Towards an Integrative Model of Organizational Culture and Knowledge Management

This paper proposes the integration of The Competing Values Framework (Quinn 1984; 1988) with Nonaka and Takeuchi’s (1995) knowledge creation and conversion model. Conceptual parallels between the two models are identified and the interaction effects among dimensions are analysed. The resulting Organizational Knowledge Management Model should further understanding of the social and organizational cultural processes that drive knowledge creation and underpin organizational effectiveness. Implications for theory and practice, as well as directions for future research, are presented. INTRODUCTION Effective knowledge management is at the heart of organizational performance and enables organizations to realise the value of human capital (Davidson & Voss 2002). However, organizational culture underpins knowledge management by influencing how members learn and share knowledge. Paradoxically, organizational culture has been identified as the main impediment to knowledge management (Ribiere & Sitar 2003) and yet very little is known about how organizational culture contributes to or impedes knowledge management. A major thrust evident in the research literature has been to develop models and typologies to delineate the characteristics of organizational culture, for example, the Organizational Culture Profile (Gray, Densten & Sarros 2003) and the Competing Values Framework (Quinn 1988). In addition, research to examine the relationship between leadership and organizational culture is well developed (e.g., Quinn 1984; Schein 2004). However, there is a lack of theory to elucidate the impact of organizational culture in initiating and sustaining knowledge creation and transfer in organizations. There is a growing recognition which underpins the learning organization philosophy that the organizational and social context of learning is an important aspect of knowledge generation and transfer (Easterby-Smith, Snell & Gherardi 1998; Elkjaer 1999). Thus, knowledge management is predicated on developing individual participation in communities of practice (Elkjaer 2004). In other words, organizational success is not so reliant on the static ‘stock’ of knowledge, but rather on the dynamic social processes through which knowledge is enhanced and renewed. Organizations need to develop cultures where their members are encouraged to share knowledge in order to gain a strategic advantage. Therefore, the impact of organizational culture in terms of knowledge management requires further research. The purpose of this paper is to extend previous theory by examining the interconnections between organizational culture, that is, the pattern of shared basic assumptions amongst Associate Professor Judy H. Gray ([email protected]) is Associate Professor in the Faculty of Education, Monash University, Melbourne University, Australia; Iain L Densten is Associate Professor, School of Business, University of New South Wales, Canberra, Australia. International Journal of Organisational Behaviour Volume 9, No. 2 595 organizational members and knowledge management. The development of an integrated model of organizational culture and knowledge management should facilitate organizational learning and lead to the improvement of knowledge management practices. The paper investigates the links between organizational culture in terms of the Competing Values Framework (Quinn 1984; 1988) and knowledge management based on Nonaka and Takeuchi’s (1995) model of knowledge creation and conversion. LITERATURE REVIEW Organizational Culture The Competing Values Framework is so named because the underlying dimensions present contrasting values (Cameron & Quinn 1999). For example, organizations need to be adaptable and flexible, but also stable and controlled. There needs to be growth, resource acquisition and external support, but also tight internal information management and formal communication. The framework suggests an emphasis on the value of human resources, but also emphasizes planning and goal setting. The Competing Values Framework clarifies the complex nature of organizational culture according to two dimensions: internal/external focus, and stability/flexibility structure. Taken together, the two dimensions create four quadrants which represent four sets of values that guide organizational tasks of environmental management and internal integration (Cameron & Quinn 1999). Figure 1 provides a conceptual representation of organizational culture according to the Competing Values Framework. Each quadrant is labelled according to its most notable characteristics. The upper left quadrant, referred to as the human relations perspective, is characterized by flexibility and an internal focus. The emphasis is on information sharing and participative decision-making. Members are part of a common social system or clan and are bonded together through the development of a sense of affiliation and belonging. The upper right quadrant, referred to as the open systems perspective, is characterized by flexibility and an external focus. These adaptive adhocracies emphasize innovation, creativity, adaptation, growth, external support, and resource acquisition. Members are bonded together through being inspired and challenged. The lower right quadrant, referred to as the rational goal perspective, is characterized by predictability and an external focus. These market type organizations value competitiveness, productivity, goal clarity, efficiency, and accomplishment. Members are bonded together through goal orientation and competition. The lower left quadrant, referred to as the internal process perspective or hierarchy culture, is characterized by predictability and an internal focus. The emphasis is on information management, documentation, stability, routinization, centralisation, continuity, and control. In a hierarchy culture, members are bonded together through internal controls that maintain rules, policies and procedures (Quinn, Faerman, Thompson & McGrath 2003). Organizations are seldom characterised by a single cultural type. Organizations tend to develop a dominant organizational culture over time as the organization adapts and responds to the challenges and changes in the environment (Schein 1985). Organizations with all four quadrants represented are considered to be ‘balanced’ and perform well. Leaders in these Gray & Densten Towards an Integrative Model of Organizational Culture and Knowledge Management 596 organizations are able to balance conflicting demands, suggesting that high performance requires the simultaneous mastery of seemingly contradictory or paradoxical capabilities. In contrast, cultures considered ‘imbalanced’ tend to emphasize values associated with rational goals (market) and internal process (hierarchy) cultures at the expense of values that characterize other cultures. This results in less effective organizational performance (Denison & Spreitzer 1991a; Yeung, Brockbank & Ulrich 1991). In a study of 176 U.S. executives, Denison, Hooijberg & Quinn (1995) found that in terms of the Competing Values Framework, less effective managers focused on roles associated with rational goals (producer and director roles) and internal processes (co-ordinating role) and neglected roles associated with human relations. This paper examines the implications of the differences identified in organizational cultures in terms of knowledge generation and transfer. Figure 1: The Competing Values Framework: Organizational Culture (Adapted from Quinn 1988) Knowledge Creation Nonaka and Toyama (2003, p. 2) conceptualized knowledge creation as a process in which various contradictions are synthesized through dynamic interactions among individuals, the organization, and the environment. They argue that knowledge is created in a spiral that integrates opposing concepts ‘such as order and chaos, micro and macro, part and whole, mind and body, tacit and explicit, self and other deduction and induction, and creativity and efficiency’. The approach focuses on the flow of knowledge which originates within individuals and is then made available to others in the organization. The process relates to the conversion of tacit into explicit knowledge and is consistent with the view that ‘knowledge is a phenomenon in motion’ (Patriotta 2004, p. 10). Tacit knowledge is based on individual insights, experience, and intuitions (Polanyi 1966) and is often difficult to communicate in words or symbols. In contrast, explicit knowledge can be codified, communicated, and shared with others, but relies on being tacitly understood and applied (Kakabadse, Kouzmin & Kakabadse 2001). Nonaka and Takeuchi’s (1995) model of knowledge creation and conversion—the SECI process (Socialization-Externalization-Combination-Internalization) which has been refined by Byosiere and Luethge (2004)—emphasizes that knowledge conversion is a ‘social process Flexibility/Spontaneity Predictability/Control Internal Focus External Focus Adhocracy Clan Market Hierarchy Human relations Open systems Internal process Rational goals International Journal of Organisational Behaviour Volume 9, No. 2 597 between individuals and not confined within an individual’ (Nonaka & Takeuchi 1995, p. 61). Figure 2 provides details of the four modes of knowledge conversion commencing with socialization where individuals share experiences and mental models to refine knowledge. Tacit knowledge is converted into explicit knowledge through a process referred to as externalization. This translation process allows ‘the individually held tacit knowledge concepts to be crystallized and shared with other members, creating new knowledge’ (Byosiere & Luethge 2004, p. 246). The combination or knowledge sophistication mode where knowledge is articulated, shared, and expounded (McIntyre, Gauvin & Waruszynski 2003) involves explicit knowledge being reconfigured into more complex explicit knowledge. Finally, internalization refers to the mode where explicit knowledge becomes internalized through knowledge interpretation and is converted into tacit knowledge (Byosiere & Luethge 2004).