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6 Knowledge management: cognitivist and constructivist psychology

6 Knowledge management: cognitivist and constructivist psychology

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118  Part 1  Systemic ways of thinking about strategy and organisational dynamics



organisational knowledge. Many argue that this is to be done by codifying the

knowledge held by key knowledge workers and by taking steps to retain their services. The new knowledge economy also has major implications for the nature of an

organisation’s assets. In the industrial age, accounting measures of asset values were

close to the capital market valuation of the organisation because market pricing of

the main assets, namely physical resources such as plant and equipment, enabled

them to be measured. Managing the value of a corporation meant managing

measurable physical assets and the ‘human resources’ who used them. In the new

knowledge economy, however, knowledge is said to be the major asset and, since

it is not directly traded in markets, it is not measured and recorded in corporate

balance sheets. As a result, enormous gaps have opened up between the asset values

recorded by a corporation and the value that capital markets place on the corporation itself. This creates problems for managing assets to produce shareholder value.

The response to this has been a call to measure the intellectual capital of a corporation and manage its knowledge assets.

Nonaka’s writings (Nonaka, 1991; Nonaka and Takeuchi, 1995) have exerted

a major impact on the development of theories of knowledge creation in organisations (for example, Brown, 1991; Burton-Jones, 1999; Davenport and Prusak,

1998; Easterby-Smith and Lyles, 2011; Garven, 1993; Kleiner and Roth, 1997;

Leonard and Strauss, 1997; Quinn et al., 1996; Sveiby, 1997). Like Senge, Nonaka

draws on the systems dynamics strand of systems thinking, including some concepts

from chaos and complexity theories, which he treats as extensions of that thinking

(see ­Chapter 10), and Argyris and Schön whose learning theories he traces back to

Bateson (1972). In addition, he relies heavily on Polanyi’s (1958, 1960) distinction

between tacit and explicit knowledge.



Creating new knowledge

According to Nonaka (1991), new knowledge is created when tacit knowledge is

made explicit and crystallised into an innovation, that is, a re-creation of some

aspect of the world according to some new insight or ideal. New knowledge,

according to Nonaka, comes from tapping the tacit, subjective insights, intuitions

and hunches of individuals and making them available for testing and use by the

organisation as a whole. For him, tacit knowledge is personal and hard to formalise.

It is rooted in action and shows itself as skill, or know-how. In addition to being in

technical skills, tacit knowledge lies in the mental models, beliefs and perspectives

ingrained in the way people understand their world and act in it. Tacit knowledge

is below the level of awareness and is therefore very difficult to communicate. The

nature of explicit knowledge, however, is easy to understand: it is the formal and

systematic knowledge that is easily communicated, for example in the form of product specifications or computer programs.

Nonaka gives an example of how tacit knowledge is to be tapped. In 1985 product developers at Matsushita could not perfect the kneading action of the home

bread-baking machine they were developing. After much unhelpful analysis, including comparisons of X-rays of dough kneaded by the machine and dough kneaded

by professionals, one member of the team proposed a creative approach. She proposed using a top professional baker as a model, so she trained with a top baker

to acquire his kneading technique, and after a year of trial and error she was able







Chapter 5  Thinking in terms of organisational learning and knowledge creation   119



to help her colleagues reproduce a mechanical kneading action that mimicked that

of the p

­ rofessional. This example describes a movement between different kinds of

knowledge, the tacit and the explicit:

• tacit to tacit as the product developer acquires the skill of the professional baker

through mimicry;

• tacit to explicit as the product developer articulates the foundations of her newly

acquired tacit knowledge to her colleagues;

• explicit to tacit as the colleagues internalise the knowledge and use it to alter their

own tacit knowledge;

• explicit to explicit as the newly formulated product specifications are communicated to the production department and embodied in working models and final

production processes.

Innovation then flows from a form of learning: that is, new knowledge creation,

that in turn flows from moving knowledge between one type and another.

New knowledge starts with an individual, according to Nonaka. Tacit knowledge

has to travel from one person to another, in a way that cannot be centrally intended

because no one knows what is to travel, or to whom, until it has travelled. New knowledge can therefore be created only when individuals operate in empowered teams.

A key difficulty in the creation of new knowledge is that of bringing tacit knowledge to the surface of individual awareness, conveying tacit knowledge from one person to another, and finally making it explicit. This is so difficult because it requires

expressing the inexpressible and this needs figurative rather than literal language. As

new knowledge is dispersed through a group and an organisation, it must be tested,

which means that there must be discussion, dialogue and disagreement.

The distinction Nonaka makes between tacit and explicit knowledge is derived from

Polanyi (Polanyi and Prosch, 1975). Nonaka and Takeuchi maintain that ‘knowledge

is created and expanded through social interaction between tacit and explicit knowledge’ (1995, p. 61) in the four modes of knowledge conversion described above.

However, as Tsoukas points out, Polanyi was actually arguing that tacit and explicit

knowledge are not two separate forms of knowledge, but rather that ‘tacit knowledge is the necessary component of all knowledge’ (Tsoukas, 1997, p. 10).

Another point to note is how Nonaka and Takeuchi (1995) talk about knowledge

as embodied, rooted in experience and arising in interaction between individuals.

They emphasise the importance of dialogue and discussion in this conversion process (p. 13), pointing to the importance of intuition, hunches, metaphors and symbols (p. 12). They see knowledge as essentially related to action and arising from

a process in which interacting individuals are committed to justifying their beliefs.

They talk about knowledge as justified belief closely related to people’s values. They

talk about the context of ambiguity and redundancy in which knowledge is created

(p. 12). However, they then take their argument in a direction that leaves the importance of relationships and the social undeveloped and unexplored. Having emphasised the social, they locate the initiation of new knowledge in the individual when

they argue that ‘knowledge is created only by individuals’ (p. 59).

In this way of seeing things, tacit knowledge is possessed by individuals and

the knowledge creation at an organisational level is the extraction of this already

existing tacit knowledge from individuals and its spread across the organisation



120  Part 1  Systemic ways of thinking about strategy and organisational dynamics



by socialising processes. This leads to a rather linear sequential view of individuals

passing tacit knowledge to others, primarily through imitation, then formalising and

codifying it so that it can be used. The emphasis of Nonaka and Takeuchi on the

individual as the origin of knowledge leads them to emphasise the organisation-wide

intentional character of knowledge creation. Having emphasised the ambiguity of

the situation in which knowledge arises, Nonaka and Takeuchi leave this behind and

move to the strategic choice view of knowledge creation. Nonaka and Takeuchi do

not pay much attention to the ever-present possibility of groups of people becoming

stuck in some stable dynamic, or some fragmenting one that kills off the knowledge-­

creating process. What Nonaka and Takeuchi end up with, then, is a process for

knowledge creation that can be managed and controlled.

Knowledge management writers focus attention on this process of translation but

do not explain how completely new tacit knowledge comes to arise in individual

heads.



5.7  Key debates

As with strategic choice theory, the notion of organisational learning has generated

much debate. Two key debates are briefly reviewed in this section: representation

versus enactment; and the learning organisation versus organisational learning.



Representation versus enactment

This is the debate between cognitivist and constructivist psychology, which has been

mentioned above. Cognitivism takes the representational perspective in holding that

the human mind constructs accurate representations of an already given reality.

These representations are then built into mental models that form the basis upon

which people act into the real world. Cognitivists accept that mental models can

become inappropriate in a changing world and therefore become inappropriate for

action requiring the double-loop process of learning in which mental models are

changed. They accept that people are interpreting their world and in a sense constructing it through their interpretation. What they are constructing, their interpretation, can be appropriate in that it is an accurate interpretation of the real world or

it may be inappropriate in the sense of an inaccurate representation. This is a view

in which thought comes before action. Constructivism goes further than this and

takes an enactment perspective in arguing that the human body actively selects what

it is able to pay attention to and so constructs the reality into which it acts. This

is a view in which thought comes after action in that the world is first constructed

in action and then understood. These differences will be returned to in Chapter 9.



Learning organisation or organisational learning:

the individual versus the group

Do organisations learn or is it individuals and groups in organisations who learn?

If one thinks that it is individuals and groups inside an organisation that learn,

then one focuses attention on individual and collective learning processes. If it is







Chapter 5  Thinking in terms of organisational learning and knowledge creation   121



thought that it is organisations that learn, then attention is focused on what it

is about an organisation that makes learning possible. A distinction along these

lines is used by Easterby-Smith and Araujo (1999) to identify two strands in the

literature to do with organisations and learning. They distinguish between the literature on organisational learning and that on the learning organisation. They say

that the former ‘has concentrated on the detached observation and analysis of the

processes involved in individual and collective learning inside organisations’ (p. 2).

The literature on the learning organisation, on the other hand, is concerned with

‘methodological tools which can help to identify, promote and evaluate the quality

of learning processes inside organisations’ (p. 2) and in so doing this literature identifies ‘templates, or ideal forms, which real organisations could attempt to emulate’

(p. 2). Easterby-Smith and Araujo argue that there is a growing divide between the

two strands. Those writing in the organisational learning tradition are interested in

‘understanding the nature and processes of learning’ (p. 8). Those writing in the tradition of the learning organisation are more interested in ‘the development of normative models and methodologies for creating change in the direction of improved

learning processes’ (p. 8).

Easterby-Smith and Araujo distinguish between a technical and a social strand

in the organisational learning literature. The technical strand takes the view that

organisational learning is a matter of processing, interpreting and responding to

quantitative and qualitative information, which is generally explicit and in the public domain. Key writers in this tradition are Argyris and Schön (1978) with their

notions of single- and double-loop learning. The social strand focuses attention on

how people make sense of their work practices (Weick, 1995). This strand utilises

Polanyi’s distinction between tacit and explicit knowledge (Polanyi and Prosch,

1975). It focuses attention on the socially constructed nature of knowledge (Brown

and Duguid, 1991), the political processes involved (Coopey, 1995) and the importance of cultural and socialisation processes (Lave and Wenger, 1991). The literature

on the learning organisation also displays technical and social interests. The former

tends to focus on interventions based on measurement and information systems,

while the latter focuses on individual and group learning processes in a normative

manner (Isaacs, 1999; Nonaka and Takeuchi, 1995; Senge, 1990).

However, the claim that organisations learn amounts to both reification and

anthropomorphism. We slip into thinking that an organisation is a thing, even an

organism or living thing, that can learn. To sustain the claim that an organisation

is in any sense a living organism, we would need to point to where this living body

is. Since an organisation is neither inanimate thing nor living body, in anything

other than metaphorical terms, it follows that an organisation can neither think

nor learn. But the alternative is not all that satisfactory either. To claim that it is

only ­individuals who learn is to continue with the major Western preoccupation

with the autonomous individual and to ignore the importance of social processes.

One might try to deal with this objection by saying that it is both individuals and

groups who learn. But that runs into the same objection as saying that organisations

learn. The claim that groups learn is also both reification and anthropomorphism.

­Furthermore, to talk about individuals who learn in organisations or in groups is

also problematic because, once again, this implies that the group and the organisation exist somewhere as a different ‘place’ or ‘level’ from people. If this were not so,

how could people be in a group or organisation? Part 3 will suggest an alternative to



122  Part 1  Systemic ways of thinking about strategy and organisational dynamics



thinking in these ways: namely, that learning is an activity of interdependent people,

­exploring in a different way the emphasis that writers such as Wenger place on the

socially constructed nature of knowledge.



5.8  How learning organisation theory deals with the four key questions

At the end of Chapter 2, we posed four questions that we would ask of each of the

theories of organisational change that this book is concerned with. They were:

1.What theory of human psychology – that is ways of knowing and behaving – does

systems dynamics/learning organisation theory assume (including the relationship

between individual and group and the extent to which they are concerned with

questions of emotion and power)?

2.How does the theory understand the nature of human action and interaction?

3.What methodology does systems dynamics/learning organisation theory assume

(the spectrum of realist through to social constructionist)?

4.How does systems dynamics/learning organisation theory deal with contradictions?

Then in Chapter 4, we examined the answers to these questions suggested by strategic choice theory. Consider now how they are answered from the organisational

learning perspective.



Q1  The nature of human knowing and behaving

Learning organisation theory draws on cognitivist, constructivist and humanistic

psychology to understand the nature of human beings. The cognitivist assumptions

are particularly clear in that individuals are understood to act upon the basis of

mental models built from previous experience and stored in the individual mind.

They are representations of the individual’s world. Part of each individual’s model is

shared with others and this forms the basis of their joint action together. The focus

on the individual nature of these models, their representation function, the claim

that they are stored and shared, the belief that they can be surfaced and subjected

to rational scrutiny, are all hallmarks of a cognitivist psychology. However, the

way in which mental models select some aspects of reality for attention and exclude

others is a feature of a constructivist approach to psychology. The emphasis placed

on individual vision and fulfilment, as part of the learning process, is evidence of

the humanistic leaning in the theory of the learning organisation.

In all of these psychological theories the individual is held to be prior and primary

to the group. Mental models are individual constructs that are shared with others.

Effective teams are composed of a balance of different types of individual. Note,

however, how differences between individuals do not feature in a fundamental way

in the learning organisation theory. A small number of different categories may be

identified but the difference is located between categories, while within those categories everyone is implicitly assumed to be the same. This is consistent with a systems

dynamics approach in which micro-entities are all assumed to be average and their

interactions are assumed to be homogeneous. To emphasise: cohesion and sharing







Chapter 5  Thinking in terms of organisational learning and knowledge creation   123



are seen as the foundations of effective learning. There is no notion that deviant and

eccentric behaviour might be essential to any creative and innovative thinking and

behaving. We are bringing this to the reader’s attention because in Part 3 we will be

arguing that organisations change in novel ways through deviant behaviour.

The group is treated in a particular way. It consists of individuals and develops in phases, only some of which are conducive to members learning together as

individuals.

So, learning organisation theory uses the same psychological theories as strategic

choice theory but it does place more emphasis on emotion and relationships between

people. It also identifies more clearly what may block people from changing and

learning. The importance of power receives more attention but power is still located

in the individual, and employees are invited to consent to give up their power in

order to achieve consensus. However, there is no fundamental change in the view of

human action as one moves from the one theory to the other.



Q2  The nature of action and interaction: theories of causality

Learning organisation theories see interaction in systemic terms just as cybernetics

does. They are concerned with how components, entities or individuals interact to

produce a system. They understand the system in the terms of systems dynamics,

and this, like cybernetics, is a theory that focuses on the macro level. They identify

the feedback structure of the system. It does not attempt to model the micro detail

of the entities constituting a dynamic system. Two assumptions are implicitly made

about these entities, events or individuals in systems dynamics (Allen, 1998a):

• First, it is assumed that micro-events occur at their average rate and that it is

sufficient to take account of averages only. Interactions between entities are then

homogeneous.

• Second, it is implicitly assumed that individual entities of a given type are identical, or, at least, that they have a normal distribution around the average type.

The entities, or events, are thus implicitly assumed to be homogeneous. Within a

category, distinctive identities and differences are not taken into account.

These assumptions make it possible to ignore the dynamics governing the micro-­

entities, events or individuals and model the system at the macro level. This is done

by specifying the structure of negative and positive feedback loops that drive the

system. For example, the beer distribution system, described earlier in this chapter,

is specified in terms of damping and amplifying loops between orders, inventories

and shipments between the different components of the system, namely customers,

retailers, wholesalers and producers. Nothing is said about how customers, retailers,

wholesalers and producers are organised or how they make decisions. This kind of

model yields insight into the dynamics of the system as a whole and the possibility

of unexpected outcomes. The way systems dynamics is used in learning organisation

theory amounts to adding positive feedback loops to a cybernetic system.

However, there are also major differences compared with cybernetics. Because

of the presence of positive feedback loops, the dynamic is no longer an automatic

movement towards an equilibrium state. Instead, the system is a non-equilibrium

one with the dynamics of fluctuating patterns that create considerable difficulties

for prediction over longer time periods. However, it is claimed that, if the feedback



124  Part 1  Systemic ways of thinking about strategy and organisational dynamics



structure of the system is understood, then leverage points can be located. Action at

these leverage points makes it possible to control the system. In the end, however, the

theory of causality underlying systems dynamics is formative cause just as it is with

cybernetics. In systems dynamics the system unfolds archetypes already enfolded

in it. People are still thought to be parts of a system and so not free. Because of its

­theory of causality, systems dynamics cannot explain novelty or creativity.



Q3  Implied methodology for making sense of phenomena

The methodological stance in learning organisation theory is similar to that in strategic choice theory in some respects. A realist position is sometimes implied in which

managers are assumed to be able to stand outside the system of which they are a

part and think systemically about it. They are also supposed to be able to stand outside their own mental models, rigorously scrutinise them and then rationally change

them. However, at other times an idealist position is suggested in that managers

are assumed to respond not to the real world but to their idea of the real world as

represented in their mental models.



Q4  Dealing with contradiction

Tensions, contradictions and dilemmas are certainly recognised in learning organisational theory but they are thought to be obstacles to learning and hopefully in the

end resolvable. The notion of paradox does not play a fundamental part. As with

strategic choice theory, learning organisation theory takes a position at one of the

poles of what seem to us to be fundamental paradoxes of organisational life. This

is very clear in the case of the individual and the group. We argue above that this

is not seen as a paradox at all. The individual is given primacy and understood to

be in fundamental conflict with the group. This conflict must be resolved through

building relationships of trust in teams if learning is to take place. Sameness and

difference are not held in mind at the same time. For example, individuals within

a personality category are treated as if they were all the same and all different

from individuals in another category. Although unpredictability is pointed to, it is

predictability and the possibility of control that are emphasised. As with strategic

choice theory, order, stability, consistency and harmony are all seen as prerequisites

for success and the role that the opposites of these might play in creativity is largely

ignored.



Making sense of experience

The focus on learning, and what blocks it, provides a rich addition to strategic

choice theory when it comes to making sense of my experience. An astute reader

will certainly recognise their own involvement in defence routines and political

struggles. He or she may also recognise the difficulty of learning in a fundamental

way. However, the theory holds out a rather idealised picture of what it is possible

for people in an organisation to do.

For example, Argyris (1990) reports that he has worked with large numbers of

managers in many countries, coaching them to engage in double-loop learning.

He reports that they find it difficult and rarely engage in it when they return to



Chapter 5  Thinking in terms of organisational learning and knowledge creation   125







their workplace. Instead, they carry on with their win/lose dynamics and their

defence routines. This immediately raises a question mark over his theory of

learning as a change in mental models. Many organisations clearly do change,

often in quite creative ways. How does this happen if double-loop learning is such

a rarity? Furthermore, we wonder whether it really is possible for people to surface their mental models and change them. Where are they located? It is far from

clear that brains store anything that could be correlated with a map or a model.

If it is possible for people to identify assumptions of which they are unaware and

change them, then why is mental illness so prevalent and difficult to deal with? It

is a tall order to simply identify whatever it is that makes us think the way we do,

and then simply change it.

In the hurly-burly of organisational life, with its political intrigues and the possibility of losing one’s job, is it at all wise to expose the defence routines that one is

taking part in? If it is so important to do so, why is it so rare to find people doing it?

When we ask ourselves questions such as these, we may begin to have serious

doubts about the practicality of the prescriptions this theory presents for successful organisational learning. For example, the kind of conversation that the theory

of organisational learning presents is a special kind called dialogue which has the

rather mystical tones of people participating in a common pool of meaning as if

it were an already existing whole outside their experience. There seems to be no

constructive place here for ordinary conversation. Also, participation has a special

meaning – participation in some whole system outside our direct experience of interacting with each other (Griffin, 2002).



5.9  Summary

This chapter introduced systems dynamics theory and clarified how it differs from

cybernetics. The most significant difference relates to the introduction of nonlinearity and positive feedback. The way in which positive feedback processes have been

used to understand life in organisations was reviewed. From this it can be seen that

a systems dynamics perspective presents a richer, more complex insight into the

­dynamics of life in organisations.

This chapter has also reviewed learning organisation theory. According to this

theory, organisations are systems driven by both positive and negative feedback

loops. The interactions between such loops tend to produce unexpected and often

counterintuitive outcomes. Perfect control is not possible, but it is possible to identify

leverage points where control may be exerted. Perhaps the most important loops

relate to learning. Organisations learn when people in cohesive teams trust each

other enough to expose the assumptions they are making to the scrutiny of others

and then together change shared assumptions which block change. The theory identifies some important behaviours that block this learning process. Although learning

organisation theory uses a different systems theory from strategic choice theory, its

conceptualisation of that systems theory in terms of feedback loops keeps it close to

cybernetics. Learning organisation theory is built on the same psychological theories as strategic choice theory. Control and the primacy of the individual are central

to both.



126  Part 1  Systemic ways of thinking about strategy and organisational dynamics



Further reading

Richardson (1991) provides an account of the use of feedback thinking in human systems and

Senge’s (1990) book gives a summary of systems thinking. Rush et al. (1989) explain how

personality types affect decision making, as do Belbin (1981) and Kiersey and Bates (1978).

Argyris (1990) is important reading. Critiques of learning organisation theory from a system

perspective are to be found in Flood (1999) and from a process perspective in Griffin (2002).

Wenger’s (1998) book on communities of practice is an important source for understanding

the notion of communities of practice.



Questions to aid further reflection

1. What theory of causality is reflected in systems dynamics?

2. How is the conceptualisation of control different in systems dynamics from that in

cybernetics?

3. What are the basic features of constructivist psychology?

4. What implications do theories of organisational learning and knowledge creation have

for strategy?

5. Can organisations learn?

6. Do you think it is possible for people to change their mental models?

7. If double-loop learning is as difficult for people as some writers claim then how do

organisations change?



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Chapter 6



Thinking in terms

of organisational

psychodynamics

Open systems and

psychoanalytic

perspectives

This chapter invites you to draw on your own experience to reflect on and consider the

implications of:

• The nature of unconscious group processes in organisational life and the part

that they play in the activities of managing

and strategising.

• How people in organisations deal with

the experience of anxiety, particularly the

social defences against anxiety that they

employ, and the effects these have on

how an organisation evolves.



• The role of leaders and how this is

­co-created in groups, particularly in its

neurotic form.

• The nature of groups and teams and the

irrational processes that affect team formation and functioning.



This chapter is important because it draws attention to the unconscious, irrational

and neurotic and the part that all of these play in the evolution of an organisation. It

provides a fuller understanding of the leadership role and how it arises, particularly

the negative aspects and the way leaders play a role in the fantasies of others, so

providing a very different perspective from the charismatic hero view of leadership in

learning organisation theory. This is a useful antidote to the generally idealistic view

of teams taken in theories of the learning organisation.



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