STRATEGIC MANAGEMENT (SM)

GROUP ASSIGNMENT-1

Organisational DNA for Strategic Innovation

vs
The Knowledge Creating Company

Group 06 Members

S.No. Group Members Roll Numbers

1. Vijay Mohan Sharma CCBMDO/19-20/A54

2. Raghubir Sinha CCBMDO/19-20/A34
3. Gautham YB Reddy CCBMDO/19-20/A59
4. Sushma Rawat CCBMDO/19-20/A51
5. Prabhakar Bhatt CCBMDO/19-20/A31
 STRATEGIC MANAGEMENT (SM)

GROUP ASSIGNMENT-2
CCBMDO – 16 (Group 06)

Organisational DNA for Strategic Innovation

vs
The Knowledge Creating Company

Statement

The articles about the Knowledge Creating Firm (Nonaka) and Organizational DNA (Govindarajan and
Trimble) both discuss knowledge creation in Innovation. With reasons, state which pieces of advice are
similar in the two articles and which advice are distinct or different.

Similar Pieces of Advice from Both Studies

Piece of Advice (reasoning based on excerpts from articles) Reference

Both articles argue that in the backdrop of rapidly changing economic
background, for companies to thrive, remain viable and be relevant,
• Organisational DNA
companies must innovate with entrepreneurship.
for Strategic innovation,
CMR Vol. 47, No. 3, Para
In an economy where the only certainty is uncertainty, the one sure source
3 Page No. 47
of lasting competitive advantage is knowledge. When markets shift,
technologies proliferate, competitors multiply, and products become
• The Knowledge-
obsolete overnight, successful companies are those that consistently
Creating Company, HBR
create new knowledge, disseminate it widely throughout the organisation,
| July-August 2007, Para
and quickly embody it in new technologies and products. These activities
3 Page No. 162
define the “knowledge-creating” company, whose sole business is
continuous innovation.
In the process of strategic innovation, organisations explore fundamentals • Organisational DNA
questions of business definition, by altering at least potential customers/ for Strategic innovation,
conceptualisation of delivered customer value and design of end-to-end CMR Vol. 47, No. 3, Para
value-chain architecture. 1 Page No. 48

Few companies have become famous for their ability to respond quickly • The Knowledge-
to customers, create new markets, rapidly develop new products, and Creating Company, HBR
dominate emergent technologies. The secret of their success is their | July-August 2007, Para
unique approach to managing the creation of new knowledge. 2 Page No. 164
Both articles promote the idea of borrowing knowledge for innovation by • Organisational DNA
deliberating on the ‘borrowing challenge’ and the ‘spiral of knowledge’ for Strategic innovation,
respectively. The borrowing challenge poses thoughts about selection of CMR Vol. 47, No. 3, Para
links between NewCo and CoreCo, favourable conditions for borrowing, 5 Page No. 60
managing ongoing interactions between NewCo and CoreCo. The

2 Group 06 (CCBMDO-16)
 Piece of Advice (reasoning based on excerpts from articles) Reference
distinction between tacit and explicit knowledge suggests four basic • The Knowledge-
patterns for creating knowledge in any organisation, viz, from tacit to Creating Company, HBR
tacit, from explicit to explicit, from tacit to explicit and from explicit to| July-August 2007, Para
tacit. 12 Page No. 164
• Organisational DNA
Both articles advocate sharing of the organisation past knowledge for Strategic innovation,
(borrowing & tacit to explicit arguments). In that, the company receiving CMR Vol. 47, No. 3, Para
the created knowledge is utilising the already well-established brand. This 5 Page No. 60
activity will confer a tremendous advantage over the existing competition.
Thus, both the authors strongly advocate that creation & transfer of • The Knowledge-
relevant knowledge including domain expertise will offer a lot of Creating Company, HBR
advantage over other competitors/ companies | July-August 2007, Para
5&6 Page No. 165
Organisational DNA article illustrates that innovation initiatives that only
require borrowing can be characterized as new product/ service launches
or when “borrowing” takes place from “CoreCo” to “NewCo” having
some overlapping goals.
Throughout both articles
Similarly, Knowledge Creation Company article presents arguments
favouring that the essence of innovation is to recreate the world according
to a particular “vision/ideal”.

Distinct/ Dissimilar Pieces of Advice from Both Studies

Piece of Advice (reasoning based on excerpts from articles) Reference

• Organisational DNA
for Strategic innovation,
Organisational DNA article revolves around the CEOs being the core
CMR Vol. 47, No. 3, Para
decisive body.
3 Page No. 51-52
The Knowledge-Creating Company article argues that that the central
• The Knowledge-
activity of knowledge-creating company takes place at all levels of the
Creating Company, HBR
company.
| July-August 2007, Para
2 Page No. 165
The article Organisational DNA majorly revolves around the arguments
and explanation of strategic innovation based on the trade-offs between
forgetting and borrowing.
Throughout both articles.
The Knowledge-Creating Company article bases its article on knowledge-
creation through tacit and explicit knowledge.
Organisational DNA article revolves around the core that Structure, Staff,
Systems and Culture determine organisation DNA. Throughout both articles.

3 Group 06 (CCBMDO-16)
 Piece of Advice (reasoning based on excerpts from articles) Reference
Knowledge-Creating Company article themes around the interaction
between tacit and explicit knowledge is by an individual, not an
organization.
The article Organisational DNA brings out that the organizations struggle
when trying to manage an existing business and a related new strategic
experiment simultaneously. The new venture must forget much of what
has helped the corporation become successful but must borrow its
resources at the same time. To overcome the challenges posed by strategic
innovation, organizations must adopt a dual-purpose design. In dual-
purpose organizations, the core business and the new venture are distinct
subunits within the corporation and have very different DNA. The new
firm must also hire outsiders at the operational and management level,
create its own business functions and processes, develop its own
performance measures, and establish its own unique culture of
Throughout both articles.
experimentation and learning.

In the article Knowledge-creation company, illustrations to back the

arguments have been given from Japanese and Western societies where
companies have developed different understandings of what it means to
learn and to innovate. Knowledge is taken as the basis for what an
organization does, but it’s important to know that creating knowledge can
be as important as processing knowledge. A key idea is that some
knowledge is tacit and other is explicit. Western philosophy is described
as focused more on explicit knowledge. Japanese thought has tended to
treat tacit knowledge as more important.
Organisational DNA Article. Organizations struggle when trying to
manage an existing business and a related new strategic experiment
simultaneously. The new venture must forget much of what has helped
the corporation become successful but must borrow its resources at the
same time. To overcome the challenges posed by strategic innovation,
organizations must adopt a dual-purpose design. In dual-purpose
organizations, the core business and the new venture are distinct subunits
within the corporation and have very different DNA. The new firm must
also hire outsiders at the operational and management level, create its own
Throughout both articles.
business functions and processes, develop its own performance measures,
and establish its own unique culture of experimentation and learning.
Once the new firm has overcome the difficulties that accompany
borrowing, it can borrow, among other things, the core enterprise's
physical assets (such as manufacturing capacity), brands, expertise, and
process outputs. In order to become a distinct organization capable of
exploiting links to the core firm, the new strategic venture must be
carefully supervised.

4 Group 06 (CCBMDO-16)
 Piece of Advice (reasoning based on excerpts from articles) Reference
The knowledge-Creating Company. Argues that metaphors and analogies
are used to help provide a framework for thinking about things that can’t
be easily described. As such, metaphor is highly effective in fostering
direct commitment to the creative process in the early stages of
knowledge creation. Second, knowledge moves from an individual to an
organization; teams provide a shared context and multiple points of view.
Finally, ambiguity and redundancy are used; ambiguity lets many things
fit within a framework; redundancy lets a group explore many aspects of
a direction before deciding where to go.
• Organisational DNA
In Organisational DNA article, the authors advise the managers of for Strategic innovation,
“NewCo” & “CoreCo” to report to the Senior Executive. CMR Vol. 47, No. 3, Para
3 Page No. 58
In Knowledge Creating firm article, the author does not advise the
managers to report to any Senior Executive as they believe that all levels • The Knowledge-
in the organisation have a firm role to play and are fully committed to the Creating Company, HBR
mission of the firm & its goals. | July-August 2007, Para
1 & 2 Page No. 165
• Organisational DNA
The Organisational DNA article advocates that the “NewCo” leave for Strategic innovation,
behind some of the competencies that support “CoreCo” & build new CMR Vol. 47, No. 3, Para
ones. 6 Page No. 52

The authors of Knowledge Creating Company article advocates the • The Knowledge-
foundation for creation/ transfer of knowledge on the competencies of the Creating Company, HBR
source company. | July-August 2007, Para
9 Page No. 165

5 Group 06 (CCBMDO-16)