70 Hatami and Galliers
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The latter involves relying primarily on experience-based tacit knowledge, subjective
judgments, intuition, and “gut feeling” as opposed to hard data. Although there is a
tendency to view both as intermingled and complementary, the debate on rationality
versus relativism in the literature argues as to which sources are tapped by top managers
to make sense of complex and uncertain situations in making strategic business deci-
sions. In the light of Organizational Memory, this has considerable implications on the
knowledge strategy, Organizational Memory structure, and systems.
Organizational Learning
New perspectives on learning and innovation arise from the knowledge-based view
of the firm. For example, “absorptive capacity” (Cohen & Levinthal, 1990) refers to the
ability of a firm to recognize the value of new, external information, and to use it for
commercial value. Lei, Hitt, and Bettis (1996) suggest that competencies that lead to
competitive advantage have dynamic qualities and create value only through continuous
development. Increasingly, more executives are becoming aware of the potential benefits
of KM and KMS for continuous organizational learning and retaining the lessons
learned.
KM strategy involves the fostering of a LO. The concept of the LO is based on the
work of Argyris (Argyris & Schon, 1978) and Senge (1990). Senge (1990) discusses the
concept of generative learning, which is about adaptive learning and coping with
accelerating pace of change. He introduces a view on leadership based on vision, which
is to facilitate generative learning.
Mintzberg (1973) argues that strategy is less a rational plan arrived at the abstract
than an emergent phenomenon. Furthermore, decision makers should continually learn
about shifting business conditions and balance what is desired and what is feasible.
Accordingly, the key is not getting the “right” strategy but fostering strategic thinking,
whereby it is important to achieve insight into the nature of the complexity and to
formulate concepts and worldviews for coping with it.
Impact of Systems Thinking on Decision Making and KM/OM
Organizational Learning theorists (e.g., Senge, 1990) emphasize the systems per-
spective in attempting to explain the element of tacitness (i.e., tacit knowledge and hidden
assumptions) as the underlying currents of decision making and strategy formulation,
especially where there is a lack of explicitness in terms of quantitative support for further
analysis. This argument may provide one part of the explanation of why difference in
knowledge reuse may have different impact on the effectiveness of decisions.
When confronted with a situation, the decision maker recalls memories of past
performance and experiences that seem most relevant. This recollection acts as a
reference and consciously or unconsciously influences current perception of the
problem situation and hence subsequent behavior (i.e., decisions made, style of commu-
nication, and approaches to similar challenges). Here, OMS may serve as a powerful tool
to make selective choices on remembering past lessons learned. Since context shapes
human perception to a great extent, the way the initial tacit-to-tacit knowledge is
communicated into the explicit determines how understanding is gained of the problems
situation.