Knowledge Management in Project-Based Companies

Knowledge Management in Project-Based Companies

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Knowledge Management in Project-Based Companies An Organic Perspective Kaj U. Koskinen and Pekka Pihlanto

Kaj U. Koskinen and Pekka Pihlanto 2008 Foreword Rolf A. Lundin 2008 Softcover reprint of the hardcover 1st edition 2008 978-0-230-22071-3 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6-10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2008 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-30616- 9 ISBN 978-0-230-59507-1 (ebook) DOI 10.1057/9780230595071 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. 10 9 8 7 6 5 4 3 2 1 17 16 15 14 13 12 11 10 09 08

This book is dedicated to the memory of my mother, who taught me humility and diligence (KK) I dedicate the book to my wife Pirjopäivi, who has always greatly supported my work (PP)

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Contents List of Figures List of Tables Foreword by Rolf A. Lundin About the Authors Acknowledgements ix x xi xiii xiv 1 Why Knowledge Management in Project-Based Companies? 1 Keywords of the book 4 Structure of the book 5 2 The Project Work Context 7 Project business 7 Project-based company 8 Project team 10 Project team building 12 Project team members 13 Summary 15 3 The Basic Framework 16 Epistemological assumptions 16 Holistic Concept of Man 19 Summary 22 4 Knowledge Management and Knowledge-Related Project Work Environments 25 Knowledge management 25 Knowledge-related project work environments 39 Summary 43 5 Learning and Organizational Memory 45 Types of learning 45 Organizational memory 60 vii

viii Contents Factors affecting learning and organizational memory development in a project work context 66 Summary 76 6 Knowledge Sharing and Methods of Knowledge Sharing 80 Dependence on others 80 Basics of knowledge sharing 81 Intuition 85 Language 86 Media 88 Imitation 90 Boundary brokering 91 Shared understanding with the help of boundary objects 96 Benchmarking 100 The Internet 104 Storytelling 107 Mentoring 111 Factors affecting knowledge sharing in a project work context 116 Creating an effective knowledge sharing culture in a project work context 146 Implications for project leaders 150 Summary 151 7 Strategic Knowledge and Intellectual Capital Management in Project-Based Companies 158 The resource-based view of the company 158 Strategic knowledge management 159 Strategic intellectual capital management 167 Summary 169 8 Epilogue 171 Bibliography 173 Index 196

List of Figures 4.1 Transformation of individual team members knowledge into project knowledge 33 4.2 Project tree 34 4.3 Individual s personal competence 35 4.4 Competence transformation of an engineer in the course of a working life 37 4.5 Four knowledge-related project work environments 40 4.6 Knowledge-related project work environments 40 5.1 The knowledge learning spiral 46 5.2 The Lewinian experiential learning model 48 5.3 An individual team member s learning model 49 5.4 A team s learning model 52 5.5 Construction of a learning organization 54 5.6 The company s learning model 55 5.7 The three learning levels 57 5.8 Risk knowledge in the project risk management process 67 5.9 Assessment of knowledge quality within a project 68 6.1 Media richness vs. knowledge communicability 90 6.2 The product development plan as a boundary object 99 6.3 Competence transfer through mentoring 112 6.4 Four interaction relationships of the project manager 119 6.5 The propensity to hoard or share: control mechanisms and motivation 121 6.6 Project culture 140 6.7 Value framework 141 6.8 The SECI model 148 6.9 Effectiveness of knowledge transfer in a project work context 154 6.10 Conceptual model for estimation of knowledge transfer in a project work context 156 7.1 Codification and personalization strategies 161 7.2 The Skandia Navigator 168 ix

List of Tables 2.1 Functional vs. project-based organization 9 6.1 Informal and formal mentoring forms 113 6.2 Benefits of trust in project company customer relationships 126 x

Foreword I am certainly delighted to be able to contribute to this volume on knowledge management in project-based organizations, for at least two reasons. First, this book adds to the growing scholarly literature related to social science on the management of projects and temporary organizations. Fifteen to twenty years or so ago, project management was a matter almost exclusively for the engineering sciences and for practitioners in the field. It now appears that social scientists have come to realize that the research field of projects and temporary organizations is in need of attention. In a world where increasingly more of the most important economic activities are run as projects, the relevance of the research field is undisputed. For me personally, having seen the development from the inside since the late 1980s, it is certainly a joy to see all the good work being done in the area. The literature on projects has expanded from relatively simple books of a how-to-do-it type on project planning and follow-up in the 1980s to modern books based on scholarly work on project teams as temporary organizations, on the role of projects for economic development, on the effects of project proliferation on working life, etc. These efforts to legitimize the area for scholarly attention have certainly been successful. Theses are written and articles published in highly prestigious journals covering a variety of subjects related to projects and temporary organizations. Furthermore, the movement is international even though at times researchers outside the Nordic countries consider the Nordic practitioners to be at the forefront of the development. The research efforts in Denmark, Finland, Norway and Sweden have been called The Scandinavian School. Even though the denomination is improper geographically, it stresses the impact we have had together on the research scene. It might even be that we are currently witnessing something that one day might be classified as nothing less than a scholarly revolution where the Nordic countries took the lead. The second reason for feeling delighted is that this volume treats some of the most interesting but also least understood aspects of the field, namely learning and knowledge in a project context. The debate on the why and how questions of learning and knowledge has been fierce at times. Transforming experiences to learning has always been described as difficult in a project context, especially in project-based firms where xi

xii Foreword participants run off to a new project as soon as the old one is finished: the renewal paradox is too common an observation for project-based firms. Renewing project handling should be easy since a new project always involves procedures being adapted to what has been learned in the past. The paradox is that renewal is not as easy as one might expect. The reasons why are still under debate: practise always to look for remedies to problems. In the current book, a fresh look is taken at the mechanisms of knowledge handling in project-based firms and some quite intricate social science approaches emanating from organization theory are applied to the project management field. In particular, the discussion on autopoietic learning and the notion of the holistic concept of man (HCM) are rewarding for the reader, to mention only a couple of the contributions made by the authors. ROLF A. LUNDIN Professor of Business Administration Jönköping International Business School Sweden

About the Authors Dr (Tech.) Kaj U. Koskinen has worked for many years as project manager in several international engineering companies, including Outokumpu and Honeywell. His main experience derives from process automation. Since 1997 he has been a Senior Lecturer (Docent) in Industrial Management and Engineering at Tampere University of Technology, Pori. Dr Koskinen s research interest is focused on knowledge and project management, and he has published several articles on these research areas. Professor Pekka Pihlanto held a Professorship in Management Accounting at the Turku School of Economics (TSE) from 1985 until he retired in 2003. He continues his research work at TSE Corporate Research and Education. Professor Pihlanto s main research interests include behavioural management accounting and accounting methodology and philosophy. xiii

Acknowledgements I would like to extend my best thanks to the Finnish Cultural Foundation, the Satakunta Regional Fund, which has given financial support for this book. KAJ U. KOSKINEN I would like to thank Professor Lauri Rauhala, who developed the holistic concept of man we apply in this book. He has always encouraged me in applying the holistic concept of man to business studies and to other disciplines as well. PEKKA PIHLANTO The editors and publishers are grateful to the following for permission to reproduce copyright material: John Wiley & Sons Ltd for Figure 4.3 Individual s personal competence Source: Koskinen, K.U. and Pihlanto, P. (2006). Competence transfer from old timers to newcomers analysed with the help of the holistic concept of man. Knowledge and Process Management, 13(1), pp. 3 12. John Wiley & Sons Ltd for Figure 4.4 Competence transformation of an engineer in the course of working life Source: Koskinen, K.U. and Pihlanto, P. (2006). Competence transfer from old timers to newcomers analysed with the help of the holistic concept of man. Knowledge and Process Management, 13(1), pp. 3 12. John Wiley & Sons Ltd for Figure 4.5 Four knowledge-related project work environments Source: Koskinen, K.U. (2004). Knowledge management to improve project communication and implementation. Project Management Journal, 35(2), pp. 13 19. Butterworth Heinemann/Elsevier for Figure 5.1 The knowledge learning spiral Source: Ahmed, K.P., Lim, K.K. and Loh, Y.W. (2002). Learning through Knowledge Management. Oxford: Butterworth Heinemann. Interscience Publishers for Figure 6.2 Product development plan as a boundary object Source: Koskinen, K.U. (2005). Role of metaphoric boundary objects in the development of a company s strategic vision. International Journal of Management Concepts and Philosophy, 1(2), pp. 156 76. John Wiley & Sons Ltd for Table 6.2 Benefits of trust in project company customer relationships Source: Kerzner, H. (1997). In Search of Excellence in Project Management. New York: John Wiley & Sons. John Wiley & Sons Ltd for Figure 6.7 Value framework Source: Ronen, S. (1986). Comparative and Multinational Management. New York: John Wiley & Sons. Pearson Education Ltd for Figure 7.1 Codification and personalization strategies Source: Jashapara, A. (2004). Knowledge Management: An Integrated Approach. Harlow: Pearson Education Limited. Every effort has been made to contact all the copyright-holders, but if any have been inadvertently omitted the publishers will be pleased to make the necessary arrangements as quickly as possible. xiv