Complex Responsive Processes in Organizations

Learning and Knowledge Creation

Ralph Stacey

• Publisher: Routledge
• Year: 2003
• eBook ISBN: 9781134535187
• Topic: Business
• Subtopic: Business General
• Index: Business

The past decade has seen increasing focus on the importance of information and knowledge in economic and social processes, the so-called 'knowledge economy'. This is reflected in the popularity amongst practicing managers and organizational theorists of notions of learning, sense-making, knowledge creation, knowledge management and intellectual capital in organizations and more recently, of emotional intelligence as an important management skill. This insightful book:

• argues that the information processing view of knowledge creation held by systems thinkers is no longer tenable
• develops the alternative perspective of Complex Responsive Processes of relating, drawing on the complexity sciences as a source for analogies with human action
• places self-organizing interaction at the centre of the knowledge creating process in organizations.

Learning and knowledge creation are seen as qualitative processes of power relating that are emotional as well as intellectual, creative as well as destructive, enabling as well as constraining, and the result is a radical questioning of the belief that organizational knowledge is essentially codified and centralized. Instead, organizational knowledge is understood to be in the relationships between people in an organization and has to do with the qualities of those relationships.

1: Introduction: can learning and knowledge creation in organizations really be managed?

• The historical context
• Moving on from systems thinking
• Outline of the book

It is now widely thought that the world economy has left behind the industrial age and is moving into a new age of knowledge work in the information society. This global pattern of change is said to require new forms of organization and different ways of managing them. Many argue for a move away from bureaucratic, hierarchical forms of organizing and extol the virtues of more flexible, flatter, leaner structures modeled on networks in which authority, responsibility and decision-making are decentralized and distributed. Attention is drawn to the very different ways in which professional knowledge workers must be managed, compared to the manual workers of the industrial age. It is said that knowledge workers must be empowered so that they can participate more fully in the development of the organization. It is supposed that this will unleash the creativity of the organization.

The global change toward the knowledge economy is also said to have major implications for the nature of an organization’s assets. In the industrial age, the main assets were physical resources, plant and equipment, which were traded in markets and could thus be valued. Measures of asset value coincided to a significant extent with the valuation of the organization by the capital markets. Managing the value of a corporation could then be understood as managing physical assets and the workers, the “human resources,” who used them. Now, in the new knowledge economy, knowledge is the major asset and since it is not directly traded in markets, it is not measured and recorded in corporate balance sheets. As a result, enormous gaps have opened up between the asset values recorded by a corporation and the value capital markets place on the corporation itself. This clearly creates problems if the aim is to manage assets so as to produce shareholder value. This is the motivation behind the Intellectual Capital movement and its call to measure the intellectual capital of a corporation and manage its knowledge assets.

The new management task, then, is to manage the creation of knowledge. However, knowledge is thought to arise in individual heads, largely in tacit form and this creates significant management problems. First, the professional experts who possess knowledge could leave, taking it with them. One requirement, then, is to adopt management styles encouraging the professional elite to stay, such as empowerment. Another requirement, one that takes up a great deal of the literature on knowledge management, is to extract tacit knowledge from individual heads and convert it into explicit knowledge. In this form, so it is said, knowledge can be stored and manipulated using information technology and thus owned and controlled by the corporation. A second problem to be faced in the management of knowledge is that individuals, it is assumed, are reluctant to share the knowledge they possess. This requires management styles that encourage and persuade people to share knowledge and spread it around the corporation. A call is made for rediscovering the lost art of dialogue.

What I have briefly outlined above is a sketch of what I will be calling mainstream thinking about knowledge in organizations. I call it mainstream because views of this kind form the central message of most books I have come across that are directed at practitioners. Such views are also much in evidence in the academic literature on the subject. There are, of course, criticisms of this mainstream thinking particularly in the academic literature. Some have pointed to the importance of communities of practice in the generation of knowledge, and closely linked to this, there is the view of organizations as sense-making systems. Both place importance on narrative forms of knowledge and the role of storytelling and informal conversations in creating and storing knowledge. It is recognized that these forms of communication are important in using and spreading knowledge, and thus are to be encouraged.

The historical context: extending the sphere of control

Consider the place of this call for the management of knowledge in its historical context. In the first part of the last century, management was thought to be essentially the function of controlling the performance of tasks, that is, the particular actions members of an organization were required to undertake in order to produce its goods and services. It was the motivation and the actions of people that were to be managed. In the second half of the last century systems thinking led to an important shift to managing not just tasks but whole systems of roles required to carry out the tasks. In other words, it was no longer just the details of task performance but the whole inter-related system of tasks and roles that was to be managed. It was people’s relationships that were to be managed. Then in the 1980s, the emphasis shifted once more. It was thought insufficient to manage the system of tasks and relationships. In addition, the system of values and beliefs, the culture, was also to be designed, managed and controlled. By this time the focus of control had widened from the detail of tasks, to systems of relationships, to systems of beliefs. Not long after this, the learning organization became a popular concept. The scope of management was extended to the learning process. It was assumed that learning was primarily individual in nature, meaning changes in the mental models that were thought to comprise an individual’s mind. In other words, it was changes in people’s minds that was now to be managed. It was thought to be possible for people to engineer changes in their own minds and in the minds of others.

The last century, then, witnessed a steady expansion in the scope of what was to be designed, managed and controlled. When that extension of control is couched in systems language it sounds innocuous enough. It is the extension of control from systems of tasks, relationships, values and beliefs to systems of learning and mental functioning. However, when one remembers that one is talking about human persons the flavor changes. During the twentieth century the extension of control was from the actions of a human person at work, to the relationships between human persons, to the beliefs and values of human persons and then to the very minds of human persons. Now, with the movement to measure intellectual capital and manage knowledge, the focus of what is to be controlled is shifting to knowledge itself. Again, if this is thought of as another system, it does not sound too bad. But when it is recalled how close knowledge is to the very identity of human persons, it sounds far more ominous to me. To talk of a corporation owning knowledge, managing knowledge, controlling knowledge, is to talk of corporations controlling the very identities of human persons. Some even talk about measuring “human capital” as a component of intellectual capital, referring to it as the “soul” of the organization. At this point, there is nothing left of the human person that falls outside the ambit of organizational control.

The irony is that one of the fundamental assumptions of this whole way of thinking is that of the primacy of the individual. It is assumed that an individual’s mind is in his or her head and that knowledge is possessed by the individual in tacit form in his or her mind. It is the heroic individual who has the visions driving corporations. It is the heroic leader who achieves organizational success. Having placed the individual at the center of everything, however, we then talk about “human capital” as the “soul” of the organization and come to take it for granted that knowledge can be owned, measured and controlled. In the process, we reduce the human person to insignificance. I think that a very important reason why this has happened is the way we are thinking. We think that the human mind is a system, that human relationships are systems, that knowledge itself is a system. Running through mainstream thinking, and also through much of the criticism of it, there is a taken-for-granted view that there is a category called organizational knowledge and that it can and must be managed. This reflects an underlying way of thinking in which knowledge is reified, treated like a “thing” that can be possessed, that corporations can own. Knowledge creation is thought to be a system and it this view that makes it even remotely plausible, let alone ethical, to talk about managing knowledge and measuring intellectual capital.

Moving on from systems thinking

This book aims to move on from systems thinking about learning and knowledge creation in organizations to argue that knowledge arises in complex responsive processes of relating between human bodies, that knowledge itself is continuously reproduced and potentially transformed. Knowledge is not a “thing,” or a system, but an ephemeral, active process of relating. If one takes this view then no one, let alone a corporation, can own knowledge. Knowledge itself cannot be stored, nor can intellectual capital be measured, and certainly neither of them can be managed. From this perspective, the mind is not a system and neither are the relationships between human persons. Instead of thinking about human acting and human relating in systemic terms, this book will be exploring a way of thinking in which individual minds, relating between people, organizations and societies are all transient processes in which human futures are perpetually constructed. The human self-conscious mind is not an “it” located and stored in an individual. Rather, individual mind arises continuously and transiently in relationships between people. Strangely enough, thinking that decenters the individual in this way actually restores the dignity of the human person and points to the capacity human relating has to pattern itself in the absence of global forms of control. Knowledge cannot be managed, and there is no need to manage it, because knowledge is participative self-organizing processes patterning themselves in coherent ways. This is the perspective of complex responsive process of relating to be explored in this book. It is not a perspective in which human agency is located either in the individual or the group/social, nor is it one in which agency is located in both the individual and the social. Human agency is not located anywhere because it is not an “it.” Instead, in the perspective to be developed in this book, human agency is processes of interaction between human bodies and those processes perpetually construct themselves as continuity and potential transformation.

The first volume in this series of books (Stacey et al., 2000) outlined the sources of this way of thinking. One source is analogies drawn from the natural complexity sciences. The first volume distinguished between two strands of thinking in the complexity sciences on the basis of their underlying theories of causality. One strand takes a Kantian view of causality in nature in which nature is assumed to unfold already enfolded forms. This causal framework was referred to as Formative Teleology, one that does not encompass an explanation of the emergence of truly novel forms. This strand of complexity thinking is an extension of systems thinking about nature. Transformative Teleology is an alternative causal framework derived from Hegel as interpreted by Mead, in which the future is understood to be under perpetual construction. This does encompass the possibility of emergent novelty and the second strand of thinking in the complexity sciences points toward it. It is this second strand of the complexity sciences that is used in this book as a source domain for analogies with human action. The main analogy to be drawn on is that of interaction. The second strand in the complexity sciences works with abstract models of interaction between abstract entities and convincingly demonstrates the possibility that interaction has the intrinsic capacity to spontaneously pattern itself in coherent ways. What if this is true of interaction, that is, relating, between human bodies? What if relating between human bodies also has the intrinsic capacity to spontaneously pattern itself in coherent ways? This book will argue that abstract interaction is analogous to human relating as understood from the perspective of a number of social psychologists, principally Mead and Elias. From this perspective, human futures are under perpetual construction through the detail of interaction between human bodies in the living present, namely, complex responsive processes of relating. This perspective represents a departure from, and a challenge to, systems thinking.

It is the purpose of this book to explore just what complex responsive processes mean and how they perpetually construct human futures, particularly how they perpetually construct human knowledge in organizations. Relating between diverse people in their local situations is understood as the process in which knowledge is perpetually reproduced and potentially transformed at the same time. This relating is understood as communicative interaction in which power relations emerge. Individual minds/selves and social relationships, individual and collective identities, are all understood as aspects of the same phenomenon, namely, relating. There is no separation between individuals as one level and groups, organizations and societies as another level. Knowledge creation is then understood as an active process of communication between humans. It follows that knowledge is not stored, but perpetually constructed. Knowledge is not shared as mental contents but perpetually arises in action. Knowledge is not transmitted from one mind to another but is the process of relating. What I am trying to do in this book, therefore, is to point to an alternative to systems thinking when it comes to understanding learning and knowledge in organizations. The shift is from whole systems to local processes in the living present.

The perspective to be explored in this book, then, focuses attention on relationships. However, it does so in a different way to some other responses that contest the extension of control ideology. Some of those others call for a return to ancient wisdom and closer links with nature, for finding a simpler way, for more caring in organizations. The perspective I will be exploring, however, is not about returning to the past and moving back to nature. Rather, it is an attempt to understand what people are currently doing in the complex, sophisticated organizations of the twentyfirst century, with all their promise of increased wealth and their disturbing potential for destruction. The perspective I will be exploring is not a prescription for more caring relationships but an attempt to understand the multiple aspects of human relating as caring and not caring, and even worse, as disrespect and aggression. Yet others who focus on relationships are concerned with whole systems and seek to understand organizations as wholes. The perspective this book explores, however, is a move away from systems thinking and is, therefore, not about understanding and working with whole systems. On the contrary, it advocates focusing attention on local interactions between people. This book is not about a search for deeper levels and structures, or contact with transcendental wholes. On the contrary, it explores how we might understand the ordinary, observable communicative interactions between people in local situations in the living present.

Outline of the book

The two chapters in Part I outline the basic assumptions underlying mainstream thinking about learning and knowledge creation in organizations. The frame of reference here is that of systems thinking, including the psychological form of systems thinking, namely, cognitivism. One of the key assumptions is that the individual and the organization are different kinds of phenomenon. Although the group, team or organizational level is granted important motivational effects, it is usually assumed that it is ultimately the individual who learns and thus creates knowledge. That knowledge is thought to be located in individual heads in largely tacit form and expressed as professional skills. For knowledge to exist at the organizational level it must be shared by individuals. The issue of organizational knowledge then becomes one of transmission from one individual to another and to constitute organizational knowledge it must be extracted from individuals and stored in explicit form. Others downplay the importance of formally sanctioned, designed rules and codes of practice and elevate the role of informal stories as the location and means of sharing what an organization “knows.” However, this approach mostly continues to make the same underlying assumption that individuals and organizations are different phenomena to be explained at different levels of aggregation. All that changes is the mode of transmission of knowledge between individuals and the location of organizational knowledge.

Throughout, knowledge is thought of as representations, models and maps, stored either in individual heads or in shared stories, practices and codes. Thinking, talking and acting are taken to be separate with acting flowing from talk and talk flowing from thought. Chapter 3 will argue that the split between individual and group/organization is an inappropriate one when it comes to thinking about organizational learning and knowledge creation. It will argue that individual and group are fractal processes that require to be understood at the same explanatory level. From this starting point, attention is focused upon the nature of relationships between people in an organization and the concern with sharing and transmission between individuals, with codification and technology, slips into the background. It becomes highly problematic to talk about extracting knowledge from individual heads as an activity that can be designed or managed. The whole of idea of designing the learning organization or managing organizational knowledge is called into question.

The chapters in Part II of the book develop a different theory of learning and knowledge creation in organizations, presenting an explanation of human action that is not built upon a split between the individual and the social. These chapters will argue that individual mind and the social are the same process. Mind is the action of a body, just as social relationships are and individual minds and social relationships arise together, simultaneously. Knowledge is under perpetual construction in the detail of relationships between people. It is only already formed rather than new knowledge that can be captured in explicit form, codified and stored as an organizational asset. It becomes meaningless to talk about managing the learning and knowledge creation process.

The two chapters in Part III compare the complex responsive process perspective with mainstream thinking and explore the implications of the differences. Finally, because a number of writers on knowledge management turn to the notion of autopoiesis, the Appendix explains why the theory of autopoiesis is an inappropriate source of analogy for human action.

The key conclusions are these. It is not possible to measure intellectual “capital” in any meaningful way. Even more, it is an illusion to imagine that “you,” some powerful person in an organization, can manage learning and knowledge creation, quite simply because no one can manage human minds and human relationships of which knowledge is an essential aspect. The ideas of measuring and managing knowledge arise from a particular way of thinking about organizational life, which it is one of the aims of this book to question. What “you” can do, including the most powerful, is become more skillful in participating in the relationships you already participate in, in generating the knowledge you already generate with others, by paying attention in a different way. The main aim of this book is to point to ways of thinking that direct attention to different matters in different ways, that direct attention toward the complex responsive processes of relating in which knowledge is created.

PART I: The foundations of mainstream views on learning and knowledge creation in organizations: systems thinking

The two chapters in this Part outline the key assumptions, usually unquestioned, upon which reasoning about learning and knowledge creation in organizations is generally based.

First, the organization and its individual members are thought of as two different explanatory levels so that the question of knowledge has to be dealt with at two levels. Second, organizations themselves, as well as learning and knowledge creation by, or within them, are all thought of as systems. This focuses attention on interactions between sub-systems of which organizations are composed and between organizations as systems. Groups and individual members of an organization are also thought of as sub-systems, where individuals are mental systems. Third, interaction between systems and sub-systems is largely thought of in terms of the transmission of mental contents stored in the minds of individuals and then shared by them. The considerable problems inhering in these concepts of storing, transmission and sharing of mental contents are rarely addressed. Fourth, the explanation of transmission usually distinguishes between tacit and explicit mental contents as distinct categories of knowledge. The shaky foundations of this distinction are not normally subject to much scrutiny. Chapter 2 will explore these assumptions in mainstream thinking and how they are developed and critiqued.

Chapter 3 will be concerned with further exploration of the fundamental assumption, namely, the distinction between individual and organizational levels of explanation. A key concern will be that of human agency. At which level is agency to be located? In other words, where does the capacity for, the cause of, human action lie? Is it at the individual level? Or is it at the social level? Chapter 3 will question the whole idea of splitting the social and the individual and suggest that such a split creates problems that can only be overcome by abandoning it and thinking about the individual and social as one explanatory level.

This conclusion sets the scene for Part II of the book, where arguments will be presented for thinking about the social-individual as one ontological level and agency as processes, complex responsive processes of relating, that pattern themselves in the perpetual construction of the future as continuity and potential transformation. This perspective presents a significant challenge to system-based mainstream thinking about learning and knowledge creation in organizations. Such a challenge has major implications for the notion that knowledge creation can be managed.

2: Mainstream thinking about learning and knowledge creation in organizations

...

Table of contents

• Cover Page
• Half Title page
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• Series preface
• Acknowledgements
• 1 Introduction: can learning and knowledge creation in organizations really be managed?
• Part I The foundations of mainstream views on learning and knowledge creation in organizations: systems thinking
• Part II Toward a complexity perspective: the emergence of knowledge in complex responsive processes of relating
• Part III Systems thinking and the perspective of complex responsive processes: comparisons and implications
• Appendix Autopoiesis: an inappropriate analogy for human action
• Bibliography
• Index