Evolution of Business Knowledge in SMEs

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6 Νοε 2013 (πριν από 3 χρόνια και 5 μήνες)

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ESRCAPRIL2003CONFPAPER

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Evolution of Business Knowledge in SMEs

Richard Thorpe, Ossie Jones, Sudie Sharifi, Robin Holt,

Michael Zhang and Alan MacPherson

Manchester Metropolitan University Business School, Aytoun Building,

Aytoun Street, Manchester Manchester, M1 3GH, United King
dom

Tel: +44 (0) 161 247 3953 Fax: +44 (0) 161 247 6350 Email:
r.thorpe@mmu.ac.uk


Abstract


The paper conceptualises the way in which knowledge is created and
constrained by owner managers and management team
s in the small firm
context. Adopting a systems
-
oriented epistemology knowledge creation is
conceived as an
activity

promoted and enabled by a variety of ‘mediating
means’, (Vygostki). Activity theory recognises knowledge as a relational
achievement betw
een a “knowing” subject and “known” object, mediated
by the creation and use of artefacts such as a firms infrastructure or the
language used by mangers, or the constraints or norms of a craft or
professional association that form part of the owner manager
’s day to day
world. The relations between the knowing subjects, their activities and
mediating artefacts is an activity system


the SME, of which each manger
is an integral element. In this context “knowing” is not seen as a
representation of something
that already exists but rather, as something
self
-
produced, created and applied, driven by the views and self imposed
constrains of the owner manger through the activity system. This paper
reports on the methodology we intend to adopt to uncover how knowi
ng
might be developed, mediated (constrained and enabled) in a number of
organisational settings. The project on which we focus forms part of the
ESRC evolution of business knowledge initiative. The paper sets out the
theoretical framework we plan to adop
t and the research methods we plan
to use. Although we suggest the implications of this approach have
relevance to organisation of all types the SME sector offers an ideal focus
for research. In order to understand the aspects of the activity systems
with
in which mangers operate we have developed a methodology that
involves the use of composite maps. This methodology is a blend of
concept mapping and cognitive mapping (in which conscious and
unconscious authority routines are revealed through grounded in
terviews
and workshops) and voice diaries (in which managers record in an
immediate and direct way their experiences). Both these methods will
focus around critical incidences of real concern to the mangers in the
companies under study. The concept map we

intend to produce for each
manager (or teams of managers) provides both the cognitions of the
manger as well as other data which give us an understanding of the
images, landscapes, and practices developed and used by owner mangers
to create and re
-
create
knowledge in a way that allows comparisons to be
made and for discussions to take place between mangers and researchers.


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Background

The aim of the research is to enhance understanding of the ways in which managers
1

in
small and medium
-
sized enterprises (S
MEs) acquire and utilise knowledge as a basis for
wealth creation and improved competitiveness. Our focus will be on SMEs in the north
west of England. Using a particular region rather than examining firms on a national
basis is important because entrepre
neurial and organisational knowing (the creation and
use of knowledge) is, we believe influenced by social, historical and sectoral contexts.


Objectives

The specific research objectives of the research are as follows:

1.

to establish how knowledge is acquir
ed, generated, shared, absorbed, challenged and
transferred within and between SMEs in practices of knowing;

2.

to investigate enablers and constraints that influence effective knowing in SMEs
within a regional economic, political and cultural context;

3.

to con
sider whether, according to experience and sector, managers use different
‘recipes’ in response to critical incidents;

4.

to investigate ways in which formal and informal practices associated with
organisational knowing contribute to competitive success;

5.

to
develop an activity theory
-
based methodology with strong theoretical groundings
for investigating practices of knowing within and between SME ‘activity systems’;

6.

to operationalise a Mode 2 research design which incorporates key users of academic
knowledge
including managers and institutions such as the Small Business Service
(SBS).


Why this research is significant
:

We believe this research to be significant because despite their economic significance
2
,
SMEs are under
-
researched particularly in terms of su
bstantive, theory
-
based approaches.
In the way we have defined knowledge we see it not so much as a commodity but rather
something that is created, understood and exchanged through relations between subjects,
activities and mediating artefacts such as lang
uage. Hence, we are sensitive to how
knowledge is acquired and used as well as the implications for relationships between
actors within activity systems. Congruent with activity theory, we have attempted to
build into our research design an element of act
ion research that brings it close to a Mode
2 approach. This we believe will ensure that the understanding of the knowledge
production process is based on a constant interplay between management theory and
practice. Finally, we believe that by comparing

SMEs across sector and by level of
maturity will provide insight into the dynamic and contingent nature of recipes associated
with ‘organizational knowing’.


While an awareness of links between knowledge and growth has been articulated in the
past (Penros
e 1959) there is increasing interest in the specific issue of
knowledge
management

(Blackler, 1995; Nonaka and Takeuchi, 1995). For example, the acquisition



1

The terms ‘management team’ and ‘managers’ are used throughout the proposal as shorthand for the full
range of SMEs from micro firms with owner
-
managers to medium
-
sized firms with functional structures.

2

Th
ere are 2.7 million firms in the UK and 99.8% have less than 250 employees. SMEs (up to 249
employees) account for 50% of all economic activity and 56% of private sector jobs.

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and integration of
knowledge

is integral to the development of firm
-
based resources and
capabilitie
s (Grant, 1996; Spender 1996). As described by Castells (1998), the
exponential growth in information and communications technologies (ICTs) has
engendered a concomitant increase in access to
codified knowledge
. However, there has
been a reaction to concep
tions of knowledge that are limited to the creation and
translation of codified data (Lave and Wenger, 1991; Holman
et al
,1996). A number of
influential authors stress the importance of
tacit knowledge

which incorporates the
unspoken skills and intuitions
of employees at all organisational levels (Berman
et al
,
2002; Nonaka and Takeuchi 1995; von Krogh
et al
.1998, Sanchez, 2001). Adopting a
pluralistic, systems
-
oriented epistemology (Spender, 1996) means tacit knowledge is
regarded as something that is uniq
uely created within a particular organisational milieu
(Venzin
et al
, 1998). From this epistemological perspective knowledge, intrinsically
related to language and contextual meaning, is a social and public phenomenon
(Wittgenstein, 1952). Secondly, from a

practical perspective, the nature of business
knowledge is evolutionary and dynamic, emphasising the process of change and the
activity

of learning (Blackler, 1995) in informal, heterogeneous contexts (Gibbons
et al
,
1994). As knowledge transfer is often
partial and immersed in the cultural processes of
conversational design then knowledge management cannot be limited to practices of
translating and disseminating data (Wenger 2000). Thirdly, at a policy level, external
intervention to encourage effective k
nowledge management requires an interactive and
processual approach because strategic change is a highly uncertain, negotiated activity
(Pettigrew and Whipp, 1993).


The Research Strategy

Our research will focus on managers who are active agents within an

infrastructure of
relationships created and re
-
created in conversations based on description and dialogue
(Nonaka et al, 1998), Oakeshott, 1962). Discussion is concerned with knowledge
application while dialogue involves the suspensions of beliefs to rev
eal deeply
-
held
assumptions about the conception of problems and their solutions which constitute
organisational knowledge (Schein, 1996). It is through dialogue that management teams
not only make sense of the world but also seek to shape it (Shotter, 19
97). As
conversants in description and dialogue, managers are envisaged as practical authors
(Holman and Thorpe, 2002) for whom knowledge represents an understanding of the
potential positions people can take within specific patterns of institutional enab
lers and
constrains (Giddens, 1979). Conceptualising knowledge creation as an interaction
between managers as practical authors engaged in conversational processes means our
research will focus on ways in which responsive and reflexive meanings are establ
ished.
Furthermore, it will be essential to identify how mangers orient themselves to these
meanings and how, through the influence of interlocutors, meaning is modified as the
manager effect changes within activity systems. Understanding variations in
approaches
to knowledge management will illustrate how different contexts, relationships and tools
enhance or inhibit knowing. In addition, considering growth, aspirations, experience and
sectoral influences will provide data on the activity patterns by w
hich mangers attempt to
meet their strategic aims. The research methodology will also demonstrate how links
between academic research and policy can enhance practices associated with knowledge
management.

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Methodology

To identify patterns of organizational

knowing we build on the term ‘industry recipe’
(Spender 1980; 1989) which itself is a specific interpretation of the original formulation
by Schutz (1967; 1973; 1976). We also acknowledge associated debates in the
organisational knowledge and strategy lit
erature (Scholes and Johnson, 2000; Stacey,
2001). Spender (1980; 65) argues that when managers are ‘confronted with an
undetermined situation (one in which knowledge, or the lack of knowledge, is at issue)
they characterize it with a set of correspondence

rules, interests and purposes which
comprises rationality’. It is these recipes rather than logical judgments, that influence
actions directed to resolve organisational problems. This ‘theory of uncertainty’
conceives choice
-
making processes as ‘standard
operating procedures’ that reduce
environment equivocality by selecting and interpreting available cues to a manageable
quantity (Clarke, 2000). ‘Recipes’, akin to Weick’s (2000) sense
-
making tools, are
grounded in the historical expression of enacted iden
tities
3

within shifting institutional
contexts. (Varela
et al
, 1993; Dazin
et al
, 1999).


To investigate sense
-
making recipes we will adopt an approach based on activity theory
(Engeström, 1999; 2000; 2001; Blackler 1995; 2000). Engeström (2000) stresses
the need
for clear units of analysis and in this research we concentrate on SMEs conceived as
activity systems. This is important because SMEs are accorded their own unique identity
rather than being regarded as scaled
-
down versions of large firms (Dandrid
ge, 1979).
Smaller firms have many features that distinguish them from their larger counterparts:
lack of formal structures, dominant role of owner
-
managers, idiosyncratic nature of
success, lack of internal labour markets, greater uncertainty, limited cus
tomer base, short
time horizons, little influence over environment and greater potential for evolution and
change (Wynarczyk
et al
., 1993). As noted by Jennings and Beaver (1997) independence
and survival may be more important measures of success for owner
-
managers than profits
growth or job creation. The SME activity system (Fig. 1) exhibits components and
relations that link managers’ conceptions of their activity (along with their immediate
community) to technologies, language, division of labour, operat
ional procedures and
prevailing norms that both enable and constrain knowing.




3

For example, when subjects are faced with threats to identity as a result o
f uncertainty and change.

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Figure 1: A general model








of an SME activity system

c.f.Blacker, F





























Within activity system practices of knowing, not just specific

elements of knowledge, are
inherently contested in that identities, conceptions of activity and mediating artefacts are
held in dynamic relations between actors (Engeström, 1999:380). The oscillating lines
(Fig 1) indicate that managerial responses to cri
tical incidents will be accepted or
challenged according to organisational arrangements (divisions of labour and knowledge)
and significant mediating artefacts. The complexity and quality of knowledge relations
are influenced by contradictions that exist b
oth within the activity system (the
unwillingness of an owner
-
manager to delegate may restrict access to knowledge) and
between activity systems (transposing ‘good practice processes’ between sectors/firms as
a result of benchmarking). Such contradictions
can lead to qualitative transformation of
the firm if managers are prepared to question artefacts and prevailing conceptions of their
activity.


As Engeström (2001) points out, historical and experiential analysis helps reframe new
explanatory knowledge t
hat is then tested, reflected upon and consolidated. Change
occurs at two levels; first, individuals develop because they are open to more fluid
experiences with transitory communities and the acceptance of contested norms.
Secondly, activity systems thems
elves become increasingly interdependent as global
access to a growing range of comparative data universalises the expectation that more can
be done with less. Operating in a steady state, managers co
-
ordinate the application of
existing knowledge within t
heir particular activity system. Once contradictions are
acknowledged, managers may conceptualise their activity as the better application of
linear problem
-
solving techniques, they may innovate by improving integration of
knowledge, or they may innovate t
hrough collaboration and knowledge creation
(Blackler 1995). The latter initiates cycles of ‘expansive learning’ (Engeström, 1999) that
occupy managers in the self
-
productive creation and adoption of new conceptions of their
activity (Blackler, 1999). Unde
rstanding knowledge management in SMEs is a question
of understanding all three modes of knowing.


Social rules: task
based; self
guidance; codes
of practice

Mediating artifacts
:

language; technology

Community: employees;
advisors; regulators;
financiers; networks

Managers

Conceptions
of activity:
critical
incidents;
problem
identification

Division of labour:
personalized
leadership; flexible

divisions; adaptation

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The Research Sample

To capture potential variations in recipes the research sample will include SMEs that
differ along two dimensions: first, sectoral influ
ences (division of labour, industry norms
and technologies) and, secondly, internal organisation (emerging, steady state, innovative
and rapid growth). Examining 24 x 4 sets (96) of SMEs (Table 1) is justified by a study
(Blackler
et al

1999] which found t
hat in activity systems the potential for learning and
innovation varied according to levels and use of technology [from craft work to high
technology]. The first dimension encompasses sectoral variations incorporating services,
knowledge
-
based and manufac
turing. The second dimension is related to levels of
maturity and is linked to the three modes of knowing: knowledge application (mature and
stable); knowledge integration (start
-
up; mature
-
innovative) and knowledge expansion
(start
-
up; rapid growth) (Blac
kler, 1999). Hence the research sample will range from
single owner
-
managers to medium
-
sized firms with relatively sophisticated functional
structures.


This sample design provides opportunities for understanding how managers in different
activity systems

devise strategies of knowing. Because all knowing is inherently
contested this understanding will be based on the identification of typical recipes that
managers use to orient themselves to uncertainty. We will compare these ‘knowledge
-
creation recipes’ a
ccording to sector and firm experience, to investigate, for example,
whether there are common recipes in start
-
up firms or the extent to which managers in a
particular sector use similar recipes irrespective of their experience.



Sector


Experie
nce

Cultural &
leisure

Retail

Knowledge
-
based advice

Knowledge
based
process

Low
-
tech
manufacture

High
-
tech
manufacture

Total

Young/start
up

4

4

4

4

4

4

24

Growing
rapidly

4

4

4

4

4

4

24

Mature/
innovative

4

4

4

4

4

4

24

Mature/

Stable

4

4

4

4

4

4

24

Total

16

16

16

16

16

16

96


Table 1: Research Sample


By identifying contradictions, problems and practical responses of managers within SME
activity systems, our research will provide insight into two of the main themes the
Evolution of Business
Knowledge initiate aims to explore namely




Ways in which knowing is mediated and constrained by existing and emerging
infrastructures, practices and networks and how managers, as practical authors,
transform their ‘knowing’ through novel orientations. We

will investigate how
knowledge and practices of knowing are created, over time, from the internal
worldview of managers and their community and the language, technologies and
social norms by which these worldviews are expressed and are subject to change.


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How knowing can be consolidated and managed, including movement between
embedded (routines/habits), embodied (expertise), encultured (communication)
embrained (cognitive analysis) and encoded (policies, signs and technological)
knowledge. By searching
for recipes within and between activity systems we will
investigate how knowledge management can exhibit patterns and the links
between these and ‘successful’ business outcomes.


Collection and Analysis of Data

These accord closely to the acti
vity research priorities identified by Blacker, (1995).


Concept and Composite Maps



There will be two main techniques for the collection of data: cognitive maps and
individual diaries. We aim to construct cognitive maps of SME activity systems by
combini
ng three well
-
established techniques: concept mapping (Trochim and Linton,
1986), causal mapping (Bougon et al, 1977) and oval mapping (Eden
et al
,1983).


We will aim to capture and represent the qualitative ideas and judgements of managers
(as well as to

some extent preserving their use of language) through the construction of
maps of SME activity systems, firstly by developing schemas of individual managers (or
where appropriate groups of managers within a single organisation) and then by
integrating the
se individual maps into composites. From these we aim to develop a
morphology of ‘knowing’ between and across industries and sectors.



From these maps the internal relations and landscapes of activity systems will be
analysed and ‘recipes’ identified bo
th of which will be ‘tested’ with policy makers and
practitioners. Issues of confidentiality and anonymity will be given full consideration
with regards to the presentation of data. Produced interactively, the maps will reflect our
research strategy design
ed to elicit perceptions of managers as practical authors within
real
-
world activity systems. The study will be based on a longitudinal approach as each
manager will participate in at least three research sessions. By investigating responses to
critical in
cidents (startup; lose key staff; acquire new customers, innovate new products)
managers will be encouraged to produce cognitive maps for direct comparison.


Concept maps help identify embedded individual and group perceptions as a precursor to,
and facil
itator of, negotiated strategy development (Eden and Ackermann, 1998). Such
maps are not designed to model an individual’s thought processes but are a technique for
revealing impressions and intuitions related to the experiences of knowing amongst a
sample

group. The visual nature of maps helps reveal ambiguity and complexity without
compromising nuanced and reflexive responses to uncertainties faced by the firm
(Holman and Thorpe, 2002; Thorpe and Cornelissen, 2002). The semi
-
structured sessions
will focu
s on individual and group decisions related to specific critical incidents and
perceptions of those actors and institutions which make up the operating context. The
research team have extensive experience in the ‘real
-
time’ use of Decision Explorer
softwar
e (‘COPE’) to collect and present qualitative data. To add clarity and validity to
the results we propose that researchers’ interpretations of events are checked with
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managers themselves. In using the term cognitive mapping we do not wish to suggest
that
our research will focus solely on mapping the psychological constructs of cognition
then we need to make clear this will not be the case. It is our intention to collect data
from a wide range of sources (not simply the manager). The study of an activity
system
will require us to address such aspects as: that nature of the professional associations,
trade groups and communities within which the business operates and to which the
manager relates; the regulatory regime; government policy and the nature of th
e business
processes involved. In addition, we need to understand cultural artefacts such as the
language used. The data collection methods employed will be based on in
-
depth, semi
-
structured interviews designed to encourage managers to reflect on their
experience of
specific critical incidents. Hence, data will be collected by adopting conventional
qualitative approaches in which managerial responses will be taped and other relevant
data recorded during the interviews. The mapping tool, Decision Explore
r, will be used to
categorize, classify and compare qualitative data in the same way as other software tools
such as InVivo. Therefore, our in
-
depth qualitative approach to data collection and
analysis is epistemologically consistent with the nature of the

phenomena under
investigation. At the same time, we intend to remain reflexive and flexible and to adapt
and refine the methodology as the research progresses.


The use of mapping techniques in this research will provide a rigorous approach to the
repres
entation of qualitative data. This will enable the research team to reveal sense
-

making within organisations and compare ‘recipes’ across a range of activity systems.
Representing data in map form will also allow managers to reflect upon the content of
t
heir maps and those of others. This approach, combining theory, analysis and practice, is
consistent with the spirit of Mode 2 inquiry and we hope will enable us to understand the
development of management knowledge and learning in a social context.


Spend
er and Eden (1998), note that managerial and organizational cognition (MOC) has
emerged as a recognisably new and separate area of study. (Huff, 1990). The authors also
make reference to five key questions posed by Meindl et al (1994) in the introduction
to a
special issue of
Organization Science

on the theme of MOC). Of particular importance to
our research is the question related to the nature of links between managerial cognition
and organisational outcomes such as learning. We are concerned with ways

in which
knowledge is shaped by the social context in which managers operating and ways in
which particular ‘activity systems’ use common rules and resources, or recipes, to make
sense of their learning experiences.


As Spender (1998:13) notes, individ
ual’s representation of reality ‘seem to be the result
of complex selection, sorting, manipulation and conversion processes that are shaped by
our existing knowledge, interests and intentions’. He draws on the work of Weick and
Roberts (1993) to suggest th
at understanding emerges through the interrelated practices
of ‘contributing, representing and subordinating’ associated with any activity system.
Spender, 1998:19). Hence, knowledge, or knowing is embedded in practices and cannot
be separated from the co
ntext of activity systems. Such a perspective is influenced by
Vygotsky (1986) for whom learning is a pragmatic, use
-
oriented activity mediated by
cultural artefacts such as language (Gergen, 1985).

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Mapping is increasingly recognised as an important rese
arch tool for revealing sense
-
making activities in organizations (Clarke et al, 2001). Individual (cognitive) maps can
represent the knowledge used by decision makers as they create their subjective world
(Clarke et al, 2001:269). Mapping as a research t
ool can be applied to three classes of
phenomena (Laukkanen, 1998:169):

1.

A social or physical system, mechanism or process, some real domain.

2.

A person’s or group’s knowledge or beliefs relative to such a system or about a
real domain.

3.

The patterns of natura
l communication or discourse, emanating from a set of
actors, relative to a real system (1) or the actors’ beliefs about it (2).


Laukkanen (1998) argues that items 1 and 2 are most frequently the target of
management and organisational research. Our resea
rch will integrate the concept of
‘industry recipe’ (Spender, 1989; Schutz, 1976) with activity theory (Blacker et al, 1999;
Engestgrom, 2000) to provide insight into all three levels. It is further argued by
Laukkanen (1998:169.70 that mapping can be used

to study a wide range of
organizational activities including:




the modelling of real social systems in ways that helps understand and analyse
their underlying mechanisms and structures;



representing the structure of a target system and its critical interr
elations;



representing the ‘activity oriented’ knowledge which managers utilise to explain
and predict strategic situations (such approaches can incorporate ‘cognitive maps’
but can also be conceptualised as mental models, belief systems or operational
kno
wledge).


When combined, these maps can help reveal the raw data of an unseen phenomena
(Laukkanen, 1998:173). It is also important to note that Laukkanen makes the point that
significant MOC problems could be best resolved by carrying out studies in small

firms.
However, SMEs are rarely the focus of such research because of the belief that there is
‘some stigma’ attached to those researchers who ignore corporate settings (Laukkanen,
1998:172). Whatever the size of firm, the central features of organisation
al learning is
dialogue Bood (1998:216). Dialogues are the cultural artefacts by which knowledge is
exchanged, tested and new knowledge developed (
cf

Nonaka and Takeuchi, 1995)
Mapping can be used to identify these dialogues and hence the degree to which

organisational learning has occurred (Bood, 1998:218).


By envisaging manager’s as practical authors, agents engaged in dialogue to understand
the potential perspectives and activities
managers

take within activity systems,
t
he

Dynamic quality of sense
making between individuals and their social system is
analogous to Giddens’s conceptualisation of the recursive relationship between agency
and structure Spender (1998). Hellgren and Lowstedt (1998) also recognises the
importance of Giddens’s work in help
ing provide a better conceptualisation of links
between managerial cognition and the constraints imposed by organizational and societal
structures. They argue ‘that cognitive structures’, which facilitate and influence action,
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can also be described as bel
iefs (Donaldson and Lorsch, 1985), interpretative schemes
(Ranson et al, 1980), maps (Weick and Bougon, 1986) and scheme and scripts (Gioia,
1986). In contrast, ideational structures (shared beliefs common to all organizations )
constrain individual minds
ets and reduce the power of actors to implement solutions
within enacted situations (Hellgren and Lowstedt (1998:48).


Daniels and Johnson (2002) suggest that one potential resolution of the
ideographicnomothetic debate in research related to managerial an
d organizational
cognition is the adoption of multiple research methods. We agree ‘multi
-
methods’ are
useful for researching complex organizational issues such as the creation, exchange and
application of new knowledge. At the same time, our view is that
, in line with a ‘social
constructionist’ perspective, a range of methods is important for deepening our
understanding of the processes associated with ‘knowledge creation’, rather than for
reasons associated with triangulation. As Daniels et al (2002) po
int out, the advantages
of ideographic mapping methods are that they do not ‘constrain’ managerial
representations of organizational phenomenon.


An important aspect of this proposal is that SMEs are regarded as having their own
unique rather than being sc
aled
-
down versions of large firms (Dandridge, 1979).
Managers in small firms often need to be generalists rather than functionalist specialists
as found in the majority of large
-
scale organizations. As a consequence, managerial and
organizational ‘recipe
s’ are more likely to remain tacit in SMEs in contrast to the
codification associated with larger, more bureaucratic firms. Our research aim is to
enhance understanding of ways in which managers in SMEs acquire and utilise
knowledge. By using maps to cat
egorise, clarify and compare activity systems we intend
to identify recipes which may vary according to two influences: sectoral (division of
labour, industry norms and technologies) and internal organisation (emerging, steady
state, innovative and rapid g
rowth). This methodological approach is consistent with our
epistemological underpinnings in which knowledge and knowing are socially constructed
within a particular activity system. This study will offer a regional contribution to our
understanding of t
he Evolution of Business Knowledge in Small Firms.


Diaries

We recognise the difficulties involved in managers writing and maintaining diaries but
we see significant benefits in their use. As with mapping, we have used diaries in
previous research to capt
ure the direct experience of managerial activity. The purpose of
the diaries is to gain a longitudinal account of organizational knowing based on the
manager’s own language as befits a Mode 2 approach. Because of the time constraints on
managers we are de
veloping a method in which participants will keep an audio dairy.
This will take less time to complete and, because it will allow a fuller account, may
improve the quality of the data. To further ensure full participation, we plan to use a
representative
sample from the different sectors and growth ranges. We also plan to hold
an initial event with participants (with follow
-
up meetings) to encourage their
commitment and involvement in the research. Our previous research experience indicates
that response r
ates are sustained when participants obtained regular feedback from
researchers who sought elaboration on diary entries. One member of the research team
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will be responsible for managing the diary element of the study via regular telephone
contact with the
participants.


As with the mapping approach discussed above, we see the use of diaries as making an
innovative contribution to the collection of longitudinal data. We intend to pilot and
refine this technique as the research progresses.


Utilising personal

diaries will reveal how managers devise appropriate responses when
faced with uncertainty. Being both sensitive and temporal (Breakwell and Wood, 1995)
diaries provide a direct, albeit sporadic, narrative of how each manager perceives an
activity system’s

evolution and how those understandings change during the development
of new knowledge. Diaries will reveal ways in which managers conceive their roles and
the landscapes they presume to be working within (Gergen
et al
, 2002).


The research aims to be inno
vatory in method as well as in the conceptualisation of
knowledge management within SMEs. Through close engagement with the small firm
community, we will experience the ways in which the academic community fosters
wealth creation through the identificatio
n of patterns of knowing and by doing so,
promote Mode 2 engagement. The underlying drive of Mode 2 research with regard to
small firms is in their ability to generate value using knowledge is influenced by the
quality of the owner
-
manager’s networks, inc
luding policy makers and researchers,
meaning our research will also be sensitive to the need for observational data and
analyses of company reports (Thorpe and Cornelissen, 2002; Thorpe, 2002). We will
also incorporate a series of conferences into our re
search, involving SMEs, the research
team and representatives of SBS, NWDA, SFEDI and FPB.


Towards a Mode 2 Engagement

According to Gibbons et al (1994) Mode 2 knowledge production occurs as a result of
interaction between theory and practice (see table 2
.). This is the antithesis of traditional
Mode 1 form in which theoretical knowledge generally precedes application to empirical
problems. As a consequence, not only is Mode 2 trans
-
disciplinary it is also much more
dynamic or ‘problem solving on the mov
e’ as described by Gibbons et al (1994:5). Mode
2 brings together universities which represent the ‘supply side’ and businesses which
comprise the ‘demand side’. Academics and managers working together create a
virtuous cycle of understanding explication

and action.


In the spirit of Mode 2, this research will engage directly with small firms managers, and
will be underpinned by close involvement with a number of key institutional actors. The
Small Business Service (SBS) was established in April 2000 to
improve the competitive
environment for small firms. SBS took over responsibility for the 25o Business Links
which are the main mechanism for the provision of advice and assistance to the small
firm community. SBS have regional offices which are linked t
o the activities of their
local Regional Development Agencies. The North West Development Agency (NWDA)
has overall responsibility for economic regeneration in the north west region and SMEs
are a key focus of their activity. The research team have close
ly engaged with
representatives of the NWDA in a number of current projects supported by European
ESRCAPRIL2003CONFPAPER

12

structural funds. The Small Firms Enterprise Development Initiative (SFEDI) is the
nationally recognised body for the monitoring of standards in the provisio
n of business
support activities for SMEs. Representatives of SFEDI have a keen interest in significant
academic studies which provide a better understanding of management practices is
smaller firms. Lastly, The Forum of Private Business (FPB) helps smal
l firms cope with
day
-
to
-
day problems of managing small firms by influencing laws and policies affecting
businesses and supporting their profitability. The FPB is a founder member of the all
Party Parliamentary Small Business Group. And is the sole UK rep
resentative of
UEAPME which is the employers’ organisation representing small firms’ interests at
European Level, MUBS has regular involvement with SFEDI and FPB as a result of
engagement with a number of projects which are of mutual interest.


In prelimin
ary discussion with representatives of these four institutions we have agreed
that it would be useful for all parties if there were regular interaction during the course of
this research project. Therefore, the research methodology will incorporate a seri
es of
conferences involving the research team and representatives of SBS, NWDA, SFEDI and
FPB. To this end, seven conferences will take place at six monthly intervals during the
course of the project.


As well as the involvement of representatives from SB
S, NWDA, SFEDI and FPB we
anticipate that at the programme’s mid
-
point (18 months) the conference will include
representatives of the wider small firm community. Using MMUB’s developing contacts
with SMEs we proposal to include at least one representative

from each of the six sectors
of our sample. In addition, we anticipate that these representatives will incorporate a
cross section of firm sizes varying from sizeband 0
-
9 to sizeband 200
-
249. Carrying out
a detailed review in this way with representativ
es of the user community 18 months into
the programme will, we hope provide us with an excellent opportunity to influence the
remainder of the project. Those attending will be provided with a summary of
preliminary findings as well as having the opportuni
ty to influence the character and
direction of its remaining 18 months.


Designed in this way we aim to fulfil the spirit of the Mode 2 knowledge creation
bringing together representatives of the supply side (MMUBS) and the demand side
represented by SBS,
NWDA, SFEDI and FPB. Although these institutions are not direct
users of knowledge they are key intermediaries between academic and the small firm
community. This project is decidedly not a piece of management consultancy designed
to resolve operational
problems for the small firm community but rather, designed to
reflect the true spirit of Mode 2 knowledge creation in which there is regular interaction
between theory and practice.








ESRCAPRIL2003CONFPAPER

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Table 2. Modes of Knowledge Production




Dimension

Mode 1

Mode 2

Context of knowledge
production

Governed by academic
community

Created in the context
of application

Nature of knowledge

Disciplinary

Trans
-
disciplinary

Producers

Homogenous

Heterogenous enabled
by ICTs

Nature of control

Hierarchical and continuing

Heta
rchical and
transient

Quality Control

Peer review

Social, economic and
reflexive

Creativity

Individual phenomena

Group phenomenon

ESRCAPRIL2003CONFPAPER

14

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