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‘Knowledge management practices’ and path-dependency in innovation

‘Knowledge management practices’ and path-dependency in innovation

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Ž .
Research Policy 27 1998 237–253
Knowledge management practicesand path-dependency ininnovation
Rod Coombs
)
,1
, Richard Hull
 ESRC Centre for Research on Inno
Õ
ation and Competition, Manchester M13 9QH, UK 
Received 6 October 1997; revised 13 January 1998; accepted 13 March 1998
Keywords:
Knowledge management; Path-dependency; Innovation
1. Introduction
An increasing number of researchers and com-mentators have recently been turning their attentionto ‘knowledge management’,
2
and particularly therole of knowledge management in innovation.
3
Itseems that there are two major underlying influenceswhich are at work in these discussions and that theyboth have complementary and contradictory features.The first of these influences can be seen as ‘inter-nalto innovation research and it is the literature
)
Corresponding author.
1
Also at Manchester School of Management, UMIST, Manch-ester M60 1QD.
2
See I. Nonaka, A dynamic theory of organizational knowl-
Ž .
edge creation, Organization Science, Vol. 5 1 , 1994, pp. 14–47;Andrew C. Inkpen, Creating knowledge through collaboration,
Ž .
California Management Review, Vol. 39 1 , 1996, pp. 123–140;Chris Marshall, Larry Prusak, David Shpilberg, Financial risk andthe need for superior knowledge management, California Manage-
Ž .
ment Review, Vol. 38 3 , 1996, pp. 77–101; Economist Intelli-gence Unit, in co-operation with IBM Consulting Group, TheLearning Organisation: Managing Knowledge for Business Suc-cess. The Economist Intelligence Unit, New York, 1996; Georg
Ž .
von Krogh, Johan Roos Eds. , Managing Knowledge: Perspec-tives on Cooperation and Competition, Sage, London, 1996; An-nie Brooking, Intellectual Capital: Core Asset for the Third Mille-nium Enterprise, International Thompson Business Press, London,1996.
which synthesises the received findings of ‘innova-tion studies’ into an evolutionary economics perspec-tive on technical change.
4
The central feature of thiswork for our purposes is its weaving together of the
3
In particular, see Dorothy Leonard-Barton, Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation.Harvard Business School Press, Boston, 1995. See also Abdelka-der Daghfous, George R. White, Information and innovation: acomprehensive representation, Research Policy, Vol. 23, 1994, pp.267–280; Max H. Boisot, Is your firm a creative destroyer?Competitive learning and knowledge flows in the technologicalstrategies of firms, Research Policy, Vol. 24, 1995, pp. 489–506;Inge C. Kerssens-van Drongelen, Petra C. de Weerd-Nederhof,Olaf A.M. Fisscher, Describing the issues of knowledge manage-ment in R&D: towards a communication and analysis tool, R&D
Ž .
Management, Vol. 26 3 , 1996, pp. 213–229. Many of thesediscussions are additionally informed by broadly economic per-spectives on learning and innovation, especially Wesley M. Co-hen, Daniel A. Levinthal, Absorptive capacity: a new perspectiveon learning and innovation, Administrative Science Quarterly,Vol. 35, 1990, pp. 128–152.
4
Indeed, it could be argued that the major thrust of ‘innovationstudies’ is
predicated 
on the ideas enshrined in the concept of ‘path-dependency’—namely, that innovation is evidently and ob-servably not random; that it is, on the other hand, dependent on avariety of factors; that those factors to a certain extent determine a‘trajectory’ or path for many classes of innovation; and that hence,one can make reasonable estimates about the future genesis andsuccess of many classes of potential innovation.0048-7333
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1998 Elsevier Science B.V. All rights reserved.
Ž .
PII 
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( ) R. Coombs, R. Hull
r
 Research Policy 27 1998 237–253
238
observed path-dependency of innovation, with thefirm-specificity of the routines which generate inno-vation. For example, Metcalfe and de Liso
5
elabo-rate the idea that a business unit will have a specific‘normal design configuration’, a shared mentalframework of fundamental design concepts relatingto specific technologies, providing the ‘operationalroute’ to specific artefacts. Thus, the perspective inthis literature links knowledge to innovation by fo-cusing on firm-specific routines which stabilise cer-tain bodies of knowledge, embed them in the sharedunderstandings within the firm, and provide tem-plates for deploying that knowledge to produce inno-vations which have a distinctive organisational ‘sig-nature’.
6
The second underlying influence in the ‘knowl-edge management’ literature has arisen at the inter-face of innovation research and management re-search. It derives from the perceived increase inimportance of knowledge as a factor of productionand as a driving force in broader changes in thenature of contemporary economies, and in the enter-prises which operate in those economies. One of thekey reference points in the emergence of a new focuson ‘knowledge management’ in enterprises is thework of Nonaka.
7
Arising originally from empirical
5
Stanley J. Metcalfe, Nico de Liso, Innovation, Capabilitiesand Knowledge: The Epistemic Connection, paper presented tothe 3rd international conference on Advances in Sociological and
Ž .
Economic Analysis of Technology ASEAT , Manchester,September 1995. Forthcoming in Technology and Organisations,
Ž .
Rod Coombs, Ken Green, Albert Richards, Vivien Walsh Eds. ,Edward Elgar, London, 1998.
6
We are grateful to one of the anonymous referees for pointingout that there are, of course, a great many studies which suggestlinks between knowledge and innovation through focusing on theroutines and processes within R&D and product development.However, these have generally been post hoc categorisations, of particular routines and processes, as entailing a ‘knowledgeelement, such as knowledge dissemination. They have not beenempirical studies of those routine activities and processes whichare explicitly intended for, or understood as, ‘knowledge manage-ment’.
7
Nonaka, 1994, op. cit. See also I. Nonaka, The Knowledge
Ž .
Creating Company, Harvard Business Review, No. 69 1991 ; andI. Nonaka, H. Takeuchi, The Knowledge Creating Company: HowJapanese Companies Create The Dynamics of Innovation, OxfordUniversity Press, Oxford, 1995.
studies of new product development in Japanesefirms, Nonaka has developed a model of the variousways in which organisations create knowledge andhas suggested a style of management and an organi-sational structure for best managing the knowledgecreation process, namely the ‘hypertext organisation’.
Ž
Central to the model as indeed to much other wor
.
on knowledge management is Michael Polanyi’sdistinction between tacit and explicit knowledge.Nonaka argues that tacit and explicit knowledge canbe converted from one to the other and his mainfocus is managing the interactions between the four‘modes of knowledge conversion’. Another majorcontributor is Dorothy Leonard-Barton
8
who basesher discussion more firmly on the ‘core competence’strategy literature and has a focus on what she calls‘‘the
whole system
of knowledge management’’
Ž .
ibid, pp. 271–272, original emphasis , which is seento be an integral element of competitive advantage,or ‘core technological capability’. Her specific inter-est is in the ‘key knowledge-building’ activities—shared problem solving, implementing and integrat-ing new technical processes and tools, experimentingand prototyping, and importing and absorbing tech-nological and market knowledge.In many ways, these two perspectives—the evolu-tionary economics perspective and the ‘knowledge-centred-model of the enterprise’—are compatiblewith each other.
9
At the very least, it can be arguedthat they have considerable potential to enrich andilluminate each other. However, in one crucial re-spect they present different pictures of the nature of,and possibilities for, ‘knowledge
management 
in
8
Leonard-Barton, op. cit., 1995.
9
Assumptions and arguments for such potential compatibility
Ž
though limited to an evolutionary perspective of the
firm
, as
.
opposed to a fully fledged evolutionary
economics
can be foundin many of the papers in Strategic Management Journal, Vol. 17,Winter 1996, Special Issue on Knowledge and the Firm, espe-cially J.-C. Spender, Robert M. Grant, Knowledge and the firm:
Ž .
overview Guest Editorial , pp. 5–9; Robert M. Grant, Towards aknowledge-based theory of the firm, pp. 109–122; J.-C. Spender,Making knowledge the basis of a dynamic theory of the firm, pp.45–62; and, to a certain extent, Haridimos Tsoukas, The firms asa distributed knowledge system: a constructionist approach, pp.11–25.
 
( ) R. Coombs, R. Hull
r
 Research Policy 27 1998 237–253
239
the business unit or firm.
10
This difference concernsthe extent to which a firm is intrinsically limited inthe degree to which it can modify the content andscope of its knowledge base. Simplifying somewhat,the Nonaka
r
Leonard-Barton perspective emphasisesthe potential openness of the firm to the acquisitionof external knowledge and the possibility for thefirm to increase its potential to create radically newknowledge. In a sense, it presents a relatively in-creased possibility of ‘breaking free’ of path-depend-ency. In contrast, the evolutionary economics per-spective emphasises the way in which the knowledgebase of a firm and its routines of operation
reinforce
path-dependency and limit the rate of integration of external knowledge or production of radically newknowledge. To put the problem in the language of evolutionary economics, the two perspectives pull indifferent directions on the question of the degree of variety generation which is possible
within the firm
.It is clear that variety generation within the firm is
constrained 
variety generation—but the questionwhich is posed in this discussion is the potential for
modifying
those constraints on its varietygeneration.
11
10
The unit of analysis is important here. Clearly, the predomi-nant locus of path-dependency is the business unit. But there arealso significant elements of path-dependency in the behaviour of adivision, and of a corporation, the firm as a collection of businessunits. The degree of interactions between these loci of path-de-pendency will be influenced by, among other things, the corporatemanagement style. These issues are discussed later in the paper inSections 3 and 4. Until that point we will refer to ‘the firm’ as theunit of analysis.
11
This question has recently been given a further dimension indebates on the validity of ‘knowledge-based approaches to the
Ž .
theory of the firm’. See Nikolai J. Foss a , Knowledge-basedapproaches to the theory of the firm: some critical comments,
Ž .
Organization Science, Vol. 7 5 , pp. 470–476, 1996; Kathleen R.Connor, C. K. Prahalad, A resource-based theory of the firm:
Ž .
knowledge versus opportunism, Organization Science, Vol. 7 5 ,1996, pp. 477–501; Bruce Kogut, Udo Zander, What firms do?coordination, identity, and learning, Organization Science, Vol. 7
Ž . Ž .
5 , 1996, pp. 502–518; and Nikolai J. Foss b , More criticalcomments on knowledge-based theories of the firm, Organization
Ž .
Science, Vol. 7 5 , pp. 519–523, 1996. The debate centresaround the extent to which ‘knowledge perspectives’ can explain
why firms exist at all
; this has clear implications for the ways inwhich a ‘knowledge perspective’ may inform our understandingof the degree of variety generation that may be possible within afirm.
This paper proposes an approach to understandingand researching knowledge management which isdesigned to explore this problem in more detail. Thecentral feature of the approach is a theoretical andempirical focus on knowledge management
prac
-
tices
in the firm,
12
which is in contrast to the focus,characteristic of a great deal of the current literaturein this field, on categorising different types of knowledge.
13
In particular, it will be argued that itis vital to look not only at the effects of existingknowledge management practices on innovationwithin the firm, but also to account for the creationand maintenance of new knowledge managementpractices.In Section 2 of the paper, the case for a focus onknowledge management practices is elaborated. InSection 3, a taxonomy of knowledge managementpractices is presented, with some illustrative exam-
12
In Section 2 of the paper we elaborate on our understandingof knowledge management practices as
routines
within the firm.It is worth pointing out here, however, that there is increasinginterest in analysing ‘practices’ within a number of disciplines.See for instance Tsoukas, op. cit. for a focus on ‘social practices’within the firm. Within sociology, see Stephen Turner, The SocialTheory of Practices: Tradition, Tacit Knowledge, and Presupposi-tions, University of Chicago Press, Chicago, 1994. In the historyand sociology of science and technology, see Andrew Pickering,The Mangle of Practice: Time, Agency and Science, University of Chicago Press, Chicago, 1995. Within social anthropology, Jean
Ž
Lave has suggested a focus on ‘communities of practiceJeanLave and E. Wenger, Situated Learning: Legitimate Peripheral
.
Participation, Cambridge University Press, Cambridge, 1991 .Lave’s ideas are now being utilised by some within organisationstudies, and interestingly by senior figures at the Rank Xerox PaloAlto Research Centre—see John Seely Brown, Paul Duguid,Organizational learning and communities-of-practice: towards aunified view of working, learning and innovation, Organization
Ž .
Science, Vol. 2 1 , 1991, pp. 40–57.
13
Thus, we do not base our approach around discussion of thedifferences between tacit and explicit knowledge, or between‘individual’, ‘group’ and ‘organisational’ knowledge. This ap-proach in the event appeared justified, as many of the intervieweesthemselves discussed the difficulties they found with attempting todistinguish different types of knowledge when describing theirknowledge management activities, and preferred to describe thoseactivities in terms more relevant to their everyday work experi-ence.

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