1. Purpose Emerging from Knowledge, Technology and Innovation
Lecture 5

2. Learning Outcomes
Define and explore the implications of tacit and explicit knowledge
Explain how purpose emerges from knowledge creation
Examine the implications of developments in technology for the organisation’s purpose and strategy
Identify the main innovation processes relevant to purpose
Show how purpose changes with innovation
Explain why an organisation’s purpose may sometimes be emergent rather than prescriptive

3. Introduction - An Emergent Approach to Purpose
Resulting in…
Knowledge creation
Increased revenues
Leads to….
Experimental and emergent purpose
Technology development
Enhanced value added
Innovation
Stronger sustainable competitive advantage

4. Creating New Knowledge
Main characteristics of knowledge:
Knowledge is a resource of the organisation
Knowledge could be created – that opens new opportunities
Knowledge creation is essentially an emergent process

5. Knowledge – strategic origins and definition
“Knowledge is the business fully as much as the customer is the business. Physical goods or service are only the vehicle for the exchange of customer purchasing – power against business knowledge” Drucker (1964)

6. Knowledge – strategic origins and definition
“Knowledge is a fluid mix of framed experience, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers, In organisations, it often becomes embedded not only in documents or repositories but also in organisational routines, processes, practices and norms.” Davenport and Prusack (1998)

7. Knowledge – strategic origins and definition
Knowledge is not just data
Knowledge is not just information

8. Knowledge – the distinction between tacit and explicit knowledge
Explicit knowledge concerns s codified and transmittable in formal systematic language – often, but not necessary written down.
Tacit knowledge is personal, context specific and much harder to formulate and communicate – often, but not necessarily, hidden and not formally recorded.

9. Knowledge – the distinction between tacit and explicit knowledge
Tacit knowledge
Costing procedures codified in company accounting manuals
New product development though formal company review procedures
Company patents and legal contracts
A company’s written history of its past events and experiences, successes and failures – often very limited
Training schemes and apprenticeships programmes that develop ad teach best practice
Practical and unwritten procedures for unblocking production stoppages
Informal networks and procedures for sales order processing
Multifunctional team working on new projects that rely on informal contacts
Experience of what has worked in practice in branding development over a number of years
Specific company treatments of some detailed aspects of management accounting

10. Knowledge audit and management
Skandia value scheme
Market value
Adjusted shareholders equity financial capital
Intellectual capital
Human capital
Structural capital
Customer capital
Organisational capital
Customer base
Innovation capital
Customer relations
Process capital
Customer potential

11. Knowledge creation and purpose
Conversion and communication of existing knowledge
Knowledge creation and acquisition processes
Knowledge transfer processes

12. Conversion and communication of existing knowledge
Four modes of knowledge conversion
To tacit knowledge
To explicit knowledge
From tacit knowledge
Socialisation
Externalisation
From explicit knowledge
Internalisation
Combination

13. Knowledge creation and acquisition processes
According to Davenport and Prusack (1998) we have six mechanisms that will assist in knowledge creation. They are:
Acquisition
Rental
Dedicated resources
Fusion
Adaptation
Network

14. Knowledge transfer processes
Proactive decision to transfer knowledge
Involves people and groups

15. Knowledge creation and purpose
A new definition of purpose – emerges from the acquisition of knowledge
Knowledge adds value and assists the organisation in sustaining its competitive advantage:
knowledge is a resource for the organisation (RBV)
Applying and generating knowledge is a capability
Therefore:
Replicability
Imitability
VRIN

16. Knowledge creation and purpose
Present
Problem solving
Core resources
Importing knowledge
Implementing and integrating
External
Internal
Experimenting
Future

17. Using technology to develop purpose and competitive advantage
Technology and competitive advantage
Survey of existing technologies
Development of technology strategy
New products
Possible growth opportunities in new areas
Embryonic, new stars
Mature products
Cash cows
New possible opportunities and competitive threats
Mature technologies
New technologies

18. Innovation and Purpose
The strategic role of innovation
Customer needs analysis – market pull
Technology development analysis – technology push
Innovation
Technology push
Market pull
The development of new initiatives in technology
The analysis of customer needs