Projects As Triggers Of Knowledge Production In
Project-Based Companies: An Autopoietic View
Kaj U.
Koskinen, Tampere University of Technology, Pori
ABSTRACT:
This conceptual article draws attention to the autopoietic epistemology as a potential observational scheme to describe project-based companies’ knowledge production. In the beginning of the article the concept of project-based company is described. After that the epistemological assumptions are highlighted with the purpose to get a better understanding of what is knowledge and how knowledge is produced. And then follows the main content of the article, namely the study on autopoietic knowledge production in four different knowledge related project work environments. The article ends with the conclusion according to which it is a necessity to project-based companies that new projects differ enough from each other by that means bringing about the continuation of autopoietic knowledge production.
Keywords: Knowledge production, Project-based company, Autopoietic epistemology
Introduction
During the second half of
the 20th century, there has been a shift from the functional
organisations to the project-based organisations. This shift has been caused by
the changing nature of work from mass production, with essentially stable
customer requirements and slowly changing technology, to the current situation
in which every product supplied may be against a bespoke design, and technology
changes continuously and rapidly (Turner and Keegan, 1999).
Another recent shift which
surfaces as particularly important is an economic and social order in which
knowledge, not labour, raw material or capital, is the most important resource
for businesses (e.g. Drucker, 1994). In that respect it is not surprising that
also companies which base their businesses on project deliveries have found
that the classical sources of competitive advantage, e.g. low cost, have made
room for knowledge as the key source of such advantages. For example, in many
technological project deliveries the quality and sophistication of functions
are more important sources of success than the price. Therefore, it is
important for individual people and project teams working for these types of
companies to be able to continuously acquire and produce new knowledge.
However, in project-based companies knowledge production is often a complex task. This is due to the fact that project teams are often a set of diversely skilled people working together over a limited period of time, and they often include members who have never worked together before and who do not expect to work together again. Therefore, many authors argue that the knowledge produced during the project implementation is lost when the project team is disbanded and the people go back into their own organisations.
The goal of this article is to describe with the help of autopoietic
epistemology how knowledge is produced in project-based companies. The special
focus is on different knowledge related project work environments. In the
pursuit of this goal the following discussion first describes the concept of
project-based company. Then the discussion deals with two epistemological
assumptions, namely cognitivist and autopoietic epistemologies. And then
follows the main content of this article – namely the study on the
autopoietic knowledge production in four different knowledge related project
work environments.
Project-Based Companies
Project-based companies are organisations in which the majority of products are made against bespoke designs for customers. These types of organisations may be stand-alone, making products for external customers, or subsidiaries of larger firms, producing for internal or external customers. They may also be consortiums of organisations that collaborate to serve third parties. (Turner and Keegan, 1999)
The governance of such
companies is a challenging task. Their heavy reliance on projects implies that a
high degree of discretion is granted to lower levels. Since projects enjoy
autonomy, they easily become separated from each other, with the risk of
turning the company into a series of disconnected projects. This means that the
project-based companies will tend to suffer from certain weaknesses, e.g. bring
about company-wide development and learning (Hobday, 2000) and difficulties in
linking projects to firm level business processes (Gann and Salter, 2000).
Furthermore, individual projects typically comprise a mix of individuals with
highly specialized competences, belonging to different functionally
differentiated worldviews (Dougherty, 1992) making it difficult to establish
shared understandings, a common knowledge structure. (cf. Lindkvist, 2004)
Thus, project-based
companies tend to be, not only strongly decentralized, but also quite loosely
coupled (Orton and Weick, 1990). This also applies to the knowledge dimension.
Relevant pieces of knowledge will be distributed (Tsoukas, 1996) into a
multitude of local settings and to a great extent reside in individual members.
In other words, project-based companies are not like functional organisations
with a long and stable history of tenured individuals, a standing tradition of
cohort groups, and low turnover. Governance in a project-based company context
must take into account the organisation’s fundamental dependence on its
knowledgeable individuals, and its potential weaknesses in dealing with issues
of firm integration and development.
Although project basing is
often conceived of as a appropriate way of producing customised products (e.g.
Lundin and Midler, 1998) research on knowledge production in project-based
companies consistently highlights the problems involved in attempting to
capture and share knowledge and learning across projects (DeFilippi, 2001).
Many authors point to the inherent contradiction between organising to meet
short term project task objectives and the longer-term development nature of
organisational learning processes (Ekstedt et al., 1999; Bresnen et al., 2003).
However, learning through projects is one of the main ways by which
project-based companies interact with, and are changed by their environment.
This means that using knowledge gained from failures or successes that have occurred
in projects is Vital For The Long-Term Competitiveness Of Businesses (E.G.
Schlichter, 2001; Williams Et Al., 2005).
Epistemological Assumptions
The literature of organisational
knowledge reveals that companies – project-based companies, in our case
– can be regarded as knowledge-intensive systems of knowing (e.g. Love et
al., 2005). However, by this
literature the epistemological assumptions have not been well clarified.
Therefore, the attempts to improve a knowledge-based theory of a company are
relevant here because it is assumed that knowledge has an important role to
play in project-based companies’ knowledge production (Spender, 1996).
So, the epistemological
distinction that is highlighted in the following is mainly based on the
contributions of Maturana and Varela (1980), Varela et al. (1991), Luhmann
(1986) and von Krogh and Roos (1995). These authors refer back to cognitive
science because it has been the most influential for scientists studying
organisational knowledge. The following two sub-sections provide short
illustrations of cognitivist and autopoietic epistemologies.
Cognitivist Epistemology
The cognitivist epistemology is based on the idea that the mind has the ability to represent reality in the way that corresponds to the outer world, be it objects, events, or states. This is also frequently referred to as the ‘intentionality of the mind’ (cf. Goldman, 1986). Broadening the idea, the organisations are considered to be systems that develop knowledge by formulating increasingly accurate representations of their pre-defined worlds. Because knowledge is seen as a representation of these worlds, knowledge accumulation and dissemination are the major knowledge production activities in an organisation: the more knowledge an individual or an organisation can gather, the closer the presentation is to reality.
Knowledge production in the cognitivist epistemology means to improve representations of the world through assimilating new experiences. According to Bruner and Anglin (1973), an individual actively constructs knowledge by relating incoming information to a previously acquired frame of reference. In other words, when gathering information from the external environment the brain stores facts, relates them to existing experiences and creates a picture of the world. The world is considered to be a pre-given object, event or state, which can be perceived in an objective way. What varies from one person to another is the ability to represent reality. The truth of knowledge is understood as the degree to which inner representations correspond to the world outside. As new things are learned, this truth will constantly be improved.
Autopoietic Epistemology
The autopoiesis theory (Maturana and Varela, 1980), which is the basis for the autopoietic epistemology (von Krogh and Roos, 1995), has gradually evolved into a general theory of systems (e.g. Luhmann, 1986; Mingers, 1995; Morgan, 1996; Bakken and Hernes, 2002). The theory’s main thesis is that the components of an autopoietic system are used to produce new components and their relations so as to recreate the system. In other words, an autopoietic system is self-referential, which means that the components accumulated by the system themselves affect the components of the system. From this it follows that the production of components does not depend on an input-output relation with the system’s environment, but everything that the system needs for its production is already in the system. This also means that an autopoietic system is simultaneously open and closed. In the case of a human being, an individual is open to data (i.e. perturbation) but closed to knowledge from outside the individual.
According to autopoietic epistemology, input is not regarded as knowledge but as data, i.e. knowledge is data put into a certain context. This means that knowledge cannot be directly conveyed from one individual to another, because message have to be interpreted before its becoming knowledge. Moreover, according to autopoietic epistemology, information does not equal knowledge, but it is a process that enables knowledge production and communication to take place. von Foerster (1984, p. 193) states that “…information is the process by which knowledge is acquired”. This is, books, manuals, memos, computer programs, this article, etc., are data – not information.
Thus, an autopoietic system is autonomous. However, although the autopoietic system is autonomous, it will be perturbed by changes in its environment. For example, when a project team member, a project team, or a project-based company (i.e. autopoietic systems) interacts in a recurrent manner, data produced elsewhere reach them as perturbations. These perturbations trigger information processes in the receiving system. That is, the perturbations trigger knowledge production, but not specify it. The receiver’s own knowledge structure determines which perturbations are allowed to enter the system, and what changes in the existing knowledge structure are available at a given point in time. This is, data triggers information process, which interprets this data with the help of existing knowledge. In other words, this triangle of interdependency is the foundation of autopoietic knowledge production.
For example, when a teacher delivers a speech, two students build different knowledge. The transmission by the teacher is the same for both, but the knowledge produced is different: knowledge therefore cannot be directly transmitted but only produced with the help of interpretations of messages. (Vicari and Troilo, 1999) This means that the only way to produce new knowledge is to utilise existing knowledge. Within a project team the people cannot directly transfer knowledge, but they can help in the formation of situations where an individual team member can produce new knowledge.
According to the discussion above, we choose autopoietic epistemology to be the basis of our understanding of knowledge and knowledge production in project-based companies. The choice is based on the idea to find a new observational scheme to deal with these issues.
Projects And Autopoietic Knowledge Production In Different Project Work
Environments
Project teams are
organisations of people dedicated to specific purposes or objectives. Projects
themselves often involve large, expensive, unique, and high risk undertakings
which have to be completed by a certain date, for a certain amount of money,
within some expected level of performances. At a minimum, all projects should
have well defined objectives and sufficient resources to carry out all the required
tasks. (e.g. Steiner, 1969; Pinto and Kharbanda, 1995; Kerzner, 1997) Seen the projects from the viewpoint of
knowledge production they are considered to be triggers (i.e. perturbations) of
information processes which interpret project-based data and then produce new
knowledge. In other words, new projects are events that encourage or compel a
company to respond to external stimuli (Winter, 2000).
According to Koskinen
(2004), with the help of identification of the knowledge gap between the
existing knowledge that is owned by the system (i.e. individual team member,
project team, or project-base company) and the target knowledge that is
acquired by the system, it is possible to identify different knowledge related
project work environments. The following discussion describes four different
knowledge related project work environments which illustrate circumstances and
situations where autopoietic knowledge production takes place (see Figures 1
and 2).
Figure 1: Four Knowledge Related Project Work
Environments
Mechanical Project Work
Environment
In a mechanical project
work environment (left lower part of Figure 1, and left lower part of Figure 2)
a system tries to reach predetermined single-minded interpretations. Moreover,
in a mechanical project work environment knowledge utilised is often explicit
in its nature. Success in a mechanical project work environment requires that
the systems are skilled in adapting instructions. The tasks are precisely defined
and a large proportion of the relevant knowledge is transferred in a written
form, i.e. utilisation of information technology in knowledge transfer is
usually abundant. Strictly speaking, knowledge is not transferred for
discussion but only to be obeyed. Because the knowledge in a mechanical project
work environment is in a great part in the explicit form, it can be sent to
people involved over vast distances. The mechanical project work environment
fits in projects in which quality criteria must be met precisely in advance.
For example, in fully
standardized house building projects the handling of knowledge is seen as
processing of knowledge primarily in a written form, and every problematic
situation is met by more processing of knowledge. In these types of projects
the possibility of multiple interpretations is not usually taken into account.
This means that a new standardized house is manifestation of explicit
knowledge. This also means that only small changes (i.e. only slightly
different projects) in the companies’ environments keep autopoietic
knowledge production alive. Of course, there is always a possibility that same
data (i.e. exactly similar project) is interpreted differently, and also then
autopoietic knowledge production is kept in running.
Organic Project Work
Environment
In an organic project work environment (right upper part of Figure 1, and right upper part of Figure 2) the ambiguity of knowledge is significant. The tasks involve inconsistent situations, and the changes that they produce and the challenges produced by circumstances do not necessarily have immediate answers. In the organic project work environment solutions to problems are directed by non-linear thinking (e.g. in research and development projects). People act on the basis of worldviews born of their intuition and experience. The elements of knowledge consist of the multidimensional knowledge stores of the project participants, which mean that knowledge is often produced with the help of face-to-face interactions.
Figure
2: Knowledge Related Project Work
Environments (cf. Ståhle and Grönroos, 1999)
The knowledge in an organic
project work environment is, to a great deal, more difficult and
multidimensional form than in a mechanical project work environment. A lot of
the knowledge and know-how of a system is based on experience-based tacit knowledge.
For example, when the manufacturer produces a concept of the new machine, then
the concept is in great part a manifestation of tacit knowledge. The concept
creation may begin with team members discussing a variety of personal
experiences, but as it proceeds, the expressions should converge through the
understanding of individuals into one concept that becomes their common focus.
The team members may apply creative techniques that make their insights and
experiences more explicit, helping to bundle them into key words that finally
form a concept. Crystallisation of concept is achieved when all the team
members feel that the concept corresponds with what they know tacitly. In other
words, this view on knowledge handling is fully in line with the autopoietic
epistemology. However, it is possible that the large changes in the
company’s environment (i.e. new unfamiliar projects) cannot be handled by
the company’s existing knowledge structure, and then the autopoietic
knowledge production disintegrates.
Semi-Mechanical And Semi-Organic Project Work Environments
Semi-mechanical (left upper part of Figure 1) and
semi-organic (right lower part of
Figure 1), and in the middle of Figure 2 project work environments are probably the most prevalent. Knowledge
is produced with the help of both face-to-face communication and information
technology. However, the utilisation of information technology in knowledge
production and utilisation is more abundant in the semi-mechanical project work
environment than in semi-organic project work environment, and vice versa,
face-to-face interaction based knowledge production and utilisation is more
abundant in semi-organic project work environment than in semi-mechanical
project work environment.
For example, project
delivery practices have a lot of common in paper and pulp and steal industries,
but there are a great amount of differences between house constructing and
product development projects. Same way of knowledge production does not fit
all. There are obvious practical differences. The knowledge production culture
varies considerably; some practices are more authoritarian and have more formal
procedures than others, some are specials while the others are diverse, and so
on. All these differences have implications for knowledge production.
For another example, in
many investment projects the information technology based document management
is an important foundation for knowledge sharing. Engineers can access data on
past projects, including plant designs. They can also use information
technology for accessing reports from sales people and a directory of in-house
experts. However, this explicit knowledge can often serve only as a basis for
deciding what tacit knowledge to apply. This means that also explicit knowledge
is a subject to alternative interpretations, because, according to autopoietic
epistemology, everybody understands knowledge in a subjective way, i.e.
depending on the contents of the personal worldview.
Conclusions
The current theories about knowledge production in project-based companies are largely based on the idea of codability and transferability of knowledge between the people and across the borders. This type of thinking is based on the traditional cognitivist epistemology that means that knowledge represents external reality. The new autopoietic approach suggests transition from these theories to the theory of knowledge production as a creational matter, which type of thinking can potentially provide a new explanation for project-based company’s knowledge production.
On the basis of this paper it has been concluded that:
1. According to autopoietic epistemology, the new knowledge come from making distinctions based upon existing knowledge, which is itself constructed from knowledge of previous experiences – and so on recursively. Therefore, knowledge production in a project-based company means that an individual team member, a project team and a project-based company itself produce knowledge consistent with currently shared knowledge. In other words, a project-based company’s knowledge production at various organisational levels is an expression of change in knowledge that always maintains compatibility between the autopoietic system (i.e. individual team member, project team or company) and its environment. Therefore, in order to increase the project-based company’s ability to produce new knowledge, it becomes necessary to create perturbations. This means, in turn, that the project-based company’s knowledge production addresses how it is able to create these perturbations, (e.g. new and different projects), and thereby produce knowledge around them.
2. Interpretations of events, problems and solutions vary with individuals. This means that the organisational interpretations are made possible through the sharing of people’s interpretations. With the help of this sharing, the organisational interpretations transcend the individual level. This paves the way for conceptualising the project-based company in a manner how an individual project team member produces new knowledge is similar to the way a project team produces new knowledge, which is similar to the way a project-based company produces new knowledge.
3. Finding viable ways, in which project-based companies can ensure that knowledge is produced and communicated across project boundaries and up and down the organisational levels, is a very important issue. Autopoietic epistemology provides a lens through which we may advance our understanding of the dynamics of project-based companies’ knowledge production at individual, project team, and project-based company levels.
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Contact the Author:
Kaj U. Koskinen, Industrial
Management and Engineering, Tampere University of Technology, Pori, Pohjoisranta
11, B.O.Box 300, FI-28101 Pori, Finland; Tel: +358 2 6272839; Fax: +358 2 627
2727; E-mail: kaj.koskinen@tut.fi