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Autopoiesis and knowledge in the organization: Conceptual foundation for

authentic Knowledge Management

Article  in  Behavioral Science · January 2006

DOI: 10.1002/sres.745

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Systems Research and Behavioral Science
Syst. Res. 23, 39^49 (2006)
Published online inWiley InterScience (www.interscience.wiley.com)
DOI:10.1002/sres.745

& Research Paper

Autopoiesis and Knowledge in the

Organization: Conceptual Foundation
for Authentic Knowledge Management
Aquiles Limone* and Luis E. Bastias
Commerce School, Faculty of Economics and Management, Pontificia Universidad Católica de Valparaiso, Chile

Traditionally, Knowledge Management (KM) has focused primarily on the implementa-

tion of information technologies, with greater emphasis being placed on technology rather
than on information or knowledge, understanding them as epistemological entities. This
has had serious consequences, for there is the risk of converting KM in a mere fashion or
even a commercial name designed to sell certain Information Technology tools. This
paper suggests that authentic knowledge management must start with the study of the
cognitive phenomena inside the enterprise. It should not be related only with individual
knowledge and learning, but rather mainly to organizational knowledge and learning.
This paper also suggests that there is such thing as corporate learning, beyond individual
learning, for both—individuals and corporations—are cognitive systems. The scientific
arguments supporting that corporations, regarded as systemic wholes, are indeed cognitive
systems lie in the understanding of the enterprise as an autopoietic entity. The fact that the
enterprise is an autopoietic system implies that not only it has the capacity to acquire
knowledge, but also that knowledge itself, understood as effective action, determines the
viability and, indeed, the very existence of the enterprise. Hence, Knowledge Management
ceases to be an alternative administrative tool and becomes an inherent necessity for the
proper functioning of the enterprise. Copyright # 2006 John Wiley & Sons, Ltd.

Keywords Knowledge Management (KM); autopoiesis; epistemology; information; Information

Technology; cybernetics; cognitive processes; cognition; cognitive sciences; theory of the
organization

INTRODUCTION

Today the concept of knowledge undoubtedly

* Correspondence to: Aquiles Limone, Commerce School, Faculty of
Economics and Management, Pontificia Universidad Católica de
Valparaiso, Chile. E-mail: alimone@ucv.cl
arouses interest for those who study or are
involved in business management and the
economic dynamics of societies, especially in
the framework of the crucial transformation

Received 20 August 2004

Copyright # 2006 John Wiley & Sons, Ltd. Accepted 25 July 2005
RESEARCH PAPER
associated with the phenomenon generally
known as ‘globalization’.
For almost 15 years, a variety of notable
authors have concerned themselves with the
enormous utility of this concept and others—
information, data, learning, creativity and inno-
vation among others—associated with competi-
tiveness. A series of relevant traits have been
suggested as the result of the management and
generation of knowledge.
* The success of companies that demonstrate
creativity.
* The ability of some firms to adapt to profound
changes in the work environment (changes in
fashion and taste, in technology, in the world
order, etc.)
* The ability to consistently excel and maintain a
position as market leader.
* The ability to capture and retain customers.
* The ability to assure timely, properly priced,
and reliable supply by managing its relations
with suppliers and others, too numerous to
mention here, through an ability to add value
to its products or services.
Authors of the stature of P. Drucker, I. Nonaka,
P. Senge, A. de Geuss, D. Garvin, Ch. Argyris, J.
B. Quinn, among others, have repeatedly empha-
sized this topic, suggesting that this may be the
most momentous change of the century, whose
consequences will be none other than the most
profound transformation of the ‘reality’ in which
we live.
Although there may be no doubt as to the
importance of the concept of knowledge, its
epistemological status generates certain disquiet,
as do the various terms employed by the various
authors when referring to it.
Intellectual concern about the topic and the
concept of knowledge is nothing new. To the
contrary, its study is rooted in the most pristine
anxieties of humanity and there is a long,
philosophical tradition surrounding it. In the
Western culture this tradition dates back to the
pre-Socratic philosophers. Epistemology, both in
its original consideration as a branch of philoso-
phy and as its more recent consideration as a
scientific discipline (experimental epistemology),
has had the nature of knowledge as its central
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2006 John Wiley & Sons, Ltd.
40
Syst. Res.
object of study—What is it? How is it dissemi-
nated? How is it conserved? How is it validated?
Nevertheless, it is not common to find references
to this tradition or to the scientific depictions
referring to the nature and generation of
knowledge in studies dealing with Knowledge
Management (KM). In our opinion this consid-
eration should constitute the starting point for
any reflection on the matter. In this regard, the
approach of E. Bueno, of the U. Autónoma de
Madrid, seems quite appropriate when he
states, ‘This development in economic thought
of considering knowledge as a critical resource
and as the objective of the creation of value, has
been quite successful. At the same time it is
introducing greater complexity and a certain
degree of confusion of concepts, terms, models,
proposals, and other mental developments at the
end of the 20th century. And it seems that it will
continue doing so in the first years of the 21st
century’. ‘The profusion of terms, occasionally
amounting to linguistic nonsense, flippancy as to
the way the concept is used, ignorance of the
classical categories of thought and the frivolous
abuse of fashions and of pseudo-scientific and
postmodernist movements are constructing a new
‘‘Tower of Babel’’, provoking injustice and unease
in the unnecessary formulation and accelerated
substitution of propositions of new models and
expressions without allowing them to mature
and without making even a minimal effort to
contrast them to prior ones . . . At the present time,
the lack of agreement, of order, of objectivity, and
the social explanation in this field of knowledge is
an ‘‘objective reality’’’ (Bueno, 2001).
On the other hand, the excessive emphasis that
has been placed on Information Technology—
which, as we will see below, reflects only one of
the schools of thought in relation to the genera-
tion of knowledge—has tended to deform and
displace the centre of attention from the heart of
the problem to the merely instrumental. Such a
displacement has in many cases allowed ‘Knowl-
edge Management’ to become just another
fashion in the field of Business Administration,
just another commercial term devised to sell
certain software and hardware tools to busi-
nesses—avid for solutions to problems that arise
in the current working environment. However,
Syst. Res. 23, 39^49 (2006)
Aquiles Limone and Luis E. Bastias
Syst. Res.
beyond fashion, the subject of knowledge today
is not only important but also crucial to a
profound understanding of the true nature of
an organization and the processes that allow it to
sustain itself over time. In the remainder of this
paper we propose to demonstrate and support
this last assertion.
WHAT IS KNOWLEDGE? HOW
IS IT GENERATED?
As we have already alluded to above, there
is a long, philosophical tradition underlying
the area of knowledge that should be studied
and analysed in order to adequately deal
with this subject. Likewise, there is an abundant
bibliography in the scientific field, which
deals with it, particularly beginning with the
advent of cybernetic science during the 20th
century.
In the philosophical tradition, the oldest
epistemological reflections are mixed with the
ontological and metaphysical reflections, at least
during the periods of time that we can call
Antiquity (mainly Greece) and the Middle
Ages. According to Hessen (Hessen, 1926), the
theory of knowledge as an autonomous disci-
pline appears with the work entitled ‘Essay on
Human Understanding’ in 1690 by John Locke,
the English philosopher, in the so-called Modern
Age. On the European continent the celebrated
work by I. Kant in 1781, ‘A Critique of Pure
Reason’ is the starting point. These two land-
mark works were followed by numerous con-
tributions, by a series of notable philosophers, in
the 18th, 19th and 20th centuries. These works
should not be overlooked when referring to the
subject of knowledge. However, in this paper we
focus fundamentally on the 20th century, or
more precisely on the two main lines of thought
generated by the cybernetic studies in the 1940s
because they bring us not only a philosophical
point of view but also fresh and scientific
grounding.
Cognitive Science (C. S.) or the Cognitive
Sciences, as designated by others—noting that
there was more than one discipline involved in
its origin—was born with the cybernetic move-
Copyright
2006 John Wiley & Sons, Ltd.
Autopoiesis and Knowledge in the Organization
RESEARCH PAPER
ment of the 1940s. During this founding cyber-
netic era there was a fundamental concern for the
phenomenon of the mind and intelligence at the
core of the movement. This concern was parti-
cularly strongly felt by four brilliant minds:
Norbert Wiener, John Von Neumann, Warren
McCulloch and Gregory Bateson. The first two
were mathematicians, McCulloch specialized in
psychology and neurophysiology, and Bateson
was an anthropologist, although he worked in
more than one discipline. At this time the seed
was planted which would ten years later bear
fruit in the form of classic cognitivism begin-
ning in the decade of the 1950s. Following the
distinction suggested by F. Varela (Varela, 2000),
today we may differentiate among three main
lines of thought in cognitive science: cognitivism;
the connectionist approach; and the enactivist
approach.
Cognitivism is the heir of one of the principal
views about the mind and knowledge in cyber-
netics. This approach is markedly reductionist
and revolves around the thinking of John von
Neumann. This idea ultimately gave rise to the
digital computer. The traditional, generic struc-
ture of a digital computer is still known today as
‘Von Neumann’s Machine’.
Given the fact that for von Neumann and his
school of cyberneticists, the human brain pro-
cessed information, it was natural for them to
view the use of the computer as a metaphor for
the functioning of the brain.
The other main line of thought of the first
cyberneticists, suggested by Wiener, McCulloch,
and Bateson, was more organic and systemic.
However, it was overshadowed—provisionally
in this era—by the traditional ‘Von Neumann’
view, which developed rapidly and saw a
meteoric rise and application in the fields of
information technology, robotics and the first
ventures into artificial intelligence, culminating in
the victory of ‘Deep Blue’, the computer, over the
reigning world chess champion of the time.
Cognitivism was established mainly during the
years 1953–1955 with the contribution of such
authors as H. Simon, N. Chomsky and M. Minsky.
The basic ideas of this era gave foundation to the
principal patterns of modern cognitive science
(Varela, 2000).
Syst. Res. 23, 39^49 (2006)
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RESEARCH PAPER
The connectionist approach came forward as
an alternative to the symbolic cognitivism and
finally become a complement, taking up again
the ideas that had been overlooked in the first
cybernetic discussions (Wiener, McCulloch, and
Bateson). It favoured the concept of self-organi-
zation, which was also beginning to take root
in physics, chemistry, and the development of
nonlinear mathematics. At this point, it is
extremely important to point out the two main
‘flaws’ of cognitivism. Perhaps the best way to do
this is through the words of Francisco Varela:
‘The motivation for a second look at self-
organization was based on two widely recog-
nized deficiencies. The first is that the processing
of symbolic information is based on sequential
norms applied one at a time. This well-known
bottleneck of Von Neumann is a dramatic
limitation when the task in question requires
great quantities of sequential operations (such as
climate prediction or the analysis of natural
images). The permanent search for algorithms
of parallel processing in the classic architectures
has not had much success due to the fact that the
entire computing/computational philosophy has
developed in the opposite direction’.
The second major limitation is that the sym-
bolic processing is localized: the loss of any part
of the symbols or norms of the system implies
significant failure in the overall functioning of
the system. In contrast, a distributed operation is
highly desirable, in such a way that there is at
least a relative equipotentiality and an immunity
to mutilations.
This two deviations from cognitivism can be
expressed the same way: the architectures and
the mechanisms are far removed from biology.
The most ordinary, visual tasks, even those
performed by small insects, are carried out faster
than what is physically possible when they are
simulated in a sequential manner. The elasticity
of the mind to face damage without compromis-
ing its overall competence has been known by
neurobiologists for a long time.
The above suggests that instead of focusing on
symbols as the point of departure, one could
begin with simple components (non-cognitive)
that connect to each other by forming tight
patterns. With this approach each component
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Syst. Res.
operates only in its local environment, but due to
the structure of the network of the complete
system there is an overall cooperation that
emerges spontaneously when the states of all
the participating components reach a mutually
satisfactory state, without need for a central
processing unit to guide the complete operation.
This step from local norms to an overall
coherence is at the heart of what is usually called
self-organization during the founding years.
Today it is more common to speak of emergent
or overall properties, of dynamic networks, or
even synergy (Varela, 2000; pp. 192–193).
Connectionism, then, as an alternative to the
symbolic, cognitivist approach focuses on the
concept of the emergence of a network of
elements and in the dynamic of this network,
where self-organization of the elements plays a
fundamental role. This allows us to abandon the
scenario in which the symbols are running in the
opposite direction. Connectionism is fairly recent
and seems to play an important role in advancing
to the last approach mentioned: the enactivist
approach.
The enactivist or enactive approach, as desig-
nated by Varela, is definitely rooted in the work
that he carried out in conjunction with Humberto
Maturana (Maturana and Varela, 1980, 1987).
Due to this, and due to the fact that the
assumptions implicit in the concept of enaction
are still in their early stages, we will focus on the
roots of the ideas underlying this approach,
particularly on the pronouncements of Maturana
himself. Before inspecting Maturana’s work, it is
advisable to briefly summarize the three main
lines of thought in an outline that shows the
central aspects of each and allows us to appreci-
ate the differences among them. The synopsis
below is based on Varela’s explanation.
What is Cognition?
* Cognitivism: ‘Processing of information:
manipulation of symbols based on a set of
norms and rules’.
* Connectionism: ‘The emergence of global
states in a network of simple components’.
Syst. Res. 23, 39^49 (2006)
Aquiles Limone and Luis E. Bastias
Syst. Res.
* Enactivism: ‘Effective action in a domain: a
history of structural coupling that generates a
world’.
How Does it Function?
* Cognitivism: Through any mechanism that
can sustain and manipulate discrete physical
elements: symbols. The system interacts only
with the form of the symbols (their physical
attributes), not with their meanings.
* Connectionism: Through local norms for
individual functioning and norms for changes
in connectivity between elements.
* Enactivism: Through a network of intercon-
nected elements capable of structural changes
that experience an uninterrupted history.
How Does One Know When a Cognitive
System is Functioning Properly? (Criteria of
Validation)
* Cognitivism: When the symbols appropriately
represent some aspect of the ‘real world’ and
the processing of information leads to success-
fully solving problems1 that confront the
system.
* Connectionism: When one can see that the
emerging properties (and the resulting struc-
ture) correspond to a specific cognitive capa-
city: success in solving a required task.
* Enactivism: When it becomes part of a world
of continuous and existing meaning (in
ontogeny) or forms a new meaning (in
philogeny).
As we indicated above, the pioneering work
that sustains the latest line of thought about with
regard to knowledge emerged in 1968–1970, with
the appearance of ‘Neurophysiology of Cogni-
tion’ by H. Maturana and its presentation at the
international meeting of the Wenner Green
1
This approach assumes the existence of a ‘real and objective’ world
independent of the observer.
Copyright
2006 John Wiley & Sons, Ltd.
Autopoiesis and Knowledge in the Organization
RESEARCH PAPER
Foundation, whose main theme was ‘Cognition:
a Multiple View’. From this point on we will refer
mainly to the thought and ideas of Maturana,
without overlooking the substantial contribu-
tions of Varela, who was co-author of numerous
publications with Maturana. At a later date the
two went their own separate ways, with Varela
ending up in France until he passed away in
Paris.
An appropriate and resourceful way to
describe Maturana’s research and work could
be to characterize it as a brilliant effort to ‘know
knowledge’. His ‘getting to know knowledge’
has been carried out from a perspective based on
a biological understanding of the cognitive
process. This is a crucial point about cognition:
nobody can deny that the biology of the organ-
ism—in this case, the human being—is a
condition of absolute necessity to achieve real
knowledge of the subject. Maturana developed
this idea by claiming that for this to happen it is
vital to construct an ontology of the observer,
since this plays a central role in human knowl-
edge: ‘Everything that has been said has been
said by someone’ (Maturana, 1969, p. 83).
For both Maturana and Varela knowing is
effective action, i.e. ‘operational effectiveness in
the domain of existence of being alive’. ‘We find
out knowledge every time that we observe
effective or suitable behaviour in a certain con-
text; i.e. to say, in a domain that we, as observers,
define with an implicit or explicit question’.
Keeping in mind that for them the nervous
system is operationally closed, and therefore
whatever we observe as cognitive behaviour
corresponds biologically to structural changes in
the nervous system, we can understand their
most emphatic assertion that ‘doing is knowing
and knowing is doing’. This assertion is key
because it does away with the separation
between knowledge and action, which had been
assumed by all the previous lines of thought
regarding cognitive activity.
For Maturana scientific explanations—which
we normally view as carriers of knowledge—are
generative propositions, i.e. propositions that
must have the property of generating and
explaining phenomena within the scope of
experiences of the observers. Hence, the ass-
Syst. Res. 23, 39^49 (2006)
43
RESEARCH PAPER
umption of objectivity, i.e. the acceptance or
supposition of the existence of an exterior
world that is objective and independent of the
observer, is made unnecessary. And knowledge
generated in such a way is validated through
the scientific community, which accepts or
rejects it in accordance with scientific criteria,
i.e. the rigorous verification using the scientific
method.
Maturana’s work, together with Varela, is
extensive, complex and theoretically ‘round’ or
thorough. His detailed exposition far exceeds the
space we have for this presentation; it explores a
tremendous range, from an explanation of living
beings in terms of the organization that allows
their existence and generates their autonomy
(autopoietic organization), to an explanation of
knowledge in animals with or without a nervous
system, the closing of the nervous system,
language and the behaviour that make it possible
in human beings as in living beings and social
beings. One can understand why our presenta-
tion of his theory must necessarily be concise. In
any case, the objective and intention of this paper
is not to do an in-depth study of any of the
approaches mentioned above, but rather to
establish the need for more profound, rigorous
epistemological work if there is the intention to
‘manage’ knowledge.
From the above summary of the approaches to
cognition, one can see that the scientific bases
underlying a serious study of Knowledge Man-
agement are not as clear as we would hope. This
reveals just how weak the base of reference is
when dealing seriously with the issue of Knowl-
edge Management, and the lack of attention it
has received in the field of management studies.
How can we deal with something that has not yet
been sufficiently defined and clarified? On what
basis do we accept one line of thought as valid
(symbolic cognitivism), while ignoring the criti-
cism and objections of reputable experts and
interlocutors? Can we really talk seriously of
Knowledge Management, or should we be more
realistic and prudent and speak only of informa-
tion management or, in some cases, simply of
data management?
One need not look very far to realize that the
different points of view with respect to knowl-
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2006 John Wiley & Sons, Ltd.
44
Syst. Res.
edge are necessarily fundamentally different
derivations claiming to ‘capture, administer,
classify and study the knowledge generated in
an organization’ (Fernando de Franco) and,
therefore, we must not be hasty in adopting a
position without previously establishing our
reasons for doing so, and not, as has often been
done up to now, adopting a position without
clearly stating why or to whom it belongs.
Autopoiesis and Cognition
The central idea in Maturana is that the constitu-
tion of the living implies knowledge. The
organization of the living and the organization
of the nervous sytsem (which permits cognition
in humans) are the same thing: circular and
closed organization.2
This conclusion brought him to his well-
known statement: ‘living systems are cognitive
systems and the process of living is a process of
cognition. This assertion is valid for all organ-
isms, whether or not they have a nervous system’
(Maturana, 1970). This is how cognition identi-
fies itself with the processes of generating and
maintaining life.
Since autopoiesis is the distinctive phenom-
enon of life, autopoiesis implies cognition and
cognition implies autopoiesis. This means that
cognitive phenomena play a central role in the
constitution and maintenance of living systems.
This intimate relationship between autopoiesis
and cognition suggest that viewing an enterprise
as an autopoietic system is fundamental for a
thorough understanding of the cognitive pro-
cesses within it. Using this understanding as a
starting point we will attempt to deal with the
management of knowledge within an organiza-
tion.
This explanation of an enterprise has already
been proposed (Limone 1976, 1984, 1998, 2000,
2001). It holds that ‘an enterprise is a dynamic
system of labour, technological and economic
acts linked in operational closure, that constitute
a unit in the social space (or human relations).
2
By closed we mean that the living organism defines itself organiza-
tionally as a system. This characteristic called autopoiesis (creation of
itself) necessarily carries with it a constructivist point of view of
cognition since it is expressed as a mechanism that develops from a
living being in accordance with its best adaptation to the environment.
Syst. Res. 23, 39^49 (2006)
Aquiles Limone and Luis E. Bastias
Syst. Res.
This system is self-defining and self-maintaining
in a process of continuous and uninterrupted
transformation of the flow of personnel, material,
symbols, and energy in the physical space’
(Limone, 1984, 1998, 2000, 2001).
The system, as a unit, exists simultaneously in
two domains: as a simple unit in the social
domain (or space of human relations) and as a
unit composed of tour elements (people, mate-
rial, symbols and energy) in the physical domain.
It may be disturbed in either domain. In each unit
we can distinguish three fundamental processes:
the primary process, the decision-making pro-
cess and the structuring process coupled with
organizational closing.
The primary process deals with the financial
aspects and the cybernetic functioning that
permit the continuity of the enterprise to
continuously generate and regenerate those
funds, which are indispensable to the structure
and maintenance of the system. It is the process
that provides the energy source, which makes
the uninterrupted functioning of the constitutive
processes of the system possible (Limone 1976,
1998, 2000).
The structuring process produces both the
operational and decision-making structure
necessary for carrying out the vital processes of
the system (Limone 1976, 1998).
The decision-making process is a closed net-
work of conversations, coupled to the primary
process that allows the activation, regulation and
coordination of that process and therefore is a
condition that makes the existence of the enter-
prise possible.
It is precisely the functioning of this closed
network of conversations, given its continuous
linkage to the primary and structuring processes
that allows the generation of organizational
knowledge in the enterprise.
In order to differentiate and avoid confusion
among the domains of existence we have called
the enterprise (or economic machine), the simple
unit, and what we have called the economic
community, the composite unit. The enterprise
(or economic machine) has already been defined
above. The economic community is defined as:
‘A set of human, material, symbolic and energy-
providing elements in constant interaction.
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2006 John Wiley & Sons, Ltd.
Autopoiesis and Knowledge in the Organization
RESEARCH PAPER
These constitute a productive unit of goods and
services in the physical space’.
‘The community is a viable system with
constant feedback between itself and its environ-
ment. It interchanges its elements and the
consequences of the interactions between the
results and the environment; but it is closed
(operational closure) with respect to its organiza-
tion’. This means that the constitutive elements
of the economic community (human beings,
symbols, materials and energy) interact among
themselves according to a mode of organization
that is continuously defined by the economic
machine, which constantly determines the opera-
tional coherencies in which the community must
function (Limone, 1998, 2000).
The most characteristic aspect of an autopoie-
tic system is the organization, which is defined as
autonomous system. In the case of a company
this organization is: ‘a network of processes of
production of labour, technologic and economic
acts that, upon interacting among themselves,
return to produce the processes produced
through the generation by those processes of
relations that specify the conditions and opera-
tion of the economic community, which is the
domain where the acts are produced’ (Limone,
2001).
The above means that the specific elements to
be incorporated into the system (human beings,
materials, symbols,3and energy), the conditions
which make up these interactions, and the order
between them establish that the acts which are
produced in these interactions are precisely those
acts which, in turn, are necessary to constitute
the processes of the economic machine.
As one can see, the economic community
and the economic machine exist as units in
different domains and, consequently, are dis-
tinct; but they are also indissolubly united
because the existence of one requires the exis-
tence and the operations of the other one and vice
versa.
3
Symbols or signs are what we call these elements of the linguistic
domain that an observer see and that are held as objects of linguistic
distinctions when operating in language. From an Enactive point of
view symbols do not exist to the extent that it is impossible to assume
them as reference pointers that refer to real, true things.
Syst. Res. 23, 39^49 (2006)
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RESEARCH PAPER
Having established this we must now ask the
question; how does cognition intervene in the
realization of autopoiesis inside an enterprise?
We said that an enterprise forms itself and
operates uninterruptedly coupling three pro-
cesses: the primary, the decision-making and
the structuring. Now, the phenomenon of cogni-
tion is a sine qua non condition for the concrete
carrying out of these three processes in order for
the transformations that compose the processes
to likewise be carried out. Without the interven-
tion of knowledge these processes simply could
not be carried out.
Let us take a look at some sample transforma-
tion for each of these processes. For example, in
the productive transformations that make up the
productive process (a linked set of transforma-
tions), no matter what the product, it implies
human–machine operations. Now, in order for
this human–machine operation to be carried out
correctly (an effective action in a domain) the
human knows (has knowledge): (a) what the
operation is and how it is carried out; (b) what
materials must be chosen; (c) precisely how to
relate the material to the machine and how the
material and the machine must be handled; (d)
how the energy, or fuel, intervenes in the
transformation and how it must be handled,
etc. In each of these described interactions the
four fundamental elements of the economic
community (human beings, materials, symbols
and energy) are all involved. And knowledge
must necessarily be involved in order for each of
these actions to take place and be effectively
carried out. No effective action is possible if the
human being does not know precisely what to do
and how to do it.
The same thing occurs if we look at a
transformation of a decision-making process.
For example, when deciding whether or not to
close a production line we must evaluate the
strategic and financial impact of such a decision.
In fact, such a decision requires an analysis of
the positioning in the market and the character-
istics of the industrial segment. In addition,
the strengths, weaknesses, opportunities and
threats must all be assessed, as well as the
financial impact of the alternatives (close or
continue operating)—all with the purpose of
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2006 John Wiley & Sons, Ltd.
46
Syst. Res.
knowing what the impact of such a decision
would be, etc.
As we can see, no vital transformation for the
enterprise, not even the simplest and most trivial,
can be carried out without knowledge. In fact, if
we now consider the total knowledge of the
functioning of an enterprise, i.e. of the funda-
mental conclusions among essential variables,
such as costs with incomes, future investment
flows, regulation of the work environment etc.,
these can only be achieved as the result of
semantic and linguistic interactions throughout
the total network of processes that comprise
the enterprise. The same thing is valid if
we consider the structural coupling of the
enterprise as a unit in its environment in order
to flow via a structural linkage with it, as a sine
qua non condition that sustains its viability over
time.
Keeping in mind that the enterprise is in and of
itself an autopoietic system of acts (Limone, Op.
cit.), we can see that, although individual or
personal knowledge plays a fundamental role in
the composition of the enterprise as a nanoeco-
nomic system, this autopoiesis must necessarily
carry cognition within it as an associated
epistemological factor. This means that the
company—understood as an emerging total-
ity—is capable of acquiring knowledge in order
to adapt to its environment. It is important to
emphasize that the acts carried out synergetically
by the enterprise are cognitive acts and cannot be
of any other nature.
If we truly want to understood and deal
correctly with cognitive phenomena in the
enterprise, we must be aware that we cannot
confuse individual or personal knowledge with
organizational knowledge, not only because they
are different but also because they are generated
in different domains and the way they function
show different dynamics.
Individual knowledge is generated socially
through interactions of people in the linguistic
domain,4 as a result of the structural changes in
the respective nervous systems. Organizational
knowledge is generated in part in the structural
4
By the linguistic domain of a system we mean all of its possible
linguistic behaviours (Maturana y Varela, 1984).
Syst. Res. 23, 39^49 (2006)
Aquiles Limone and Luis E. Bastias
Syst. Res.
changes of the network of cognitive and con-
versational interactions that are necessary both
for the operational functioning of the processes
that make up the enterprise (productive pro-
cesses, financial processes etc.) and for the
spontaneous interactions of people in the lin-
guistic domain, which belong to the socialization
processes in every group or community of
human beings. That is why organizational
knowledge is a type of emergent knowledge that
cannot be assumed to be more than the result of
the interactions generated within the system, and
never as the simple reductionist sum of indivi-
dual knowledge in the organization, nor is it a
kind of intersection of knowledge. From an
enactive perspective this organizational knowl-
edge cannot be completely described in any
human language, for attempting to speak of an
enterprise knowledge turns out to be as sterile as,
for instance, talking about what a bacteria knows
and how they know it (how their world is
pictured, or better: how they enact). We can only
tell if they know or not by the consequences of
their acts.
Finally, storing and adding data in a database
will, by itself, never generate any knowledge
(neither at the individual nor organizational
level), not even with expert systems. These can
only produce solutions or paths through combi-
nations of previously stored solutions. True,
innovative knowledge implies the creation of
new knowledge (marginal/peripheral increase),
and that implies a creative process that expert
systems cannot produce. How could an informa-
tion system capture and creatively combine the
tacit knowledge of the members of an enterprise?
The more we analyse the matter, the more
evident it becomes that the existence of the
enterprise depends on knowledge and the
management of knowledge. Knowledge Man-
agement is not something new and modern, but
rather has always been implicit and carried out
implicitly. Today we are merely becoming aware
of its importance. Likewise, it is evident that
knowledge management is not an alternative
style of administration, but rather an inherent
necessity for the life of an enterprise.
Cognition is inseparable from the process of
transformations that continuously generate the
Copyright
2006 John Wiley & Sons, Ltd.
Autopoiesis and Knowledge in the Organization
RESEARCH PAPER
enterprise in its permanent linkage with the
environment, while at the same time it exists in
the social space. In consequence, knowledge
management of the enterprise is the manage-
ment of the enterprise.
CONCLUSIONS
The cybernetic revolution that we are witnessing
and carrying out nowadays finds its outward
expression mainly in the fields of telecommuni-
cations and Information Technology. The Inter-
net and the World Wide Web are the most
prominent stereotypes of this revolution in
economics and thinking. However, these are
only superficial elements and do not represent
its principal character. In the fields of manage-
ment and economics, some authors have agreed
that the new economy differs from the economic
tradition centred on financial aspects by the
marked emphasis it places on non-traditional
factors, such as resources of an informational
nature: knowledge, information and data, with a
decline in the traditional financial resources. This
is the true and profound reach of the cybernetic
revolution for organizations. This is expressed in
the need to shift the main focus away from
financial management and towards informa-
tional management, which, in turn, involves:
data management, information management and
knowledge management.
This means that informational management
and, in particular, knowledge management
become increasingly relevant. Managers must
receive at least a minimum preparation in the
areas of epistemology, cognitive sciences as well
as in cybernetic theory, especially in the more
recent lines of thought of this discipline (second-
order cybernetics). Actually, the widespread but
inexact idea that knowledge is a resource that
basically shares the characteristics of traditional
business assets derives from the fact that, until
now, there has been a mistaken definition of the
concept of knowledge in the theory of manage-
ment, nor have there been correct definitions for
the concepts of data or information. When one
adopts the definition of knowledge coming from
the current lines of thought in the cognitive
Syst. Res. 23, 39^49 (2006)
47
RESEARCH PAPER
sciences (such as the enactive approach), one
discovers that knowledge is not an object that can
be stored or transferred, but rather a quality that
systems either demonstrate or do not demon-
strate.
One of the most relevant aspects in knowledge
management is not only that the individuals who
make up the business community can and must
acquire knowledge, but also that the organiza-
tion or system of human activity itself, under-
stood as a totality, acquires knowledge by and of
itself. In effect, several authors have used the
metaphoric image of the organization—particu-
larly the decision-making process—as a brain
(G. Morgan, ‘Images of the Organization’).
This brings us to a fundamental question.
When we say that a system of human activity as a
totality acquires knowledge, are we speaking in a
merely poetic sense or are we dealing with an
exact reality. What exactly do we mean when we
say that a system of human activity, in and of
itself, acquires knowledge? We can find the
answers to these questions in the autopoietic
theory of the company, also known as ‘Valpar-
aiso Theory of Autopoiesis’, that the senior
author of this paper formulated in 1977.
In fact, Maturana and Varela coined the term
autopoiesis as the central concept for the so-
called ‘biology of knowledge’ (Santiago Theory
of Autopoiesis). It is a scientific theory about
knowledge and the cognitive process as the
fundamental process of a living organism and,
as such, forms part of the branch of science that
the cybernetist Warren McCulloch has accurately
called ‘experimental epistemology’. Maturana
and Varela, using rigorous logic and methodol-
ogy, demonstrate that knowledge is not an entity
capable of being stored or transferred, but rather
a denotative convention that the observer makes
of a system when the behaviour of the system is
accepted by the observer as being suitable in
accordance with a pre-established referent. In
this way, Maturana and Varela are effectively
arguing against the ‘representationist metaphor’
of knowledge, typical of rationalist (classical
cognitivist) thought, which demands the exis-
tence of an objective reality that allows one to
judge supposed knowledge as true or false. To
the contrary, Maturana and Varela show that
Copyright
2006 John Wiley & Sons, Ltd.
48
Syst. Res.
anatomy and physiology of life never admit
direct access to an objective reality and, more-
over, that the biological explanation of cognitive
phenomena does not need to appeal to a
supposed external, objective reality of live
organisms. This rigorous criticism of rationalist
thought is inherited by Winograd and Flores,
who apply it (‘Understanding Computers and
Cognition’) to the field of management and, in
particular, to informational management.
The theory of autopoiesis of the enterprise
(Valparaiso Theory)—in our opinion—demon-
strates that the enterprise has autopoietic orga-
nization (organizational pattern), and
differentiates it from biological organisms by
being composed of elements of another nature.
That is to say, using the language of cybernetics,
that the difference among the enterprise and the
biological organism lies in that fact that they exist
in different domains of observation and, there-
fore, perform autopoiesis in different ways.
Apart from that, the principal characteristics that
Maturana and Varela attribute to a living being
are present in the enterprise, including the
cognitive ability.
A thorough understanding of the cognitive
process that develops the enterprise as a total-
ity—as an autopoietic unit—is, therefore, clearly
necessary to recognize, assimilate, correct, and,
in this way, manage knowledge.
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