Communications of the ACM

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Understanding the Influence of Network Positions and Knowledge Processing Styles

By Seokwoo Song, Sridhar Nerur, James T. C. Teng
Communications of the ACM, October 2008, Vol. 51 No. 10, Pages 123-126
10.1145/1400181.1400208
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In today's turbulent business environment, an organization's ability to sustain its growth and competitive edge depends on how well it manages its stock of knowledge. Recognizing that knowledge is paramount to the success of the firm, companies are evolving practices to facilitate the creation, acquisition, storage, transfer, and utilization of knowledge assets. Intra-organizational units play a critical role in this process, and it is imperative that organizations understand how the information and knowledge network comprising such units can impact the overall effectiveness of their knowledge management (KM) practices.

The creation of knowledge in an organization, as well as the mechanisms for its storage, transfer, and reuse is a result of the interchange of scarce intellectual resources between organizational units. To reap benefits such as learning, knowledge transfer and sharing, access to expertise and skills, economies of scale arising from pooling resources, and collaborative problem-solving, units in an organization must actively engage in the exchange of information/knowledge with other work units. Thus, like actors in a social network, units holding privileged positions in their knowledge network accrue social capital, which provides them access to opportunities and assets that would otherwise be unavailable.^2,3 One example of a privileged network position is brokerage, where a unit occupies an exclusive passage through which other units communicate.

Indeed, researchers have demonstrated that such privileged positions in the knowledge network can influence performance, productivity, knowledge sharing and transfer, and innovation.^1,8,11 However, these studies do not take into account the fact that units in an organization are not all alike in the nature of work they do and, therefore, in the type of knowledge they deal with. Each unit may have its own knowledge processing (KP) style, ranging from codification (where knowledge is processed mostly through formal documents) to personalization (where knowledge is processed primarily through personal contacts). We conducted a study to examine network positions and KP styles in organizations, and discovered that the interplay between the two can influence a unit's overall KM effectiveness.

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Work Unit's KP Style: Personalization vs. Codification

Expertise, a scarce and valuable resource, is reflected in the knowledge that a work unit utilizes to perform tasks. The form and nature of this knowledge may vary. While some units prefer to deal with codified and explicitly represented forms of knowledge, others may rely on the tacit knowledge of personnel to solve problems. Thus, in initiating and deploying organizational knowledge, each work unit may place itself in the continuum between codification and personalization.^7,12

Codification, as a KP style, encourages the documentation and reuse of knowledge by evolving means for its effective storage and retrieval.⁷ This is a viable style when we deal with more explicit knowledge related to operational routines and procedural tasks. For example, procedures for handling accounts receivable can be readily documented (i.e., codified). In these situations, knowledge may be codified by means of manuals, formal documents, and databases, etc. However, considerable investment in technology may be required to systematically codify knowledge and to provide mechanisms that will facilitate search and retrieval of relevant knowledge.

Personalization, on the other hand, is a desirable KP Style when the unit frequently deals with knowledge that does not lend itself to codification, possibly because it is tacit and experiential.⁷ For example, how to successfully negotiate with a certain customer would be difficult to describe and thus codify. Such units rely on extensive interactions between their members for the sharing and transfer of knowledge. The success of such a style depends on the ability of the people involved and on their willingness to interact and share their knowledge with others.

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Work Unit's Network Position

In addition to KP style, the ultimate effectiveness of KM may also be dependent on a unit's network position in the organization. As summarized in Table 1, we are concerned with three different types of network positions for a unit: position of brokerage, position of proximity, and position of prominence.⁶

Figure 1 illustrates an example of various network positions of work units. In Figure 1, unit A holds a position of brokerage and serves as an exclusive passage between two otherwise disconnected networks (X and Y). Unit A has access to new sources of information and is in a position to control and broker the flow of information between networks X and Y. Unit B occupies a position of proximity since it has more direct links to other units, resulting in low dependence on other units for the transmission of information and knowledge.⁶ Unit C holds the highest position of prominence that is characterized by high communication and knowledge exchange activities with other units.

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Benefits of Information/Knowledge Network

Extensive research on social and information networks suggests that a work unit's position in the network determines the extent to which it can: a) control and/or broker information; b) participate in communications with other units; c) access diverse and complementary resources and skill sets; and d) function independently without relying on other units for the transmission of its messages.^2,6 The benefits obtained from various network positions of a work unit are summarized in Table 1.

A position of brokerage in an organizational network, such as Unit A's in Figure 1, enables the work unit to control the flow of communications through the path on which they reside.^6,8 Work units privileged with brokering opportunities also enjoy the benefits of access to more skills, expertise, and resources than other units that lack such brokering opportunities.

Proximity (or path length) between a work unit and other units, as is the case with Unit B in Figure 1, affords several benefits including quick access to knowledge and higher potential for being exposed to diverse information within the network, which may lead to innovative and domain-relevant knowledge.⁹ Units that have direct links or shorter path lengths with all others become aware of opportunities earlier than those with longer paths. On the other hand, the potential for the distortion of information and for being unaware of opportunities is high when longer paths or indirect relations are involved.

Work units, such as Unit C in Figure 1, that hold positions of prominence are more likely to engage in high communication and knowledge exchange activities. In addition, they have high potential to create new linkages that enhance social capital and organizational capabilities. Positions of prominence have been associated with directness of ties/connections, which, in turn, affords benefits such as information access and transfer of tacit knowledge.⁸

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Aligning Work Unit's Network Position with its KP Style

The ultimate objective of any knowledge management effort is to achieve the highest possible level of effectiveness. KM effectiveness, as seen in Table 2, refers to: unit members' satisfaction with the KM cycle—the process of creation, acquisition, storage, transfer, and application of knowledge, the unit's level of creativity and adaptability, and the contribution of the unit's KM to its overall effectiveness.¹⁰

To utilize organizational knowledge effectively, we posit that a work unit's KM effectiveness depends on the unit's network position being appropriately aligned with its KP style. For example, work units with higher positions of prominence may enhance their KM effectiveness if their KP style is primarily personalization. Figure 2 presents our research framework for enhancing KM effectiveness.

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Research Findings

We conducted a survey to empirically verify our framework. The data for the study was obtained from 27 business units of an advanced aerospace technology company located in a major southern city. We administered two survey forms. The first form was issued to individual members of all 27 units. On an average, there were 27 people in each work unit. Table 2 summarizes how we gathered information on their KP style and assessment of unit KM effectiveness. The second form, filled out only by the leaders of the 27 units, provided us with the data required to determine the network positions of the various work units.

Drucker defined knowledge workers as high-level employees who apply theoretical and analytical knowledge, acquired through formal education, and who have a habit of continuous learning.⁵ This is exactly the type of respondents we targeted in this study. Indeed, about one third (35.2 %) of the respondents classified themselves as managers, and the remainder consisted of engineers, analysts, specialists, and a variety of other knowledge workers.

As depicted in Figure 2, KP style for a unit can be positioned along a continuum ranging from codification to personalization. The results of our study support the postulate that KM effectiveness is enhanced when KP style is appropriately aligned with its network position. In particular, the results suggest that units that hold positions of prominence and that engage in high communication activity, as well as those that control the flow of information and have high information access, are effective in knowledge management so long as personalization is a dominant characteristic of their KP style. On the other hand, units that hold less privileged network positions will have greater KM effectiveness if they practice more codification in their KP style.

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Conclusion

Our findings show that work units with high brokerage positions play a powerful role in enabling and controlling the flow of information that they transmit from one unit to another. This is consistent with the view that high brokerage positions provide units with an ability to absorb knowledge from others that are otherwise unconnected.⁴ Thus, high brokerage positions can benefit and improve KM, particularly when new projects demand diverse information or expertise that requires more personalization. Another reason why the association between brokerage position and KM effectiveness was found to be higher when the unit's style involves more personalization is that a brokerage position provides opportunities for accessing diverse skills, expertise, and resources, which often involve tacit knowledge. However, these opportunities would not be brought to fruition unless the unit is able to engage in rich personal communication, i.e., personalization, to effectively absorb such tacit knowledge.⁸ Positions of prominence are associated with directness of ties, information/knowledge access benefits, and more active communication with other units.^1,6 Units that hold positions of prominence are in the hub of communication activity and have access to rich sources of information and knowledge, which makes their KM practices more effective when they rely on the deep tacit knowledge of their members.

Proximity between a work unit and other units implies higher extents of coordination and communication with other units, which in turn means strong ties leading to increased resource sharing and information access, better use of complementary skills, mutual learning, joint problem-solving opportunities, and scale economies from pooling investments.¹ These benefits become more pronounced if the way they process knowledge in the unit is predominantly personalization. The units are able to pass on product-specific technical know-how and knowledge through direct interactions.

Recent studies on KM practices have focused on the ability of individuals or units to absorb and process organizational knowledge. The investigation of the impact of network positions on KM has been limited. This article attempts to provide valuable insights into KM practices from the perspective of social networks. The work unit manager may improve the scope and effectiveness of the unit's knowledge management practices by first understanding the basic KP style for the unit: codification or personalization. The manager may further enhance KM effectiveness by harmonizing this style with the unit's network positions.

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