Returning to the Hypertext organisation

The underlying principles of the Hypertext organisation design have been explained in detail in the preceding section. This section will combine these principles and construct the model from its building blocks.

The Hypertext organisation design (figure 6) has been introduced as a three-layered organisation in which employees create knowledge using the knowledge creation spiral, while moving through these layers. The business-system layer and the project-system layer’s complementing characteristics support the processes of combination and internalisation (business-system layer), and socialisation and externalisation (project-system layer). The knowledge-base layer functions as an organisational knowledge repository in which newly created knowledge is stored and from which it will be

distributed back into the organisation.

Self-organising teams are created from the business-system layer, to create knowledge using socialisation and externalisation in the project-system layer. When this task is completed, the team members move to the knowledge-base layer to document and store their findings, before returning to the business-system layer. The knowledge creation process is continued in this layer, but this time focusing on combination and internalisation. Employees remain in the business-system layer until they are called upon to form a new self-organising team and move to the project-system layer. The knowledge creation process is seen as a spiral (see 2.2.3.) in which the four modes of knowledge creation (see 2.2.2.) function interdependently to increase the knowledge assets in overall size (see

28

2.2.4.) and branching them out to form new knowledge assets (see 2.2.2.). All the while, the knowledge assets move back and forth in the tacit-explicit continuum (see 2.2.1.).

The Hypertext organisation structurally supports the middle-up-down management model (see 2.2.7.) and embodies the cyclical motion of knowledge creation in a stream of employees throughout the organisation structure. It provides the organisation with the ability to acquire, create, exploit and accumulate new knowledge continuously, in a cyclical process. Being able to switch between

“contexts” of knowledge creation enables the Hypertext organisation to respond to changing internal and external knowledge requirements.

Figure 6: Reimagined Hypertext Organisation (based on Nonaka, 1994)

It is unclear to which degree the organisation can move through the three layers. From what is written, one can conclude that the shifts between the organisational layers can apply to the organisation as a whole, which would mean that the entire organisation moves into the project- system layer simultaneously. On the other hand, Nonaka’s explanation (1994) can also be interpreted as a scenario where only parts of the organisation move into the project-system layer. In the latter case all layers are occupied at any given moment. A third interpretation is that the Hypertext organisation design should be viewed as a non-practical, stylised view of the organisation. If the conceptualisation of three different layers is dropped because a practical distinction between the layers is based on aspects such as the level of autonomy, self-transcendence and cross-fertilisation,

29 what is left is a model that can be implemented in practice without the impact of having to move (parts of) the organisation. If Nonaka had meant for the model to be viewed in this light, it is expected he would have explained it as such. This leads to the conclusion that this third interpretation is potentially distant from what is intended.

How the individual building blocks from the preceding sections fall into place is also not thoroughly explained by Nonaka (1994). By piecing the elements together one can come to an understanding of how the author has envisioned the model. The article would benefit from a greater emphasis on the coherence between the model’s elements. Because of this lack of clarity, the following explanatory segment is based on an interpretation of Nonaka (1991, 1994):

In the project-system layer the modes of socialisation and externalisation take place after being triggered by the creation of self-organising teams and promoting inter- and intra-team dialogue and discussion. After a period of documenting and storing the new knowledge in the knowledge-base layer, the business-system layer is where the modes of combination and internalisation take place through coordination between employees and applying the newly created knowledge. These modes are triggered by the documenting of the new knowledge and by experimenting with the new knowledge in day-to-day activities.

In the project-system layer the top management sets out the overall direction and creates budgets. The direction should be formulated in ambitious, but ambiguous goals; examples are provided as “limit pursuing projects”, “key technology projects” and “new product or market development”. The ambitious, but ambiguous goals lead to a goal interpretation where contradictions have to be solved. The goal interpretation and potential environmental fluctuation introduce creative chaos to the organisation, which is expected to be conducive to knowledge creation effectiveness. The knowledge creation effectiveness is further enhanced by love, care, trust and commitment, redundancy of information, and requisite variety. Requisite variety also has an effect on cross fertilisation in self- organising teams, which helps in unlearning.

The parallel operating self-organising teams are led by middle managers, who secure the resources that top management has made available and form the main communication hub between the upper and lower organisational levels. The middle management is also responsible for chaos reduction and the creation of a new order from the ambitious, but ambiguous goals. They do this together with the members of the self-organising teams by harmonising the contradicting terms and attaching meaning to the task with which they have been entrusted. In this way, the middle management serves as a change agent. The factors affecting the effectiveness and efficiency of knowledge creation in self- organising teams are cross fertilisation, autonomy and self-transcendence.

30

How knowledge creation through combination and internalisation in the hierarchy of the business- system layer takes place is not exhaustively discussed by Nonaka, apart from the elaboration he has provided on the processes of combination and internalisation. The suggested causal relation between organisational hierarchy, or top-down management, and combination and internalisation (Nonaka, 1988b), is hypothesised to stem from absence of information and decision problems at lower organisational levels, which reduces the opportunity to explore solutions, or deviate from the path that has been set out by the top management. Under the top-down management system, there is a low personal interaction with information, which negatively affects the amount of knowledge absorption and accumulation. From these arguments it is clear that top-down management is ill- equipped for socialisation or externalisation and more suitable for combination and internalisation. Prerequisites for this side of the Hypertext organisation design are the processes of coordination among employees and documentation of existing knowledge (combination process), and promoting experimentation with newly created knowledge in a trial-and-error fashion (internalisation process). A network of the most important conceptualised relations in the Hypertext organisation design is provided in figure 7. Note that the arrows don’t indicate causal relations, but serve to connect constructs with their underlying principles or triggering mechanisms.

The items are grouped to highlight their interconnectedness and context in the model. Several boxes have been coloured to emphasise their position in the network. The four modes of knowledge creation have been coloured blue and form the central assumption on which the Hypertext

organisation is built. Socialisation and externalisation are linked to the project-system layer because this layer is intended to stimulate these two modes of knowledge creation. Similarly, combination

and internalisation are linked to the business-system layer. Within the modes of knowledge creation-

container there are an additional five (yellow) boxes depicting the triggering conditions for each of the modes.

The containers effectiveness of self-organising teams, middle-up-down management, managing

organisational knowledge creation and knowledge scaling are placed below modes of knowledge

creation for layout purposes. These items are important for the successful implementation of the

31

Figure 7: Network of conceptualised relations in the Hypertext organisation design, based on an interpretation of Nonaka (1988a, 1988b, 1991, 1994)

32