Professional Documents
Culture Documents
MA ContinuousKnowledgeDevelopment
MA ContinuousKnowledgeDevelopment
Miomir Arandelovic
Fast technological development and worldwide operation integration had imposed a strong pres-
sure on modern companies to stay competitive, and continue producing positive business results
in the fast changing market. To achieve these goals, companies needed to adopt the continuous
improvement of its operations. However, due to difficulties to continually grow internal know-
ledge, the organizations often rely on renting the expertise through outsourcing or purchase of
the external services. While such policies could bring temporary success, it has also been proven
that they could weaken the organizational identity and the position in the field. A number of
scholarly works have been dedicated to an achievement of the sustainable knowledge growth,
however, an universally accepted integrative view of the problem has not been established.
Based on the inspiration from an ancient Taoist wisdom, the present study thus will attempt a
coordination of multiple prior findings and best practices, in a holistic framework for the conti-
nuous knowledge development in organizations that is both mathematically rigorous and intui-
tive. The proposed model postulates knowledge generation as one of the core elements of a self-
organizing system that contributes to more sustainable operations within an organization as well
The circulation of the Light is the inclusive term. The further the work Secret of the
Golden Flower advances, the more can the Golden Flower bloom. But there is a still
more marvelous kind of circulation. Till now we have worked from the outside on what
is within; now we tarry in the center and rule what is external (Lü, Wilhelm & Jung,
2010).
Continuous Knowledge Development in Organizations and Taoist Wisdom 4
strong pressure on modern companies to keep track of new technology and market changes. To
be able to continue producing positive business results and stay competitive in the fast-changing
environment, companies must strive to address the need for continuous improvement of their op-
firm performance require continuous knowledge development, rather than relying on the fixed
strategy. However, in spite of extensive efforts, firms often fail to sustainably manage necessary
knowledge development, and more than 50% of knowledge management initiatives had been
unsuccessful (Swink, Narasimhan, & Kim, 2005). Thus the present study builds upon the
theoretical findings from prior work in heterogeneous domains and best practices in the field, to
organizations.
The goals of the current study’s theoretical framework will be to embody the crucial
aspects of the previous theories in the field while addressing apparent conflicts and bridging the
gaps in the body of knowledge. In particular, the target framework aspires to offer:
minimize the set of implicit assumptions, which were often made in previous theories,
due to their prevailing social and business nature. The usage of mathematical terms in
expressing some core constructs should be able to offer a unifying and bias-free
for intuitive reasoning and wide audience. The visual representation of the proposed
knowledge development framework was inspired by the metaphor of the field of bloom-
ing golden flowers embodying the development (Lü, Wilhelm & Jung, 2010), as quoted
in Epigraph.
sue of the separation of the knowledge and identity of the organization, which had been
discussed, in regards to personal knowledge, since Plato’s Dialogs (Plato & Jowett,
1892). In addition to the philosophical concerns, it has also been proven in the field that
attribution of the knowledge management (KM) practices to the separate entities, unre-
lated to an organization, can lead to structural conflicts and inefficiencies (Senge, 1990).
operational performance and competitive advantage, has been widely accepted in the industry
since the nineties. Various views of the problem developed, however, the majority of theoretical
findings, as well as the field-based evidence, clearly demonstrate that business performance can
Even though a number of scholarly works have contributed to the subject of continuous learning
in the organizations, there has been no clear consensus on naming conventions, a set of goals or
the common methodology (Arandelovic, 2015). Various fundamental studies have generally
been focused on separate, even though closely related topics, such as organizational change by
Lewin (1958), competitive strengths by Porter (1979), organizational learning by Senge (1990),
Continuous Knowledge Development in Organizations and Taoist Wisdom 6
Nonaka (1994).
Some of the aforementioned seminal findings have often been considered together as
(VRIO) framework. Both KBT and VRIO consider that valuable and unique knowledge is a
organizational knowledge as a set of factors that makes possible for an organization to act
differently from competitors and thus promote competitive advantage. No rigorous, standardized
definition had emerged, but most of the perspectives converged to a general agreement that
Accordingly, the organizational capability has been seen as a direct outcome of the level of
A number of modern organizations, such as Internet giant Google, have based their
essential business strategy on the continual knowledge creation suggested by Nonaka (1994) and
other KBT and VRIO findings (Steiber & Alange, 2013). Investment into continuous knowledge
development paid off for Google and many other firms. However an investigation of the overall
statistical data, performed by Swink, Narasimhan, and Kim (2005), shows that the KBT
initiatives had been failing in about 50% of cases. Swink, Narasimhan, and Kim (2005) suggest
development and performance improvements, organizational executives have also been pursuing
mergers. While these approaches, driven by cost reduction or resource gap factors, often
provided direct financial benefits, in the long term they often proved to weaken the core
Keep track of the shared standards while preserving internal trade secrets. This
apparent conflict between an organization and its environment requires that IP (Intellectual
Property) of the firms need to be preserved and, on the other hand, shared with partners, vendors
and clients. Organizations are also compelled to continually adopt and integrate standard field
According to Singh and Zack (2006), the identification of the domains of knowledge and skill,
which are worth to be developed internally versus pursued externally, have to be carefully
considered. The most important factors to be taken into account in a designation of inner and
outer areas of expertise are organizational readiness for new technologies, the importance of
these technologies to the core business, as well as the proximity of the alternative knowledge
centers.
Balance the need for specialization in specific aspects of knowledge aspects versus
generic skills and flexibility. According to the findings of Leonard-Barton (1992), the core
Continuous Knowledge Development in Organizations and Taoist Wisdom 8
competencies of a firm often become rigidities in its business practice, that are difficult to correct
when the market changes. To address that issue, firm specialization lines would periodically
need to be re-evaluated and potentially modified, to adapt to the current best practices in the
measuring the quality of production of an organization, using Six Sigma methods, and
subsequently incorporating the acquired knowledge to optimize internal processes. However, the
research of Jackson and Williamson (2011) produced a seemingly opposite conclusion - that only
free experimentation and brainstorming practices can produce the organizational knowledge
robust enough to cope with unexpected issues in real-world knowledge applications. As both
conclusions were based on evidence from the field, any comprehensive framework of
organizational knowledge development should not exclude either one of these two factors, but
Systems thinking regarding firm priorities and values is usually molded by company strategists,
with an intent of imparting the core business directions to each department and individual
(Senge, 1990). However, for this process to work optimally, it is important that opinions of
experts and production results are taken into account in the formation of the core business
pragmatic processes of continual creation and transfer of knowledge across the organization.
Continuous Knowledge Development in Organizations and Taoist Wisdom 9
The field evidence demonstrated that contextual, intuitive and visual access to shared knowledge
is of high importance for the modern organizations, but it cannot be optimally implemented in an
environment where traditional, hierarchical command chain is the main point of connection
between isolated departments. However, the hierarchical organizational structure had been
historically widely established, to address the need of specialization for specific tasks. While
such structure was convenient for separation of some clearly distinguished manufacturing tasks,
it resulted in the formation of functional silos within many late 20th century firms, which made
continuous knowledge development difficult. Significant studies of the silo problem have been
conducted in recent decades and various integration solutions have been attempted, but without
knowledge development for modern firms, the focus of field studies are usually specialized and
semantically tied to the specific business areas and practices. Many of issues in implementing
various proposed practices also come from lack of the understanding of an inherently dynamic
nature of knowledge (Swink, Narasimhan & Kim, (2005). Thus, it would be useful identify core
elements of the continual knowledge development and provide some semantic-free definitions.
Definition of Knowledge
Human thinking and knowledge had always been directly related and the theories of
knowledge have often been considered as a core of philosophy and modern science. However, a
definition of knowledge had been a subject of ongoing debate for millennia. The topic has been
approached and analyzed from various complementary perspectives such as abstract and explicit
or individual and group, reflective and active angle of view (Rorty, 1974).
Continuous Knowledge Development in Organizations and Taoist Wisdom 10
Different theories of knowledge had been based on very different initial assumptions and
the application space. For instance, according to (Plato & Jowiett, 1892), a subject has a
• X is true.
While these assumptions could be considered valid in most of the circumstances, they are
not complete, which had been observed even by Plato himself, who points out that they do not
“Know Thyself” (Gnothi Seauton in Greek) claims that all external knowledge is based on the
Self-Knowledge (Plato, Jowiett, 1892). Detailed analysis by Gettier (1963) also points out that,
due to subjective nature of “belief” and time and space-time restricted nature of “justification”,
JBT premises are not sufficient pre-requisites of knowledge for the purposes of modern science.
In the knowledge definition used in science, additional parameters, such as memory and
systems of reference of the subjects also need to be taken into account in defining the
knowledge. Also, while most of the earlier definitions of knowledge have psychological or
sociological focus, newly discovered facts in modern science, such as DNA-based capabilities of
the species, required a more comprehensive definition of the knowledge. According to Popper
(1974), knowledge should be considered different from both passive set of facts and a subjective
Due to difficulties to address the nature of knowledge, most researchers in the modern
social science work resort to only position various knowledge components relatively one to
another. One of the related and frequently used patterns is knowledge pyramid, comprised
doesn’t attempt to capture knowledge dynamics, it assigns its objective elements (data and
information) to the bottom of pyramidal structure, while the subjective elements (knowledge and
individuals’ wisdom) are mapped to the tip of the pyramid (Rowley, 2007).
physician Pribram (1999), who experimentally established that the knowledge is recorded in
different frequencies are distributed over various regions of the brain and can be later refocused
in the act of remembering. Theory of a renowned quantum physicist, David Bohm (1980)
considers the same, holographic principle to be applicable to all self-organizing systems (sub-
in-motion, a process where everything is in the state of becoming (universal flux). For Bohm,
the phase space or a domain of available behaviors of any self-organized system is thus never
static either as a whole or in parts, but based on its interconnectivity and continuous exchange of
Organizational Knowledge
The concept of the organizational knowledge in modern social sciences and business had
also been addressed in terms specific to various modalities and instruments of knowledge and its
epistemology, without considerations of its ontology. Davenport and Prusak (2000), for
instance, suggest that knowledge originates and is applied within the minds of individuals but it
Continuous Knowledge Development in Organizations and Taoist Wisdom 12
is reflected, and its multiple sources combined, in the organizations. Consequently, knowledge is
not stored not only in personal memory, but also in documents, information repositories,
Senge (1990) authored one of most popular theories of the organizational knowledge,
which had been widely adopted by executives throughout the world. Senge’s book “Fifth
Discipline, The Art and Practice of The Learning Organization” had been published in many
editions and inspired practical changes in large organizations such as BP, Unilever, Intel, Ford,
HP, Saudi Aramco, Roca, Oxfam, and The World Bank. Senge (1990), envisions modern
organizations as places where individual members continually learn together, expanding their
capacity to create the results they desire and nurturing new and expansive patterns of thinking.
support such process: systems thinking, personal mastery, mental models, shared vision and team
learning.
The findings of Senge have been widely adopted by scholars in the field, but were not
easy to implement in practice and the eventual success had often been determined by the
capability of the leaders, associated to difficult to describe, subjective tip of DIKW pyramid (
Rowley, 2007). Jackson and Williamson (2011) point out that a fully systematized approach to
knowledge management cannot be ever fully applied in practice, as it fails to satisfy the
unanticipated, indeterminate needs that can only be established only with trial an error.
According to these authors, free experimentation and brainstorming practices, even though
without a direct financial justification, could help creation of the knowledge assets that are
Nonaka (1994) provided one of the seminal theories of the Continuous Knowledge
highlighted by modern science and the pragmatic business approach. Nonaka’s theory of
Dynamic Knowledge Creation, presented in Figure 1 below, takes into account internal and
external, carrier and process and implicit and explicit aspects of the knowledge, connecting both
are exposed to continuous change and thus the organizational knowledge is always in the state of
becoming, generated from the continuous dialog between its tacit (or implicit) and explicit
aspects. Nonaka (1994) explains that tacit knowledge mostly has “personal quality” and is
comprised of the understanding and skills, which are deeply rooted in the specific context or the
prior experiences of a subject, such as an individual or the organization. On the other side,
explicit or codified knowledge and its “group quality” relates to shareable aspects of the
Continuous Knowledge Development in Organizations and Taoist Wisdom 14
knowledge, suitable for transmission between multiple entities through some standardized
means, such as written language, Unified Modeling Language (UML) diagrams or Architectural
Design Patterns. Nonaka defines continuous knowledge development as a process where tacit
and explicit form of knowledge constantly convert one to another, through so-called Spiral of
. As the need for sustainable knowledge development had been recognized as a burning
application of knowledge creation initiatives was only partially successful, while the differences
between various target-specific practices and the gaps between covered areas made difficult to
establish a comprehensive view of the problem. Thus, the goals of the current study are to
establish some semantic-free definitions and interlink crucial aspects of the previous theories in
the field into a unifying conceptual framework, which aspires to bridge the gaps in the body of
practices.
It has been widely recognized today that systematic study of the organizational
Lewin and his three-step process of the organizational change (Meyer & Meyer, 2011).
from the ideas regarding individual and group knowledge, which had existed from the dawn of
the civilization.
As early as in fifth century B.C. Greek philosopher Plato argued that group of
knowledgeable persons has an ability to bring about happiness and justice to the Republic (Plato
& Jowett, 1892). Around the same time, Chinese philosopher Lao Zi (老子) postulated the
principle of Virtue, Knowledge or Power (De 德) that can be developed in a group of people at
various levels of the organizational complexity, such as family, tribe, trade line or a school of
thought, and interlink such group with the Universe (Arandelovic, 2014). A few centuries later,
famous Chinese strategist, Zhuge Liang (诸葛亮) acknowledged that that state of affairs in the
region directly depends on the understanding of its geographic potentials and individual
cultivation of the people living and working there, and attempted to regulate country policies
The theories describing dynamism of knowledge as a dialog between its tacit and explicit
aspects, pointed out by Nonaka (1994) or its enfolding and unfolding, discussed by Bohm (1980)
and Pribram (1999), can be also found in the five phases (Wu Xing 五行 ) of nature defined even
Medicine” (Huang Di et al., 1978). While the Taoist Wisdom targeted mostly individual
development (cultivation), the underlying constructs could be directly associated with the
organizational knowledge development and the common mathematical terms. The phases of
knowledge generation proposed by Nonaka (1994), as well as four transitional phases of Huang
Continuous Knowledge Development in Organizations and Taoist Wisdom 16
Di could be, for instance, clearly related to the maxima, minima and infle
inflection
ion points of any
The tacit knowledge socialization of Nonaka would correspond to the water phase
and combination to the fire phase (maxima) while the internalization (learning) would match
quality control. The analysis could also drill down to more detail, identifying use cases mapped
to ever finer-grain
grain subdivision of the continuum of the organizational activities
activities.. Regardless of
the complexity of the knowledge generation curve in the organizations, the subject can be
decomposed into elementary periodic curves with four inflection points, as on the left side of
Determination of the knowledge aspects for a particular use case would be,
be consequently,
based in subdividing the continuum of its activities, as in Figure 3 below, based on four
Continuous Knowledge Development in Organizations and Taoist Wisdom 17
transitional phases or knowledge phases defined by Nonaka (1994), similarly as, for instance,
one can use calculus to solve non-linear equations numerically, by utilizing bisection method.
Due to the universality of the proposed model, based on the inherent states of the
knowledge maturation, rather than on the social variables, the model can be applied to any level
of aggregations of the four elements, in any domain of the life of an organization. In the
proposed model, knowledge creation phases are associated with an angular frequency or phase
domain of any organizational function. Such approach would also be pertinent to the
holographic nature of the knowledge viewed from the perspectives of the exact sciences, as in
the work of Bohm (1980) and Pribram (1999). Implicit and explicit states of the dynamic
systems proposed by the holographic model of Bohm and Pribram can be directly mapped to the
tacit and explicit knowledge of Nonaka’s system, while the internal transformation of the
Continuous Knowledge Development in Organizations and Taoist Wisdom 18
The fifth, earth phase of the five traditional elements of Taoist knowledge system,
traditionally attributed to the center, could be mapped to a central axis of the knowledge
development spiral, described by Nonaka (1994), as in Figure 3.3. In the terms of the Secret of
the Golden Flower (Tai Yi Yin Hua Zong Zhi 太乙金華宗旨), One is formed by circulation of
light that crystallizes. The stillness of the crystallized light in a poetic image of Lü Dongbin
Mapped to the concepts of Lao Zi, in Dao De Jing (道德经), Chapter 1 (Arandelovic,
2014) the four transitional phases can be associated to the level of manifestation (You 有), while
the vertical axis would match the realm of non-manifestation (Wu 無). Explicit knowledge
templates (Mu 母) can be replicated (Wan Wu 萬物) in the field (Tian Xia 天下), while its
implicit origin (Shi 始) establishes the relation between aspired and achieved aspects (Tian Di 天
地). Based on these Taoist concepts, yet another association can be made between knowledge
development and cultivation of the perfection defined in Yu Di Mind Seal Classic (Yu Di Xin
Yin Jing 玉皇心印经), where the practitioner gathers non-manifested essence while working in
the field of manifestation (Cun Wu, Shou You 存无守有), as explained by Olson (2003). The
temporal (You 有) cycles thus could continually unfold and enfold from/to central, non-temporal
practice described by Luk (1973). Taoist Master Tan Qiao (谭峭) in his Books of
Transformations (Huà Shū 化書) also recapitulates the work of this cycle as follows:
transforming to Qi, Qi transforming to Form, from the Form myriad things are born,
each with the unique principle. Reintegration of Tao occurs through Form transforming
to Qi, Qi transforming to Spirit and Spirit transforming to Void. This Void is radiant and
While these generic development patterns are reflected throughout the comprehensive
Taoist knowledge system and its longevity (Xian 仙) practices, most of the related patterns could
be also identified in the other spiritual traditions. The continuous development cycles that
originates from and returns to an origination point are, for instance, also depicted in Egyptian
knowledge system, in the pattern of Ouroboros (Hornung, 2002), as well as in the Toltec
The four transitional elements thus support the growth of the central element. If we
associate the central axis to the core values of mission statement of the organization, each
generating changes can be associated to a matrix A, defining linear transformations that preserve
11 … 1 1
A • X = X’, where A is extendible matrix: … … … and X is a vector: … (1)
1 …
Continuous Knowledge Development in Organizations and Taoist Wisdom 20
According to this definition, the transformational matrix A can have the arbitrary number
the dimensions driving the knowledge development could be described by separate equation
identity of the organization, by defining new combinations of organizational core values against
four modes of the information exchange, while the performance dimension factors could
similarly include the measurements of the selected performance indicators. The extension of the
Nonaka’s model, presented in Figure 4 below, thus reaches outside of intellectual knowledge
area, into performance and collaboration domain, as adaptation layers of the organization to the
The four elements of the Nonaka’s framework are still fully applicable according to the
left side of the above diagram, while explicit knowledge sharing within different organizations is
pictured on the right. The tacit knowledge of the organization is pictured as intrinsic curvature
that it forms in the business space, while the explicit knowledge is displayed as flattened
standardization of the knowledge, to a form suitable for sharing in the field. The right section of
Figure 4 above could be considered as a top-down view of the left section and illustrates an
explicit knowledge exchange of a sample organization (in the center) with other organizations in
its field. Each of the organizations (presented by a small circle) in the field maintains its private
circle of tacit knowledge (larger circle), but it also participates in the explicit knowledge sharing
in the industry (largest circle) with the external knowledge centers. The collaboration enhances
the explicit, and consequently tacit, knowledge of each participating organization, allowing for
cooperative efforts that cover new areas, as marked by the bolded line that interconnects small
Based on the above analysis, an organizational identity can be mapped to a center of the
coordinate system and its continuous knowledge development would be defined as its identity
continual development of the core values of the organization, at the evolving knowledge planes,
in the model where tangible resources and the financial results can be considered as the explicit
multidimensional systems can explain many business aspects that were usually underappreciated
or loosely associated with the organizational operations. The market dominance of the Japanese
car industry, for instance, was for quite some time considered a mystery. Even though Nonaka
(1994) and Wu (2010) pointed to the role of the Japanese firms’ tacit knowledge and its constant
growth in congruence with the postulated mission statements, the intangible nature of these
constructs made them difficult to be recognized and adopted in the West. However, if we
consider that tacit, implicit knowledge of the workers operates in direct and immediate manner,
while the explicit knowledge needs to get de-serialized and serialized via operations that require
storage record space and access time, the difference in the performance of different knowledge
The theoretic support for the proposed framework of the continuous knowledge
development can be also found in a model of gauge symmetry states, proposed by Tiller (2011),
where stateless systems, conforming to U(1) symmetry, are differentiated from those that are
classification of systems, to ones that preserve or do not preserve certain internal symmetry
invariance (such as core values of an organization) in time, could be also directly mapped to
learning (dynamic) versus stateless (static) models of the organization, discussed by Nonaka
(1994).
Continuous Knowledge Development in Organizations and Taoist Wisdom 23
The recorded holonomic knowledge patterns, explained by Pribram (1999) comprise the
self-coherent information space of Tiller (2011) or tacit information of the system of Nonaka
(1993), which has usually been called its phase space in physics (Arandelovic, 2010). The
individual phase space can be assigned to a tacit knowledge or subconscious memory of the
“Combining all in One’s Mind” (Hun Qi Xin 渾其心) by Lao Zi, in Chapter 49 of Dao De Jin
(Arandelovic, 2014).
In addition to the paradigm-shifting perspective of the knowledge (or wisdom, as its most
proposed framework should also address various aforementioned conflicts in the application of
important conceptual critique of an organizational knowledge development had been pointed out
performed to a specific type of the knowledge can tax firm’s resources and weaken the ability of
rigidities that often develop due to specialization to a specific area make the organization less
able to adapt to the industry and market changes. This issue can be addressed in the current
framework by implemented a continuous testing of current knowledge system against the best
industry practices, as well as the feedback loop between tacit and explicit knowledge (Nonaka,
1994).
increase organizational knowledge. On the other hand, Jackson and Williamson (2011) insist that
only free experimentation and brainstorming practices can produce the tacit knowledge strong
enough to cope with unexpected issues in practice. The current framework incorporates both
currently address the need to utilize the latest technologies using different and often mutually
exclusive approaches, such as internal development, outsourcing and knowledge transfer. This
core values and identities of the organizations. However, the alignment of the organizational
knowledge development with the holographic patterns of knowledge growth (Bohm, 1980;
Pribram, 1999), presented in current framework, can be defined arbitrarily small dialog loops
between external and internal knowledge. In the cases when strategic delineations between
internal and external knowledge are necessary, certain heuristic algorithms could be established,
as recommended by Singh & Zack (2006), based on careful alignment between central core
values of an organization.
where the cycles of the interrelation of internal and external knowledge constantly change, this
can utilize selected core competences for the financial benefit during a designated exploitation
time, while gradually transferring the related knowledge to the external entity. At the same time,
new unique competences can be developed by a combination of internal knowledge and some
best practices emerging in the industry, preserving the VRIO value of the firm.
Even though the organizational identity enhancement model does not directly consider
tangible benefits, they would be naturally manifest as a result of the consistent knowledge
development initiative that will enable better quality of products or services. Corporate
pay off through an influx of value produced by organization members’, which might dedicate
some free time or externally acquired knowledge to the work (Steiber & Alange, 2013).
Similarly, an investment of efforts to analyze customer preferences could ensure the increased
value of the products and services and eventually the higher customer satisfaction. As a rule,
Continuous Knowledge Development in Organizations and Taoist Wisdom 26
bidirectional, win-win resolution of the seemingly conflicting aspects of the business should
The intent of the above analysis and the proposed framework had been to holistically
knowledge creation of self-transforming organization would build growing values that can
surface whenever an opportunity occurs, thus augmenting the prosperity of the organization and
its members. On the other side, the more holistic model of business operations that does not rely
solely on immediate financial returns can favorably influence the stability of organizations and
However, this paper establishes only a base framework. Further work would be
necessary to quantitatively prove its functionality, highlight various implementation details, and
affect operational performance as the dependent variable should also be performed, or the
evidence should be explicitly referenced from the works of the other researchers. The collected
field data of the selected organizations could be subsequently analyzed to evaluate how these
measured values affect dependent variables and which results could be expected in specific
circumstances.
as indicated by Nonaka (1994), measurement of the parameters regarding its specific aspects,
suggested by Anand et al. (2010) could be combined with its strategic advocacy founded on
creation practices would be possible only at the inflection points where that spiral climbs to a
higher plane. Thus, business effects would often show only at the specific points of knowledge
development, where the expertise becomes explicitly involved in the business processes. That
has been exactly the strategy used in some of the most successful modern firms, such as Google
(Steiber & Alange, 2013). At the moments when previously accumulated knowledge get aligned
to drive a business action, the many hours used to gather and structure the information would
manifest in the visible business results and the increased market value of an organization.
Continuous Knowledge Development in Organizations and Taoist Wisdom 28
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