ABSTRACT:
The implementation of
knowledge-based approaches in modern organisations has reached peak level
throughout the world. Knowledge Management (KM) scholars have not lagged behind
in trying to understand why modern entities have suddenly turned into knowledge
as a way of achieving sustainable competitive advantage. There is now consensus
amongst KM scholars that the Knowledge-Based View perspective is a better
reflection of the modern entity. After an in-depth literature research, I
traced the genesis of the Knowledge-Based View (KBV) from the contribution of
classical scholars such as Socrates, Plato and Aristotle.
Keywords: Knowledge-based View,
Knowledge management, Strategic asset.
1. Introduction
The Knowledge-Based View
(KBV), though is officially recognised as part of the post-World War II
developments characterised by advances in information communication technologies,
can be traced back to the pre-technology era. Proponents of the Knowledge-Based
View agree that the KBV is an extension of the Resource-Based View (RBV). The
RBV may be considered an off-shoot of Penrose’s classic, The Theory of the Growth of the firm (TGF). According to Penrose
(1959: p24) a firm is more than an administrative unit, it is also a collection
of productive resources. Thus, the size of a firm could best be measured by the
productive resources it employs. The resource-based view perceives the firm as
a “unique bundle of idiosyncratic resources and capabilities where the primary
task of management is to maximise value through the optimal deployment of
existing resources and capabilities, while developing the firm’s resource base
for the future” (Grant, 1996: p110).
The resource-based view is
applied to explain that differences in performance between and amongst firms
depends on the valuable resources they possess (Curado
& Bontis, 2006). These resources may be physical,
human or organisational and tangible or intangible. In terms of the RBV,
sustainable competitive advantage is achieved when a firm possess certain
strategic assets (Halawi et al., 2005). Both the RBV
and its off-shoot, the KBV, have deep roots in the field of strategic management.
In line with the KBV, managers enhance a “firm’s capacity to produce
efficiently by updating or advancing knowledge” (Nickerson & Zenger, 2004:
p1).
The KBV defines knowledge
as a strategic resource that does not depreciate in the same way traditional
economic productive factors do since it has the capacity to generate increasing
returns (Wang et al., 2009). According to the knowledge-based view of an
organisation, knowledge and information have become the underlying sources of
competitive advantage (Patton, 2007). This implies that knowledge stocks and
the learning capabilities of organisations become key economic factors in the
productivity of knowledge-based organisations (Martin de Castro et al., 2007).
This article traces the
genesis of the knowledge-based view as it is popularly known in Knowledge
Management (KM) literature. While the classical scholars such as Socrates,
Plato and Aristotle have provided modern scholars with the theoretical basis upon which they can base their views on
knowledge, it were the seminal works of Drucker
(1991) and Nonaka (1991) that led to modern
organisations adopting a knowledge inclined strategy. Drucker
(1991) developed a model for the systematic approach to the development of
“craft and skill” for knowledge and service workers as part of his quest to
improve the productivity of knowledge-based organisations.
While Drucker
(1993) may be credited for coining the concepts “knowledge worker” and
“knowledge work”, it was Nonaka (1991) who introduced
the idea of a “Knowledge-creating company”. In his argument, a
“knowledge-creating company” is defined by its ability to create new knowledge,
disseminate the knowledge quickly throughout the organisation and embodying the
knowledge into technologies and products. I hold the view that Drucker deserves to be called the father of the Western
model on knowledge management and Nonaka should be
rightly referred to as the grand master of the Japanese model on knowledge. Nonaka (1991) laid the basis for the distinction between
the Western model and Japanese model when indicating that
“…creating
new knowledge is not simply a matter of ‘processing’ objective information.
Rather, it depends on tapping the tacit and often highly subjective insights,
intuitions, and hunches of individual employees and making those insights
available for testing and use by the company as a whole” (p97).
The two overlapping phases
in the historical development of the knowledge-based view, as identified from
KM literature, are described in this article in terms of the pre and post
Information Communication Technology (ICT) knowledge views.
2. The
Pre-Information Communication Technology Knowledge View
Knowledge is as old as
humankind. The classical scholars made great strides in explaining knowledge and
the art of knowing (learning) before information communication technology came
into existence. Among the classical scholars, Plato wrote extensively about
knowledge in his work the Republic (380 BC). Being a disciple of the
Greek philosopher, Socrates, Plato was schooled in the dialectic art used by
Socrates. It is alleged by classical commentators that Socrates himself never
wrote his own works, but that most of the views on Socrates’ thinking were
written by Plato. “Plato writes where Socrates did not but he writes the words
of Socrates” (Phillips, 2000: p46).
Socrates described
knowledge as “care of the mind” and believed that the main reason why some
people could not succeed in life was due to “bad training and bad company”
(Ferguson, 1970: p. 293). Socrates laid the foundation that would later lead to
the modern dichotomous reference of knowledge in terms of codified and tacit
knowledge. It was Socrates who distinguished between true opinion (beliefs) and
knowledge. Socrates believed that “true opinions do not stay long in our minds,
but they can be fastened into our minds through recollection” so that they
become knowledge (Cottingham, 1996: p12). True
knowledge as defined by Socrates meets the same definition as that of tacit
knowledge. Tacit knowledge is described as the knowledge that is primarily in
the heads of people (Becker, 2007).
It is apparent when
analysing the contribution of various classical writers (from Socrates to
George Hegel) that the authors never disagreed to the definition of knowledge.
They only differed on how people would acquire knowledge. But the disagreement
into the process of knowing forced the majority of scholars to accept two forms
of knowledge. Socrates, Plato and Aristotle would refer to beliefs (opinions)
and knowledge while later (during the 18th century) the German
philosopher Immanuel Kant in his Critique on Pure Reason would refer to
the two forms of knowledge as a priori
knowledge and empirical knowledge. A priori knowledge
entails knowledge that is independent of sensory experience, and the empirical
knowledge relates to knowledge possible through experience (Cottinham,
1996: p43). These two forms of knowledge were later to be adopted by modern
writers when Nonaka introduced the concept codified
and tacit knowledge in his work The Knowledge Creating Company in 1991.
Though Knowledge Management
theory is presently steeped in this dichotomous debate of viewing particular
aspect of knowledge as codified and another form as tacit, I argue that there
is only one knowledge form, but with various dimensions. This is also supported
by Soo et al. (2002)
who argued that true knowledge, by definition is non-codified. They
insisted that as soon as knowledge becomes codified and transmitted, it ceases to
be knowledge and becomes data. The next sub-sections present the classical
definition of knowledge and the classical art of knowing.
2.1. The Classical Definition Of Knowledge
The classical definition of
knowledge is “justified true beliefs”. In line with this definition, Socrates
would argue that “true opinions (beliefs) can be aroused by questioning and
turned into knowledge” (Cottingham, 1996: p12). The
German philosopher, Jacob Friedrick Fries (writing
during the 19th century) made a clear distinction between beliefs
and knowledge in his work Wissen, Glaude und Ahndung (Knowledge,
Beliefs and Aesthetic sense):
“In everyday consciousness belief is much
weaker than knowledge, for knowledge forces itself upon us through the strength
and evident nature of its intuitions and never leaves us as long as we live”
(Richter, 1989: p69).
Thus, knowledge is of a
higher degree when compared to beliefs and aesthetic sense. This is rooted in
Plato’s argument that true knowledge is more stable and permanent and must
relate to reality (Cottingham, 1996). Plato viewed
“knowledge as the most powerful of all faculties” which is infallible,
incorrigible and absolute (Vlastos, 1971: p72).
2.2. The Classical Art Of Knowing
When analysing the views of
various classical writers on the art of knowing, two groups of dichotomous
theorists stand out:
·
The
innatists (a priori knowledge): influenced by
Plato’s idea of innate knowledge as that which is within us in the form of
“true thoughts which only need to be awakened into knowledge by putting
questions” (Cottingham, 1996: p1). Plato “thought our
a priori knowledge was a result of an immediate acquaintance in a
previous disembodied state with the relevant truths” (O'Connor & Carr,
1982: p9)
·
The
empirists (posteri
knowledge): emanating from Aristotle’s argument that knowledge develops
“naturally from sense perception” (Cottingham, 1996:
p19).
Phillips (2000: p62)
appropriately observed that the Western thought throughout its formative stages
has been dominated by these two “towering traditions”. According to Phillips,
the innatists emphasised ideas, rationality and the
mind while the empirists focused on the material
things, sensible experience and bodily passions. It is apparent that the key
building block behind knowledge according to the innatist
is reflection, while sensation is regarded as the foundation of knowledge by
the empirists. In line with the innatist
theory, Plato indicated that “knowledge comes from teaching rather than
persuasion, but from recollection rather than teaching” (Vlastos,
1971: p10). The influence of Plato’s innate knowledge theory is apparent in
Polanyi’s work, The tacit dimension
(1966).
Just like Plato who
described knowledge as practical, Polanyi (1966) argued that tacit knowledge is
rooted in practical operations. It is the tacit nature of knowledge that
captured the imagination of Japanese scholars such as Nonaka
(1991 and 1994), and Nonaka and Takeuchi (1995). The
notion of innate knowledge as originated from Plato formed the basis of René Descartes’s Mediation on First Philosophy published in 1641. As reflected by
Descartes, knowledge originates internally within the mind rather than away
from the senses (Cottinham 1996: p26). As a reaction
to the idea of innate knowledge, John Locke wrote in his Essay Concerning
Human Understanding in 1690 that “the senses are the primary source of all
knowledge” (Cottingham, 1996: p27).
John Locke’ ideas led to
the development of the empirist conception of empeiria a
Greek word meaning experience. He would argue that “observation via the senses,
plus the mind’s subsequent reflection on the data so acquired, constitutes the
basis of all knowledge we have, or can have”. While John Locke sought to
disprove of the doctrine of the innatist, he succeeded
in proving that the senses can improve the ‘innate capacities’ of the mind. Cottingham (1996) observed how Locke “sets out his own
account” of how people come to knowledge of general propositions:
“…
the senses first ‘let in particular ideas’ and furnish the ‘yet empty cabinet’
(the image here is of the mind as a chamber that is entirely empty until data
from the senses enter it); the mind then gets to work on these materials,
abstracting from the particular and learning the use of general names” (p27).
John Locke, just like his
predecessor Aristotle, viewed the mind as a tabula rasa and that the
senses and experience provided the inscriptions into the human mind (Cottingham, 1996). On the other hand, the German
philosopher Gottfriend Leibniz defended the innate
theory of knowledge in his New Essays on Human Understanding (Nouveaux Essais sur ľentendement
humain) published in 1704. Leibniz sought to
answer the question:
“Whether
all truths depend on experience, that is on induction and instances or if some
of them have some other foundation?” (Cottingham,
1996: p34).
Gottfriend Leibniz found as an answer to the
above question that the senses though necessary for all our knowledge, they are
not sufficient to provide all our knowledge. He agreed with John Locke that the
“two sources of our knowledge” are the senses and reflection (Cottingham, 1996: p38). Locke and Leibniz only differed
about which of the two deserved much emphasis. Locke maintained that the senses
should dominate while Leibniz was of the view that reflection should be of
paramount importance behind human knowledge.
David Hume, writing in his
work An Enquiry concerning Human Understanding in 1748 argued that sense
experience “must be the basis of all knowledge concerning matters of fact or existence”
(Cottingham, 1996: p37). While Locke and Leibniz were
more integrative in their approaches by accommodating the two dominant
classical strands on knowledge, Hume was to argue that though the senses alone
were not to be depended on, they were the proper criteria of truth and
falsehood. According to David Hume, reason (reflection) should only be
accommodated for the purpose of correcting any shortfall in the senses.
Amongst the work of
classical authors who attempted to bridge the gap between the rationalists (innatists) and the empirists, the
work of the German philosopher Emmanuel Kant Kritik der reinen Vernuft (Critique of Pure Reason) published in 1781 is much
convincing. Kant illustrated that the two forms of knowledge (innate/priori knowledge and empirical/posteriori
knowledge) were intertwined when arguing that “thoughts (priori) without
content (posteriori) are empty; intuitions without
concepts are blind, the understanding can intuit nothing, the senses can think
nothing” (Cottingham, 1996: p44-45). Immanuel Kant
was adamant that “true” knowledge could only arise through the union of the two
forms. As such, he argued that “all analytical propositions are still a priori even if their concepts are
empirical” (Allison & Heath 2002: p62). Emmanuel Kant believed that the two
forms of knowledge emanated from a common root, namely sense and understanding.
Considering the views of the various classical
writers, it is apparent that knowledge and knowing cannot be comprehensive if
viewed in terms of often diverge dichotomous theorist. I argue that the various
theoretical strands of knowledge should be viewed as various stages of the
common knowledge denominator. Hence the work of George Hegel, Phenomenology
of the Spirit which became popular in the early half of the 19th
century deserves more emphasis. Rather than debating the various approaches to
knowing, Hegel indicated that knowledge “comes about via a process” (Cottingham, 1996: p46). Cottingham
described Hegel’s four main stages of knowing as follows:
Stage 1:
sense-consciousness - whereby a person comes into acquaintance with objects
through the senses
Stage 2:
perception - involving a cognitive grasp of the ‘world’ through making some
judgement
Stage 3:
understanding - a conception which involves recognising the causal powers
underlying properties of things
Stage 4: self-consciousness - interacting with objects
as purposeful and self-conscious agents. Hegel referred to this stage the “native land
of truth”.
I advocate a view that
knowledge should not be approached from a single ideological framework.
Knowledge should be embraced from both the innatists
and empirists perspectives. Polanyi (1966: p6-7)
justified this line of reasoning by pointing out that the “wissen” and “können” (in
German) meaning knowledge of a more intellectual (innate knowledge) and
practical (empirical knowledge) nature “have a similar structure and neither is
ever present without the other.” As highlighted by Polanyi, there is only one
art of knowing covering both the practical and theoretical aspects of
knowledge.
Based on the above
exposition, it is apparent that the classical scholars viewed knowledge as a
valuable resource to the well-being of individuals in their society.
3. The Post ICT Phase Knowledge
View
While the classical writers
could be described as focusing on the importance of knowledge to an individual,
the post-ICT phase scholars are recognised for their role in observing the
importance of knowledge in organisational performance. The Knowledge-Based View
only gained currency in management literature when managers started to
recognise that knowledge is a strategic asset which is rare, valuable,
imperfectly imitable and non-substitutable (Halawi et
al., 2005).
The “present emphasis” on
Knowledge Management resulted from the economic, industrial and cultural
developments which took place since World War II (Drucker,
1993 and Wiig, 1997). Wiig
observed that the increasing important role of knowledge in the competitiveness
and success of organisations started to gain ground around the mid-80s. This
was accompanied by a flurry of publications and empirical studies which proved
that knowledge has become a fundamental factor behind the success and all
activities of an organisation. In line with the knowledge-based view, Wiig (1997: p6) argued that an organisation would become
more competitive and successful if it could develop ‘a quality’ knowledge
content. According to Wiig (1997), such ‘a quality’
knowledge content should be rooted in the expertise and competence of the
organisation’s employees. The underlying assumption with the development of the
knowledge-based view is that KM helps boost employee expertise and competence. Wiig (1997: p8-9) highlighted the historical developments
leading to the knowledge-based view in six phases as follows:
Phase 1: The
agrarian economies where people were solely producing products for consumption
and exchange
Phase 2: The
natural resource economies dominated by exploitation of mineral resources
Phase 3: The
industrial revolution emphasising efficiency of the production process
Phase 4: The
product revolution wherein emphasis had been on entrenching product leadership
positions
Phase 5: The
information revolution which emphasised IT as a tool to reinforce operational
excellence and product leadership
Phase 6: The
knowledge revolution which puts more focus on the application of human
expertise to add competitive value to products and services.
The sixth phase has
catapulted modern organisations into Drucker’s
knowledge revolution. Drucker (1991: p69)
appropriately observed that the knowledge revolution will dominate the
‘management agenda’ for several decades. The emphasis by modern organisations
on knowledge and information could be traced to phases 5 and 6 of Wiig’s six phases in line with the historical developments
of the knowledge-based view. Rademakers (2005)
captured these six phases into three main economic revolutions:
1. Agricultural revolution of over 8000
years (first wave)
2. Industrial revolution of the 18th
century (second wave)
3. The knowledge revolution (third
wave).
Rademakers (2005) observed that the knowledge
revolution could be traced back to the 1950s. He insisted that due to the third
wave revolution, knowledge has become a key force that holds over the
competition, enabling innovation and organisational development.
Just as reflected by Drucker (1991), Rademakers (2005)
pointed out that improved quality and productivity emanated from a more
informed and knowledgeable workforce:
“Business
leaders realise that continuously leveraging and renewing the corporate
knowledge base makes the difference between excellent performance or muddling
through- or even worse, failure” (p130).
Hence, Drucker
(1991) alluded to the dominance of the productivity challenge in the modern
management agenda. He reflected that the knowledge revolution’s main concern
was about improving the productivity of knowledge workers. Drucker
(1993: p8) referred to this as an “economic challenge”. It is an economic
challenge as it relates to efforts by organisations to improve their
productivity by improving the productivity of their knowledge workers.
Furthermore, Drucker (1993: p6) called Rademakers’ third wave knowledge revolution phase a
“post–capitalist new world order.” He argued that in the post-capitalist new
world-order the real controlling resource would not be capital nor land nor
labour, but knowledge. According to Drucker (1993),
knowledge workers are the knowledge executives “who know how to allocate
capital to productive use.” They “own the means” and “tools of production” in
the form of their knowledge, which they “take” wherever they go.
It is “generally accepted
in theory that the workers’ knowledge of their job is the starting point for
improving productivity, quality and performance” (Drucker,
1991: p77). As part of solving the productivity challenge, Rademakers
(2005) argued that companies should continuously and rapidly renew their
knowledge base. According to Rademakers,
organisations still playing by the “old rules of the game of industrialisation”
are slowly being displayed by those with new business models and organisational
systems tuned to the requirements of a knowledge-driven economy. Rademakers (2005) went further into the knowledge-based
view debate by analysing the third wave of the knowledge revolution phase into
two distinct but overlapping phases:
·
Initial
phase: this is driven by information collection, adaptation and distribution
·
2nd
phase: emphasises knowledge transfer, exchange and creation.
The two phases of the
knowledge revolution have led to the dichotomous views wherein information
management practices are sometimes confused with Knowledge Management
practices. This is reminiscent of the classical scholars’ views on knowledge. Metaxiotis, el al. (2005) noted that the Knowledge
Management literature should separate information and knowledge. Nonaka (1994) addressed this divide by distinguishing
between information and knowledge as follows:
“Information is a flow of messages, while
knowledge is created and organised by the very flow of information, anchored on
the commitment and beliefs of its holder” (p45).
The divide between
information and knowledge contributed to the explicit-tacit knowledge dimension
(Nonaka, 1991). Nonaka
suggested that the starting point in the process of knowledge creation was
tacit knowledge and the end point explicit knowledge. Nonaka
and Takeuchi (1995) described the whole process of knowledge creation in terms
of the SECI model. The SECI model refers to four modes (Socialisation,
Externalisation, Internalisation and Combination) of the knowledge conversion
process. The SECI model would not be explained in this article because it is
already popular in KM literature.
This article assumes the
view that knowledge is different from information. Nevertheless, increased ICT
connectivity enhances the flow of information. There is no doubt in KM
literature that ICTs play a crucial role in the knowledge-based economy. ICT
connectivity allows organisations to tap information without restrictions
imposed by time and space (Coakes, 2006). The key
question that needs to be asked here is whether widespread ICT connectivity
constitutes Knowledge Management or information management. Rademakers
(2005: p131) argued that corporate success is “to a large measure determined by
the knowledge resources enabling them to make sense of the information chaos.”
What Rademakers was arguing was that Knowledge
Management is different from information management, and the knowledge
revolution has never been about “just information” management, but is about
“making sense” of the information at an organisation’s disposal. Drucker (1993) referred to this when describing his
‘post-capitalist society’:
“But in the knowledge
society into which we are moving, individuals are central. Knowledge is not
impersonal, like money. Knowledge does not reside in a book, a databank, a
software programme; they contain only information. Knowledge is always embodied
in a person; carried by a person; created, augmented or improved by a person;
applied by a person; taught and passed by a person; used or misused by a
person” (p210).
In this regard, Drucker (1993) insisted that the educated person would
become the knowledge society’s representative. The knowledge revolution has
already dominated the management agenda ever since Drucker
made his prediction about the ‘post-capitalist society’. I believe that Drucker’s views laid a solid focus for a knowledge-based
agenda of the modern organisation.
Conclusion
In this article, I have
chronicled the historical roots of the Knowledge-Based View. There is no doubt
that the classical scholars have provided KM scholars with the theoretical
foundations upon which the KBV theory later developed. When analysing the
classical definition of knowledge as “justified true beliefs,” one is compelled
to point out that it was unnecessary to confuse Knowledge Management with
Information Management. In this regard, the Socratic view was that a
distinction should be made between ‘true opinions’ and ‘true beliefs’. This
dichotomy between true opinions and true beliefs blessed KM theory with the
explicit-tacit knowledge paradigm.
Similarly, two strands of knowledge have been
observed by the classical knowledge theorists. The innatists
(building on Plato’s idea of innate knowledge) referred to a priori knowledge to explain knowledge
that could be acquired independent of sensory experience. On the other hand,
the empirists (influenced by Aristotle’s views)
defined knowledge acquired through experience as posteri knowledge. The reference
made by modern KM scholars to both tacit and explicit knowledge is clearly
rooted in the a priori and posteri knowledge
paradigm. Thus, the knowledge-based view owes its origin to the views of the
classical scholars.
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About the Author:
Dr Oliver Jan Mbhalati is currently a Deputy Chief Education Specialist at the Department of Education in the Republic of South Africa. He completed a Doctorate in Business Leadership at the University of South Africa in 2011. His thesis is titled, Knowledge Management Practices In Rural Areas Of South Africa.
E-mail: oliverj@webmail.co.za