Should the Knowledge- Based Economy be a Savant or a Sage?

Wisdom and Socially Intelligent Innovation. D. Rooney and B. McKenna. Prometheus. Vol. 23, No. 3, Sept 2005.
Type of paper – article
Audience – academics, Public policy professionals.
This article explores the idea that knowledge without wisdom leads to social dysfunction and cataclysm, making public policy the context of their enquiry. They explore the Aristotelian idea of practical wisdom and briefly acknowledge an Eastern perspective (the Chinese “I Ching” and Persian philosopher Avicenna). The authors use the taxonomy devised by an eighteenth century Aristotelian (Giambattista Vico) that provides a framework of four intellectual types ranging from the Savant (imprudent) to the Sage (wise people) to explore how the administrative complexities of contemporary life can be approached from a knowledge point of view. They postulate that a knowledge economy managed without wisdom is deficient and can lead to cataclysmic outcomes (they cite the dot-com crash, I am thinking of the GFC) and that policy level discourse must contain social and ethical considerations, or the “knowledge” is wanting. Otherwise we are at the mercy of rationalist, functionalist, utilitarian and technocratic driven short term gains.

The article is very technical in its philosophical approach and is a hard read. However the argument is compelling. The savant approaches ethics slowly and most often fails. The sage has both practical and theoretical wisdom and makes plans for the long term. This they argue is a humanistic approach and is better for social policy in complex technological societies in the long term. Perhaps this assertion has been proved correct by the economic events of the past year?

Effective societal management

Here are article commentaries on Karl Wiig's model, with which I disagree as being too western-centric and simplistic, and David Rooney's model, which I find appealing, but the model is the size of the system.

Crossings

Summary on Crossings

Article summary for Week 4, Class 6.

Group: Bullet Express – Helen Ng Lam, Ian Blood Worth, Torrance Mayberry and Vijay Rao.

Audience: Academics, Knowledge Management Professionals
Abstract:

This article summarises Crossings, (Cranefield and Yoong -2009). It is a research paper for facilitating the embedding of Personal professional knowledge in an complex online community.


Description:

The researchers aim was to look at how communities of practice (COP) facilitate the embedding of Personal Professional Knowledge in the complex online world we live in today. The researchers undertook the research by interviewing 41 participants from 5 different online communities, online records for additional data and using Wiki so that the participants could feedback to the researchers. The researchers were able to determine that knowledge sharing was often facilitated by the participants by “Crossing” between the different spaces online, offline, visible and invisible, formal and informal and reflective and active mediums. As the participants moved through the different mediums they changed the information into knowledge by varying it and making it there own adapting it to fit the different functions of each medium. In addition to encouraging the development of Personal Professional Knowledge, the different mediums the study also provided a space where themes with mnemonic attributes were distributed and magnified.

Review:

The article was well written although I had you review my dictionary more than once while reading this article. I did however learn a few things while reviewing this article which is what knowledge management is all about.


References:
Cranefield, J and Yoong, P (2009) “Crossings”, online information review.

The Knowing Nation: A Framework for Public Policy in a Post-industrial Knowledge Economy

Rooney, D, & Mandeville, T., (1998), Prometheus, 16(4) pp. 453-467.

Bullet Express MIM Study Group (Pennie, Helen, Vijay, Torrance, Ian).

Audience: Academics, policy Analysts, Knowledge Management professionals

Theme: As countries enter the knowledge-based global economy, it is important to have a policy framework not based on neoclassical economic theory (only having tangible assets as factors of production), but one where intangible assets (primarily knowledge) are also considered factors of production. However, additional polices are not recommended – it is preferable to filter existing policies through a “knowledge-policy matrix”, so appropriate, “knowledge friendly” amendments can be made.

Summary:

With the increasing reliance of a countries competitive advantage on effective knowledge management, it is essential that policy is put in place for the development and utilization of intangible knowledge assets. However, given the fact that knowledge is context dependent (and a multitude of contexts can be applied to any given 'item' of knowledge), it is difficult to devise specific policy that can be applied to all contexts. For this reason, knowledge policy frameworks are useful, whereby existing policies are influenced by the identified national knowledge imperative.

The following points capture some of the key ideas in this paper:

• Knowledge is a key intangible asset.
• Key Question: how do nations develop knowledge policy initiatives that span their economies coherently and efficiently?
• Policy imperatives should require openness and a capacity to learn from the external environment.
• This requires nations to be receptive to knowledge, networked to foster knowledge flow, and be able to process codified knowledge (this requires a pre-existing critical mass of tacit knowledge be present in the economy).
• Separate knowledge policies are counterproductive; they risk de-contextualizing the knowledge - reducing its value.
• Authors present knowledge as a socio-epistemological system - i.e. one in which knowledge can be interpreted differently by different people, or by the same person in different contexts.
• They present a non-reductionist perspective on the context of knowledge, which they use to drive a policy framework which promotes a dynamic, self-organizing form of knowledge management.
• Non-reductionist - i.e. the whole is greater than the sum of its parts.
• The difference between a firm's book value and its market value is a proxy for its intellectual capital. This concept scales up to the level of economies.
• Intellectual assets exist in 3 usage domains:

1. External - competitors / collaborators / communities / networks. The ability to learn from external sources is profound. It is vital that this is capitalized on.
2. Internal - regulatory framework, government/bureaucracy, infrastructure, etc. The key is that a coherent knowledge policy framework is put in place.
3. Competence of personnel. People, people, people….the people aspect of economies can no longer be ignored. People must be utilized to their full potential, to achieve true competitive advantage.

Review:

I found the article interesting and balanced. It was a little hard going at times (socio-epistemological??) but well worth the effort. The authors acknowledged the scope for debate with what they propose, and that room for refinement exists. I internally applauded when they suggested that their ideas put less emphasis on "best practice". Rooney's ideas seem more pragmatic than some, which from a practitioner perspective is refreshing.

Wisdom as an Attribute of Knowledge Work

Rooney, D., McKenna, B., and D'Agostino, F. International Conference on Knowledge Management in Asia Pacific (KMAP), College of Management, National Taiwan University, Taipei, Taiwan, 2004, pp. 118-127.

Bullet Express MIM Study Group (Pennie, Helen, Vijay, Torrance, Ian).

Audience: Academics, Knowledge Management professionals

Theme: Orthodox management practice is based on objective knowledge management, but is set to be overwhelmed by the sheer volume of knowledge available to business decision makers. That is, unless wisdom is incorporated into the organizational decision making process.


Summary:

The knowledge economy is characterized by an excess of information and knowledge. Contemporary management practice is heavily influenced by neo-liberalism, rational managerialism, and positivist science, which espouse methodological reductionism. These ideologies are referred to as technocratic rationality, and the authors argue that such an ideology leaves decision makers vulnerable to knowledge overload. Wisdom, they suggest, can be used to overcome this. They also question why wisdom has not been afforded the same status as technocratic rationalism in management science. Further, they suggest that it is essential for wisdom to be incorporated into contemporary management practice, if organizational decision makers are to make optimal business decisions.


The following points capture some of the key ideas in this paper:

• The world is more connected, better informed, and has more expertise than ever before.
• This has lead to knowledge overload, resulting in increasing complexity and uncertainty.
• Decision making is bounded by the limits of human cognition and imperfect knowledge.
  

The following figure illustrates how information production by knowledge workers feeds back positively on itself. This cycle continues ad infinitum.

• The increasing complexity of decision making is a failure of the knowledge economy. The antidote, is wisdom.
• WISDOM - characterised by good judgement, is ethical, prudent and practical. It applies imagination, insight / foresight (transcendent forms of knowing).
• WISDOM is the catalyst for reducing knowledge overload.
• Competitive advantage from organisational learning can be driven by leveraging WISDOM.
• Little literature exists regarding wisdom in management theory.
• Current management practices embodying technocratic rationality are short-sighted, and need to incorporate more people oriented and humanistic practices.
• WISDOM is a mental shortcut to trying to apply rational method and technique to all of the knowledge present in a problem domain.
  

Review:

The article was interesting and made valid points regarding current management decision making practices in an environment of knowledge overload. It made a good case for incorporating wisdom into management practice. The paper offered practical advice, although it was often buried in dense, technical text, that I found difficult to read, and follow. For example, while interesting, it is difficult to see the relevance of Superstring Theory to a discussion of aesthetics in a management paper. I also though that in trying to support their argument, the authors focussed too much on subjective measures and not enough on objective measures. To some extent however, this is consistent with the theme of the paper.

The Knowing Nation

Article:
Rooney, D. and T. Mandeville, The Knowing Nation: A Framework for Public Policy in a Post-industrial Knowledge Economy. Prometheus, 1998. 16(4): p. 453-467.

Type of article: Position paper

Audience: Employers, Employees, Knowledge Management Professionals, Public Policy Makers

Focus:
To provide an insight on the usefulness of effective management of intellectual capital

Summary:
Introduction
The authors recommend that investment in domain knowledge override the urge for policy making frameworks. Today’s focus is on managing tangible assets. The authors also assert that the first nation to do so will dominate in the twenty-first century.

Understanding knowledge in the management domain
Empirical research has attempted to measure intellectual capital but this is difficult. Focus has moved toward strategies for harnessing and growing knowledge within the boundaries of its domain. To do this means that strategists and policy makers must understand the ecology of knowledge taking into account that knowledge is dynamic but maybe both tangible and intangible.

Knowledge policy framework
The authors advocate that the two concepts of knowledge management and intellectual capital are related and explores how intangible assets create value for an organisation.

There are three usage domains of intellectual capitalwhich further expand on this:

• External structure – relationships that occur between staff and their customers, vendors etc. Knowledge is gained from and shared with customers.
• Internal structure - the workings of the organisation such as manuals, procedures, culture, communication networks etc. Internal structures provide the foundation for cohesion within leading to knowledge creation, sharing, and re-use.
• Individual competence - the abilities and capabilities of staff, the investment in their professional development and ultimately transfer of knowledge for the benefit of the organisation.

The usage domains can also bring about the notion of communities of practice (CoP) which shouldn’t consist of staff of the employer alone rather CoPs are sites of knowledge transfer and innovation either internal or external to the employer. Conversely, where the usage domains are not recognized and knowledge transfer fails then a deficit is eminent. Lessons are left unlearned and tacit knowledge is untapped.

Conclusion
A balanced perspective is critical. Knowledge creation, storage and sharing seem key to building a knowledge policy framework that can be used to grow an idea, an organisation, a market, an economy, trade.

Review:
While the article is greater than 10 years old, the themes and lessons to be learned remain current. The authors’ position is convincing in the context of understanding knowledge and its relevance for employers irrespective of the size of their organisation. However, I believe the authors’ intention is to demonstrate the relevance of intellectual capital and its management on the international stage. The article is text heavy. The reader may appreciate the use of models to demonstrate the same point. Just an opinion!

Summary by Huia for KM Crackers

Summary of 'A Model of the Material, Mental, Historical and Social Character of Knowledge'

Article summary for Week 5, Class 7.

Group: MIM-SUMMER (Ashwini, Dick, Eleanor, Kai, Holger)

Rooney, D. & Schneider, U. (2005). A Model of the Material, Mental, Historical and Social Character of Knowledge. In Rooney, Hearn & Ninan (eds). Handbook on the Knowledge Economy. Cheltenham: Edward Elgar, 19-36.

Summary

Rooney and Schneider provide an extensive overview of what the concept of knowledge actually means, and in particular what ‘knowing’ entails. The focus is on what tacit knowledge is and how ‘enigmatic and messy’ it is. (p. 19) Their overview draws on research from the sociology of knowledge (that knowledge is socially constructed and articulated), the psychology of consciousness (how we came to know things from an evolutionary perspective), research into learning (specifically how knowledge can be declarative or procedural), and intuition (how we can form ‘relationships between different sets of ideas’). Put into this context, the act of knowing becomes something deeply human and deeply cultural.
The focus of explicit knowledge also shifts within this context. Here the importance is its ability to communicate something: ‘It is not the degree of codification which is significant, but, rather, the degree to which an idea is explained or made explicit’ (p. 22). So the focus is here on what happens when a person ‘reads’ the code, rather than on the code itself. The concept of knowledge’s communicability is dependent on a person’s ability to understand the code, and this is dependent on such factors as shared understandings, context and background. The final transformation of the knowledge comes when it is enacted by another person. The authors stress that this also takes place in a contextualized and individual way: the reenactment of the knowledge is never identical as the original ‘knower’s’ enactment, as: ’different people in different parts of social systems, having different vested interests and power, and experience different rewards and frustrations’ (p. 31).

Review

This is a heavy, academic article with much technical referencing to philosophy and sociology. Its strength is that it leaves you with an overall appreciation of how knowing is not a simple process; rather it is as individual as the wiring of a person’s mind and is inseparable with their cultural context and belief system. There are many very quotable excerpts, which illustrate complex points well. As primarily being concerned with the goal of describing knowledge there are no suggestions on how these definitions can be put into practice with the job of KM in an organizational context. This is not what the authors set out to do. The focus is also clearly on tacit knowledge as this is what the authors believe true knowledge is. For more understanding on explicit knowledge, it would be better to look elsewhere.