The firm as a distributed knowledge system: A constructionist approach

TLDR

Firms are distributed knowledge systems in which knowledge is indeterminate, continually emerging, and cannot be fully known or specified by a single agent. The study finds that firms can largely control normative expectations but have limited influence over employees’ dispositions and local contextual knowledge.

Abstract

Abstract The organizational problem firms face is the utilization of knowledge which is not, and cannot be, known by a single agent. Even more importantly, no single agent can fully specify in advance what kind of practical knowledge is going to be relevant, when and where. Firms, therefore, are distributed knowledge systems in a strong sense: they are decentered systems, lacking an overseeing ‘mind’. The knowledge they need to draw upon is inherently indeterminate and continually emerging; it is not self‐contained. Individuals' stock of knowledge consists of (a) role‐related normative expectations; (b) dispositions, which have been formed in the course of past socializations; and (c) local knowledge of particular circumstances of time and place. A firm has greater‐or‐lesser control over normative expectations, but very limited control over the other two. At any point in time, a firm's knowledge is the indeterminate outcome of individuals attempting to manage the inevitable tensions between normative expectations, dispositions, and local contexts.