Extra-Organizational Knowledge Processes

External markets exist and perfect competition doesn’t, so sometimes you have more knowledge, something you have to decide to give to or take from the market. Machlup (1962) fond that 29% of GNP of the USA was coming from knowledge production. The public wants knowledge public as markets ensure the best use of all available knowledge.

Companies might also want external knowledge, to get new ideas or just because it is cheaper or because they just don’t have it internally. This might be as of Porter a way to gain new capabilities. Sometimes companies also share knowledge. If knowledge can be patented there is little risk and a lot of upside in terms of licensing. Otherwise secrecy might be the best option but the idea of communities of practice, with researchers publishing papers for status, might bring more to the table than potentially is list.

Edge (1979) argued that especially scientists need informal networks to keep up to date. Specialized knowledge has extra value and is extra expensive to generate. On top of that it is increasingly created in the market. Gibbons talked about Mode 1 and Mode 2 knowledge. Mode 1 is about ideas, methods, is very scientific and the producer and consumer are separated. With Mode 2 however there is a strong application context and group task focus. In reality it is mostly a mix of these two.

The dimensions of knowledge are access to and use of knowledge.

Patents, licenses, copyrights allow public access to restricted knowledge.

Trade associations, conferences and the internet are used best where we are talking about public unrestricted knowledge.

If access is private and use restricted, joint ventures, networks and alliances are best used.

For private access to unrestricted knowledge, email, phone and face-to-face communication are common.

Institutions and levels

1. Sectoral level institutions can be guild and trade associations. This is about knowledge shared at the industry level but not beyond. Often these are only an option for a few members of your stuff.

2. National level knowledge creation happens in public funds and government sponsored R&D. International collaboration might be needed to share costs, e.g. with particle physics.

Governments also need to be able to pick the winners and set policy and directives. In Japan things are a bit different as it is more about continuous improvement and less about Mode 1 knowledge development there. You have a more collective tacit knowledge too. The government in Japan does a lot of work on foresight databases and studies, taking the broader picture approach.

Foresight approaches are newer in Europe and less structured there and in the USA. IT is also seen as expensive and the industry runs more in the trial and error system.

Intellectual property

Regulatory systems created intellectual property legislation, looking at recognizing an author and setting terms for protection. IP legislation is only following technological advances though, which among others decrease the cost of production and transaction, hence increasing things that might be seen as privacy. Some believe that the power of IP is getting out of hand though.

There are two branches here:

IP is about prior registration for a wide range.

Copyright is working without registration, with creative commons being a new model here.

Global systems of administration are the World Intellectual Property Organization (WIPO) with 170 member states and the World Trade Organization (WTO).

Collaboration networks and alliances

There are different kinds of networks and they relate to the need of trust, sharing power, knowledge and information. As Kanter points out they also increase your relationship knowledge which is mostly tacit. The boundary between internal and external knowledge becomes fluid with networks.

Alter and Hage (1993) provided a categorization of types of collaboration which can be seen in Table 4.1. and 4.2.. They believe that inter-organization collaboration is an ongoing process.

What is a network organization thought? An organization is already a pattern of roles and relationships, but here we have more integration across formal boundaries (Baker, 1992). The changing linkages and loose boundaries increase flexibility. people are allocated to problems and projects.

McKiernan (1992) identified 7 basic premises of network theory:

\- networks relate organizations

\- dependence on each other is high

\- resources are firm unique (mostly)

\- networks are in a flux

\- strengths depend on links (knowledge is valued highest at the point of highest need which might not be with you)

\- information exchange is key

\- product and service characteristics influence bonding.

They are promising in fast changing technology markets but do not only have benefits but also costs. You no longer follow a strategy of killing competitors and control. You go for cost, speed and co-operation. Competition is now amongst groups. Alter and Hage argue that there are four factors necessary for a network to work:

\- willingness to cooperate

\- need for expertise

\- need for funds

\- need for adaptive efficiency

Dupond formed a virtual laboratory for example.

You do need a strategic fit (complementarity) and cultural fit (trust, …). Inter organizational dealings are complex:

\- less rules and more experience driven

\- conflicts are resolvable

\- grant autonomy

\- operational rules can’t replace contact

\- co-ordination through mixed teams

Miles et al believes that the cellular organization is coming in light of Mode 2 knowledge gaining importance in a complex world.

Technology transfer is the way knowledge is transfered across boundaries. Howells argued that lack of attention to tacit knowledge can lead to downfall. Technology transfer is among others driven by cost, time, desire for new areas to work in and acknowledging the increase in creativity through networks. There needs to be a mutual benefit for it to work.

There are two main points in this chapter. For one, it is written in the context of rapid change. Because the way knowledge is produced, especially in Mode 2 knowledge, you need to look outside your own organization.