Balancing knowledge creation : examining organizational slack and knowledge creation in product development

University dissertation from Stockholm : Economic Research Institute, Stockholm School of Economics [Ekonomiska forskningsinstitutet vid Handelshögskolan] (EFI)

Abstract: Over the last few years there has been a downturn in business. As a response, many companies have initiated various downsizing activities – often on a short-term financial basis – in order to improve the competitive position of the company. Yet, at the same time, innovation is often cited as the key to long-term success by the very same companies.The central problem examined in this book is whether downsizing and innovation are compatible. The problem was studied during a two year exploratory case research in six cases – selected from a well-defined reference population consisting of 37 companies – facing the exact challenge of simultaneously downsizing and trying to sustain its high level of innovation. The simple answer found in the study is yes. Companies can simultaneously downsize and still maintain a high level of innovation, but it is difficult and challenging and it depends on the company’s ability to handle the knowledge creation process.So what is needed? Create an understanding in the company, at all levels, that balancing knowledge creation – the ability to share and transfer knowledge – is one of the most important tasks in order to remain innovative over time. This is done by building a commitment to knowledge creation. This commitment is achieved through making knowledge creation a visible and central element of the strategic intent, and organizing the company so that ideas can be generated and generalized. Examples of activities include:At an organizational level there is a need to create boundary spanning activities to facilitate knowledge creation between various part of the organization, but also to other organizations.At a top management level shared visions and values need to be created; exemplified in words and action. Important is that the top management not get involved into micro-management.Avoid cutting-down on initial activities – where visualization and brainstorming are in focus – in projects aiming for innovation, as these activities are the foundations the rest of the project.This book is useful for those who are faced with the challenge of finding a balance between short-term activities, often focusing on downsizing, and the more long-term activity of being innovative.