UPPSALA PAPERS IN ECONOMIC HISTORY
1989
RESEARCH REPORT NO 22
KNOWLEDGE RENEWAL AND
KNOWLEDGE COMPANIES
bY Eskil Ekstedt
Department of Economic History
Reprocentralen HSC Uppsala 1989
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Interest in the role of knowledge in societal development is growing fast.* Towards the end of the 1970s the importante of human capita1 in economic growth was already the subjett of lively discussion, and today a knowledge perspective is being applied to even more wide- ranging changes. The knowledge society is a term now frequently adopted to describe this development.
Growing Service Input
There are several signs that the foundations of the industrial mode of production are beginning to fail; traditional goods production is being automated, the service sector is growing, and “human capital” is coming to mean more for the economic system than real capital. More people tend to be engaged in services, i.e. in an economic exchange that involves immediate consumption and precludes the kind of stock-kee- ping characteristic of the trade in goods.
Fint, the production of services itself has expanded substantially.
Many tasks previously performed in the home have been transferred to the open labor market. Medieal care, education and social welfare are activities which engage avery largesegment of the labor forte today.
Setondly, large companies have been investing increasingly in know- ledge-intensive services, R&D activities, banking operations, market- ing, education and training. Thirdly, the service element is increasing even on the shop floor. The borderline between what is manual labor and what is services is becoming blurred. Those who work closest to production are responsible for supervision and control, servicing, re- adjustments and programming. FourthEy, the presence of “knowledge
*This article is based on Eskil Ekstedt’s book Human Copiful in M Age of Tranifion - showledge Development and Corporate RenavaL Allmänna Förlaget 1988. Dr.
EskilEkstedt is a researcher at the Swedish Council for Management and Work Life Issues (FA-rådet) and lecturer at the University of Uppsala.
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companies” is becoming increasingly important in the production ap- paratus. These companies supply the large torporations and the various publit agencies and other institutions with the knowledge they need to solve problems of various kinds.
The growing element of services often means that the knowledge factor becomes increasingly important and also changes in character.
Things have gone so far that the knowledge factor, the human capita&
Will gradually take over the influential position previously enjoyed by real capita1 when it comes to designing the organization of production - a tendency that is being reinforced by the greater flexibility of real capita1 today. Machines such as computers can be increasingly control- led by the user. And the user’s knowledge is becoming more important to production planning than the knowledge built into the machine by the design engineer. Real capita1 is losing its “work-scheduling” role.
The implications of this shift in forms are considerable: the size of workplaces is being affected, ownership arrangements Will change, leadership and reward systems Will be altered to fit the new conditions.
The substantial element of human capita1 Will also affect the corporate capacity for adaptation and renewal. How is the build-up and develop- ment of knowledge organized? What is its direction and focus? These and similar questions Will greatly affect the process of renewal.
The growing element of service talls for changes in the nature and structure of knowledge. When most service functions (chicfly educa- tion and care) were performed in the home, the knowledge involved was based on experience; the younger generation learned from the older. Now that most of the traditional domestic tasks have been transferred to the labor market where they are run on institutional lines, the knowledge has also become institutional. There has been a massive increase in education for the “caring professions” - child care, nursing, teaching, etc.
Evolution of the Knowledge-Intensive Company
How do companies maintain and develop their knowledge in this new situation. This is the question to be addressed below. The expansion of the modern knowledge Company is an important feature in this picture.
Any discussion is complicated, however, by the loose way in which the concept of the knowledge company has been used. By comparing the
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knowledge Company with other types of companies, 1 hope to be able to remove some of the uncertainty. However, we can consider some of the general characteristics of the knowledge companies, before trying to establlsh their boundaries more exactly.
Naturally all companies possess and have access to knotledge. But the extent of this knowledge (its intensity), its direction and focus, and the way in which it is embedded in the Company all differ considerably.
We thus have good grounds for classifying companies by reference to the knowledge factor.
People are the core of the knowledge Company, much as they are in certain traditional institutions such as theaters or universities. The
“real” value of the knowledge Company cannot be inferred from a traditional balante-sheet: its employees represent its value. They hold the real power in the Company, and are frequently offered part-owner- ship in recognition of this fatt.
Capita1 requirements may be quite modest in the knowledge com- pany to begin with. In the long run, however, a great deal of capita1 may be needed for activities such as R&D, training and marketing. The necessary development of various kinds of overhead functions may also explain why some knowledge companies grow very big indeed. In order to maintain and develop knowledge, special departments have to be created. This is more difficult in small companies in which everybody is engaged in the running of day-to-day operations. An underlying conflict between short-term and long-term requirements can be glimpsed here. For long-term survival large comprehensive invest- ments may be necessary. A certain preparedness must be built into the organization. The kind of market-oriented organizational arrange- ments commonly prevailing in small companies have to make way for the administrative arrangements that have a much greater role in large companies.
The knowledge companies which have been first to expand are those which supply services to industrial companies and publit agencies.
They often start as the offshoot of an industrial company. People with special knowledge, perhaps in the computer field, establish a consult- ancy firm of their own. It thus becomes possible for them to use their knowledge in several companies at the same time. The possession of ample human capita1 is inherent to the very concept of the knowledge company. The main and almost exclusive value of these companies lies in the knowledge possessed by their members. The knowledge compan-
ies are so idiosyncratic as to be quite distinct from other kinds of companies: their special nature obviously distinguishes them from industrial companies, but they differ from other service companies as well.
If we tontent ourselves with defining the knowledge company as a company possessing a lot of knowledge, then the category Will be extremely capacious. It Will range from craft shops and skilled trades, such as hairdressing salons and carpet layers, to professional firms such as lawyers and architects. And given such a broad definition, it is no longer so certain that the “knowledge sector” has expanded greatly in recent years: there have always been craftsmen and professionals of various kinds who have established units of their own.
In Ihnskx.zpsf~retaget (The Knowledge Company), Sveiby and Ries- ling suggest that traditional ownership based on finantial capita1 Will decline as an instrument of power. It is my view, however, that new
“game rules” or new ways of controlling the knowledge capita1 Will be discovered on the financing side. But what is certain is that control over the knowledge capita1 Will become increasingly important.
The knowledge companies differ from other service-producingcom- panies. In some companies such as hamburger chains, for example, the service itself has become an industry. This type of Company is charac- terized by the large scale and mass-production techniques of industrial production. Manual production has been routinized. In banks, on the other hand, developments have moved in another direction. Routine impersonal tasks have been taken over by plastic cards and machines, leaving the banks with more time to attend to their customers. Each tustomer can benefit from the knowledge possessed by the staff, and the bank thus qualifies as a knowledge company. It is characteristic of the knowledge company that it solves complex and often varied prob- lems. Characteristic of the “service company” is that it solves simple and often identical problems.
Consequently the staff of a knowledge company is always know- ledgeable, which need not be the case in a service cumpany. The service company provides a limited number of services and depends on its well-functioning organization. The knowledge company sells a more differentiated range of solutions, which must necessarily be customer- specific. An excellent example of this is medieal treatment. The cus- tomer/patient visits the doctor with a problem. Not until the doctor has
made a diagnosis can there by any question of offering a service or a good - and even then usually in a unique tustomer- specific form.
Many companies and organizations (such as banks, hospitals and insurance companies) are engaged in the production of both services and knowledge. At the same time a combination of service, goods and knowledge production is also becoming more tommon in the large industrial torporations. Obviously this must make heavy demands on control and management, sinte the production of knowledge is hardly likely to be successful in a formal industrial organization. A division of labor is sometimes introduced, whereby certain people are engaged in increasingly routinized short-term tasks, while others concentrate on unique long-term problems. It is this division that often provides the basis for a breakaway and the establishment of a separate Company.
The knowledge company also differs quite clearly from theindustrial Company. In industrial companies real capita1 always counts fora great
deal, although naturally this does not mean that knowledge is lacking in these companies. On the contrary. Sometimes the human capita1 may be more extensive and above all more advanced than in the knowledge companies. But in the industrial companies the knowledge is always tied up with large amounts of real capital.
The knowledge companies also differ in some respects from the high- technology companies. Common to both types of Company is their
high knowledge intensity. But in the high-technology companies the knowledge is always associated in some way or another with advanced technology. Thus the knowledge in the high-technology companies is very largely embedded in real capital, to use an expression which Will be explained more fully below.
It is not easy to describe the high-technology Company or the high- technology industry in unequivocal terms. The main problem is that what is regarded as high technology at one time may be regarded later as “mature” or even obsolete. Computers and electronics are regarded as a high-tech industry today, but may not be tomorrow. It must be possible to find a more general definition of high technology, however.
We could perhaps start by saying that a high-technology Company (or industry) is an organization constantly in need of a rich flow of new technical knowledge. By “new knowledge” 1 mean knowledge close to the frontiers of science. Once a company’s constant need for new knowledge disappears, it no longer qualifies as high-tech. This defini- tion implies that in the high-technology Company basic research (pub-
lic or private) and practical application must always be very close to one another. It is also typical of the present-day high-tech company that its advanced technology is associated with the production of both services and goods. An obvious example of this intertwining is provided by the information sector.
Thus knowledge-handling is of great importante to the high-tech- nology companies. They must be able to develop, receive and exploit knowledge. The corporate organization must allow for research, development work, and the scanning and monitoring of new tech- nology, so that the company can retain its position on the technological frontier. It must also permit investment in training and development or a recruitment system that promotes the rapid spread and expioita- tion of the new technology. In other words these companies must be constantly and actively prepared for change, maintaining a capacity to hold their own in the future. They must be able to understand and adapt to developments that lie beyond the bounds of the generally known and to deal with uncertainty of a very complicated kind.
The high-technology companies must also have access to advanced real capital, i.e. advanced knowledge embedded in machines. Thus our definition of different types of companies takes account of knowledge- intensity and capital-intensity. The knowledge-intensive companies thus include high-technology companies in which a large proportion of the knowledge is embedded in real capita1 (and its technology), and knowledge companies in which the knowledge is embedded in human capita1 (the individual and/or the organization). The definitions dis- cussed above are summarized in the following figure.
Figure 1. ‘löpes of companies
Low real capita1 tntensity High ren1 capita1 intensity
Low knowledge intensity
High knowledge intensity Knowledge company High-technology company
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The knowledge structure differs quite dramatically in the various types of companies, largely due to the way in which the knowledge is embedded in the company. For the sake of simplicity we can envisage three ways in which knowledge can be attached to a Company: it can be embedded in the real capita1 (the machines), in the organization (the company as such) or in the individuals who make up the Company.
In the knowledge companies, knowledge is embedded in the organi- zation and/or the individuals. Knowledge accumulates partly as a result of experience gained from the work itself and partly through knowledge transfer. In traditional craft shops, where the knowledge consists of advanced skills, experiental knowledge predominates. Here the cus- tomer is often also the final tonsumer. In modern knowledge compan- ies such as computer and engineering firms much of the knowledge is institutionally acquired through knowledge transfer. In this case the customers are generally other companies or institutions. In service companies knowledge is almost exclusively embedded in the organiza- tion, whereas in traditional industrial companies and high-technology companies it is largely embedded in real capita1 (machines).
Thus the knowledge company can be characterized as follows: first, its capita1 consists predominantly of human capital; setondly, there are heavy demands on the knowledge of those who work in it; thirdly, the company sells or deals in unique services, or possibly goods in combi- nation with services.
It is extremely difficult to determine the number of knowledge companies, partly because of the vagueness of the concept and partly because of the lack of statistics. In the official statistior present-day knowledge companies are probably included under the rather indeter- minate heading “business services”, although this also includes busi- nesses such as banks. In Sweden the number employed in this sector as a whole has risen by a good 4 % in the last few years. Between 1970 and 1982 growth in the “consultancy sector” was 4.2 % per year, in the R&D sector 4.1 %, and in the culture and information sector 3.5 %. At the same time of course the number engaged in industry has been falling.
During the same period the number of data centers, which are included under “business services”, has increased by 206 %.
There is also some indication that traditional knowledge companies (craft-oriented, experience-based) have begun to expand. Consump- tion patterns have changed in favor of esthetic and person-specific consumption (see Solveig Wiktrom; Ulf Elg & Ulf Johansson “From
the Consumption of Necessities to Experience-Seeking tion).
Study of Companies in Three Industries
In my book Human Capita1 in an Age of i’Yansition -
Consump-
fiowledge Development and Corporute Renewal 1 studied the direction and organ- ization of the acquisition and development of knowledge in three industries. 1 started with the capital-intensive and traditional forest industry. 1 then compared these capital-intensive companies with the computer companies which have been springing up everywhere over the last few years. A typical feature of this setond industry is its heterogeneity. Products and organization can both vary enormously.
But what is interesting in our present tontext is the high knowledge intensity, or the new forms of knowledge.
Lastly 1 studied building firms. These exist in a traditional branch of industry that is characterized by low capita1 intensity. What is the role of the knowledge dimension in corporate renewal in this labor-inten- sive industry? Is there no knowledge-development unless something is done to change the technical conditions, or does it assume quite other forms? Is another kind of knowledge being developed?
It can be seen from the extensive empiri& investigation reported in the book that the organization and direction of knowledge-develop- ment differ greatly between these three industries. Common to them all, however, is the prime importante of knowledge-development aimed at influencing existing processes. Perhaps the direct finantial control systems adopted in most companies today serve to reinforce this type of investment for immediate returris. ‘Raining and instruction in coping with new machines and new technology also appear to be a major factor. The introduction of computers seems to have been particularly important. The large forestry companies are characterized by highly diversified knowledge-development, which has been institu- tionalized in various ways. Companies invest in R&D, they cultivate contacts with the state educational system, they encourage personnel development, they stan their environment, and so on.
The builders are fairly single-minded in their focus on the concrete work process. That is where knowledge is generated and where person- nel development occurs; knowledge based on experience is valued most
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highly. Many people in the building industry are still somewhat skep- tieal about any general learning that smacks of the classroom.
In the computer companies the more general and formalized type of teaching is combined with learning on the job. In these companies there is an evident conflict between the short-term profit perspective and the desire to acqulre more knowledge.
The computer firms definitely qualify as knowledge companies.
Here institutionally acquired knowledge predominates. Even the building firms (contractors), however, have quite a high knowledge intensity, but in their case it is largely based on experience. Adiscussion of knowledge-development in building firms can therefore help to illustrate the operation of this process in traditional knowledge com- panies.
How Knowledge is Embedded in the Company
The organization of production also has a decisive impact on the way the knowledge is embedded in the company. It may be embedded in the real capita1 (Le. the machines), in the organization itself, or in the individuals of which this is composed. In most companies examples of all these arrangements can be found, but the emphasis on one or the other varies greatly between the capital-intensive, the labor-intensive and the knowledge-intensive companies. This is the most important reason why the knowledge structure assumes such different shapes in the companies studied.
In the traditional industrial companies and particularly in the for- estry companies, a large proportion of the knowledge is embedded in the machines. The production result is much the same, whoever is
“running” the machines. “Preprogrammed knowledge” determines most of these companies’ operations. There has been some modifica- tion in this picture over the last few years, as the emphasis on market and environmental knowledge, and on personnel development, has grown.
In the building industry the emphasis is quite different. Real capita1 plays an insignificant role here, and knowledge tends rather to be embedded in the organization. People have access to the relevant knowledge exclusively through their ties with the organization, and ties of this sort are acquired only after several years spent working in the
industry and learning how the different bits of the process hang to- gether. Not until then do people become fully fledged members of the
“gang”. People working in the building industry generally have to start by doing the simplest tasks at the lowest levels in the hierarchy, whence they can gradually rise. A great deal of organized knowledge is unar- ticulated and mute (tacit) knowledge, that outsiders often cannot even see. But for the initiates this knowledge provides guidarme and moti- vation. Perhaps we can campare it with the kind that used to exist in the medieval guilds, and that made that system so strong and enduring.
The individual’s knowledge was an intrinsic part of an organization, in which the individual himself could easily be replaced. Recently, how- ever, a certain fragmentation can be observed in the building organi- zation with a consequent shift in the location of knowledge, which is now more often associated with the individual. This means that some people can break away from the organization to establish their own companies. The number of consultancy firms in the industry has grown.
In computer companies knowledge is largely embedded in the in- dividual. As organizations these companies are thus rather weak; they have to make themselves attractive in order to keep their members, who also represent their knowledge capital. One reason for their weakness is that a great deal of their knowledge has been accumulated and developed outside the Company. Recruits are very well-educated.
They rarely have any difficulty in finding work somewhere else. And they can easily take their knowledge with them. For this reason the computer companies try in various ways to embed the knowledge in their own organizations. Employees are sent on long courses, which include a major portion of indoctrination. The companies also try to
“take possession of’ their products, so as to link them with the Company rather than the programmer or tonsultant who does the job. Manage- ment also tries to standardize certain tasks so that these can be some division of labor: if several people are involved in a job together, a dependence relationship is established between them and the organi- zation gains in strength. Reorganization along project limes, rather like the building industry, also helps to tie knowledge into the organization in a way that is not possible so long as each employee performs his tasks independently.
Very little knowledge is embedded in the actual machines (the computers) because these are so flexible in themselves. The prepro- gramming is substitutable, and the flexibility of the software is also
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often considerable. The computer is thus largely controlled by the programmer and the user. It is their knowledge that is vital.
Thus, over time we can observe a shift from machine-embedded to organization- embedded knowledge. There is also evidente of a further step, from organization-embedded to individual-embedded know- ledge. The location of the knowledge in the three industries - forestry, building and computers - can be summarized as follows.
Figure 2. How Knowledge is Embedded in Companies FORESTRY COMPANY
COMPUTER COMPANY
BUILDING COMPANY
Corporate Renewal and How Knowledge is Embedded in the Company
The different ways in which the companies studied attached their knowledge to themselves also affect their capacity for renewal. In the traditional industrial companies a large share of the knowledge is embedded in real capital, and the capacity for renewal is closely con-
nected with opportunities for making this capita1 work more efficient- ly. Machines can be replaced by others which are more effective.
Generally, however, a certain running-in-period is required before the efficiency of the new machines exceeds that of the old ones they are replacing. Moreover investment in machines often involves heavy costs and long depreciation periods, which makes it impossible to keep continuously up-to-date with the latest and most efficient technology.
This is very noticeable in the basic industries such as paper and pulp.
Plant has very long depreciation periods; at the same it has proved possible to introduce certain improvements successively in already existing equipment.
Nonetheless technological development provides a continual impe- tus to renewal. Companies and publit institutions such as universities, research institutes and so on are constantly involved in developing technology. In the forestry companies a great deal of knowledge is acquired through the purchase of technology. Replacing a machine almost always means increasing the supply of knowledge. And it is a question of stable knowledge, reflecting the designer’s leve1 of know- ledge. Those who use the machines need only a limited amount of knowledge; it is perfectly possible to drive a tar, for instance, without knowing how to design or manufacture cars.
Knowledge embedded in real capita1 thus has considerable renewal cap: city. It is easy to develop, to disseminate, to store, to use and to replace. Now that many big industrial companies are beginning to cancern themselves with other activities apart from the manufacture of goods, they are also finding it more difficult to cape with renewal.
This may well be because their knowledge is no longer embedded in the machines as it used to be. A growing number of well-educated people are engaged in tasks not directly connected with the products and production processes. Knowledge about markets, customers, pub- lic authorities -in fatt the whole environment - is becoming increas- ingly important. Moreover companies are trying to exploit knowledge about their employees’ development capacity more efficiently.
In the labor-intensive building companies a great deal of knowledge is embedded in the organization. The conditions for generating or promoting renewal are quite different from those prevailing in the capital-intensive companies. “lb build” means assembling and combin- ing work and materials in time and space; in other words coordinating an enormous quantity of factors in a process whose tontent Will always
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be slightly varied. Machines or individual people carry out certain parts only of the whole process. But it is important that each person under- stands the functional tontext to which their knowledge belongs. Much of this knowledge is mute; there are tacit norms and rules about the way the work is to be done. There is also tacit knowledge about the workings of the relevant knowledge network.
Organization-embedded knowledge is associated with the company and its surrounding network. Individual people can be replaced and the knowledge Will not disappear with them. lb gain access to organiza- tion-embedded knowledge it is necessary to work in the organization concerned. This is why builders are so enthusiastic about knowledge based on experience. They know that it is in work that organization- embedded knowledge can be released.
It is difficult to replace and improve organization-embedded know- ledge. It is like a social culture: those who live in it do not even see it.
It is therefore necessary to make those involved aware of the ingre- dients of the knowledge: only when these have been released can they be reshaped. The biggest problem, however, is to disseminate the new knowledge to the different parts of the organizations. And spreading knowledge to different companies or to other organizations can take a good deal of time. It is often much simpler to introduce new real capital.
Old machines are dumped. Old organization-embedded knowledge can live on, long after new knowledge has been introduced, which can lead to uncertainty and inefficiency in the organization.
The fundamental differente between the different ways of attaching knowledge to the organization cancerns the methods for storing it.
Knowledge embedded in machines is very stable. Machines can per- form exactly the same taska great many times, and the products Will be identical. It is therefore easy to link them up and combine them with other parts of the production process. It is possible to create a homo- genous and consistent logistic system, which is necessaty for efficient mass production.
Organization-embedded knowledge is not as stable. The work tempo and functional capacity of the organization varies with human moods and motivations, with the team spirit. Sometimes the work goes well, and then the tempo is high and the quality of the products is good.
At other times the opposite applies. It is therefore difficult to base advanced mass production solely on organization-embedded know- ledge. We found, for instance, that the degree of industrialization (use
of machines) in the building industry in Sweden increased during the mass production of the “million homes” program of the 1960s.
Thus the renewal capacity of knowledge is connected with the way in which it is embedded in the Company: methods for developing, diffusing, retrieving and discountinuing knowledge all depend on this, as the following figure shows. It has to be remembered, however, that the different phases of renewal appear in parallel, and that develop- ment builds very largely on existing experience.
Figure 3. Renewal and How Knowledge is Embedded in the Company.
Knowledge embedded in
Capita1 Organisation Individual
Phases of
Development (Generation)
R&D investment
Diffusion Investment in new machines
Storing (Rettieving)
Stable programming in machines
Discontinuation Dumping Depreciation
Reorganization On-the-job development Personnel Development Job rotation Information:
press, data banks, internal training etc
Norms, vaks, rules, coporate spirit,professinal codes (often tacit hnowledge)
Dismissals Transfers
On-the-job training
Training Scanning
Individual’s memoxy
Forgetting Unleaming Retraining
The renewal methods for capital-embedded knowledge are largely institutionalized and familiar. Up to a point this applies to individual- embedded knowledge as well. The methods for renewing organization- embedded knowledge are by no means as unequivocal. They are often
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tacit, and yet they are present in the internal conceptual world of the companies - in their culture.
Obviously all companies possess a combination of capital- embedded, organization-embedded and individual-embedded knowl- edge. The types of company studied here are fairly extreme and have of course been chosen to illustrate the differentes clearly. On the other hand it is usually - and to an increasing extent - organization- embedded knowledge that makes the differente between a company’s success and failure, especially sinte capital-embedded or machine- embedded knowledge is available to all.
The Problems of Renewal
Organization-embedded knowledge is becoming increasingly more crucial, as the service functions of companies become more significant.
The ties with real capita1 are also losing in importarme, as this capita1 becomes more flexible. Modern machines such as computers give the user plenty of opportunny to exercise continual control and influence.
Thus theproblem of corporate renewalcan be increasingly associated with the renewal of organization-embedded knowledge. How to make organi- zation-embedded knowledge moreflexible Will be an even more important issue in the future.
One solution to this problem has been the frequent breakaways and the subsequent creation of knowledge companies (consultancyfims). We have observed this development in the building industry, and the computer companies studied in the empirmal investigation are in themselves evidente of this phenomenon. In these newly formed com- panies knowledge is embedded to a great extent in the individual employees. The Company is a loose organization whose input consists of certain necessaty overhead functions. Actual production (the serv- ice) is carried out by the employee at the customer’s workplace.
What renewal capacity does this type of company possess? Up to now most of its new knowledge has been acquired through the recruit- ment of well-educated people from the publit education system. But, as we have seen, other ways of building up knowledge have also been used. The greatest advantage of individual-embedded knowledge is of course that it can be used in a vevflexible way. It therefore plays a crucial role in periods of transition, e.g. during technological revolu-
tions like computerization. It is good at solving bottlenecks in big companies. Individual-embedded knowledge is probably also fairly easy to disseminate. On the other hand there is a natural restriction as regards storage: the human memory appears to be limited.
In a composite organization the total sum of knowledge possessed by many individuals is utilized. In a well-functioning organization we could therefore expect synergy effects: the total supply of knowledge Will be greater (of higher quality) than the sum of the knowledge possessed by the separate individuals. Thus individual-embedded knowledge is at its best when it is utilized and transformed into organ- ization-embedded knowledge. Organization-embedded knowledge systematizes capital-embedded and individual- embedded knowledge.
Broadening the Scope of Knowledge Build-up
A changeover to organization-embedded knowledge also changes the conditions for renewal in another respect. When the emphasis is on capital-embedded knowledge, renewal starts from a few individuals who account for technical innovations. Knowledge in the company can then easily become polarized, with some people responsible for advan- ced development and others for the routine maintenance of the ma- chines. Renewal can occur despite a two-tier knowledge structure.
T te demands are quite different when organization-embedded knowledge is predominant. If change or renewal are to be possible in such a case, the whole organization has to be on the alert. The main- tenance and development of knowledge must cancern everyone. Each individual’s behavior must be accessible to change. Thus if a production system is increasingly dependent on organization-embedded know- ledge, it Will be necessary to extend the scope of investment in training and knowledge-development. It must be possible to disseminate knowledge continually and widely.
Iraditionally the build-up of organization-embedded knowledge has been almost entirely based on the experience of the corporate mem- bers. In rapidly changing systems, however, this learning method has its drawbacks. If all members of the organization (the company) are to be able to acquire new knowledge quickly, tacit knowledge has to be articulated and/or written down.
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Such problems often arise in knowledge companies. These compan- ies have generally been started by a small group of people with expert knowledge of a particular field. When the companies later begin to grow, their long-term survival has to be considered. Specialization and the division of labor increase. Some people are assigned to strategic and development issues. Individual-embedded knowledge has to be developed, released and transformed into organization-embedded knowledge. In large organizations this Will hardly be possible unless experiential knowledge is transformed into transferred knowledge.
What should then be done to exploit this transferred knowledge in the cause of developing organization-embedded knowledge, and what learning Will be required, Will thus be the great challange for the future.
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14. Georg Peteri: The Role of State and Market in the Regula- tion of Capita1 Imports: Hungaty 1924-1931.
1987.
15. Håkan Lindgren: Banking Group Investments in Swedish In- dustry: On the emergence of banks and asso- ciated holding companies exercising shareholder influence on Swedish industry in the first half of the 20th century. 1987.
16. Mats Moreii:
17. Juergen Salay:
18. Goran B. Nilsson:
19. Maurits Nystrom:
20. Lars Magnusson:
21. Hans Sjögren:
22. Eskil Ekstedt:
Om mått- och viktsystemens utveckling i Sve- rige sedan 1500-talet. Vikt- och rymdmått fram till metersystemets införande. 1988.
The Soviet Union River Diversion Project.
From Plan to Cancellation 1976-1986. 1988.
Kreditens jattekraft. Svenskt bankvasende i brytningstid och genombrottstid vid 1800-ta- lets mitt. 1988.
En spegel av ett sekel. Riksdagens resor i Norrbotten 1880-1988. 1988.
Korruption och borgerlig ordning - naturratt och ekonomisk diskurs i Sverige under Fri- hetstiden. 1989.
Kreditforbindelser under mellankrigstiden.
Krediter i svenska affärsbanker 1924-1944 fordelade på ekonomiska sektorer och regio- ner. 1989.
Knowledge Renewal and Knowledge Gom- paniies. 1989.
1. Alice Teichova:
2. FritzjKastner/Larsson:
3. Elizabeth A Boross &
Håkan Lindgren:
4. Volker Wellhöner &
Harald Wiiorth:
5. Ragnhild Lundstram &
Jan Ottosson:
6. Agnes Pogany &
György Kover:
7. Ulla Wikander (ed.):
Rivals and Partners. Banking and Industry in Europe in the First Decades of the Twentieth Century. (Report from the Viennu Banking - Zndustry Symposium 1988.) 1988.
Banking and Bank Legislation in Europe 1880-1970. (Report from the Vienna Banking -Zndustry Symposium 1988.) 1989.
Bank-Industty Connections in Hungaty and Sweden. lXvo Studies. (Report from the Vienna Banking-Zndustry Symposium 1988.) 1989.
Bank-Industty Relations in Theory and Prac- tise. Two Studies. (Report from the Vienna Banking -Zndushy Symposium 1988.) 1989.
Bank-Industry Relations in Sweden: Owners- hip and Interlocking Directorates. (Reports from the Bienna Banking - Zndustry Symposi-
um 1988.) 1989.
Banking and Industry In Hungary. (Reports from the Bienna Banking - Zndustry Symposi-
um 1988.) 1989.
The Sexual Division of Labour, 19th & 20th Centuries. Six essays presented at the Ninth International Economic History Congress, Berne 1986.1989.
BASIC READINGS 1. Håkan Lindgren &
Kersti Ullenhag (eds.):
Teorier och teoretisk tillampning i företagsbis torisk forskning. Med bidrag av Herman Da- ems, Erik Dahmen, Håkan Lindgren och Kersti Uiienhag. 1985.
2. Britta Jonell-Ericsson: Skinnare i Malung. 1987.
3. Håkan Lindgren & The Swedish Match Company in the Interwar Hans Modig: Years. An International Perspective. 1987.
4. Bo Gustafsson: Den ekonomiska vetenskapens utveckling.
Del I: Från Aristoteles till Adam Smith. 1988.
5. Bob Engelbertsson & Seminarieuppsatsen. En genomgång av for- Lynn Karlsson: mella krav. 1989.
6. Mats Larsson &
Håkan Lindgren:
Risktagandets gr&ser. Utvecklingen av det svenska bankvaendet 1850-1980.1989.
