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Organizational Knowledge Essay

Organizational Knowledge – Useful Construct or Misleading Distraction?  Or Both?

Organizational knowledge is the understanding and comprehension of organizational affairs and activities that is acquired by people in the network through time and in the course of his interaction with the people in the organization and in the process of doing his specific tasks therein.  Thoroughly knowing one’s company and one’s job therein is an advantage for an employee during his stay therein.  It can be equated to being aware of what is going on in the big picture that one’s department or one’s company is part of while the rest in the same company just got themselves busy with their specific roles and duties.

When an employee eventually leaves a company and lands on his next job, all the things that he has learned in the duration of his last employment go with him and will henceforth make up a part of him – his professional skills, his professional network, his added value and his capabilities.  After leaving his previous employer, he moves on to the next stop in the journey through his professional life.  He brings with him, though, a wealth of knowledge and network that no one will be

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able to take away from him.

The question, then, is whether such organizational knowledge will serve to be a helpful tool, a detriment? Or both?  Will it be a useful construct or a misleading distraction?  Or both?

“The volume of social network research in management has increased radically in recent years (Borgatti & Foster, 2003, p. 991).  Social capital is ‘just’ a powerful renaming and collecting together of a large swath of network research from the social support literature to social resource theory.  In management, social capital promises to bring together a variety of research relating a person’s ties or network position to significant outcomes such as power, leadership, mobility, employment, individual performance, individual creativity, entrepreneurship, and team performance (Borgatti & Foster, 2003, p. 993).

Social capital has been defined by Coleman, Putnam and others in terms of broad cross-cutting interconnections among all group members.  A similar and related line of investigation reverses the usual logic of social capital and examines the negative consequences of social capital – the so-called ‘dark side’ in which social ties imprison actors in maladaptive situations or facilitate undesirable behavior.  Social capital literature has been used to explain well-known relationships between minority status and job mobility.  Seidel et al suggest that minorities have fewer ties (i.e. social capital) in the organization, and that people with fewer ties have less successful salary negotiations.

Hence, a network process provides the mechanism that relates minority status to less successful salary negotiations.  Similarly, McGuire concludes that network characteristics explain the racial and gender differences in employee status, and James suggests that social capital mediates the relationship between race and social support among organization managers.  More recent empirical work has focused on the performance benefits of embedded ties, which are often associated with closer and more exclusive business relationships (Borgatti & Foster, 2003, p. 994).  It is argued that the decree of overlap of two individuals’ friendship networks varies directly with the strength of their tie to one another.

The personal experience of individuals is closely bound up with larger-scale aspects of social structure, well beyond the purview or control of particular individuals (Granovetter, 1973, p. 1377).  Weak ties, often denounced as generative of alienation are seen here as indispensable to individuals’ opportunities and to their integration into communities (Granovetter, 1973, p. 1378).  Embedded ties have been found to affect the choice of joint ventures partners, the cost of capital, consumer purchasing decisions, the continuity of client relations, and the performance of firms with close ties to both competitors and suppliers.

Intertwined with embeddedness literature is the literature on network organization.  As commerce became more global, hypercompetitive and turbulent, both markets and hierarchies displayed inefficiencies as modes of organizing production.  In their place, a network organizational form emerged that balanced the flexibility of markets with the predictability of traditional hierarchies. (Borgatti & Foster, 2003, p. 995).  Board interlocks, or ties among organizations through a member of one organization sitting on the board of another, are seen as means to manage organizational dependencies and maintain power and control for social elites.

In recent years, the focus has shifted toward an informational perspective that sees interlocks as a means by which organizations reduce uncertainties and share information about acceptable and effective corporate practices.  Scholars have used board interlocks to explain the diffusion of poison pills, corporate acquisition behavior, the adoption of organizational structures, CEO pay premiums, joint venture formation, and the use of imitation strategies in general (Borgatti & Foster, 2003, p. 996).

The term ‘knowledge management’ may soon disappear as practitioners rush to disassociate themselves from the relatively unsuccessful effort to use technological solutions to help organizations store, share and create new knowledge.  They current mantra is that knowledge creation and utilization are fundamentally human and above all social processes.  The basic idea is that new practices and concepts emerge from interaction of individuals engaged in a joint enterprise; the classic example is members of a functional department, such as claims processors in an insurance firm (Borgatti & Foster, 2003, p. 997).

What is new here is that this seemingly arcane distinction may be traceable to different underlying conceptions of how ties work (girders vs. flows), and applies to all kinds of network research, including distinguishing between the two major variants of social capital theory (Borgatti & Foster, 2003, p. 1005). Whereas researchers studying product innovation have found that a tight coupling and extensive communicatin between two departments or business units is most effective, some social network researchers have argues that a loose coupling – weak ties – is most beneficial.

The finding in this study that tie weakness and knowledge complexity interact to explain project completion time provides some evidence for the contention that social network research that considers task outcomes could benefit from a richer conceptualization of knowledge.  Some network scholars have argued that sparse networks characterized by nonredundant and weak contacts are most beneficial for instrumental tasks such as obtaining advice, whereas dense (i.e., more cohesive) networks are more advantageous for conveying normative expectations, identity, and affect.

Sparse networks (i.e., those with many weak and nonredundant contacts) are most advantageious for instrumental tasks.  The implication is that social network research could provide a more complete account of the role of instrumental network ties in organizations by considering search and transfer as well as various forms of knowledge that flow through network relations (Hansen, 1999, p. 107).  Findings confirmed that the use of interdivisional knowledge is effective in innovation activities (Miller, Fern & Cardinal, 2007, p. 320).  It is perhaps easiest to think about the notion of a ‘knowledge community’ in the Democratic and Consulting models.

However, other corporate structures nonetheless have community aspects:  They are groups of people who share resources (documents, a.k.a. knowledge resources), who share a concern for the maintenance and use of those resources, and who derive common and individual benefits from those resources.  Communities outside of a corporate or on-line setting are known to have diverse structures and dynamics, and to manage their authority and shared resources in a variety of ways.

The role of knowledge/authority staff appears to be crucial in the identification, definition, distribution and refinement of knowledge in these hierarchical knowledge organization models (Muller & Millen, 2000).”


Borgatti, S.P. & Foster, P.C.  (2003).  The Network Paradigm in Organizational Research:  A    Review and Typology.  Journal of Management 29(6), 991-1013.

Granovetter, M.S.  (1973).  The Strength of Weak Ties.  American Journal of Sociology, 6,        1360-1380.

Hansen, M.T.  (1999).  The Search-Transfer Problem:  The Role of Weak Ties in Sharing            Knowledge Across Organization Subunits.  Administrative Science Quarterly, 441, 82-           111.

Miller, D.J., Fern, M.J. & Cardinal, L.B.  (2007).  The Use of Knowledge for Technological       Innovation Within Diversified Firms.  Academy of Management Journal, 50(2), 308-326.

Muller, M.J. & Millen, D.R.  (2000).  Social Construction of Knowledge and Authority in         Business Communities and Organizations.  Lotus research.  Retrieved from:              http://domino.watson.ibm.com/cambridge/research.nsf/c9ef590d6d00291a85257141004a            5c19/64d5be552434b27d85256aaf00502120/$FILE/social%20construction-       michael%20muller-paper.pdf

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