Proceedings of the 12th European Conference on Knowledge ...

Pamela Chidiogo Izunwanne
use <strong>of</strong> clusters (Ba<strong>the</strong>lt et al., 2004). By directly or indirectly specifying particular inputs (controls) for
subsidiaries, MNCs can limit or enhance <strong>the</strong> effectiveness and productivity <strong>of</strong> <strong>the</strong>ir knowledge creation
activities. They can directly specify inputs by explicitly stating <strong>the</strong> methods to be used by subsidiaries
and headquarters to generate knowledge (for example R&D projects, special meeting sessions,
virtual teams etc) and <strong>the</strong>y can indirectly specify inputs by taking ideas generated through particular
methods lightly.
3.1.2 Output to Outcome
Processes that could occur in this phase include commercialization, implementation and adaptation.
The outputs (ideas, prototypes etc) chosen by <strong>the</strong> organization as most in sync with business policy
and objectives are <strong>the</strong>n commercialized, implemented within <strong>the</strong> firm and adapted for maximum
benefit. Adaptation is <strong>the</strong> organization’s ability to obtain successful implementation and
commercialization (Miner, 1990). It <strong>of</strong>ten starts within <strong>the</strong> employees who will ultimately be in charge
<strong>of</strong> <strong>the</strong> new product or technique as may be <strong>the</strong> case and involves <strong>the</strong> Knowledge management
system in <strong>the</strong> MNC. This system supports knowledge management practices in an organization
(Gallupe, 2001, Skuce, 1993). It normally includes but is not limited to expatriation
strategy/mechanism, management information systems and transmission channels (Bonache et al.,
2001, Minbaeva and Michailova, 2004) that ensure that all subsidiaries benefit from new knowledge
realized. Structural changes within <strong>the</strong> knowledge management system could become necessary in
order to facilitate <strong>the</strong> implementation and commercialization processes (Davenport and Prusak, 1997).
The ultimate goal <strong>of</strong> organizations is or should be to attain <strong>the</strong> outcome stage as fast as possible. It is
at this stage that innovation is said to occur(Popadiuk and Choo, 2006), i.e., when <strong>the</strong> new knowledge
begins to yield benefit for <strong>the</strong> MNC. Sometimes, attaining this stage is relatively easy in <strong>the</strong> case <strong>of</strong> an
incremental innovation but is more challenging when <strong>the</strong> innovation or new knowledge is entirely new
to <strong>the</strong> organization (Christensen, 1997). Depending on <strong>the</strong> structure <strong>of</strong> <strong>the</strong> MNC, attaining <strong>the</strong>
outcome stage may take a long time as a result <strong>of</strong> existing output to outcome controls (how to
implement, how to commercialize and adaptation decisions). Reporting relationships could affect <strong>the</strong>
speed and efficiency <strong>of</strong> knowledge creation in cases where commercialization, implementation and
adaptation decisions are to be agreed upon by corporate headquarters.
4. Knowledge creation and organizational structure
Having shown <strong>the</strong> relevance <strong>of</strong> knowledge creation in MNCs, <strong>the</strong> remainder <strong>of</strong> this paper first
sketches <strong>the</strong> contours <strong>of</strong> what an appropriate knowledge creation <strong>the</strong>ory should be and proceeds to
show how <strong>the</strong> speed; efficiency; quality and productivity <strong>of</strong> knowledge creation in MNCs is influenced
by reporting relationships and routines when organizational controls exist and influence <strong>the</strong> phases <strong>of</strong>
<strong>the</strong> knowledge creation activity chain. Organization structure can be considered <strong>the</strong> skeletal system <strong>of</strong>
an organization (Dalton et al., 1980) that provides <strong>the</strong> platform within which an organization performs
its operations. Scholars have presented arguments about whe<strong>the</strong>r organizational structures shapes or
is being shaped by individuals (Sewell, 1992, Pugh et al., 1968). Organizational structure is said to
have many dimensions: concentration <strong>of</strong> authority; line <strong>of</strong> workflow and size <strong>of</strong> supportive component
(Pugh et al., 1968). Its dimensions also vary from one organization to <strong>the</strong> o<strong>the</strong>r.
4.1 Theory <strong>of</strong> knowledge creation: a general perspective
It can be said that <strong>the</strong> organic approach has been <strong>the</strong> most common approach in studying knowledge
creation in firms. However this approach alone does not adequately accommodate <strong>the</strong> evolving
knowledge creation methods mentioned in preceding paragraphs. The KGA on <strong>the</strong> o<strong>the</strong>r hand does
not totally account for <strong>the</strong> informal knowledge creation activities that go on inside and outside <strong>the</strong>
organization. According to <strong>the</strong> structural evolution <strong>the</strong>ory, some degree <strong>of</strong> formalization in conjunction
with variation i.e., flexibility and structure is needed to improve knowledge creation and learning within
an organization (Miner, 1990). But even <strong>the</strong> combined approach does not account for <strong>the</strong> role <strong>of</strong>
customers and <strong>the</strong> external influence <strong>of</strong> social media on <strong>the</strong> knowledge creation activities <strong>of</strong> MNCs.
Perhaps <strong>the</strong> only way to accommodate <strong>the</strong> new useful <strong>the</strong>ories and approaches; incorporate macro
and micro perspectives; monitor <strong>the</strong> knowledge creating processes and tackle <strong>the</strong> related challenges
is by a customized organizational structure and this can only become possible when organizations
realize <strong>the</strong> exact impacts <strong>the</strong>ir structure has on <strong>the</strong>ir knowledge creation efforts.
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