Transformation Process of Personal to Social Knowledge within Organizations

This article focuses on the process of Transformation of Personal to Social Knowledge within organizations, that is developed by Kogut and Zander in their famous article published in 1992 in Organization Science. We begin by categorizing the organizational knowledge into information and know-how.

By information, we “mean knowledge which can be transmitted without loss of integrity, once the syntactical rules required for deciphering it are known. Information includes facts, axiomatic propositions, and symbols”. “Know-how is the accumulated practical skill or expertise, that allows one to do something smoothly and efficiently”. “Knowledge as information implies knowing what something means. Know-how is, as the compound words state, a description of knowing how to do something”. “The information is contained in the original listing of ingredients, but the know-how is only imperfectly represented in the description”.

Figure 1: Transformation of Personal to Social Knowledge

Source: Kogut and Zander (1992, p.388)

At Individual Level

Now, suppose that: “knowledge is only held at the individual level, then firms could change simply by employee turnover. But we know that: hiring new workers is not equivalent to changing the skills of a firm; so, an analysis of what firms can do must understand knowledge as embedded in the organizing principles, by which people cooperate within organizations”.

This Transformation process of Personal to Social Knowledge allows us to distinguish the knowledge of an individual and that of the organization; and to know how the organizational knowledge is transformed from personal to social level.

Individuals can be skilled in certain activities, such as driving a car or playing tennis. These skills may indeed be difficult to pass on”. in fact, It is the problem of communicating personal skills that underlies Polanyi’s well-known idea of tacit knowledge, an idea similar to the dimensions of non-codifiable and complex knowledge. As noted earlier, the central puzzle is why do individuals know more than they can express”.

There is a need to go beyond the classification of information and know-how, and consider why knowledge is not easily transmitted and replicated. The transferability and imitability of a firm’s knowledge, whether it is in the form of information or know-how, are influenced by several characteristics.

“Consider the two dimensions of codifiability and complexity of knowledge. Codifiability refers to the ability of the firm to structure knowledge into a set of identifiable rules and relationships, that can be easily communicated. Coded knowledge is alienable from the individual who wrote the code. Not all kinds of knowledge are amenable to codification”. Complexity, from a computer science perspective, “can be defined as the number of operations required to solve a task”.

“Codifiability and complexity are related, though not identical. It is obvious that: the number of parameters required to define a production system is dependent upon the choice of mathematical approaches or programming languages. For a particular code, the costs of transferring a technology will vary with its complexity. A change of code changes the degree of complexity”.

At Group Level

“The teaching of know-how and information requires frequently, interaction within small groups and often through the development of a unique language or code. Part of the knowledge of a group is simply knowing the information who knows what. But it also consists of how activities are to be organized, e.g., by Taylorist principles”.

“It is the sharing of a common stock of knowledge, both technical and organizational, that facilitates the transfer of knowledge within groups”. “By shared coding schemes, personal knowledge can be transmitted effectively within close-knit groups. Personal knowledge can be transmitted because a set of values are learned, permitting a shared language by which to communicate. It is this language which provides a normative sanction of how activities are to be organized, or what information is to be collected and evaluated”.

At Organizational Level

“But whereas the accumulation of small group interactions facilitate the creation of shared coding schemes within functions, a fundamental problem arises in the shifting of technologies from research groups to manufacturing and marketing. At this point, the identification with a professional orientation conflicts with the need to integrate within the organization. The problems of different professional languages are attenuated when technology transfer is horizontal. To facilitate this communication, certain individuals play pivotal roles as boundary spanners, both within the firm as well as between firms.

“The vertical transfer of technology, as when a product is moved from development to production, poses additional problems insofar that the shared codes of functional groups differ. To facilitate this transfer, a set of higher-order organizing principles act as mechanisms, by which to codify technologies into a language accessible to a wider circle of individuals. These principles establish how the innovation is transferred to other groups, the responsibility of engineers to respond to complaints, and the allocation of incentives to establish authority over decisions. These organizing principles, which we call higher-order as they facilitate the integration of the entire organization, are also supported by data regarding profitability, costs or task responsibility as represented in an organizational chart.

At Network Level

“Complex organizations exist as communities within which, varieties of functional expertise can be communicated and combined by a common language and organizing principles. To the extent that close integration within a supplier or buyer network is required, long-term relationships embed future transactions within a learned and shared code”. “In this wider perspective, a firm’s knowledge consists also of the information of other actors in the network, as well as the procedures by which resources are gained, and transactions and cooperation are conducted”.

So, we have presented to you the Transformation process of Personal to Social Knowledge within organizations, that allows to distinguish the knowledge of an individual and that of the organization; and to know how the organizational knowledge is transformed from personal to social level.

Source: Kogut Bruce, Zander Udo (1992), “Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology”, Organization Science, Vol. 3, No. 3, Pages 301-441. https://doi.org/10.1287/orsc.3.3.383