Creating new knowledge

Creating new knowledge is a central component of knowledge transformation at boundaries (Carlile, 2002:453), and more generally, innovation (Nonaka & Takeuchi, 1995;

Nonaka, 1994). However, the knowledge transformation literature does not describe how new knowledge is created at organizational boundaries. I draw from the literature that defines new knowledge creation as a process where existing knowledge, information and meanings are combined in social interaction (Dougherty, 1992b; von Krogh, 1998), and focus my initial data analysis on situations where existing knowledge is combined across the organizational boundary. As my initial coding of all 1031 speech acts revealed individuals synthesized represented knowledge in a number of speech acts, I define the cross-organizational boundary knowledge creation as a within-discussion process where two or more individuals first represent existing knowledge, and then some from across the organizational boundary combines the knowledge representations in a single speech act. This definition is consistent with broader knowledge management literature that

views knowledge creation as interpersonal knowledge exchange that results in a combination of pieces of knowledge previously held at by different persons (Grant, 1996b;

Nonaka & Takeuchi, 1995:65; Nonaka & von Krogh, 2009; Smith, Collins, & Clark, 2005; Zahra

& George, 2002). However, these authors have not explicated how the knowledge creation process occurs at organizational boundaries. In the following example, I show how knowledge creation by synthesizing disparately held pieces of knowledge occurs in a cross-organization boundary discussion. This case discussion deals with Suburban’s formal strategy process. The discussion includes two facilitators (Facilitators 1-2), four strategists from Suburban’s central administration (CA Strategists 1-4), and a strategist from the social services department (SSD Strategist). As the actors in this discussion come from different organizations within the city of Suburban, an organizational boundary forms between them. First, CA Strategist 1 represents his knowledge concerning how the annual strategic planning process begins:

“It technically starts with an environment analysis kick-off, but, John isn’t it so that the city top management team discusses the outlook of the coming year in their winter seminar, and then they give a summary [of the discussions] to the departments and the strategy group. There are some members present here as well, and they are the ones that are able to plan the process.Formally, it’s the city board that starts the process, and they deal with their own internal working process and start scheduling…This year they did, during the month of March if I recall correctly, they delegated work to the committees about…now that the nationwide restructuring of municipal services is urgent…so how this issue should be addressed.”

In this speech act, CA Strategist 1 represents knowledge by telling how the process starts and who does what; we learn that formally the process starts by environmental analysis, but in reality it is the city top management team that is considered to instigate the process by discussing future issues in their annual winter seminar. After a brief dyadic clarifying discussion between CA Strategist 1 and Facilitator 2, CA Strategist represents his knowledge about how the strategy process proceeds and what is the relationship between top management team and environment analysis:

“The top management group schedules the process, and they do it together with the city council. In terms of environment analysis, there are some people from the departments that are members in the strategy group”

In this speech act, CA Strategist 2 first assesses the earlier represented knowledge concerning who starts the process, and represents his own knowledge concerning the issue (top management team in collaboration with city council). In this representation, he also clarifies that although the top management team actually starts the process (as CA Strategist 1 told earlier), the process starts with collaboration with the city council. After this CA Strategist 2’ clarification, Facilitator 2 asks about how the departments are involved in the environment analysis stage of the strategy process. Then, SSD Strategist represents his knowledge:

“As the elder care director I am in the top management team --- There’s different rounds of revisions in different years”

This SSD Strategist’s knowledge representation then enables CA Strategist 3 to synthesize knowledge from across the organizational boundary regarding how the strategy process begins and what are the responsibilities of different actors in it:

“Yes, like Jack [from social services] said, there’s different rounds; this year it started with less work because of last years efforts. Last year we had department] units involved, so this year we used that information. So yes, [within-department] units are involved in the process.”

In this speech act, CA Strategist 3 transforms knowledge by synthesizing knowledge that has been represented by members from different organizations. Thus, organizational boundaries are crossed, and as a result, new knowledge is created. CA Strategist 3’s synthesis suggests that the process actually is different every year. Furthermore, that each year’s process is different from the previous year probably explains some of the confusion apparent in the discussion; how can one understand a process that seems to be different every time it occurs? Therefore, the new knowledge provided by CA Strategist 3’s synthesis is potentially very important. Moreover, that CA Strategist 3 was able to synthesize knowledge required knowledge representations from across the organizational boundary, in this case by a member of the social services organization. All the elements of the synthesized, new knowledge existed in different organizations, but they could be put in this new form only after they became represented and then synthesized at the organizational boundary.

Even basic business knowledge is dispersed in organizations (Cyert, Dill, &

March, 1958). More recent research has argued that assimilating knowledge from external sources is an important part of organizational innovating and new knowledge creation (Cohen & Levinthal, 1990; Matusik & Hill, 1998) and that converging knowledge (Leonard & Sensiper, 1998) is a key component of organizational capability (Grant, 1996a) and it is something that strategists in the middle management are capable of doing (Mantere, 2008). This literature, however, does not specify how exactly the integration or convergence of knowledge occurs in collaborative interorganizational settings. My finding concerning knowledge synthesis specifies these arguments in the context of interorganizational collocated strategy workshops by showing how knowledge is integrated from across the organizational boundary in collaborative strategizing so that the participants can “see the world in a new light” (Bechky, 2003b:321). Based on these findings, I propose that

Proposition 4: Knowledge transformation at the organizational boundary leads to new knowledge when existing represented knowledge is synthesized at the boundary