The knowledge-intensive company and the economy of sharing: rethinking utility and knowledge management

& Research Article

The Knowledge-intensive Company andthe Economy of Sharing: RethinkingUtility and Knowledge Management

Alexander Styhre*

Chalmers University of Technology, Goteborg, Sweden

Knowledge-intensive organizations are based on their capability of making use of intangible,intellectual resources and assets. As opposed to preceding economic regimes, the post-industrial society is to a lesser extent dependent on production factors that are subject to scar-city. Instead, knowledge tends to grow rather than being consumed as it is shared with others.When examining the practices of knowledge-intensive companies, an ethics of sharing under-lying to the use of all knowledge needs to be recognized. Rather than conceiving of knowledgeas being an organizational resource that is derived from previous economic regimes, the ana-lysis of knowledge needs to be grounded in a different perspective. This paper is an attempt toformulate such a perspective on knowledge-intensive organizations as being based on sharingrather than exploitation. The argument is supported by an empirical study of a pharmaceuticalcompany wherein the distribution of knowledge across project teams, communities of practiceand individuals was of key strategic interest. Copyright # 2002 John Wiley & Sons, Ltd.

INTRODUCTION

The postindustrial society is centred on the useof intangible intellectual capital and knowledgeresources (Bell, 1973; Castells, 1996; Kallinikos,1996). As a consequence, our understanding ofthe firm and the organization should be reformu-lated in the economic regime that Burton-Jones(1999) refers to as knowledge capitalism. For instance,Teece (2000) writes: ‘The essence of the firm in thenew economy is its ability to create, transfer,assemble, integrate, protect and exploit knowledgeassets. Knowledge assets underpin competences,and competences in turn underpin the firm’sproduct and service offerings in the market’ (Teece,2000: 29).

The emergence of intangible intellectual andknowledge-based resources as the key organiza-tional resource has far-reaching consequences forthe economy in toto as well as for the analysis oforganizations (Little, Quintas and Ray, 2002;Liebeskind, 1996; Leonard-Barton, 1995; Blackler,1995; Pfeffer, 1994). In previous economic regimesof accumulation and distribution, the firm’s pri-mary resources have been physical, tangible andfinite. In the knowledge-based economy, the or-ganization’s resources cannot be conceived of inthese terms. For instance, Orlikowski (2002) writes:‘[k]nowledge is an ongoing social accomplishment,constituted and reconstituted in everyday practice.As such, knowing cannot be understood as stableor enduring. Because it is enacted in the moment,its existence is virtual, its status provisional’(Orlikowski, 2002: 252–253). Therefore, the rational-ities inherent to the knowledge-based economymust be critically examined. In an economy basedon tangible resources, certain beliefs, assumptions,and qualities may be justified, while in the

Knowledge and Process Management Volume 9 Number 4 pp 228–236 (2002)Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/kpm.155

Copyright # 2002 John Wiley & Sons, Ltd.

*Correspondence to: Alexander Styhre, Fenix Research Programand Department of Project Management, Chalmers University ofTechnology, Aschebergsgatan 46, Vasaomradet Hus 3, S-412 96,Goteborg, Sweden.E-mail: [email protected]

knowledge-based economy other beliefs andassumptions become established. For instance, inthe preceding economic regime, the waste of scarceresources is problematic as tangible resources arecostly for the company and because tangibleresources embody energy. Therefore, the use oftangible resources needs to be optimized in orderto reduce the waste of scarce resources. On theother hand, in the knowledge economy whereinknow-how and experience are the key organiza-tional resources, the notion of waste has differentconnotations. In this case waste no longer denotesthe loss of energy or the unproductive consump-tion of resources but becomes something different.Underlying to the notion of waste—the concept weuse in the example—is the neoclassic economics’idea of utility. Utility is a theoretical concept aimedat explaining the effect or the impact of a resource.In the example on waste, utility is low because thewasted resources are not used in a wise (i.e. pro-ductive) way. Utility is therefore employed as aconcept that aims at capturing the capability ofmaking use of a resource in an optimal manner.While utility is linear in an economic regime char-acterized by its dependence on tangible resources,i.e. there is a close-knit relationship between theuse of a resource and its outcome, in the knowl-edge-based economy, the notion of utility is poten-tially much more complicated (Tsoukas andVladimirou, 2001; Letiche and Van Hattem, 2000).

In much of the knowledge management litera-ture, knowledge is simply considered to be a sub-stitute for other tangible organizational resourceswithout a proper analysis being conducted ofhow such intangible resources are employed inthe firm. The most obvious problem with much ofthe knowledge management literature is that it con-ceives of knowledge as being a tangible resource—a stock of knowledge—that can be applied to cases(see Tsoukas, 1996; Orlikowski, 2002). As notedabove, rather than being a stock of knowledge,knowledge is produced as it is shared; it is not con-sumed but shared, given away and received(Tsoukas, 1996; see also Latour, 1987). The knowl-edge economy is, as opposed to other precedingeconomic regimes and modes of accumulation, aneconomy of sharing (Rehn, 2001). Rather than talkingof a bounded rationality, a rationality of utility thatis restricted on basis of access to information andcognitive limitations, one could talk of a ‘reversedrationality’ or a ‘disentangled rationality’ whenexamining organizational knowledge-based resour-ces. The rationality of the knowledge economy issomething different than that of the boundedrationality in what Georges Bataille (1988) calls‘restricted economies’.

This paper is organized as follows. First, thenotions of knowledge and knowledge managementare examined. Next, what will be called the econo-my of sharing is discussed. Third, the sharing ofknowledge in knowledge-intensive companies isconsidered as one of the key features of the knowl-edge-based economy. Finally, some implicationsand conclusions are drawn.

THE NOTION OF KNOWLEDGE

Hardt and Negri (2000) talks of the present eco-nomic regime as being a ‘postmodernized’ econo-my of information, They state that:

It has now become common to view the succes-sion of economic paradigms since the middle agein three distinct moments, each defined by thedominant sector of the economy: a first paradigmin which agriculture and the extraction of rawmaterials dominated the economy, a second inwhich industry and the manufacturing of dur-able goods occupied the privileged position,and a third and current paradigm in which pro-viding services and manipulating informationare at the heart of economic production. Thedominant position has thus passed from primaryto secondary to tertiary production. Economicmodernization involves the passage from the firstparadigm to the second, from the dominance ofagriculture to that of industry. Modernizationmeans industrialization. We might call the pas-sage from the second paradigm to the third,from a dominance of industry to that of servicesand information, a process of economic postmo-

dernization, or better, informatization. (Hardt andNegri, 2000: 280)

The transition from an agrarian and extractioneconomy into an economy based on manufacturingof goods and commodities is referred to as moder-nization by Hardt and Negri (2000). The emergenceof an economy based on information and knowl-edge is called postmodernization. The key notionhere is information. Information is coded data(Boisot, 1998), but the step from information toknowledge is by no means uncomplicated. Bateson(1972) offers a useful definition of information: ‘Thetechnical term ‘‘information’’ may be succinctlydefined as any difference which makes a difference in

some later event’ (Bateson, 1972: 381; see alsoLuhmann, 2000: 18). Information is therefore whatcan be used to create a difference. As soon as apiece of information is used, it is, as Luhmann(2000) points out, turned into non-information. Amessage has an informational content for me only

Knowledge and Process Management RESEARCH ARTICLE

Rethinking Utility and Knowledge Management 229

the first time I receive it. On the second occasion ofreceiving it I already have the information andhence it is non-information. Its receipt provides mewith no information and may even be frustratingor somewhat annoying. As a consequence, there isa continuous production of information in society.Information is turned into non-information that inturn begets new information. Knowledge is basedon the ability of making use of such information.

What is of great importance to notice is that thetransformation of information into knowledge is byno means linear or uncomplicated. Data and infor-mation can be regarded as being facts and decodedfacts respectively, but knowledge is not simply theaccumulation of facts and decoded facts but theintelligent use of such resources. However, knowl-edge is too often theorized as being a ‘thing initself’ removed from social interests and beliefs.As opposed to this reified view on knowledge,Knorr Cetina (2001) talks of ‘epistemic objects’ or‘objects of knowledge’ as being entities of knowl-edge with no fixed, innate constitution:

From a theoretical point of view, the definingcharacteristic of an epistemic object is this chan-ging, unfolding character—its lack of objectivityand completeness of being, and its non-identitywith itself. The lack in completeness of being is cru-cial: objects of knowledge in many fields havematerial instantiations, but they must simulta-neously be conceived of as unfolding structuresof absences: as a thing that continually ‘explode’and ‘mutate’ into something else, and that are asmuch defined by what they are not (but will, atsome point have become) than by what theyare (Knorr Cetina, 2001: 182).

To Knorr Cetina (2001), knowledge is always in astate of becoming, undergoing modifications andchanges. Therefore, knowledge is never a thing assuch but is always made up of heterogeneous fluidelements. In a similar vein, Wood (2002) writes:‘[K]nowledge is not a commodity ‘‘out there’’, noris its movement a question of the starting or finish-ing of use or production. Rather it is the elusivesubject of what happens ‘‘in-between’’ ’ (Wood,2002: 153). Knowledge is always what emergesin-between data and information and previousknowledge and beliefs.

In the Platonist tradition of thinking, knowledgeis attained through the recollection of eternal ideas(see e.g. Plato’s dialogue Meno). The term ‘recollec-tion’ in this context refers to undergoing philosophi-cal training and contemplation. Thus, knowledge isseen as a stable configuration that can be employedin appropriately interpreting and interacting withthe world. Knowledge is therefore based on a

logocentric view, an ontology of presence, that as-sumes that all resources are fixed in determinatepositions and essences. Foucault writes: ‘Westernphilosophy—and this time it isn’t necessary to limitthe reference to Descartes, one can go back toPlato—has always characterized knowledge bylogocentrism, by resemblance, by congruence, bybliss, by unity’ (Foucault, 2000: 12).

Rather than recognizing the logocentric view onknowledge wherein knowledge is seen as somestable foundation that can serve as the basis fororganizational activities, knowledge is here seen,as suggested by Wood (2002), as what is in-between, what is emerging in processes of becom-ing wherein various social actors and resources aremobilized and jointly create what we call knowl-edge. Knowledge is articulated on basis of dataand information but is irreducible to such assetsand is always a fluid and fluxing configuration,or, to use a notion of Bergson’s (1988: 9), an image

that is in-between a ‘thing’ and a ‘representation’.Therefore knowledge needs to be examined onbasis of its capability of being in-between. The con-cept of in-between here denotes the capability ofbeing shared and jointly constituted by individualsand communities.

The pivotal idea is that knowledge cannot sim-ply be seen as accumulated data and information,but as a human capacity that escapes logocentricthinking in terms of being located in simple placesor being based on fixed essences (Chia, 1998;Whitehead, 1925). Therefore, knowledge comesinto being through the practices of sharing and giv-ing: ‘Knowledge is a remarkable substance. Unlikeother resources, most forms of knowledge growrather than diminish with use’ (Adler, 2001: 216).Since the concept of knowledge is used to denoteresources with such characteristics, we need toturn back to the assumptions on sharing and howsharing is related to concepts such as boundedrationality in order to fully understand the qualitiesof knowledge.

THE ECONOMY OF SHARING: SHARINGKNOWLEDGE AS PRODUCTIVEEXPENDITURE

Simmel (1971) writes: ‘Most relationships amongmen can be considered under the category ofexchange. Exchange is the purest and most concen-trated form of all human interactions in which ser-ious interests are at stake’ (Simmel, 1971: 43).Human beings exchange tangible resources butalso make emotional and intellectual exchanges.From its outset, the principles of economics have

RESEARCH ARTICLE Knowledge and Process Management

230 A. Styhre

been based on the ideas of exchange. At the sametime as exchange is a fundamental principle foreconomic activities, individual interests serve asthe rationale for such exchanges. In classical andneo-classical economic theory, exchanges areembedded in a rational worldview wherein eachactor aims at maximizing the utility from theexchange. The Homo Oeconomicus ideal type of indi-vidual assumed by classical and neo-classical eco-nomic theory seeks to achieve a favourableexchange on basis of a calculation of utility. Aswe learn from Adam Smith (1776/1982), we donot become enriched by the butcher’s and thebaker’s philanthropy but from their will to makea living, i.e. their ‘self-interest’. Thus, the principlesof economics are both focused on individual bene-fits at the same time as such benefits are inextric-able entangled with the activities of othereconomic actors (cf. Durkheim, 1933). The economyis therefore a confusing human institution in termsof being aimed at from the economic actors’ pointof view producing personal benefits but under therestriction of the interests of others. Critics of thecapitalist economic regime argue that one ofthe consequences of this is greed and the exploita-tion of various resources. For instance, CharlesWright Mills (1951) writes that white-collar work-ers ‘are cogs in a business machinery that has rou-tinized greed and made aggression an imperialprinciple of organization’ (Mills, 1951: 104).

The decisionist school represented by HerbertSimon and James March represents another cri-tique of the neo-classic conceptualization of ration-ality and utility. However, Simon and March onlypartially break with neo-classic theory inasmuch asthey adhere to the rationalist view on utility as anideal, albeit recognizing that pure rationality ispractically complicated to achieve. In his classicbook Administrative Behavior, Simon, distinguishingbetween ‘objective’ and ‘subjective’ rationality,writes: ‘[A] decision may be called ‘‘objectively’’rational if in fact it is the correct behavior for max-imizing given values in a given situation. It is ‘‘sub-jectively’’ rational if it maximizes attainmentrelative to the actual knowledge of the subject’(Simon, 1976: 76). Simon’s (1957) concept ofbounded rationality, later further developed and the-orized by March and Simon (1958) and Cyert andMarch (1963), represents a link between the idealand abstract category of ‘pure’ rationality of neo-classic theory and later evaluations of the notionsof rationality and utility. To Simon, agents aim atundertaking rational decision but only have thecapacity of making decisions on basis of boundedrationality because of the lack of information andpossibilities for making predictions.

In organization theory, the emergence of institu-tional theory (see e.g. DiMaggio and Powell, 1991;Meyer and Scott, 1992; Scott, 1995) representsanother strand of critique on the neo-classic viewof rationality and utility. To Institutional theorists,agents act in accordance with instituted practices,norms, values, morals, and beliefs. There is no nakedrationality as such but what is regarded as rationalbehaviour is not only cognitively and practicallybounded but is also institutionally dependent.

The decisionist school of Simon and March andinstitutional theory thus represent two critiques ofthe neo-classic view of rationality. In these two per-spectives, in themselves complicated to fully distin-guish, it is not the notion of rationality per se that iscomplicated but rather its practical use. Humanactors can never be fully freed from their social,emotional, perceptual and cognitive limitationsand therefore ‘rational behaviour’ is always ration-ality under determinate conditions. Nevertheless, itis possible to take the critique of neo-classic theoryeven further. For instance, the category of exchangecan be examined in terms of ‘giving’ rather thantrading as in the neo-classical view.

Critics of the capitalist economic regime recog-nizing the category of giving claim that the empha-sis on market transactions as the dominantmechanism for exchange remains an ideology sincebelow the surface, clan-like coalitions are beingforged among market actors (Ouchi, 1980; see alsoJackall, 1988). Rehn states that:

Although kinship relations are sometimes viewedas exogenous and disturbing factors in whatcould be a ‘good’ market economy, they are oftenviewed as an inevitable part of economy in certainsocieties. As for gift economies, i.e. economicorders that are founded on the exchange of giftsrather than the exchange of commodities, theseare seldom if ever referred to as anything besidesa charming archaic custom. (Rehn, 2001: 16)

Critics of neoclassical economic reasoning such asRehn (2001) argue that ‘the market’ remains anideal type construct whose proponents overlooksignificant empirical evidence on joint ventures,coalitions, partnerships, long-term relationships andso forth (Chandler, 1977; Callon, 1998; Lazonick,1991). Of course, there are institutions based onsocial exchanges that operate through marketmechanisms but such institutions are generallyless unified and coherent than their proponentsrecognize (cf. Granovetter, 1985; Douglas, 1986).

In contrast to the market-based rationality ofnegotiation, contracting, and mutual exchangesfavoured by neoclassical economics, anthropolo-gists and social theorists such as Mauss (1954)



and Bataille (1988) put forth an economic model ofexchange that is based on long-term relationsrather than the rationale of contracting in an openmarket (see also Derrida, 1992). For Mauss (1954),the act of giving is what constitutes both the econ-omy and the social relationships in which the econ-omy is embedded. When social communities orindividuals exchange gifts, they forge relations atthe same time as goods and services are distributedacross the economy. The gift is thus a sine qua non

for the economy and for the creation and sustainingof social formations. For Bataille (1988), the princi-ples of economy and the rationales inherent to ‘eco-nomic behaviour’ are based on the principles ofscarcity (see Nodoushani, 1999; Goux, 1998). ButBataille questions the axiomatic principles of scar-city and argues that what is the driving force inthe economy is the expenditure and waste of excessresources. Therefore, rather than examining theeconomy in terms of its capacity of accumulating

excess resources, Bataille suggests that the con-sumption of goods and services should serve asthe basis for an analysis of economic behaviour.

Both Mauss and Bataille radically put into ques-tion the taken for granted protestant virtues ofaccumulation (Weber, 1992) and the assumptionson scarcity in the economy. In fact, they overturnthe very idea of economy as we know it, etymolo-gically derived from the Greek word of ‘house-hold’, oikos. For us moderns, the term economyrelates to the control of resources rather than to giv-ing them away or wasting them. Rehn states that:‘Economy begins when we have something to con-trol, accumulated matter, and is synonymous withplanned exchange and striving toward balance. To‘‘do economy’’ then is to control things, part themin a controlled manner and closely manage theacquiring of the same’ (Rehn, 2001: 170–171). Theeconomy is an assemblage of principles and pro-cesses aimed at establishing productive, meaning-ful exchanges between economic actors (Berle andMeans, 1934/1991).

In the previous economic regime, based on themanufacturing of goods and commodities, theprinciples of scarcity and bounded rationalityentailed a certain modus operandi among economicactors. In the emerging ‘postmodern’ (to followHardt and Negri, 2000) economy of informationand knowledge, such principles may be overturnedand succeeded by principles of abundance and the‘rationalities of sharing’. As pointed out, knowl-edge draws on data and information but is irredu-cible to such resources. Knowledge is rather whatemerges in-between data, information and varioussocial institutions; it is, with Orlikowski’s words,an ‘ongoing social accomplishment’. In addition,

knowledge grows rather than diminishes when itis shared with others. Therefore, the virtues andbeliefs of the economy of scarce resources mayneither be desirable nor indeed possible to applyin the knowledge-based economy. However, itmay at least be possible to ponder the limitationsand assumptions inherent to a management per-spective in terms of knowledge-based resources.Management practices are based on a number ofassumptions that can be manifested in what is com-monly referred to as ‘best practice’. O’Shea (2002)writes from a critical perspective:

Managerialism . . .presumes that meaning andunderstanding are in some way rational, con-scious, and fixed. It fails to account for howmeaning may unfold through a process not toproduce a better understanding that relies onan unveiling of some form of Absolute Knowl-edge but different multiple meanings each speci-fic to a particular time. ‘Best practice’ is just toostatic because it assumes that meaning andunderstanding are fixed (O’Shea, 2002: 123–124).

Managerialism is an ideology of the governmental-ity (to use Foucault’s, 2000, concept) of organiza-tional resources (see also Deetz, 1992; Jacques,1996; Perrow, 1986). Management practices assumethat there are stable configurations of resources thatare fixed in order to make them manageable. In thecase of knowledge management, there are ratherlimited possibilities for wielding full control overthe knowledge-based organizational resources. Asnoted previously, knowledge is always in-between,moving and fluxing in a continuous state of becom-ing, escaping any attempt to locate it in a singleplace. Therefore, there are few opportunities forconceiving of knowledge in managerialistic terms,i.e. to conceive of a final ‘method’ or ‘strategy’ forcontrolling knowledge. Knowledge is always whatis slippery and escapes the full control of managers.

KNOWLEDGE-INTENSIVE COMPANIESAND THE ETHICS OF SHARING

The rationality of the modernist manufacturingeconomy and the knowledge economy are toosome extent incommensurable. Therefore, the con-ceptual framework serving the previous economicregime needs to be replaced with something differ-ent. Rather than re-enacting the protestant ethic of

accumulation or an ethic of contracting, primarilyaimed at safeguarding personal interests, theknowledge-based economy is founded on the ethicsof sharing, an ethics of giving. Rather than restrictingthe use of scarce resources on the rationale of


232 A. Styhre

utility, the knowledge-based economy is based onthe principles of sharing and abundance.

Empirical studies suggest that the ethics of shar-ing is an important trait of the knowledge economy.In a study of a major pharmaceutical multinationalAlpha, the clinical trail phase of the new drugdevelopment was problematized as being one ofthe key areas for sharing knowledge (see Yeoh andRoth, 1999; Koretz and Lee, 1998; Powell, 1998;Henderson, 1994). Alpha is one of the largest phar-maceutical companies in the world, employingmore than 50,000 employees’ worldwide, includinga R&D organization of 10.000 employees, and witha R&D budget of more US$2.5 billion. Majorresearch sites are located in the USA, England,and Sweden. Alpha is operating in the therapeuticareas of gastro-intestinal, cardio-vascular and can-cer medicine. The entire new product developmentprocess is costly due to regulatory demands interms of testing new candidate drugs on largepopulations. As a consequence, the time to marketis an important aspect of new drug development inthe pharmaceutical industry. The clinical trails, thetesting of new candidate drugs on a population ofpatients, is the most costly stage in the entire newdrug development process. Therefore, the clinicalresearch process has been subject to various man-agerial innovations.

The new drug development process is composedof three phases: (1) discovery where new sub-stances, chemical compounds, are being discovered,(2) drug development where the substance is turnedinto a new candidate drug, i.e. here the dosage permedication is determined and also the initial labora-tory tests of the drug are done at this stage, and (3)the clinical trail where the new drug is evaluated. Asingle drug development project team is responsiblefor each new drug throughout the clinical trails.Since clinical trails are costly and may include upto 20,000 patients located in 25 countries, the clinicaltrail process is an areas where the sharing of knowl-edge is of great importance. In the study, it was sug-gested that the project team members did notalways have the time to share knowledge betweenone another during periods of significant work pres-sure. Worse still, several of the team membersclaimed that there were few opportunities to learnfrom other clinical project teams during the work.In addition, it was often difficult to find the timeneeded to make a joint summary of the learningfrom one single project before the next clinical trailhas started. As a consequence, there were very fewopportunities for sharing knowledge among clinicalresearchers at the pharmaceutical company. In orderto handle this situation, what Hargadon (1998) callsknowledge brokers were used, that is, individuals

working as internal brokers of knowledge, aimingat serving as a mechanism for knowledge sharingwithin the company (Roth, 2002). The knowledgebroker arranged seminars where members fromeach clinical trail team discussed learnings and pos-sible improvements for the next clinical researchproject. At these seminars, the project team articu-lated their own experiences and insights. Theknowledge broker was thus able to make the projectteam members articulate their joint experiences andto put an emphasis on the importance of sharingknowledge within the company. The knowledgebroker practices at the pharmaceutical companyenabled for a more positive attitude to be developedtowards knowledge sharing and provided legiti-macy for knowledge sharing practices such asseminars.

This case illustrates that knowledge sharing is animportant components of knowledge-intensivecompanies. Rather than seeing knowledge as aresource that is located in the minds of each indivi-dual team worker, it is in this case knowledge isboth an individual experience and also what isshared with others. Thus, there are very few oppor-tunities to reduce all organizational knowledge tothe level of data and information since knowledgeis what explicitly draws on data and informationbut what is socially and culturally embedded.

One of the concerns one could raise with respectto knowledge management theory is that knowl-edge management theory regularly confusesknowledge with data and information. Otherwise,there would not be such an overwhelming empha-sis on technologically oriented knowledge manage-ment practices in the knowledge managementliterature as reported by Scarborough and Swan(2001: 8). Rather than offering more advanced cate-gorizations of knowledge, information and data,knowledge management literature should offertheoretical frameworks that enable an analysis ofhow knowledge can be understood as an organiza-tional resource that does not draw on the samerationalities and assumption as previous organiza-tional resources. To put it straightforwardly, thereis little more need for ‘more of the same’. Knowl-edge management theory needs to be examinedfrom complementary perspectives that can freeknowledge from its logocentric burdens andre-conceptualize knowledge as a resource thatwill benefit from being shared rather than beingreduced to the level of a tangible thing.

DISCUSSION

Knowledge management theorists have investedconsiderable efforts in establishing the notion of



knowledge as a new constitutive element of organi-zation (e.g. Liebeskind, 1996; Nonaka and Takeushi,1995). However, in most cases, knowledge has beenconceived of as a new resource simply succeedingprior resources. If we follow Hardt and Negri’s(2000) conceptual framework, the modernizationof the economy, that is, the leap from the primaryto the secondary sector of the economy as the mostimportant primus motor of the economy, was neverwithout unanticipated effects and great social andeconomic costs. The postmodernization of the econo-my, that is, the transition from the manufacturingsector to the knowledge-intensive industry, alsoresults in considerable costs and unanticipatedeffects. Thus, the knowledge management perspec-tive on the firm cannot solely consist in a change ofthe organization’s resources but must seek to cap-ture the broad scope of social, cultural and econom-ic changes that constitute the knowledge-basedeconomy.

Anthropologists and critics of neoclassical eco-nomics have provided evidence that the economicorganization of the modern Western society is arather recent and rather specific type of institu-tional configuration (see e.g. Sahlins, 2000). There-fore one must not take this particular form ofeconomic organization for granted but one mustcontinuously question its fundamental principlesand assumptions. In the economic regime that pre-ceded the knowledge-based economy, utility andbounded rationality served as its basic constituents.In an economy of scarcity, such concepts are ofgreat help but they are institutionally embeddedand therefore their theoretical application may belimited. Poster (2001) and Rehn (2001) suggestthat an economy of sharing is emerging on basisof new technological developments, e.g. the emer-gence of Internet as a medium for distribution. InInternet-based economic ventures, sharing is byno means a negative thing but become a part ofthe modus operandi and business ethic that areshared among Internet-based actors. It is compli-cated to make sense out of the phenomena empiri-cally examined by Poster (2001) and Rehn (2001) onthe basis of notions such as bounded rationalityand utility. Knowledge-based and Internet-basedresources are not simply consumed as they areshared with others, passed around, given away, etc.but become tokens (‘quasi-objects’, Michel Serres,1982, would say) of a specific community. There-fore, the analytical framework inherited from neo-classical economics may not be able to fully able toprovide an analysis of the mechanisms and busi-ness models of the knowledge-based organization.

The change from tangible and scarce resourcesto intangible and knowledge-based resources

represent a major epistemological break for organi-zation theory and strategic management theory.Most previous theories on organizational perfor-mance assume that management is a matter of thehusbanding of scarce resources. The epistemologyof knowledge does however radically put intoquestion the various assumptions in neoclassicaleconomics and organizational theory. Hardt andNegri (2000) talk of the informatization of the econo-my and Poster (2001: 39–40) claims that capitalismis taking a linguistic turn (see also Wolf’s, 1999, dis-cussion of what he calls the entertainment economy

and Best and Kellner’s, 2001, analysis of whatthey refer to as technocapitalism).

From a practical point of view, organization re-searchers, acting managers and consultants maybenefit from rethinking the mindset from whichorganizational resources such as knowledge, know-how, and skills are examined and managed. Ifknowledge is conceived of as a tangible, restrictedand limited resource, certain managerial practicesand organizational policies are favoured and imple-mented. For instance, information may be stored incomputer systems made accessible only to a limitedamount of organizational members in order torestrict the use of the information. If knowledge isregarded as an organizational resource that willbenefit and actually grow when it becomes distrib-uted, shared and made accessible, then differentorganizational practices are likely to take place.Managerial practices are, as suggested by institu-tional theorists, enacted and instituted by commu-nities of actors and agents. If knowledge isgenerally recognized as a tangible, restricted reso-urce, certain practices will be instituted. If knowl-edge is envisaged as an organizational resourcethat should be distributed within the organizationor organizational networks, then other organiza-tional practices will be employed. As a consequence,the theoretical perspectives and the ontology andepistemology underpinning organizationa practicesare not only of interests to academic researchers buthave far-reaching consequences for everyday prac-tices. Therefore, a re-evaluation of the assumptionsunderlying to organizational practices may enablefor radically new methods and approaches to know-ledge management. Just as the work of knowledgebroker in the pharmaceutical company was basedon the belief that experiences and know-how aremost effectively shared in a seminar setting whereineveryone was invited and encouraged to partici-pate, other knowledge management practices willbe embedded in other local beliefs and norms.Knowledgemanagement practices and ontology andepistemology is never isolated from one another.That is only single practical learning from this case.


234 A. Styhre

CONCLUSION

Barley and Kunda (2001: 86) write: ‘Being forced towork with concepts for an industrial economy isone of the most significant handicaps that scholarsface in building theories of post-bureaucratic orga-nizing.’ Social organization is continuously modi-fied by series of minor changes but in some casesthere are qualitative leaps. The emergence of apost-industrial society based on knowledge repre-sent both minor revisions of previous experiencesand qualitatively significant changes. When exam-ining knowledge resources and knowledge assets,the taken for granted neoclassical vocabulary andtheoretical framework may be a limiting factorfor the analysis. Rather than being tied to themore narrow definitions of concepts such as utilityand rationality, knowledge needs to be examinedas an organizational resource that is based on aneconomy of sharing. The notion of utility is compli-cated to employ since there is no clear-cut linear,goal-oriented, and determined utility of knowledge.Knowledge can be used in various ways that can-not be fully determined prior to its use. As a conse-quence, knowledge is never possible to conceive ofas a conventional organizational resource. It is toodistributed among social actors, too elusive, andtoo ingrained with ontological and epistemologicalassumptions to be able to make use of in a ‘tool-likemanner’, i.e. it cannot be applied to cases like anytangible resource.

REFERENCES

Adler PS. 2001. Market, hierarchy, and trust: the knowl-edge economy and the future of capitalism. Organiza-tion Science 12(2): 215–234.

Barley S, Kunda G. 2001. Bringing work back. In Organi-zation Science 12(1): 76–95.

Bataille G. 1988. The Accursed Share, Vol. 1: An Essay onGeneral Economy. Zone Books: New York.

Bateson G. 1972. Steps to an Ecology of Mind. ChicagoUniversity Press: Chicago.

Bell D. 1973. The Coming of Post-industrial Society. BasicBooks: New York.

Bergson H. 1910/1988. Matter and Memory. Zone Books:New York.

Berle AA, Means GC. 1934/1991. The Modern Corporation& Private Property. Transaction Publishers: New Bruns-wick.

Best S, Kellner D. 2001. The Postmodern Adventure: Science,Technology, and Cultural Studies at the Third Millennium.Routledge: London & New York.

Blackler F. 1995. Knowledge, knowledge work and orga-nizations: an overview and interpretation. OrganizationStudies 16(16): 1021–1046.

Boisot MH. 1998. Knowledge Assets: Securing CompetitiveAdvantage in the Information Economy. Oxford UniversityPress: Oxford.

Burton-Jones A. 1999. Knowledge Capitalism: Business,Work, and Learing in the New Economy. Oxford Univer-sity Press: Oxford.

Callon M (ed.). 1998. Laws of the Market. Blackwell:Oxford.

Castells M. 1996. The Information Age: Economy, Society andCulture, Vol. 1: The Rise of the Network Society. Blackwell:Oxford.

Chandler AD. 1977. The Visible Hand: The ManagerialRevolution in American Business. Harvard UniversityPress: Cambridge, MA.

Chia R. 1998. From complexity of science to complexthinking: organization as simple location. Organizations5(3): 341–469.

Cyert RM, March JG. 1963. A Behavioral Theory the Firm.Prentice Hall: Englewood Cliffs, NJ.

Deetz SA. 1992. Democracy in an Age of Corporate Colonia-lization. State of New York University Press: Albany.

Derrida J. 1992. Given Time: I. Counterfeit Money. TheUniversity of Chicago Press: Chicago.

DiMaggio PJ, Powell WW. 1991. The New Institutionalismin Organizational Analysis. University of Chicago Press:Chicago.

Douglas M. 1986. How Institutions Think. Routledge &Kegan Paul: London.

Durkheim E. 1893/1933. The Division of Labour in Society.Free Press: New York.

Foucault M. 2000. Power: Essential Works of Michel Foucault(Vol. 3), Faubion JD (ed.). The New Press: New York.

Goux J-J. 1998. General economy and postmodern capit-alism. In Bataille: A Critical Reader, Bottig F, Wilson S(eds). Blackwell: Oxford.

Granovetter M. 1985. Economic action and social struc-ture. American Journal of Sociology 91.

Hardt M, Negri A. 2000. Empire. Harvard UniversityPress: Cambridge, MA.

Hargadon AB. 1998. Firms as knowledge brokers: lessonsin pursuing continuous innovation. California Manage-ment Review 40(3): 209–227.

Henderson R. 1994. The evolution of integrative capabil-ity: innovation in cardiovascular drug discovery. Indus-trial and Corporate Change 3(4).

Jackall R. 1988. Moral Mazes: The World of CorporateManagers. Oxford University Press: Oxford.

Jacques R. 1996.Manufacturing the Employee. Sage: London.Kallinikos J. 1996. Organizations in an age of information.Lund: Academia Adacta.

Knorr Cetina K. 2001. Objectual knowledge. In The Prac-tice Turn in Contemporary Theory, Schatzki TR, KnorrCetina K, von Savigny E (eds). Routledge: London.

Koretz S, Lee G. 1998. Knowledge management and drugdevelopment. Journal of Knowledge Management 2(2):53–58.

Latour B. 1987. Science in Action. Harvard UniversityPress: Cambridge, MA.

Lazonick W. 1991. Business Organization and the Myth of theMarket Economy. Cambridge University Press: Cam-bridge.

Leonard-Barton D. 1995. Wellspring of Knowledge: Buildingand Sustaining the Sources of Innovation.Harvard BusinessSchool Press: Boston, MA.

Letiche H, Van Hattem R. 2000. Self and organization,knowledge work and fragmentation. Journal of Organi-zation Change Management 13(4): 352–374.

Liebeskind JP. 1996. Knowledge, strategy and the theoryof the firm. Strategic Management Journal 17: (Winterspecial issue): 93–107.



Little S, Quintas P, Ray T. 2002. Managing Knowledge: AnEssential Reader. Sage: London.

Luhmann N. 2000. The Reality of the Mass Media. PolityPress: Cambridge.

March JG, Simon HA. 1958. Organizations, 2nd edn.Blackwell: Oxford.

Mauss M. 1954. The Gift: Forms and Functions of Exchangesin Archaic Societies. Routledge and Kegan Paul: London.

Meyer JW, Scott WR. 1992. Organizational Environments:Ritual and Rationality. Sage: London.

Mills CW. 1951. White Collars: The American Middle Class.Oxford University Press: Oxford.

Nodoushani O. 1999. A postmodern theory of generaleconomy: the contribution of George Bataille. Studiesin Cultures, Organizations and Societies 5: 331–345.

Nonaka I, Takeushi H. 1995. The Knowledge-CreatingCompany. Oxford University Press: Oxford.

Orlikowski WJ. 2002. Knowing in practice. Enacting acollective capability in distributed organizing. Organi-zation Science 13(3): 249–273.

O’Shea A. 2002. The (r)evolution of new product innova-tion. Organization 9(1): 113–125.

Ouchi WG. 1980. Markets, bureaucracies, and clans.Administrative Science Quarterly 25: 129–141.

Perrow C. 1986. Complex Organizations: A Critical Perspec-tive. McGraw-Hill: New York.

Pfeffer J. 1994. Competitive Advantage Through People:Unleashing the Power of the Work Force. Harvard Busi-ness School Press: Boston, MA.

Plato. 1956. Protagoras & Meno. Penguin: London.Poster M. 2001. What’s the Matter with the Internet? Univer-

sity of Minnesota Press: Minneapolis.Powell WW. 1998. Learning from collaboration: knowl-

edge and networks in the biotechnology and pharma-ceutical industries. California Management Review 40(3):228–240.

Reed R, DeFillippi RJ. 1990. Causal ambiguity, barriers toimitations, and sustainable competitive advantage.Academy of Management Review 15(1): 88–102.

Rehn A. 2001. Electronic Potlatch. PhD dissertation,Kungliga Tekniska Hogskolan: Stockholm.

Roth J. 2002. Knowledge Unplugged: An Action ResearchApproach to Enable Knowing in R&D Organizations. PhDdissertation, Fenix Research Programme, ChalmersUniversity of Technology: Gothenburg.

Sahlins M. 2000. The original affluent society. In Culture inPractice: Selected Essays. Zone Books: New York.

Scarbrough H, Swan J. 2001. Explaining the diffusion ofknowledge management: the role of fashion. BritishJournal of Management 12: 3–12.

ScottWR. 1995. Institutions and Organizations. Sage: London.Serres M. 1982. The parasite. Johns Hopkins UniversityPress: Baltimore.

Simmel G. 1971. On individuality and social forms. InSelected Writings, Levine DA (ed.). The University Pressof Chicago: Chicago.

Simon HA. 1957. Models of Man. Wiley: New York.Simon HA. 1976. Administrative Behavior, 3rd edn. FreePress: New York.

SmithA.1776/1982.TheWealth ofNations. Penguin:London.Teece DJ. 2000. Managing Intellectual Capital: Organiza-tional, Strategic and Policy Dimensions. Oxford Univer-sity Press: Oxford.

Tsoukas H. 1996. The firm as distributed knowledge sys-tem: a constructionist approach. Strategic ManagementJournal 17 (Winter special issue): 11–25.

Tsoukas H, Vladimirou E. 2001. What is organizationalknowledge? Journal of Management Studies 38(7):973–993.

Yeoh P-L, Roth K. 1999. An empirical analysis of sus-tained advantage in the U.S. pharmeceutical industry:impact of firm resources and capabilities. StrategicManagement Journal 20(7): 637–653.

Weber M. 1992. The Protestant Ethic and the Spirit ofCapitalism. Routledge: London.

Whitehead AN. 1925. Science and the Modern World.Cambridge University Press: Cambridge.

WolfMJ. 1999. The Entertainment Economy: HowMega-MediaForces are Transforming Our Lives. Penguin: London.

Wood M. 2002. Mind the gap? A processual reconsidera-tion of organizational knowledge. Organization 9(1):151–171.


236 A. Styhre

Documents

The knowledge-intensive company and the economy of sharing: rethinking utility and knowledge management