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“Knowledge is of two kinds.

We know a subject ourselves, or we know where we can find

information on it.”

This Journal written by CW Choo, talks about how an Organisation uses information strategically:
First of which is making sense of change in its environment; helping in making decisions about
courses of action; to help create a piece of entirely new knowledge for innovation. The flow of
information behaviors is analyzed in each of these cases to interweave a richer explanation of
where how information is used in the organization. Through the concept of making sense, people
in an organization add meaning to the events and actions. Through the concept of knowledge
creation, the insights of an individual are converted to the design of a new product or as an
improvement in the processes. Finally, through decision making, both knowledge and
understanding are used to focus on the selection and the required commitment to a required
course of action.

The importance of organizations as decision-making systems is such that, Organizations expect

the concept of “rational behavior” when it comes to measuring its actions which contribute to
its goals and objectives. However, this behavior of individual members is often constrained by
their mental cognitive capacity, the information they hold, and their values. A way to bridge
both is to create a set of decision routines or design the decision making premises that guide or
help control individual decision-making behavior.

An organization starts in sense-making by four sets of interlocking processes: ecological change,

enactment, selection, and retention. This begins when there is a change or difference in its
environment, which results in disturbances in the flow of experiences affecting the participants.
This ecological change requires the members to understand these differences and to find the
significance of these changes. The enactment process differentiates between possible
environments that the organization could clarify or take seriously, In the selection process, the
question, "What is going on here?” is answered. This reaches into the past to extract history and
select a reasonable scheme of interpretation. In the retention process, the results of successful
sensemaking are retained for future use.

There are four modes in knowledge conversion: socialization, externalization, combination, and
internalization. they feed off each other in a continuous spiral of internal knowledge creation
which it typically begins with individuals who develop some insight or intuition in how better can
they do their tasks. This tacit knowledge may be shared with others through effective
socialization. However, as long as the knowledge stays tacit, it is difficult to exploit it further.
Thus, it has to be converted into explicit knowledge which is then used to design the real
concept. From this perspective, the externalization of tacit knowledge into explicit concepts is
therefore very important. These different bodies of expertise may be combined into new forms
of explicit knowledge. Lastly, the new explicit knowledge created through the various modes
will have to be re-experienced and re-internalized as new tacit knowledge.

Finally, the organization that effectively integrates sensemaking, knowledge-creation, and

decision making is called a Knowing Organization. This possesses information and knowledge, Its
actions are based upon a shared and valid understanding of the environments and needs and are
leveraged by the available knowledge resources and skill competencies of its members. It also
possesses information and knowledge that confers a special advantage, allowing it to develop
intelligence, creativity, and occasionally, cunning.

For Example, Shell has been able to effectively manage and integrate itself into a knowing
organization into the processes of scenario planning and strategy development. Its ability to
survive and adapt through the years is no small part in its skill in scanning the environment,
developing interpretations or scenarios that provide a context for action, mobilizing the tacit
knowledge of its managers and planners, and finally the implementation of hard-headed decision
routines to aid strategy development.
The definition of the Knowing Organization provides a collective view of the principal ways in
which an organization can make use of information strategically. From attending to and making
sense of signals from its environment, the organization will able to adapt and thrive successfully.
Next, by deploying the knowledge and expertise of its members, it is constantly learning and
innovating. Finally, By designing action and decision routines that are based entirely on what its
members know and believe, the organization is able to choose and commit itself to further
courses of action.

Ref: The Knowing Organization: How Organizations Use Information to Construct Meaning, Create Knowledge and Make
Decisions, PII: S0268-4012(96)00020-5 International Journal of Information Management,Vol. 16, No. 5, pp. 329-340,