Journal of Knowledge Management Practice, February 2003

To Facilitate Or Intervene – A Study

Of Knowledge Management Practice In SME Networks

Johan Magnusson, Gothenburg School of Economics and Commercial Law, University of Gothenburg, and Andreas Nilsson, Plexus Consortium, and Gothenburg School of Economics and Commercial Law, University of Gothenburg


The management of knowledge in organizations transgressing the traditional organizational boundaries through a purposeful cooperation with other separate juridical entities (i.e. network organizations) is in this paper studied through the identification of management activities. Through a pan-European study of SME-practice (Small- and Medium-Sized Enterprises) and with the network organizations differentiated by degree of knowledge integration we have identified three types of network organizations, namely Supply-chain Networks, Business Networks and Research-Networks. This paper concludes that knowledge management activities in network organizations can be of an either facilitating or intervening nature and that the different network types display a generic pattern regarding the mix of knowledge management activities.


With firms showing increased interest in co-operation across organizational boundaries (Black & Edwards, 2000; Cravens et al, 1994), the traditional notion of the firm as a closed, self-regulating system (Black & Edwards, 2000) is being accompanied by a distributed view of the firm that incorporates a multitude of concepts such as strategic alliances, outsourcing activities, virtual enterprising, externalisation of resources etc (Gulati, 1998; Hall, 2000). We regard the network organization as a binding term for this new notion of the firm and the novel way of regarding corporate value creation. The purpose of this paper is to investigate knowledge management activities in Small and Medium sized Enterprise (SME) networks in the European Union and draw conclusions regarding best-practice.

We define knowledge along the lines of Blackler (1995) and argue that instead of regarding knowledge as something people have, we can regard knowledge as something people do. By applying this tactic to the study of knowledge management, we shift our focus from knowledge to knowing, and from the study of knowledge-entities to the study of knowledge-activities or actions.  This paper further elaborates this by studying knowledge management in networks through the interactions between network participants. Similar approaches to identifying knowledge as an output or a manifestation can be found in for instance Starbuck (1992), Alvesson (1993) and Tsoukas (1996).

This paper is organized accordingly: After a brief introduction to the concept of network organizations and the management and concept of knowledge in said organizations we present the research methodology. Thereafter we present our findings through a brief presentation of the generic network taxonomy derived from our findings and a classification of knowledge management activities identified in the different morphologies. This is thereafter complemented in a clarification of our conclusions.

Research Methodology

The research methodology was comprised of two parallel investigations gathering empirical data from practitioners involved in or having been involved in network collaboration.

In a series of semi-structured interviews with a total of 49 individuals considered as experts within the networking field, nineteen wide ranging cases describing network practice in Europe were collected. The selection of respondents was based on criteria stating that the individual had to be employed by an enterprise involved in some sort of explicit networking. Networking was thereby defined as the co-operation of separate juridical entities with a clearly stated purpose for the collaboration. Furthermore the individual at hand had to have had substantial insight into the management of the said co-operation.

Parallel to this, a questionnaire consisting of 21 questions ranging from multiple-choice to open questions was distributed to a total of 121 respondents (fitting the same criteria as for the interviews). Due to local differences in conducting the survey, the total population is unknown, whereby the response-rate of the investigation is impossible to calculate. The final number of responses were 121.

The data from the interviews was qualitatively analyzed as case-descriptions in accordance with the previously stated purpose of the investigation. A generic taxonomy of the cases was created and complemented by a statistical analysis of the data.

Network Taxonomy

The investigation resulted in a network-taxonomy based on a differentiation of knowledge integration. Three network types were identified, namely The Supply-Chain Network, the Business Network and the Research Network, with a range from low to high knowledge integration. These types were then examined from a knowledge management perspective regarding the specific knowledge management activities of each type of network. Knowledge integration was defined and measured by the level of interaction that the partners in the investigated networks displayed in regards to their sharing of knowledge over organizational boundaries.

The Supply-Chain Network (Figure 1) displayed a low degree of knowledge integration and was usually a previous collaboration along a supply-chain that had evolved towards a network where all partners had an understanding of what the end-product was. In this case the low integration of knowledge was an affect of a very instrumental relationship between the partners in the network, where the primary communication and knowledge exchange was directly tied to production-relevancy. The partners saw no need for knowledge exchange in areas that were not relevant for the results of the supply-chain and the optimization of the interfaces of the supply-chain.



Figure 1 – Supply-Chain Network




Figure 2 – Business Network


The Business Network (Figure 2) was a constellation that had been constructed by a central actor (hub-firm) that had identified a window of opportunity and created a network to supply the need. The level of knowledge integration was categorized as medium due to the fact that this network type displayed a high level of control by the hub-firm as an affect of this actor’s role as constantly having to assess the correct/optimal constellation of the network to meet the market-need. This gave rise to a need for a high level of transparency regarding the knowledge of the participating partners, but the knowledge exchange between the partners was still limited to mostly instrumental.




Figure 3 – Research Network

The Research Network (Figure 3) on the other hand displayed a high level of knowledge integration between the networking partners. This type of network was characterized by the fact that knowledge creation was put forth as the primary objective for the collaboration. The network was usually a collection of firms with certain expertise that collaborated in some sort of research-activity where the outcome of the process was not easily defined. It could be the development of a new vaccine for HIV or a new way of producing wine, but given the fact that the experts being involved in the collaboration were given the chance to meet with other experts, the participating partners saw an opportunity to deepen their own knowledge through a high level of knowledge integration. Even though the collaboration failed to create the new vaccine, it had resulted in a learning experience for the participating companies.

Knowledge Management Activities

The knowledge management activities identified in the different network types were categorized as either facilitating or intervening activities.  The facilitating activities were defined as activities acting to provide an arena for the management of knowledge, such as the acquisition and implementation of Information and Communication Technology (ICT) and other structural investments in for instance the info-structure, as well as the creation of environments and cultures. The intervening activities were identified as activities acting to govern the management of knowledge in the arena. 

The three generic network-types all displayed a combination of facilitating and intervening knowledge management activities, but a clear differentiator was identified in what type of activity that was emphasized as the primary focus for knowledge management. The Supply-Chain Network emphasized the facilitating activities through a clear focus on investment in ICT that enabled the partners to communicate product-relevant knowledge in a specific interface. The arena was created by the knowledge manager (a role coinciding with that of the network manager) and the responsibility of the factual exchange of knowledge was left to the concerned partners.

The Business Network on the other hand emphasized the intervening activities through the hub-firm (coinciding with the role of network manager) displaying a high degree of control over the knowledge management process. Given that an arena existed (or rather had been created), the primary focus for the management of knowledge consisted of governing the factual exchanges of knowledge in the network.

The Research Network emphasized the facilitating activities through a clear focus on the creation of an environment and a culture where knowledge exchange was revered. With the Supply-Chain Network placing a strong focus on the structural facilitation of knowledge exchange, the Research Network instead focused on the cultural facilitation of exchange.


The conclusions drawn from the collected data and through our analysis can be identified as three-folded:

§         Knowledge Management in SME-networks is manifested in the management of collaborative action;

§         Knowledge Management in SME-networks can be of either facilitating or intervening nature;

§         Knowledge Management best-practice is dependant upon the type of network (with regards to the proposed network-taxonomy) that is in focus and the emphasis placed on facilitating or intervening activities.

Given these three conclusions it is possible to address the question of an effective and relevant knowledge management of network collaboration through an identification of generic knowledge management strategies.  These strategies are differentiated by where the emphasis of the knowledge management activities is to be placed. The proposed generic networks and their corresponding knowledge management strategies are:

§         Supply-Chain Networks – Facilitating strategy

§         Business Networks – Intervening strategy

§         Research Networks – Facilitating strategy

The findings of this study indicate that the management of knowledge in networks can be studied through an analysis of interaction. We therefore propose further research based on this assumption and the proposed taxonomy of networks and the corresponding strategies.


This paper was made possible through the PLEXUS-project funded by the European Community under the “Information Society Technology” programme.


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About the authors:

Johan Magnusson has a MS in Informatics from the MidSweden University, A BS. in Psychology and a BS in Business Administration from the University of Lund.  His current affiliation is with University of Gothenburg, Gothenburg School of Economics and Commercial Law, Department of Informatics (Lecturer and Phd.Candidate). His main research interests lie in knowledge management, network organizations and ERPS.  He can be contacted: Viktoriagatan 13, P.O. Box 620, SE 405 30 Gothenburg, Sweden; Phone/Fax +46317732767/+46317734754; Email:

Andreas Nilsson has a MS in Informatics from the University of Gothenburg and vast experience of practical work in network organizations. His main research interests lie in knowledge management, network organizations and enterprise analysis. His current affiliation is with Plexus Consortium (Research Assistant) and University of Gothenburg, Gothenburg School of Economics and Commercial Law, Department of Informatics (Phd.Candidate). He can be contacted: Viktoriagatan 13, P.O. Box 620, SE 405 30 Gothenburg, Sweden; Phone&Fax: +46317732747/+46317734754; Email: