An organization is encouraged to create its innovative values by applying the model, as shown in Figure 1. At first, it has to identify its critical knowledge and then specify its learning strategy and activities (for example, exploiting its intellectual properties and/or launching its experiments to innovate). Secondly, it need to decide what relationship networks have to be connected in order to enhance the learning effectiveness and thus create its competitive values.
Putting the model into practice, the recommendations are as follows.
(a) Managers’ support and commitment are keys to success. As Stewart (1997) stated, if management of structural capital is to be successful, leadership is still the most important factor. (b) The identification of critical knowledge is a prerequisite to knowledge learning activities and knowledge utilization and/or development. One might use a critical knowledge function analysis (Wiig, 1995) or develop a knowledge strategy (Zack, 1999) to locate its core competences and key knowledge.
(c) Appropriate personnel assignment is beneficial to learning activities, and appropriate transfers are conducive to the development of diversified skills and reasoning abilities. (d) Incentive systems should be fair to enliven the learning activities in collaborative networks. And (e) an organization must have core knowledge resources in order to find its collaborative partners (Wu, 1998). Finally, information technology (IT) plays a vital role in this model. (i) IT is essential to collective learning, networks of relationships, and promoting innovation. IT possesses value-added effects via the accumulation, combination, integration, presentation in new forms, and distribution/diffusion of data, information, and knowledge. Interactive mechanisms for collaboration enable
individuals to communicate directly through sharing tacit knowledge across barriers of time and space. Useful tools include e-mail, work flow systems, database applications, electronic conferences and e-learning, etc.
(ii) Information networks enable relationships to become tighter.
Knowledge-based products tend to have increasing returns or positive feedback effects. These effects occur through the outcomes of “sharing”, network externalization and customer lock-in (because the more people use the product, the greater the number of complementary products would be developed) (Afuah, 1998). (iii) Although IT could promote and strengthen relationship networks, the unstructured relationships created by intangible centripetal forces (such as trust, vision, commitment, and mutual and tacit understandings) towards the organization are more important. Frequently, these unstructured relationships are keys to the willingness of members to cooperate and share knowledge, as well as whether organizational restructuring and innovation will be successful.
Acknowledgement
The authors would like to thank the Editor-in-Chief and three anonymous reviewers for their valuable comments and suggestions.
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