertels and Savage (1998) have suggested that after three years of intense fluff, the lemmings will be on to their next topic, without ever having really mined the subject of knowledge (p. 7). This special issue of Human Relations seeks to make a lasting contribution to our understanding of the role of knowledge within organizations. It brings together researchers from a variety of disciplinary and theoretical perspectives who are united by their common interest in the management of knowledge within PSFs. Why has knowledge management become such a hot topic in recent years? Some might argue that it is the result of effective marketing by consulting firms (see Suddaby and Greenwood in this issue). Others suggest that academics are inherently attracted to ideationalist theories because, as 811

2 812 Human Relations 54(7) intellectuals, this is where their competences lie (see Donaldson in this issue). But neither argument can explain why knowledge management has become the focus of attention at this time, rather than in earlier decades. At a practical level, the current emphasis on knowledge management can be attributed to two distinct yet inter-related developments. First, capital and labour-intensive industries have continued to decline within developed economies and the relative importance of information-intensive industries has increased. Second, rapid advances in information technology have created incentives for identifying sources of knowledge within organizations and for developing systematic procedures for disseminating knowledge more widely among organizational members. At a theoretical level, two concurrent developments have contributed to the increased emphasis on knowledge within the management literature. At around the same time that the resource-based view of the firm identified knowledge as the primary source of sustainable competitive advantage, postmodern perspectives on organizations began to challenge fundamental assumptions about the nature and meaning of knowledge within organizations and society as a whole. These alternative perspectives have taken their place in a complex and long-standing debate about the role and nature of knowledge in organizations. Any attempt to impose a structure on this debate, or to develop a typology for classifying this research, represents the kind of reductivist thinking so deplored by post-modern writers on knowledge in organizations. Certainly many researchers operate across disciplinary, epistemological and paradigmatic boundaries (e.g. Amit & Schoemaker, 1993; Kogut & Zander, 1992; Spender, 1996). Nevertheless, two broad alternative perspectives on knowledge in organizations have emerged (see Table 1). Most writers in this field tend either to view knowledge as an asset or to think in terms of knowing as a process. Research which adopts the knowledge as an asset perspective seeks to identify valuable knowledge within organizations and to develop mechanisms for managing it effectively. Economists have long recognized that organizational knowledge represents an important source of competitive advantage (Nelson & Winter, 1982; Penrose, 1959; Teece, 1981). In recent years resource-based theorists have conceptualized organizations as mechanisms for creating and utilizing knowledge (Barney, 1991; Conner & Prahalad, 1996; Grant, 1996). In this context knowledge is often viewed as an objectively definable commodity, with exchanges of knowledge between individuals being governed by the functioning of an internal market (Davenport & Prusak, 1998; Szulanski, 1996; Teece, 1998). The literature on knowledge management abounds with references to organizations transferring knowledge

3 Empson Introduction 813 Table 1 Alternative perspectives on knowledge in organizations Knowledge as an asset Knowing as a process Purpose of research Normative. Descriptive. To identify valuable knowledge and To understand how knowledge to develop effective mechanisms is created, articulated, for managing that knowledge within disseminated, and legitimated organizations. within organizations. Disciplinary foundations Economics Sociology Underlying paradigm Functionalist Interpretive Epistemological Knowledge as an objectively Knowledge as a social assumptions definable commodity. construct. Models of knowledge Exchanges of knowledge among Knowledge is disseminated and transmission individuals are governed by an legitimated within organizations implicit internal market within through an ongoing process of organizations. interaction among individuals. Main levels of analysis Organization and its knowledge Individual in social context. base. capabilities, renewing knowledge bases, and measuring knowledge assets (e.g. Hansen et al., 1999; Huseman & Goodman, 1999; Scott, 1998). Consistent with the economic foundations of this perspective, much of the writing in this field reflects the functionalist paradigm and adopts the firm as a unit of analysis, or more specifically the knowledge base and the knowledge management systems of the firm. By contrast, researchers who adopt the knowing as a process perspective argue that knowledge cannot be analysed and understood as an objective reality. Instead knowledge is viewed as a social construct, developed, transmitted and maintained in social situations (Berger & Luckmann, 1967; Blackler, 1995; Tsoukas, 1996). In this context, alternative concepts of legitimate knowledge can co-exist within organizations and individuals seek to establish their claims to legitimacy by demonstrating the preeminence of their expertise (Alvesson, 1995; Morgan, 1986; von Krogh & Roos, 1996). The objective of this school of research is to understand how knowledge is created, articulated, disseminated and legitimated within organizations. Rather than consider explicit models of knowledge transmission, this perspective emphasizes the process of interaction between individuals and the role this plays in the creation, legitimation and dissemination of knowledge on an ongoing basis (Brown & Duguid, 1991; Latour, 1987; Pentland, 1992). The

4 814 Human Relations 54(7) disciplinary foundations of this perspective lie broadly within sociology and the underlying paradigm is interpretive. The primary unit of analysis is the individual operating within his or her social and organizational context. The knowledge as an asset and knowing as a process perspectives are both concerned with understanding knowledge in all forms of organizational contexts. In parallel with these literatures, a separate and substantial literature on the professions and PSFs has developed which yields generalizable insights into knowledge in organizations as a whole. Within PSFs the centrality of knowledge has long been recognized, both as an input and an output. Key knowledge holders have been highly valued and rewarded. Protracted apprenticeship models have developed for transferring tacit knowledge from experienced to junior staff. Training and examination in a formalized body of knowledge are a condition of entry into the accredited professions, such as accounting and law. This special issue of Human Relations explores the theme of knowledge management in the context of the established professions in particular and knowledge-intensive firms in general. The category of knowledge-intensive firm includes organizations which are primarily concerned with the application of specialist technical knowledge to the creation of customized solutions to clients problems. It is hoped that, by rooting the study of knowledge management in the context of a well-established literature on professionals and PSFs, substantive and sustainable insights can be developed. In the first article of this special issue, Morris presents an in-depth case study of a knowledge codification project undertaken within a consulting firm. He argues that the codification process represents the PSF s assertion of property rights over the knowledge of the individual professional. He asks why professionals are willing to cooperate with this process and suggests it is because they understand the limits of codification. Professionals perceive that their true value to their clients (and their source of power within their PSF) derives from their unique combination of experiences and intuition. They recognize that this knowledge is not susceptible to codification. My article also considers the process by which professionals share, or refuse to share, their knowledge with colleagues. I ask why individuals resist knowledge transfer in the context of mergers between PSFs and find that impediments to knowledge transfer will be greatest when individuals perceive there to be fundamental differences in the form of the knowledge bases and the organizational images of the combining firms. In this context individuals experience the twin fears of exploitation and contamination, which derive from a complex combination of organizational and individual, commercial and personal, and objective and subjective factors. Alvesson also explores the interaction of the commercial and personal

5 Empson Introduction 815 realms in PSFs and the process by which these factors shape the way in which knowledge is conceptualized and legitimated. Adopting a sceptical view on the functionalist understanding of the nature and significance of knowledge in knowledge-intensive firms, he examines the relationship between the image of the organization and the identity of the individual. He demonstrates how the interactions of image and identity can exert control over the behaviour of individuals in knowledge-intensive firms. Whereas Alvesson explores the ambiguity-intensive nature of much knowledge work, Willman et al. focus on a form of knowledge work with highly tangible outputs which is governed by an extensive body of codified knowledge. Their empirical study of trading activities in investment banks shows how traders utilize the generally understood models of finance theory to predict how the market will work, but rely upon personal experience and intuition to determine how to work the market. Traders can only outperform the market when they do not obey the strictures of established finance theory. In this context, traders will resist attempts to codify and disseminate their knowledge as it will cease to have value once it becomes widely recognized as legitimate. In Willman et al. s study, knowledge is developed by individuals in interaction with their colleagues and competitors. Lowendahl et al. introduce an additional dimension to the knowledge creation process: the client. Adopting a resource-based perspective, they explore the interaction between the knowledge base and client base PSFs and demonstrate how these two factors can either extend or constrain each other. They emphasize that processes of knowledge development and dissemination cannot be studied simply at the individual and organizational level but must also be understood in the context of a PSF s strategic positioning with regard to its clients and potential clients. Suddaby and Greenwood introduce yet another dimension to the discussion by providing a field-level analysis of the process by which management knowledge is produced and consumed within society. They explore two dynamics: the commodification of management knowledge (i.e. the tendency of large consulting firms to reduce knowledge to a routinized and codified product) and the colonization of professional fields (i.e. the tendency of Big Five PSFs to extend commodified managerial knowledge into adjacent professional jurisdictions). They explicate the complex interactions of communities of organizational actors involved in the production and consumption of management knowledge and, in so doing, question the current emphasis of much management literature on knowledge as an objectified property. In his concluding comments to the special issue, Donaldson reviews

6 816 Human Relations 54(7) current trends in research on knowledge and knowledge-intensive firms and sounds a note of caution. He counsels against the adoption of overly ideationalist theories, arguing that such theories overlook the extent to which knowledge management initiatives are leading to the increasing bureaucratization and rationalization of knowledge in organizations. At the same time, he recognizes the need to challenge rationalized and positivist models of knowledge creation, storage and transmission. He emphasizes the need to persist with a sceptical inquiring attitude and careful empirical analysis which will stand the test of time long after the current wave of interest in knowledge management has passed. Acknowledgements I would like to thank Ray Loveridge and the large team of reviewers for their valuable inputs into this special issue. I would also like to thank Tamar Jeffers for all her help throughout the process. References Alvesson, M. Management of knowledge-intensive companies. Berlin: Walter de Gruyter, Amit, R. & Schoemaker, P.J.H. Strategic assets and organizational rent. Strategic Management Journal, 1993, 14, Barney, J.B. Firm resources and sustained competitive advantage. Journal of Management, 1991, 17(1), Berger, P.L. & Luckmann, T. The social construction of reality: A treatise in the sociology of knowledge. New York: Penguin, Bertels, T. & Savage, C. Tough questions on knowledge management. In G. von Krogh, J. Roos and D. Kleine (Eds), Knowing in firms: Understanding, managing, and measuring knowledge. London: Sage, Blackler, F. Knowledge, knowledge work, and organizations: An overview and interpretation. Organization Studies, 1995, 16(6), Brown, J. & Duguid, P. Organizational learning and communities of practice: Toward a unified view of working, learning, and innovation. Organization Science, 1991, 2(1), Conner, K.R. & Prahalad, C.K. A resource-based view of the firm: Knowledge versus opportunism. Organization Science, 1996, 7(5), Davenport, T.H. & Prusak, L. Working knowledge: How organizations manage what they know. Boston, MA: Harvard Business School Press, Grant, R.M. Toward a knowledge-based theory of the firm. Strategic Management Journal, 1996, 17 (Winter), Special Issue on Knowledge and the Firm, Hansen, M., Nohria, N. & Tierney, T. What s your strategy for managing knowledge? Harvard Business Review, 1999, March/April, Huseman, R.C. & Goodman, J. Leading with knowledge: The nature of competition in the 21st Century. Thousand Oaks, CA: Sage, 1999.

7 Empson Introduction 817 Kogut, B. & Zander, U. Knowledge of the firm: Combinative capabilities, and the replication of technology. Organizational Science, 1992, 3(3), Latour, B. Science in action: How to follow scientists and engineers through society. Cambridge, MA: Harvard University Press, Morgan, G. Images of organization. Beverly Hills, CA: Sage, Nelson, R.R. & Winter, S.G. An evolutionary theory of economic change, Cambridge, MA: Harvard University Press, Penrose, E.T. The theory of the growth of the firm. Oxford: Blackwell, Pentland, B. Organizing moves in software support lines. Administrative Science Quarterly, 1992, 37(4), Scott, M. The intellect industry: Profiting and learning from professional services firms. New York: Wiley, Spender, J.C. Making knowledge the basis of a dynamic theory of the firm. Strategic Management Journal, 1996, 17 (Winter), Special Issue on Knowledge and the Firm, Szulanski, G. Exploring internal stickiness: Impediments to the transfer of best practice within the firm. Strategic Management Journal, 1996, 17 (Winter), Special Issue on Knowledge and the Firm, Teece, D.J. The market for know-how and the efficient international transfer of technology. Annals of the American Academy of Political and Social Science, 1981, 458, Teece, D. Capturing value from knowledge assets: The new economy, markets for knowhow, and intangible assets. California Management Review, 1998, 40(3), Tsoukas, H. The firm as a distributed knowledge system: A constructionist approach. Strategic Management Journal, 1996, 17 (Winter), Special Issue on Knowledge and the Firm, von Krogh, G. & Roos, J. Imitation of knowledge: A sociology of knowledge perspective. In G. von Krogh and J. Roos (Eds), Managing knowledge: Perspectives on cooperation and competition. London: Sage, 1996.