See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/313795587

Management in Modern Organizations:

Chapter · January 2017

DOI: 10.4018/978-1-5225-1913-3.ch010

CITATIONS READS

0 24,533

2 authors:

Maria José Sousa Isabel Moço

ISCTE-Instituto Universitário de Lisboa Universidade Europeia
210 PUBLICATIONS   1,104 CITATIONS    8 PUBLICATIONS   1 CITATION   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Strengthening Entrepreneurial Sparks View project

Innovation in Education View project

All content following this page was uploaded by Maria José Sousa on 12 February 2019.

The user has requested enhancement of the downloaded file.

Handbook of Research on Information Architecture and Management
in Modern Organizations

Management in Modern Organizations

1. Introduction
The starting point for this chapter was to bring together the research fields of organizational
theories, innovation and change and knowledge management. The focus was on innovation in
the perspective of organisational studies and the process of knowledge sharing in organisations.
The main idea was not to create an historical framework of these theories but to use them as
analytical models.
The chapter begins with a description of the main features of organisational theories, including
navigation in organisational innovation context: types of organisational innovation and nature of
innovation.
It also includes the conceptualization that individual knowledge is a critical source of
organisational knowledge and explores the link between individual knowledge use and
organisational innovation processes.
This literature review tries to create a frame for the organisational innovation process. In this
context it was important to analyse its implications to the effective use and share of individual
knowledge, linking it to the knowledge management theories. However the importance of
organisational innovation for competitiveness is not explicit and the choice between investing in
technology and investing in people always raises some questions about short and long term
survival of the organisations – being the new digital configuration of organizations another way
to reach organizational success.

2. Modern Organizations
2.1. Innovative Organizations
Globalization and information technology have led to a discussion of the potential for an
organization to generate competitive advantage on the basis of innovation and there have been
several studies on the subject of organizational innovation (for instance, Bessant and Grunt
1985; Attewell 1992; Kitchell 1995; Claver and Llopis 1998).
Several other organizational studies on innovation (Van de Ven 1986; Aldrich and Fiol 1994;
Van de Ven et. al. 1999; den Hertog and Huizenga 2000) show that the concept of innovation is
very complex, the European Commission‘s 1996 Green Paper on Innovation defines Innovation
as ―the successful production, assimilation and exploration of something new‖. More recently,
Mulgan and Albury (2003) made their contribution to the concept by pointing out the
importance of the results of implementing innovation: ―new processes, products, services and
methods of delivery which result in significant improvements in outcomes efficiency,
effectiveness or quality‖.
Leadbeater (2003) exposes the complexity of the concept, including the interactive and social
dimensions. He says that ―the process of innovation is lengthy, interactive and social; many
people with different talents, skills and resources have to come together‖.
Meanwhile, the literature contains various categorizations of innovation. The OECD (2002)
structures the concept around three areas: the renewal and broadening of the range of products
and services and associated markets; the creation of production, procurement and distribution
methods, and the introduction of changes to management, work organization and workers‘
qualifications.
Innovative organizations accept different types of innovation and Baker‘s typology (2002)
differentiates these three types of innovation: process; product/service, and strategy/business
concept innovation.
We can call process innovation (i.e. work organization, new internal procedures, policies and
organizational forms) and strategies and new business models (i.e. new missions, objectives and
strategies) organizational innovation.
According to the OECD (2002), organizational innovation includes three broad streams: 1) the
restructuring of production and efficiency processes, which includes business re-engineering,
downsizing, flexible working arrangements, outsourcing, greater integration of functional lines,
and decentralization; 2) human resource management (HRM) practices, which include
performance-based pay, flexible job design and employee involvement, improving employees‘
skills, and institutional structures affecting the labour management relations; 3) product/service
quality-related practices emphasizing total quality management (TQM) and improving
coordination with customers/suppliers, as shown in table 1.

Table 1 – Types of Organizational Innovation

Production and efficiency practices Human resources Product/service quality
management practices
 Business re-engineering  Performance-based pay  Total quality
 Downsizing  Flexible job design and management (TQM)
 Flexible work employee involvement  Improving coordination
 Outsourcing  Developing skills with customers/suppliers
 Greater integration of functional areas  Labour-management  Improving customer
 Decreasing centralization cooperation satisfaction
Source: Wulong Gu and Surendra Gera (2004). The Effect of Organizational Innovation and
Information Technology on Firm Performance. Statistics Canada, Catalogue No. 11-622-MIE
No. 007

2.2. Knowledge based organizations

Knowledge can be an enabler or a disabler of organizations‘ innovation and change success
(McAdam and McCreedy 1999; Nonaka, Toyama et al. 2000; Von-Krogh, Ichijo et al. 2000).
Davenport and Prusak (2000) says that ―knowledge is a fluid mix of framed experience, values,
contextual information, and expert insight that provides a framework for evaluating and
incorporating new experiences and information‖. Other reference authors like Polanyi (1958)
associate knowledge with action. He says that ―knowledge is the ability to act‖. Nonaka and
Takeuchi (1997) explain that knowledge is created by the flow of information associated with
the beliefs and commitment of those who possess it.
In the view of Nonaka and Takeuchi (1997), knowledge is created within the company to make
it more successful, to keep it on the market, to increase competitiveness and to keep it ahead of
its rivals. Coulson Thomas (2002) remarks that today's organizations do not compete in terms of
products, services or technology but in terms of know-how, processes and values.
According to Buckingham Shum (1997), organizational knowledge is multidisciplinary, hard to
formalize, and generated in discussions with competing viewpoints. This categorization of
organizational knowledge is an attempt to recognize this understanding of knowledge and
incorporate both individual and group knowledge.
We can define group knowledge as the knowledge and skills acquired collectively by
individuals who have been exposed to similar job-related situations (Reuber et al. 1990).
For example, organizational groups have part of their knowledge codified in a form of workflow
(or group) ‗metaphors‘ that only the members of that group can understand.
These workflow metaphors are typically the result of systematic communication practices that
occur in the workgroup environment, thus leading to a knowledge sharing process.
Organizations can facilitate this sharing, depending on the form of knowledge transferred, by
using incentives, and structural and cultural coordination mechanisms. In this context it is
important for organizations to have mechanisms in place to promote the sharing of knowledge.
According to the opportunities and to each culture and the specific products or activities of the
organization, employees always find a way or create their own knowledge sharing mechanisms,
even if the organization is not aware of it. Yang and Chen (2007), meanwhile, have studied the
association between organizational knowledge capabilities and the knowledge sharing process,
using regression analysis with data from questionnaires applied in different industries with a
valid response rate of 62.4%. The results show that organizational knowledge capabilities have
a positive association with knowledge sharing. Technical, structural, and human knowledge
capabilities are significant for organizational knowledge sharing.
A systematization of the knowledge sharing process is shown below, and we can see that
different kinds of knowledge can be shared in very different ways, according to the goal and the
mechanisms existing in the organization.

Table 2 – Knowledge Sharing Mechanisms

Source: various authors in Sousa, MJ 2009, 2010

This table shows that the basic principles of the organization are normally transmitted with low
contextual reference, but as a continuous exchange of experience and also with work routines.
The organization‘s goals are usually easily transmitted, enabling experience exchange and
establishing collective routines. Focal knowledge, such as knowledge about products or
services, is transmitted explicitly, in particular through instruction manuals or other kinds of
documentation.
Observability and assessment is transmitted as explicit knowledge involving operational results
of the organization‘s activity. Design recommendation is transmitted through technical and
social infrastructure. Finally, measures are transmitted through presentations, reports and IT
systems.
Furthermore, the human resources practices in the organization can be a facilitator of knowledge
sharing. They can create bases for enabling both the creation of new knowledge (for example,
the development of new products) as well as the improvement of current practices (for example,
client services‘ improvement), linking monetary and recognition rewards to new ideas and
suggestions for all employees.
Nevertheless, a great number of authors claim that many companies suffer from considerable
barriers, thereby impeding knowledge sharing and ultimately reducing organizational efficiency
(e.g., Husted & Michailova, 2002).
The typical knowledge sharing barriers identified in the literature fall into three groups:
a) Individual barriers, grounded in the participants of the knowledge sharing process, in both the
receiving and the transmitting parties. This group includes a wide range of barriers like the fear
of losing personal competitive advantage and of being misunderstood and misinterpreted, group
thinking, preference for one‘s own ideas instead of somebody else‘s, etc. (Husted and
Michailova, 2002).
b) Infrastructural (organizational) barriers are determined by the organizational structure, the
system of communication and organizational culture (Bock et al, 2005; Hall, 2002). For
example, Bock et al. note that to share knowledge successfully an organization must reinforce
the value of trust – both among employees as well as between an employee and the organization
– and promote free information flows and tolerance of mistakes.
c) Ontological barriers that deal with the knowledge itself and arise from the tacit knowledge
transfer problems (Nonaka, 1991), as well as from perceived value of knowledge (Ford &
Staples, 2005), are often not recognized at all by the knowledge sharing participants (Hall,
2002).

2.3. Digital organizations

The digital organization is a complex phenomenon focused on non-hierarchical coordination
structures, information-rich products and considerations of people‘s knowledge (Venkatraman
and Henderson, 1996). All of these can be supported by information and communication
systems which are important aspects of the current research on digital organizations.

A literature review shows that, although digital organizations have been well defined as
concepts, only a few studies have contributed to developing an understanding of the
mechanisms enabled by new modes of communication. Drucker (1988) describes such
organizations as constituting of ―teams of self-managed knowledge workers‖, linked by
information technology to share skills, costs and access to each other‘s markets.

Technology can connect geographically dispersed individuals, but it does not necessarily lead to
effective communication. Digital organizations cannot function across geographical and cultural
boundaries without information technology.

The term ‗digital organization‘ is a new form of network organization, such as virtual company
(Goldman and Nagel, 1993), virtual enterprise, (Hardwick et al. 1996), and virtual factory
(Upton and McAfee 1996).

Digital organizations are used when the boundaries of time, geographical space, organizational
units, and information access are less important while the use of ICT (Information and
Communication Technologies) is considered as highly useful. Digital organizations can also be
defined as a temporary network of independent companies - suppliers, customers – linked by
information technology to share skills, costs and core competencies.

The introduction of digital products, services, channels, and interfaces has posed a challenge for
leaders of traditional companies in order to design their organizations. Digital technology
introduces a dimension of the organization that rarely stands on its own; it must be linked and
integrated into the other parts of the company. Digital technology is transforming all kind of
industries.

The definition of digital differs in terms of types of digital technologies: Internal technologies
include analytics, search engine optimization, competitive intelligence, and social media
monitoring; and External technologies consist of the platforms used to reach customers and
deliver content—website, ads, landing pages, e-mail campaigns, and apps of all kinds.
In resume, companies are adding digital offerings such as analytics, mobility, social media, and
smart-embedded devices into their core businesses.

Digital technology, and particularly its manifestation as big data analytics, will become a fifth
strategic dimension needing to be accounted for in many companies. More and more firms will
need to find a way to integrate this capability into their existing business models. Digital
technologies can be used to create user and consumer communities, provide brand building and
e-commerce channels.

On the other hand, organizations need to define its digital vision and leaders must translate that
vision into a set of targets that drive success. Even if the digital function is not measured as a
business, it should have clear performance indicators that create accountability and serve as
guideposts of progress.

Leadership and technical staffing are clearly critical elements that companies must manage in
the transition to a digitally focused strategy. Know-how and mindsets must change in order for
digital strategies be integrated in organizations and they need to promote several important soft
skills (see Tabel 3), in order to manage efficiently their virtual teams.

Table 3 – Digital Soft Skills

Digital Soft Skills Description

Transmission of vision Top management creates a reasonable clear vision and strategy for the
and strategic intent company.
The strategies definition helps them in setting priorities.
Tolerance of risk, Mistakes are recognized as an indication of initiative and courage.
mistakes, and failure
People who make mistakes are encouraged to share them widely so that
others can learn.
Support for Intrapreneur behaviour is generally rewarded.
intrapreneurs
Top management itself are Intrapreneurs and have prior entrapreneurial
success.
Managers as innovation Managers coach and protect the innovators.
sponsor
Managers find resources for intrapreneurial projects.
Empowered digital Employees work in project teams and have considerable freedom to make
teams decisions.
Cross-functional teams working in the projects
Strong organizational Employees feel a strong desire to make contributions to the company.
community
They seem to be very proud to be part of the company.
Employees feel a strong sense of membership and mutual support.
Source: Sousa, MJ, 2014

Finally, it‘s important to sustain that digital organizations requires strong functional leadership
to guide investments, build skills, and configure the right resources around problems and
opportunities.

3. Management Models
3.1. Traditional Management Models Review
Several authors (i.e. Egeberg, 1984; Scott, 1992; Bukve, 1994) have classified organizational
theory into different theoretical perspectives: rational, natural and open system perspective and
new-institutionalism. On the one hand we have the rational and the natural perspectives that
tend to view the organization as a closed system, separated from its environment and with easily
defined groups of participants.
The rational system perspective includes Frederick W. Taylor‘s Scientific Management (1911)
and Henri Fayol‘s (1949) administrative principles, followed by Luther Gulick and L. Urwick‘s
(1937) principles for coordination and specialization, Max Weber‘s theory of bureaucracy
(1947, 1968) and Herbert Simon‘s administrative man (1947).
In this perspective, organizations are seen as instruments designed to attain specific goals.
Behaviour is precisely and explicitly formulated and prescribed independently of the personal
attributes of individuals occupying certain positions in the structure.
In the natural system perspective, organizations consist of social groups attempting to adapt and
survive in particular circumstances. The main approaches of the natural system perspective are
Robert Michels‘s iron law of oligarchy (1949), Elton Mayo‘s ―Hawthorne effect‖ (1945),
Talcott Parson‘s social system AGIL (1951), Philip Selnick‘s institutional approach (1948,
1949, 1957) and Michel Crozier‘s (1964) ―dysfunctional‖ aspects of rational behaviour.
The open system perspective, however, shows organizations embedded in larger systems and as
parts of various subsystems that are interlinked and interact.
Selected schools of the open system perspective include organizations as loosely coupled
systems (Cyert and March 1963; March and Olsen 1976; Pfeffer and Salancik 1978), David
Easton‘s political system (1953), Jay Galbraith‘s contingency theory (1973), Karl Weick‘s
cognitive model (1969, 1976), and system design theory (e.g. Ashby 1956; Burns and Stalker
1961; Mintzberg 1979, 1983; Perrow 1984).
―New institutionalism‖ is to be found within economic organization theory, political science,
history and sociology. It expresses a common conviction that institutional arrangements and
social processes matter. The development of these approaches is, to a certain extent, a reaction
against the behavioural revolution and has its theoretical roots in the political economy
associated with the functionalist thinking of Talcott Parsons (i.e. 1951, 1960) and Philip
Selznick (i.e. 1948, 1949, 1957).
New institutionalism emphasizes that organizational behaviour takes place within an
institutional context, and that the institutional context shapes the behaviour within the
organization. The institution represents an institutionalized understanding – that is the ―common
understandings that are seldom explicitly articulated‖ (Zucker 1983:5). Any organization is
ambiguous, but organizational norms and routines for appropriateness evolve gradually and
reduce ambiguity.
Learning theory, which emphasizes how individuals in institutions organize information in
social categories (Rosch et al. 1976; Rosch 1978; Fiske 1982; Kulik 1989), has a distinct role in
the new institutional theory. According to March and Olsen, institutions also learn from their
experiences through accumulating historical experiences (March and Olsen 1975; Levinthal and
March 1982; Olsen 1992; Brunsson and Olsen 1993; Olsen 1996; March 1999). Results and
inferences of past experiences are stored in standard operating procedures, professional rules
and rules of thumb. Institutions learn along several dimensions related, for instance, to
modification of strategy, competence and aspiration, and the interaction of these dimensions.

3.2. Management Models to Innovate

3.2.1. Organizational Innovation and Change Management

A significant number of those who have developed research in organizational innovation have
great difficulties in establishing the borders between this and organizational change. Carrier and
Garand (1996) argue that it is not possible to innovate without changing, but it is possible to
introduce an organizational change that cannot be considered an innovation. In addition, they
consider that change can constitute an innovation in a specific company but perhaps not in
another one. Carrier and Garand mention four theoretical perspectives on the topic of innovation
and change:
a) The first describes innovation as a change, seen as new by the adopter (organization or
individual). This perspective tends to characterize a novelty as an innovation (depending on the
perception of the adopter - Knight, 1987; Zaltman et al., 1973; Deltour, 2000).
b) The second concerns the degree of novelty of a change to the involvement of a given
organization (Becker and Whisler, 1967). This perspective holds that only an organization that
adopts the innovation immediately can be considered an innovator. The newness is not related
to the individual position of whoever adopts the novelty (subjectivity), but of the context where
it appears (objectivity).
c) The third perspective is related to radical or incremental innovation. Some authors consider
that this differentiation is pertinent because it implies different degrees of change and distinct
organizational implications. For example, Burgelman and Sayles (1986) say that innovation is
always radical, otherwise it constitutes an organizational change. Finally, other theoreticians
(Carrier and Garand, 1996) consider that the concept of innovation cannot be characterized as
radical because it is removed from reality, which means that the majority of the innovations
observed are innovations of routine.
d) The fourth perspective differentiates change and innovation based on the nature and scope of
the change. In this view, innovation is restricted to a change, where change implies
transformation of the structure, process of production and work organization (Delbecq and
Mills, 1985). It will have an effect on organizational performance, measured by higher overall
productivity. It will consider new market requirements and the linking to new markets (Gasse
and Carrier, 1992).
Assuming that organizational innovation leads inevitably to changes in the organization, it is
important to examine the dispute that has arisen on the issue of organizational change. This is
presented in the extensive literature developed by some of the main schools of thought – i.e.,
Beer and Nohria (2000); Pettigrew et al (2001); Rajagopalan & Spreitzer (1996); Van de Ven
and Pool (1995).
Lewin (in Weick, 1999) conceived one of the most important models on change processes. They
present change as passing through three stages: unfreeze-change-refreeze. To make a change,
companies would have to defrost themselves of their relative balance and then change; after that
the implemented changes would be refrozen and perpetuated.
However, what happens is that these changes often lead companies to abandon their previous
format and adopt another completely different one. The traditional model poses some problems
related to what has happened in the past few decades, which have been characterized by
continuous and very fast change.
Weick and Quinn (1999) describe a dual typology that sees change as: a) episodic,
discontinuous and intermittent, or b) continuous and incremental. Although some authors
believe this is a very simple way to analyse the change, Poole and Van de Ven (1995; 2004), for
instance, argue that the change process is related to a progression of events in an organization.
Other researchers (Orlikowski, 1996; Colville, Dalton and Tomkins, 1993) argue that the
adjustments that occur in an organization are the essence of the organizational change and, even
if they are small, they have the power to modify the strategy and structure of the organization.
In this context, we can say that given the continuity of change, it does not make sense to carry
out a deliberate intervention to initiate a process of change, like the traditional model of Lewin
states, expressing the idea that the change is made deliberately, programmed and carried
through top-down (Beer and Nohria, 2001).
Other perspectives are associated with the idea that change must be a process of construction
that already exists inside the organization. Weick and Quinn (1999) argue that "change doesn‘t
start because it never stops".
In their more recent work, Tsoukas and Chia (2002) also state that change is the norm, contrary
to the more traditional perspectives dominated by the assumption of stability, with change being
the exception. For Tsoukas and Chia: "change is always potentially there, if only we care to
look for it" (2002: 568).
Analysing change in the context of process theory, Van de Ven and Poole (1995) identified four
theories that describe the types of existing processes of change: cycle of life; teleological;
dialectic, and evolutionary.
The theory of the life cycle process includes a large number of theories of human development
and organization (Greiner, 1972; Kimberly, Miles, 1980), taking decisions in a group (Gersick,
1988), and the development of a new company (Burgelman, Sayles, 1986). The life cycle theory
assumes that the change is imminent, which means that the organization contains a logic that
regulates this process. Elements of the external environment act as mediating forces in the
process of change (Van de Ven and Poole, 1995).
The teleological theory of the process is compatible with theories such as: bureaucracy (Merton,
1970); the process of decision making (March, Simon, 1958); epigenesis (Etzioni, 1963);
voluntarism (Parsons, 1956); adaptive knowledge (March, Olsen, 1976), and many planning
models (Lorange, 1980). This is based on the assumption that the development of organizations
is planned and adapted.
The dialectic theory assumes that organizations‘ development occurs in a world of diverse
events, with colliding contradictory forces or values that compete with one another for
domination and control. Greiner (1972) showed that the tensions between evolutionary and
revolutionary forces have the organizational propensity to stop the growth. Change occurs
through the opposition of values, forces or events.
The theory of evolution estimates that the change occurs: a) in a process (new organizational
forms are created as a result of change - Aldrich, 1979); b) by selection (it occurs mainly when
there is competition and therefore the environment selects the best forms to be successful in one
definitive environment - Hannan, Freeman, 1977); c) by retention (involving forces that
perpetuate and retain definitive organizational forms). Weick (1979) and Pfeffer (1982) observe
that variation stimulates the selection of new organizational forms.
However, the practice associated with theory has led to the statement that the isolated models
cannot be used to analyse changes globally. Van de Ven and Poole argued that a combination of
different theories is needed to understand everything involved in the process of change.
Another very important aspect described by Tsoukas and Chia is that if we see change only as
one formal organizational change process, we could not investigate the micro changes that occur
in continuum in organizations. These can only be studied consistently if we consider that all
organizational actors participate actively in the process. This change involves the constant
analysis of the habits, beliefs and values that affect the way changes and new experiences are
accepted through interaction and dialogue (Tsoukas and Chia, 2002).
Small changes are normally not a concern for an organization‘s top management. However, it‘s
clear that organizations‘ managers have the power to initiate a formal change process, but they
should keep in mind the micro changes that several authors (Kotter, 1995; Beer and Nohria,
2000) regard as the main explanation for the about 70% failure of processes of change.
Authors like Beer and Eisentat (2000) and Beer and Nhoria (2000) argue that a process of
organizational change can be planned, controlled and managed like any another organizational
process. This premise is reviewed in Lewin‘s model that does not consider the effect of the
external environment during the process of unfreezing and refreezing (Styhre, 2002).
The contingency theory (Lawrence and Lorsh, 1967; Katz and Kahn, 1996; Thompson, 1967),
the theory of evolution (Nelson and Winter, 1982, Aldrich, 1999) and the institutional theory
(Dimaggio and Powell, 1991; Scott, 1995), are some of the theoretical perspectives on
organizations that make the correspondence between the internal aspects of the organization
itself and the external context.
In 1985, Pettigrew criticized existing literature on organizational change for being contextual,
historical and processual. Since then some advances have occurred and, as noted previously, a
number of authors contend that the context and the share cannot be separated.
The dynamics of organizational change is far from being completely understood, in particular
the effect of time, processes, discontinuities and context. According to Pettigrew et al. (2000), in
a dynamic and internationally complex world the search for a change standard requires greater
focus on the context.
Contemporary researchers regard organizational change as a continuous phenomenon and, in
some activity sectors, companies face long periods of turbulence, followed by short, rare
periods of relative stability, and therefore several models have been conceived by researchers
with the goal of decoding the change process. However, Van de Ven and Poole argue for a
combination of different theory types so that it is possible to understand every element involved
in the change process.
When analysing the nature of change, we can find several authors who identify different kinds
of change:
a) Radical change versus Incremental change:
The changes can be of incremental or radical nature. However, for some authors only the
radical change makes sense (Hamel and Prahalad, 1994), while for others, only the
incremental change makes sense (Imai, 1989).
Radical changes aim at modifying the whole dynamics of the processes and the interactions
in the companies. Incremental change aims at continuous improvements in the processes,
technologies and in the existing competencies.
b) Planned change versus Not Planned change:
Organizational change can be a planned process, guided by the management as a path to
lead the organization from a less favourable situation to a more favourable one. This
perspective has a teleological base, where the change is the responsibility of top
management. The planned management models involve three main stages: preparation,
implementation and reinforcement of change.
Change can also be an emergent and complex process whose contours are going to be
defined in the daily work through the organization whenever workers are looking for a
better way to answer the challenges faced by the organization. The emergent or not planned
change results from interactions within the system and not because of the will of top
management.
A not planned change is normally an answer to local problems (in an operational plan) and
provides immediate feedback to the people are involved, thus facilitating and promoting the
learning process.
Table 3 shows some examples of change processes according to the scope and the source of
change:

Table 4 - Nature of Change

Scope Source of change
Radical change Incremental Not Planned Planned change
change change
Is intense and It is continuous and Occurs in everyday It has specific goals.
involves all. incremental and the work.
impact is minor.
For example: the For example: the For example: a For example:
arrival of a new introduction of new problem of continuous
company CEO, systems and processes. relationship between improvement.
because of a merger departments.
and acquisitions
action or because of
low operating results.
Success depends, in Success depends, in The appropriate goal It requires constant
part, on the change part, on the change is to act quickly to attention to detect
agents. They assume agents. They assume minimize the problems and
the responsibility for the responsibility for negative opportunities. It also
changing existing changing existing consequences and to requires the
standards. standards. maximize the involvement of all
possible benefits. actors.
Source: various authors in Sousa, MJ, 2009

3.2.2. Origins of Organizational Innovation and Change

Deltour (2000) explains that sources of innovation are associated with a new product, a new
idea or new practices. A possible classification of the sources consists of differentiating internal
sources and external sources.
Dantas (2001) regards the internal structure of R&D and the strategy of an organization as
internal sources of innovation. The external sources are the customers, suppliers, deliverers, the
competitors and the universities/research centres. Kovács (2002) mentions other factors without
distinguishing the type of sources: Inter-organizational relations (strategic cooperation,
alliances, etc.), professional associations, consultancy companies, equipment supply companies,
management specialists and media generated publicity. Fonseca says that innovation can have
different origins: ―(...) from conferences people have attended, magazines, from analogies
drawn from other social settings, from social practices" (2000:91).
In this context, we can consider that external sources are based on all the events and activities
occurring outside the company, either at national or international level. Internal sources are
associated with all elements and activities that are part of company - technical, cultural and
intellectual capacities.
According to Fombrun (1984) in Caetano and Tavares (2000), factors like technology,
economics, culture and politics have had a very important influence on organizational changes.

Table 5 - Main changes in the organizational context

Factors Changes

Technological Increased innovation in products / services;

New technologies intended for production and information.

Economic Increase in global competition;

Scarcity of resources;
Explosion of services in industrialized countries.

Social Changes in the market structure (increase in education levels and

workers‘ professionalization);
Major importance given to product and service quality;
Change in people‘s values and behaviour regarding work.
Political Tension between the public and the private sector about activities‘
regulation;
Creation of conditions to establish partnerships, alliances and
cooperation processes.
Source: Caetano and Tavares, 2000

3.2.3. Facilitators of Organizational Innovation and Change

Innovation is a very complex process that leads people and organizations to distinguish
behaviours that can either facilitate changes or make them difficult. In terms of facilitating the
process, we can find in the literature several factors related to individuals (Ross et al. 2004) like
motivation and challenges brought by the innovation process. Recognition of the importance of
employee involvement and participation can also be one of the facilitators.
Other facilitators are creativity, the possibility of learning and development and the
improvement of skills and competencies.
Meanwhile, we can find some factors related to the organization itself, including:
 the organizational and business context;
 the establishment and promotion of an "innovation culture", considering aspects such as
tolerance, acceptance of risk and empowerment (Lynch, 1999; Glor, 1997);
 management‘s support of innovation (Lyonnais & Houle-Rutherford, 1996; Beukman &
Hartfield, 1998).
Borins (2001) conducted a wide scale inquiry, having identified a set of facilitators:
– management support for an innovation culture that encourages experimentation;
– establishment of an open dialogue that supports new ideas;
– the encouragement of new forms of thinking within the organization;
– active research of information produced outside the organization with the main goal being
benchmarking, visiting sites and participating in networks;
– expectation that innovation comes from people at all the levels of an organization;
– support for experimentation, recognizing that failures can occur but that it is possible to
learn from the errors made.
a) Dialogue
According to several researchers (for example, Isaacs 1994, Gustavsen 1992, Nonaka 1995,
Senge 1990, 1996, Schein 1993, 1996), dialogue is very important in organizational
development and it can be one of the most important facilitators in an organizational innovation
and change process.
Organizational dialogue is a process that helps create agreements between the organizational
actors, contributing to higher identification with the organization.
Some authors emphasize the value of dialogue, especially in the theories of organizational
learning and knowledge management.
According to Schein (1993, p. 51), "cultural learning across boundaries cannot be created or
sustained without initial and periodic dialogues. This dialogue involves going beyond the
cultural status quo". Later he says that, "Dialogue, then, is at the root of all effective group
action.‖
In his book The Fifth Discipline (1990, p. 11-12) Peter Senge refers to a survey carried out by
Diane McGinty Weston that presents as results three elements related to efforts of
organizational learning: 1) vision, values and integrity; 2) dialogue; 3) thought systems.
Nonaka (1995) says that dialogue can transform tacit knowledge into explicit knowledge. The
most important aim in an organization is to create knowledge, which happens in the interaction
between tacit and explicit knowledge.
This author also notes that "As we have pointed out, knowledge is created only by individuals.
An organization cannot create knowledge on its own without individuals. It is, therefore, very
important will be the organization you support and stimulate the knowledge-creating activities
of individuals or provide the appropriate contexts to facilitate knowledge creation.
Organizational knowledge creation should be understood as the process that ‗organizationally‘
amplifies the knowledge created by individuals and crystallizes it at the group level through
dialogues, discussion, experience sharing, or observation.‖ Nonaka & Takeuchi, (1995, p. 239)
Isaacs (1994) contends that dialogue is an innovative alternative to carry out joint sharing
between individuals.
Tuomi (1999) concludes in a study carried out on organizational knowledge that in informal
meetings people communicate freely, without hierarchic barriers.
Dixon and Schein emphasize the following ideas:
 organizations need collective meanings;
 collective meaning is built by the members of the organization through dialogue;
 collective meaning can also be communicated to others, but in the tacit process,
meanings can be disclosed (Dixon 1997, p. 24).
Dialogue is a space where individuals can explain their opinions and points of view, and create
shared opinions with the same meaning.
This leads us to the power of interaction between organizational actors as we point out in the 4th
dilemma (p.16), when talking about the roles and responsibilities of top management, middle
managers, technicians, operators and even external actors like consultants, universities and other
research institutions, public institutions and social actors.
 3.2.4. Obstacles to Organizational Innovation and Change
When we think about innovation and change, we always refer to people being suspicious and
resistant to change as their usual attitude. Therefore, we can also identify a tendency in those
individuals to do everything in the usual way - the uncertainty of change reveals feelings like
unreliability and fear of failure due to lack of competencies, all of which could lead to loss of
power.
Sometimes these feelings emerge due to lack of involvement in the change process or because
of the lack of information about how the change will affect the content of their functions or even
because they fail to participate in defining changes to goals.
Kovács (2002) defines a set of factors that can represent resistance to organizational innovation:
- organizational structures that tend to stability and inertia;
- individuals and groups that feel threatened (about their professional situation, the content
of their work, income, prestige, and instituted power) and therefore resist innovation;
- organizational culture defined by 'bureaucratic' values and tending to the polarization
(absence of shared values associated with an environment where there is little information
and communication between workers and the administration);
- human resources management mainly based on quantitative flexibility (reduction in the
number and changes to the employment contract - permanent or temporary);
- lack of participation and information about the introduction of the changes;
- nature of labour relations, not based on dialogue and negotiation between the social
partners.
Dantas (2001) analyses other factors that can represent obstacles to innovation: size of the
organization, its resources (human, technological and financial) and the company‘s culture.
Neely and Hii (1998) consider the distinction between internal and external barriers to the
organization. The internal barriers include rigidity, hierarchic structures of communication and
organizational deeds of division, lack of vision, resistance to the change, lack of motivation and
attitudes of resistance to the risk. In the external barriers they include inadequate infrastructure,
poor education and training systems, legislative barriers and failure to apply the existing
competencies.
In the internal barriers we can consider the size of the organization and the organizational
culture.
Much has been written about the influence of the company‘s size on the innovation process,
with diverging theoretical positions. For Rothwell (cf. Dantas), we can‘t be sure that advantages
are a consequence of the changeable size because while larger companies have advantages in
terms of resources (financial, capacity to attract and keep qualified workers), smaller companies
have a number of characteristics that enable them to meet the requirements of the innovation
process. Regarding these characteristics, Rothwell and Zegveld (cf. Dantas) mention that
communication can become much easier by allowing the involvement of workers from distinct
areas; that the simpler the structure, the more flexible it will be and, finally, management should
take risks more easily.
In terms of organizational culture, Dantas observes that "the innovative culture (...) it cannot be
imposed by the top management through internal communications; it will be the result of the
influence of the top management, materialized through the coherence of its behaviour, its
shares" (2001:113). Dantas defends that a change from a conservative culture into a culture
guided towards innovation (as expressed in the 2nd dilemma, p. 14), implies:
- enhancing people‘s roles by involving them in the definition of strategies and the
establishment of goals; by creating a communication system; by promoting the
permanent improvement of work conditions and the constant evaluation of workers;
- stimulating creativity;
- assuming a perspective of medium/long period goals, instead of a perspective of short-
term goals to obtain immediate profit;
- promoting flexible structures that will allow an increase of informality, communication,
and the participation of all members of the organization.
The work by the Competitiveness Advisory Group and the OECD has identified a range of
possible obstacles. These include:
a) Awareness. Managers, trade unions, and employees must be aware of ―high performance
work practices‖, their costs and their benefits. However, some managers lack information
about them. Moreover, many are unaware of the need to ‗bundle‘ such practices together as
part of a high-performance work system that supports an overall business strategy.
b) Attitudes. Managers, employees and their representatives must have positive attitudes
towards the introduction of new forms of work organization. However, some people are
resistant to change and try to defend existing practices and arrangements partly because of
uncertainty as to what the future holds.
c) Practical Problems. There are a number of practical problems associated with the
introduction of new ―high-performance work systems‖. It takes a long time, requires
systemic change, and demands a major investment of resources.
d) Capacity to Implement Change. Successful implementation requires a major commitment of
managerial resources. It also requires the financial strength to absorb the costs of any
disruption to operations whilst new organizational methods are being implemented. Many
companies, particularly SMEs, do not have the financial or managerial resources to
implement change successfully.
e) Investor Pressure. Investors are amongst the strongest drivers of managerial performance,
but they have little knowledge about the costs and benefits of organizational innovation.
This makes it difficult for investors to value companies properly and may lead to the
misallocation of resources within capital markets. It also makes it difficult for investors to
put pressure on managers to introduce new organizational strategies.
f) Business Economics. For rational economic reasons it can be difficult to justify investment
in organizational innovation. This may be because the costs can be high, the total scale of
cost can be uncertain, and the benefits can be difficult to quantify and take many years to
accrue.
g) Framework Conditions. It is important that the institutional settings within which
organizational changes take place is supportive. Areas of concern include:
 rigidity in product markets that limit the exposure of Managers to competitive pressure
or inhibit companies‘ ability to work collaboratively within ―supply chains‖;
 weakness in corporate governance (such as state ownership of shares or ‗cross-
holdings‘ of shares) that lessens the pressures that capital markets place on managers;
 rigidity in the labour market, particularly in areas such as remuneration, contracts, and
working time.
Making the analysis a little wider, Totterdill (2002) says that there is an extensive body of
research suggesting that the spread of successful organizational innovation in these arenas
remains weak in Europe. This can be explained by a number of mutually reinforcing factors that
include:
 low levels of awareness of innovative practices and their benefits amongst managers, social
partners and business support organizations;
 poor access to evidence-based methods and resources capable of supporting organizational
learning and innovation;
 countervailing trends in the design and application of new technologies;
 limited distribution of the competencies associated with new forms of work organization
within the workforce.
 3.2.5. Possible Impacts of Organizational Innovation and Change
Many impacts can result from organizational innovation and change, according to Duffee
(1986) and Williamson (1990), it may create: new role demands (underload or overload); role
ambiguity (lack of leadership, goals, and well-defined job descriptions); role conflict. As part of
the transition, new policies and procedures are likely to be implemented. The new work
environment may be different from the old one; supervisors may have different expectations of
workers‘ performance. Staff may not be adequately prepared for innovation and change because
they have not been given sufficient training. Supervisors may fail to provide staff with needed
support prior to, during, and after the implementation process.
Conflicts may occur with middle managers and co-workers. In general, the overall
organizational climate may not be conducive to change, which can create resistance. This, in
turn, makes it likely that the implementation of new management practices will be difficult and
may even fail.
New roles may initially be stressful and can affect performance, with an increase of employees‘
health problems and lower job satisfaction, as well as increased anxiety, absenteeism, and job
turnover. Newly introduced policies and procedures need time for employees to become
familiar with them.
The work environment is likely to include new technological equipment that may be unfamiliar
to the employees. Managers will expect to use new management practices to accomplish tasks.
However, they may never have been provided with management training.
These are some impacts that result from implementing organizational changes:

Table 6 - Impacts of Organizational Innovation and Change

Structure of the organization

Organization of the work
Organizational
Working time
Organizational culture

Market orientation
New products/services
Aspects introduced for the
Investment in core capabilities
market
Internationalization
Quality
Communication / Involvement
Rewards and recognition
Aspects involving people Training and skills‘ development
New work practices
Teamwork
Technological Introduction of new technologies
Investment in innovation
Company Entrepreneurship
Cooperation relations
Source: Wille, 1989, in Stacey, 1998 (adapted)

3.3. Knowledge-based management Model

Knowledge management is an area of study that has attracted much interest in various scientific
circles – we can find ―this topic in leading management, psychology, sociology, and economics
journals‖ (Phelps, Heidl & Wadhwa, 2012, p. 1155), where we can clearly see the growing
interest of researchers and also, certainly, practitioners, in this domain. We begin with a
synthetic approach to the essentials of this scientific field and also look to integrate new studies
and their conclusions, or even different approaches.
There are two distinct lines of thought on this matter. The first generation of authors was led by
Nonaka & Takeuchi and Davenport & Prusak, for whom the focus is the idea that knowledge
exists and the main task to get profit is using it and powering it. For Nonaka & Takeuchi (1995)
KM is reflected in the organization's ability to create and disseminate knowledge, incorporating
it into their systems, services and products. Davenport & Prusak, (1998) refers that knowledge
can be integrated in products, processes and outcomes as well in markets and that this is a great
competitive advantage for companies. For a second generation of authors like Firestone &
McElroy, knowledge can be produced. The main objective is to realize how using this
knowledge can help to innovate and to adapt quickly to new circumstances, assuming that these
issues have to be analyzed in the context of human and organizational dynamics. According to
Botha, Kourie & Snyman (2014, p. 9), ―knowledge is considered a key part of the strategy to
use expertise to create a sustainable competitive advantage in the present business
environment.‖

Knowledge can no longer be seen only as a set of guidelines exclusively conducive to economic
outcomes, but increasingly as human talent management (Saldarriaga Ríos, 2013). The author
also examined social responsibility and knowledge management as human resources
management strategies in organizations, connected and inseparable, and found that social
responsibility and knowledge management can both be considered people management tasks.

Scarbrough & Carter (2000) also believe that there is a close relationship between knowledge
management and people management, and this relationship must be expressed in practices such
as people commitment promoted in initiatives where they can be agents of knowledge
cooperation, production and dissemination, producing useful knowledge for the organization.
Linking these two areas requires congruence between practices and this may increase individual
and organizational performance.

Knowledge management often arises in the literature associated with concepts such as
organizational learning or learning organizations, as well as people management (Gelabert &
Aguilera Martinez, 2012, p139). These authors, based in a deep theoretical review, refer that
human resources management must be integrated in the organizational strategy and human
capital focused. In order to accomplish that human resources managers need to enhance the
skills of the organization; create a working system that meets the needs of the organization and
the people; facilitate the spread of knowledge and organizational learning; define compensation
systems based on the acquisition and dissemination of knowledge; create and manage networks
of relationships among people within and beyond the organization; promote teamwork and
facilitate the creation of communities of practice; design performance measurement systems
based on dynamic objectives; and design a flexible management systems (Gelabert & Aguilera
Martinez, 2012, p141). For these authors, the scope of people management tasks such as
recruitment and selection, training and development, compensations, performance evaluation,
internal communication are connected with the creation, transfer and dissemination of
knowledge, making clear, in the work of authors, the potential of human resources practices
creating the conditions for knowledge management.
However, authors as DeTienne, Dyer, Hoopes & Harris (2004) think that knowledge
management is not a role of human resources management, but an organizational strategy based
on three pillars: organizational culture, leadership and the role of ―Chief Knowledge Officer‖.
Each one plays important roles in overcoming human barriers associated with knowledge
creation, transfer and sharing like involvement, trust and rewards. Authors like as Vidal &
Alcamí (2005), point out the strategic importance of knowledge management, concluding that
the adoption of knowledge management practices produces direct and indirect effects on the
performance of the organization and its capacity for innovation.

3.3.1. Individual and Organizational knowledge

Nonaka & Takeuchi (1997) conceptualize the difference between information and Knowledge,
clarifying that knowledge is an attitude, a perspective or intention, related with action and based
and adjusted to a context. They studied two types of knowledge: Tacit and explicit. Nonaka
refers that knowledge cannot be represented only explicitly; knowledge is based on the principle
that they are co-dependent. In fact, according Nonaka (1991) both of them are essentially and
the basis for organizational learning.

Tacit knowledge is acquired by experience, is subjective, based on intuition, emotions, values

and/or ideals, experiences and actions (Nonaka & Takeuchi, 1997). It has two dimensions, one
more cognitive and other more technique. Tacit knowledge considers skills and techniques
mastered by the individual at an informal level. On the other hand, explicit knowledge is based
on facts, is formal and is expressed in words, numbers or even actions, and can be transmitted.
These authors proposed a complementary relationship between these two kinds of knowledge in
the "spiral" model, allowing the creation, diffusion and exploitation of new knowledge, through
its incorporation as a value in the organization, in products, services or systems.

The authors warn that there is a set of conditions for which this model is transferred to practice
successfully, including: organizational intent; individual and team autonomy; freedom and
"creative chaos"; information redundancy for error checking and elimination; maximizing
variety of information. Nonaka & Von Krogh (2009), after a deep and extend conceptual
distinction between tacit and explicit knowledge, consider that the conceptual distinction
between tacit and explicit knowledge should be analyzed in a continuum. The basis of the whole
model is the individual knowledge exists in organizations, but it is necessary to realize that the
behavior of individuals is constructed, modeled, is changed by the influence of multiple factors
of relational and organizational sphere.

With another point of view, Prusak (2001) considered knowledge management in a practitioner-
based response to the real circumstances and economics world trends, specifically affected by
globalization, specially related by information, technology presence and knowledge-centric
view of the organization. According to Prusak, the organization's ability to respond to these
challenges is to use the tacit and explicit knowledge to win competitive differentiation. In fact,
―Knowledge is found in numerous aspects of the business such as organizational culture,
routines, policies, systems, documents or the employees themselves‖ (Vidal & Alcamí, 2005, p.
212) but ―not only exists in the person individually, it is also found in groups, organizations and
societies‖ (Gelabert & Aguilera Martinez, 2012, p137), which brings us back to a more
comprehensive and complex dimension of management efforts. It is important for organizations
to harness the involvement and participation of employees through knowledge management.
According to organizational knowledge, it´s important to point out that the creation,
development and maturation of products and services, markets, technology are framed by the
workers individual knowledge, the organizational structure and culture and the vision of the
organization.

3.3.2. Creating and sharing knowledge

Some conditions were established by Zander & Kogut (1995) to characterize organizational
knowledge, since its creation until its diffusion, as measured levels of individual and group
competence and organizational capability: "Codifiability" captures the degree to which
knowledge can be encoded, even if the individual operator does not have the facility to
understand it; software controlling machinery is a good example; "Teachability," to the
contrary, captures the extent to which workers can be trained in schools or on the job - it reflects
the training of individual skills. "Complexity" picks up the inherent variations in combining
different kinds of competencies; knowledge, no matter the education of the worker, is simply
more complex when it draws upon distinct and multiple kinds of competencies. "System
Dependence" captures the degree to which a capability is dependent on many different (groups
of) experienced people for its production. "Product Observability" finally, captures the degree to
which capable competitors can copy the manufacturing capability, because they are able to
manufacture the innovation once they have understood the functions of the product.‖ (Zander &
Kogut, 1995, 79). Considering that these conditions must be met, one initial step in knowledge
management will accurately assess the existence and degree of maturity of each, proposing that
one can consider human resources practices as a starting point – ―performance appraisals and
compensation are the primary strategic human resources practices that firms can use to reinforce
employees' behaviors and induce them to comply with organizational goals‖ Chen & Huang
(2009, p107).

A reflection on the strategic role of human resources management, Gelabert & Aguilera
Martinez (2012) considers that this responsibility also encompasses knowledge management,
and that these concerns are present in academia and practitioners. According to this authors, in
academia and practitioners dominates the view to consider knowledge management as a
management philosophy or as a type of strategy to provide knowledge appropriate to the right
person at the right time, helping people to share what they know to be able to apply it in
everyday work, so you can raise the organizational performance (Gelabert & Aguilera Martinez,
2012, p.138). If we want follow this point of view, we need an answer to the classic questions:
What is the strategic role of human resources manager? This reflection about human resources
manager role, based on the tasks in knowledge management model of Edvardsson (2008) where
the author said that is necessary have different strategies in knowledge management –
codification and customization, but also considering their primary missions - to attract and
capture, develop and retain people, we may conceive this relationship as Fig. 4 show.

Fig. 1 - Edvardsson(2008) KMModel (adapted) and HRM missions

According to this model, and because the objective of knowledge management systems is to
support creation, transfer, and application of knowledge in organizations (Alavi & Leidner,
2001, p 107)., but also with the contribution of Gelabert Aguilera & Martinez (2012, pp.139),
the steps to cross knowledge management with human resources management, consider: Getting
knowledge creation or with the existing employees development, or with captured value –
knowledge - of new employees - for the organization. This may involve the design of jobs, the
design of tasks, compensation systems, information flows and opportunities for feedback and
training. At the distribution of knowledge, organizational culture and climate are very important
factors, encompassing people management tasks as training management and/or effective
careers management. Dimensions as leadership and teams management, measurement and
performance management or mobility systems management, should be taken into account when
the human resources manager focuses on the use of knowledge. Following this line of thought,
attention to the human dimension of management, may gain expression here, since according to
Munner, Iqbal & Long (2014) dimensions of perceived organizational support, organizational
trust and commitment, have positive mediating effect on knowledge sharing behavior.

Von Krogh, Ichijo & Nonaka (2000) call our attention that the ultimate success of knowledge
creation depends on how these managers and others organizational members relate through the
different steps of the process‖, warning that cannot be only one management mission but is
necessary create some conditions for everyone actively contribute to the creation and diffusion:
Instill a vision, manage conversations, mobilize activists, create the right context, globalize
local knowledge. The authors also defend the need to overcome barriers as: (1) the need for a
legitimate language, (2) organizational stories, (3) procedures, and (4) company paradigms.

Phelps, Heidl & Wadhwa (2012) after an extensive theoretical and empirical review point out
the importance of social relationships and networks in the processes of knowledge creation,
dissemination and use.

3.3.3. Knowledge Management and Organizational Strategies

The Davenport (1999) work is very clear in the way that explains the relation between knowledge
management and strategy. He links the strategic vision of the organization to human resources
management. The author proposes the combination of certain conditions: a) the knowledge
strategy associated with the business strategy; b) coordination of knowledge management and the
improvement of business performance: indicators of the workforce; indicators of processes or
functions; innovations, ideas or new business opportunities. None of this has value if it cannot be
convertible into financial indicators (profit, market share, ROI or other organizational income).
Davenport (1999) believes that there are several forms of knowledge management that ensure a
strategic advantage: knowledge management can enable an innovative strategy; knowledge
management can enable better execution of a strategy that already; knowledge management can
add value to a product or a service; and knowledge management can lead to excellent
performances from the organization in the implementation of non-strategic tasks.

Focusing on the people management and their articulation with knowledge management, Tejada
Zabaleta, (2011), concludes that exists four managerial characteristics that must be attended by
human resources managers: be a self-transformer; recognize the value of workers; recognize the
importance of the organizational climate; promote the development of skills needed by the
organization. Knowledge management strategy should reflect the company competitive strategy,
and must considerer how it creates value for customers and to workers (Hansen, Nohria &
Tierney, 1999).

This reflection shows a relationship between knowledge management and human resources
management defended by authors like Svetlik & Stavrou-Costea (2007) or Yang, Zheng &
Viere (2009). Human resources practices like training and competencies management can be
considered part of a context conducive to a knowledge creation/diffusion culture improving
individual performance. Vidal-Salazar, Hurtado-Torres & Matías-Reche (2012) research
concludes that training may stimulate the creation of organizational knowledge and generate a
sense of individual and organizational commitment.

4. Conclusion
Creating a strong theoretical framework that helped preparing and understanding the work in the
field about the role of innovation and knowledge management in organisations was the first goal
of this chapter. The innovation concept is normally assumed as something new or novel, but
beyond newness, definitions vary with academic perspective and application (Burgelman &
Sayles 1986). To overcome the difficulties of the concept, was adopted as a structural bases The
Green Paper on Innovation (European Commission, 1996), where, by definition, ―Innovation is
the successful production, assimilation and exploration of something new‖.
Analysing the innovation concept was a very complex activity, mainly because researchers
come from many different fields, often study specific components of innovation, and emphasise
various dimensions. Therefore, a unifying general theory is yet to emerge (Abramson 1991;
Eveland 1991, cited in Wolfe 1994 p. 406).
For this work, we assumed the idea that organisational innovation leads inevitably to a set of
changes in the organisation. Then, it become important to analyse the thematic of organisational
change that is presented in a vast literature developed for some of the main schools of thought –
i.e., Beer and Nohria (2000); Pettigrew et al (2001); Rajagopalan & Spreitzer (1996); Van de
Ven and Pool (1995). It was also considered important to analyse the nature of change: a)
radical change versus incremental change (assuming that the radical change modifies the total
dynamics of the processes and the interactions in the companies and that the incremental change
aims at continuous improvements in the processes); b) planned change versus not planned
change (organisational change can be a planned process, guided by the management or change
can be an emergent process, whose contours are going to be defined in the organisation‘s daily
work).
Determinants for successful organisational innovation, including origins, facilitators, obstacles
and impacts was also analysed like the framework on digital organizations. This analysis drive
to the conclusion that digital factors are driving the growth of information in organizations
including the increased computerization of small businesses, regulations mandating new
archiving and privacy standards, and industry-specific applications – from security imaging and
Internet commerce to medical imaging, sensor networks, and customer support applications.
The knowledge framework was also a priority because the aim of this work was to analyse the
role of knowledge management in organisational innovation and change processes and in the
literature was found a strong linkage between them. Knowledge can be an enabler or a disabler
of organisational innovation and change success, because individual knowledge transfer and use
is a very complex social interaction process (McAdam and McCreedy 1999; Nonaka, Toyama et
al. 2000; Von-Krogh, Ichijo et al. 2000).
It was also important to understand the nature of knowledge - tacit or explicit. Tacit knowledge
is highly personalized, context sensitive and informal, and very hard to measure and manage. It
includes know-how, intuition and informal communications that make up a large part of the
organisation‘s culture. On the other hand, explicit knowledge (Nonaka, 1994), is seen as an
object that can be codified and distributed outside of the individual who created it (Fahey &
Prusak, 1998).
Several sharing barriers in the literature was identified: a) individual barriers, grounded in the
participants of the knowledge sharing process (e.g. the fear to lose personal competitive
advantage and to be misunderstood and misinterpreted, group thinking, preference to one‘s own
ideas instead of somebody‘s else, etc. - Husted and Michailova, 2002); b) infrastructural
barriers, determined by organisational structure, system of communications and organisational
culture (Bock et al, 2005; Hall, 2002); c) ontological barriers, dealing with the knowledge itself
and arising from the tacit knowledge transfer problems (Nonaka, 1991), as well as from
perceived value of knowledge (Ford & Staples, 2005) that is often not recognized at all by the
knowledge sharing participants (Hall, 2002).

Regarding digital organizations, they are a form of organizations that can be productive and
efficient, but have several kinds of barriers: communication barriers, feelings of isolation from
e-workers. To be successful within a digital organization it is necessary to communicate clearly
with the e-workers and respond promptly to their requests or needs.

Finally, it‘s important to conclude that implementing organisational innovation practices

requires not only the translation of new knowledge from its abstract formulation into every kind
of organisational setting, it also requires its practical embedding in systematic routines and
working practices and its "enculturation" in shared understandings, norms and values.
5. References

Alvai, M. & Leidner, D.E. (2001). Review: Knowledge management and knowledge management
systems: Conceptual foundations and research issues. MIS Quarterly, 25(1), 107-136.

Baskerville, R., Pawlowski, S., & McLean, E. (2000). Enterprise resource planning and organisational
knowledge: Patterns of convergence and divergence. Proceedings of the 21st ICIS Conference (pp. 396-
406), Brisbane, Australia.

Botha, A., Kourie, D., & Snyman, R. (2014). Coping with continuous change in the business
environment: KMand KMtechnology. Elsevier. Consultado a 27 Junho 2014

Brown, J.S. & Duguid, P. (2000). Balancing act: How to capture knowledge without killing it. Harvard
Business Review, (May-June), 73-80

Calderón Hernández, G., Álvarez Giraldo, C. M., & Naranjo Valencia, J. C. (2006). Gestión humana en
las organizaciones un fenómeno complejo: Evolución, retos, tendencias y perspectivas de
investigación. Cuadernos de Administración, 19(32).

Carter, C., & Scarbrough, H. (2001). Towards a second generation of KM? The people management
challenge. Education+ Training, 43(4/5), 215-224.

Checkland, P. ; Holwell, S. (1998). Action Research: Its Nature and Validity. Systemic Practice and
Action Research. 11, 1; pg. 9

Chen, C. J., & Huang, J. W. (2009). Strategic human resource practices and innovation performance—
The mediating role of KMcapacity. Journal of Business Research, 62(1), 104-114.

Davenport, T. H. (1999). KM and the broader firm: strategy, advantage, and

performance. KMhandbook, 2, 1-2.

Davenport, T. H., & Prusak, L. (1998). Working knowledge: How organizations manage what they know.
Harvard Business Press. Consultado em http://www.google.pt/books?hl=pt-PT&lr=&id=-4-
7vmCVG5cC&oi=fnd&pg=PR7&dq=davenport+e+Prusak+knowledge+1998&ots=myg7Q-
5iK6&sig=EeJ-
UENSWdHekEuH_uQ74Gimw_s&redir_esc=y#v=onepage&q=davenport%20e%20Prusak%20knowledg
e%201998&f=false

den Hertog, J. F. and Huizenga, E. (2000): The Knowledge Enterprise. Implementation of Intelligent
Business Strategies. London: Imperial College Press.

DeTienne, K. B., Dyer, G., Hoopes, C., & Harris, S. (2004). Toward a model of effective KMand
directions for future research: culture, leadership, and CKOs. Journal of Leadership & Organizational
Studies, 10(4), 26-43.

Doz, Y. (2002) Learning and Innovation in Organisations and Economies, Administrative Science
Quarterly, Vol. 47

Edrisi, F., & Mahmoudi, A. (2012). The Influence of Processes of KMon Efficiency Improvement of
Faculty of Payam-E-Noor University. International Journal of Academic Research in Business and Social
Science. Vol. 2, No. 10. 409-418.

Edvardsson, I. R. (2008). HRM and knowledge management. Employee Relations, 30(5), 553-561.

Eisenhardt, K.M. (1989). Building theories from case research. Academy of Management Review, 14(4),
532-550.
Fahey, L. & Prusak, L. (1998). The eleven deadliest sins of knowledge management. California
Management Review, 40(3), 265-276.

Firestone, J. M., & McElroy, M. W. (2003). Key issues in the new knowledge management. Routledge.
Consultado em http://www.google.pt/books?hl=pt-
PT&lr=&id=zad0eXnJP5wC&oi=fnd&pg=PP2&dq=Firestone+%26+McElroy+knowledge&ots=cL9FNa
yPqC&sig=-6XCjK7V7PWPplBb-
_eYwvkgHUM&redir_esc=y#v=onepage&q=Firestone%20%26%20McElroy%20knowledge&f=false

Giddens A. (1984). The Constitution of Society. Cambridge: Polity Press.

Gold, A.H., Malhotra, A., & Segars, A.H. (2001). Knowledge management: An organisational
capabilities perspective. Journal of MIS, 18(1), 185-214.

Grant, R.M. (1996). Prospering in dynamically competitive environments: Organisational capability as

knowledge integration. Organisation Science, 7(4), 375-387.

Gupta, A.K. & Govindarajan, V. (2000) Knowledge management's social dimension: Lessons for Nucor
Steel. Sloan Management Review, (Fall), 71-80

Gustavsen, B. (2003). New forms of knowledge production and the role of action research. Action
Research, 1(2), 153-164

Hansen, M. T., Nohria, N., & Tierney, T. (1999). What‘s your strategy for managing knowledge?. The
KMYearbook 2000–2001.

Hansen, M.T. (1999). The search-transfer problem: The role of weak ties in sharing knowledge among
organisational subunits. Administrative Science Quarterly, 44(1), 82-112.

Hansen, M.T., Nohria, N., & Tierney, T. (1999). What's your strategy for managing knowledge? Harvard
Business Review, (March-April), 106-116.

Henriques, A. C. V., Antunes, E. D. D., & Macke, J. (2013). Beyond the technological aspects of
intercultural knowledge transfer: the role of international human resources. REAd. Revista Eletrônica de
Administração (Porto Alegre), 19(1), 247-273.

Hinds, R.S. & Aaronson, J.E. (2002). Developing the requisite organisation attitudinal and behavioral
conditions for effective knowledge management. Proceedings of the 8th Annual Americas Conference on
Information Systems (pp. 2059-2065).

Inkpen, A.C. & Dinur, A. (1998). Knowledge management processes and international joint ventures.
Organisation Science, 9(4), 454-468.

Kamoche, K., Chizema, A., Mellahi, K., & Newenham-Kahindi, A. (2012). New directions in the
management of human resources in Africa. The International Journal of Human Resource
Management, 23(14), 2825-2834.

LaDuke, B. (2004). Knowledge Creation: The Quest for Questions The Futurist. Washington,
Vol.38, Iss. 1; pg. 68

Lehesvirta, T. (2004). Learning processes in a work organisation: From individual to collective and/or
vice versa?. Journal of Workplace Learning. Bradford. Vol.16, Iss. 1/2; pg. 92, 9 pgs

Leiponen, A. (2005). Organisation of Knowledge and Innovation: The Case of Finnish Business Services.
Industry and Innovation. Sydney. Vol.12, Iss. 2; pg. 185, 19 pgs

Leonard, D. & Sensiper, S. (1998). The role of tacit knowledge in group innovation. California
Management Review, 40(3), 112-132.
Macías Gelabert, C., & Aguilera Martinez, A. (2012). Contribución de la gestión de recursos humanos a
la gestión del conocimiento. Estudios Gerenciales,28(123), 133-148.

Marshall Egan, T. ; Lancaster, C. M. (2005). Comparing Appreciative Inquiry to Action Research: OD

Practitioner Perspectives. Organisation Development Journal; 23, 2; pg. 29

McAdam, R. and S. McCreedy (1999). The process of Knowledge Management within Organisations: a
Critical Assessment of both Theory and Practice. Knowledge and Process Management 6(2): 101-112.

Mulgan, G. and Albury, D. (2003): Innovation in the Public Sector, Strategy Unit, Cabinet Office,
October 2003

Muneer, S., Iqbal, J., & Long, C. S. (2014). An Incorporated Structure of Perceived Organizational
Support, Knowledge-Sharing Behavior, Organizational Trust and Organizational Commitment: A
Strategic KMApproach. Pakistan Journal of Commerce and Social Sciences,8(1), 42-57.

Nidumolu, S.R. (2001). Situated learning and the situated knowledge Web: Exploring the ground beneath
knowledge management. Journal of MIS, 18(1), 115-150.

Nonaka, I. & Takeuchi, H. (1997). Criação de conhecimento na empresa. 13.ed. Rio de Janeiro: Campus.

Nonaka, I. (1991). The knowledge-creating company. Harvard business review,69(6), 96-104.

Nonaka, I. (1994). A dynamic theory of organisational knowledge creation. Organisation Science, 5(1),
14-37.

Nonaka, I., & Von Krogh, G. (2009). Perspective-tacit knowledge and knowledge conversion:
Controversy and advancement in organizational knowledge creation theory. Organization science, 20(3),
635-652.

Nonaka, I., R. Toyama, et al. (2000). SECI, Ba and Leadership: a Unified Model of Dynamic Knowledge
Creation. Long Range Planning 33: 5-34.

O'Dell, C. & Gray son, CJ. (1998). If only we knew what we know: Identification and transfer of internal
best practices. California Management Review, 40(3), 154-174.

OECD. 2002. Organisational Change and Firm Performance, DSTI/DOC (2002)14. Paris: OECD.

Osterloh, M. & Frey, B.S. (2000). Motivation, knowledge transfer, and organisational forms.
Organisation Science, 77(5), 538-550.

Pettigrew, A. e Fenton, E. (ed.) (2000), The innovating organisation, Londres, SAGE

Phelps, C., Heidl, R., & Wadhwa, A. (2012). Knowledge, networks, and knowledge networks a review
and research agenda. Journal of Management,38(4), 1115-1166.

Polanyi, M. (1997). ―The Tacit Dimension‖, in Prusak L. (ed.) Knowledge in organizations, Newton:
Butterworth-Heinemann, 135-146.

Poole, MS and Van de Ven, A (2004) Theories of Organisational Change and Innovation Processes, in
M Scott Poole & AH Van de Ven (eds) Handbook of Organisational Change and Innovation, Oxford:
Oxford University Press.

Prochno, P. (2001), Relationships between Innovation and Organisational Competences, Paris, INSEAD

Prusak, L. (2001). Where did KMcome from?. IBM systems journal, 40(4), 1002-1007.

Ribeiro, R., & Collins, H. (2007). The bread-making machine: Tacit knowledge and two types of
action. Organization Studies, 28(9), 1417-1433.
Saldarriaga Ríos, J. G. (2013). Responsabilidad social y gestión del conocimiento como estrategias de
gestión humana. Estudios Gerenciales,29(126), 110-117.

Scarbrough, H., & Carter, C. (2000). Investigating knowledge management. Chartered Institute of
Personnel and Development. London. CIPD.

Schein, E. H. (2003). On Dialogue, Culture, and Organisational Learning, Reflections, Summer2003, Vol.
4, Issue 4, pp. 27-38.

Sousa, MJ, 2009. Knowledge Dilemmas: The case of two Portuguese Organizations. Thesis (PhD)
University of Aveiro
Sousa, MJ, 2010. Dynamic knowledge: An Action Research Project. The International Journal of
Knowledge, Culture and Change Management, 10(1)
Sousa, MJ, 2013. Knowledge Profiles Boosting Innovation. Knowledge Management, 12 (4), pp. 35-46
Spender, J.C. (1996). Organisational knowledge learning and memory: Three concepts in search of a
theory. Journal of Organisational Change, 9(1), 63-78.

Svetlik, I., & Stavrou-Costea, E. (2007). Connecting human resources management and knowledge
management. International Journal of Manpower,28(3/4), 197-206.

Swap, W., Leonard, D., Shields, M., & Abrams, L. (2001). Using mentoring and storytelling to transfer
knowledge in the workplace. Journal of MIS, 18(1), 95114.

Tejada Zabaleta, A. (2011). Los modelos actuales de gestión en las organizaciones. Gestión del talento,
gestión del conocimiento y gestión por competencias. Psicología desde el Caribe. (12). 115-133

Totterdill P. (2002). Developing new forms of work organisation: the role of the main actors, UKWON
Working Paper Number 8

Tsai, W. (2002). Social structure of 'coopetition' within a multiunit organisation: Coordination,

competition, and intraorganisational knowledge sharing. Organisation Science, 13(2), 179-190.

Tsoukas H. & R. Chia (2002) On Organisational Becoming: Rethinking Organisational Change.

Organisation Science, 13: 5, Sep.-Oct., 2002, pp. 567-582.

Van de Ven, A. H. (1986): Central problems in the management of innovation, Management Sciences, 32
(5), pp. 590-607.

Van de Ven, A., e Poole, M. (1995), Explaining development and change in organisations, Academy of
Management Review, pp. 510-540

VIDAL, J. A., & ALCAMÍ, R. L. (2005). Gestión del conocimiento y desempeño innovador: un estudio
del papel mediador del repertorio de competencias distintivas. Cuadernos de Economía y Dirección de la
Empresa, (23), 117-138.

Vidal-Salazar, M. D., Hurtado-Torres, N. E., & Matías-Reche, F. (2012). Training as a generator of

capabilities. The International Journal of Human Resource Management, 23(13), 2680-2697.

Von Krogh, G., Ichijo, K., & Nonaka, I. (2000). Enabling knowledge creation: How to unlock the mystery
of tacit knowledge and release the power of innovation. Oxford university press. Retrieved
http://www.google.pt/books?hl=pt-PT&lr=&id=V-
ZDdXl15UYC&oi=fnd&pg=PT3&dq=How+can+we+identify+and+estimate+workers%E2%80%99+taci
t+knowledge%3F+How+can+we+design+a+personnel+mix+aimed+at+improving+and+speeding+up+its
+transfer+and+development%3F+How+is+it+possible+to+implement+tacit+knowledge+sustainable+pro
jects+in+remote+area&ots=uRCHVa3nGa&sig=D_eJncduOOVGlpt6s6oYcet713o&redir_esc=y#v=onep
age&q&f=false
 Von-Krogh, G., K. Ichijo, et al. (2000). Enabling Knowledge Creation: How to Unlock the Mystery of
Tacit Knowledge and Release the Power of Innovation.Oxford, Oxford University Press.

Waheed, M., & Kaur, K. (2014). Knowledge quality A review and a revised conceptual
model. Information Development, 0266666914539694

Wenger, E.G. & Snyder, W.M. (2000). Communities of practice: The organisational frontier. Harvard
Business Review, (January-February), 139-145

Wulong Gu and Surendra Gera (2004). The Effect of Organisational Innovation and Information
Technology on Firm Performance. Statistics Canada, Catalogue No. 11-622-MIE No. 007

Yang, B., Zheng, W., & Viere, C. (2009). Holistic views of KMmodels. Advances in Developing Human
Resources. SAGE 11: 273

Zander, U., & Kogut, B. (1995). Knowledge and the speed of the transfer and imitation of organizational
capabilities: An empirical test. Organization science,6(1), 76-92.

Zhang, L., Wang, H., Cao, X., Wang, X., & Zhao, K. (2012). KMcomponent in managing human
resources for enterprises.Information Technology and Management, 13(4), 341-349.

View publication stats