Knowledge management model of the service development in B-to-B networks

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6 Νοε 2013 (πριν από 3 χρόνια και 9 μήνες)

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Knowledge management model of the service development in B-to-B networks
Annika Heikkilä
a
Minna Kansola
b
a
M. Sc. Tech., Research Scientist, VTT Technical Research Centre of Finland, P.O. Box 1300,
FIN-33101 Tampere, Finland, annika.heikkila@vtt.fi
b
M. Sc. Tech., Researcher, VTT Technical Research Centre of Finland, P.O. Box 1300, FIN-33101
Tampere, Finland, minna.kansola@vtt.fi
Abstract
Purpose: The transition towards service business is topical in all industrialized countries and an
increasingly significant proportion of revenue is generated by companies’ service activities. Some
earlier studies describe service development as an ad hoc procedure (Rathmell, 1974; Claude &
Horne, 1992; Gröönroos 1990) and based on organization’s individual innovators (Claude & Horne,
1992). This stresses the role of knowledge management as a source of competitive service
development. This article focuses on identifying the knowledge sources of service development and
how knowledge is created, shared and utilized in networks for the creation of new innovative
services and developing current services?
Design:This is an exploratory case study aiming to represent phenomena and their relations with
possible causalities. Empirical information was collected from case companies, from B-to-B
networks in various service business fields.
Findings:The article traced the origins of the knowledge management field differentiating between
tacit and explicit knowledge and describing the SECI/ba model. The paper shows that the SECI/ba
model supports new service development and innovations in the network from both the research
methodological and case companies´ points of view.
Originality: The primary contribution of the paper is in describing network knowledge
management methods supporting tacit and explicit service knowledge management.From a
theoretical point of view, the article traces the origins of the knowledge management field and how
knowledge management models support new service development and innovations.
Keywords: Service development, knowledge sources, knowledge management, SECI/ba-model,
Networking, case study
1. Introduction
The transition toward service business is highly topical throughout industrialized countries and a
significant proportion of the revenue is generated by companies’ service activities. The literature
emphasises three main reasons and strategic drivers to account for why the enterprises have moved
toward service business. First, enterprises seek substantial and more stable revenue during the
product life cycle (Goffin, 1999; Hull & Cox, 1994; Knetch et al., 193) and service opportunities to
increase growth and profitability, especially in mature industries (Fitzsimmons et al., 1998;
Goepfert, 2002). Second, customers demand more services when concentrating on their core
competences (Fitzsimmons et al., 1998; Goepfert, 2002; Prahadlad & Hamel, 1994). Third, service
can be considered a sustainable source of competitive advantage (Goffin, 1999; Hull & Cox, 1994;
Matthyessens & Vandenbemt, 1998; Oliva & Kallenberg, 2003).
The innovation and management literature indicates that the development of a service is different
from the development of a tangible product, because differing characteristics distinguish goods
from services. A service is typically characterized by intangibility, heterogeneity and/or
simultaneity depending on the service type. Generally, service innovations are more easily copied
by competitors (Moeller, 1974). Services are also more people oriented (Moeller, 1974). Much of
the service development research has looked at how different stages in the development process
have been carried out (Edgett, 1996) and many of these have followed Booz and Hamilton’s (1982)
simple model of the new product development process. It is surprising that there has not been more
effort to develop a specific service development model taking account of the specific service
characteristics mentioned earlier.
In their research, Kelly & Storey (2000) identified a number of barriers to new service development
success. These have been grouped under six main themes, namely information technology, lack of
development resources, lack of knowledge, skills, capabilities and standard development processes.
These results support the findings of earlier studies investigating barriers to innovation and the
prerequisites for new service development to flourish (e.g. Johne & Harborne, 1985; Hodgson,
1986; Reidenbach & Moak, 1986; Martin & Horne, 1993; Drew, 1995). Shostack (1984) identified
four important characteristics of an effective service development process: objectivity, precision,
being fast-driven and methodologically based. Shostack (1984) stated that the successful
development of a service requires customer involvement and both the ‘front office’ (customer
contact) and the ‘back office’ (operations) of a service firm because service production and delivery
are intextricably linked.
The lack of a service development model and especially the lack of knowledge, skills, capabilities
and standard development processes in service development motivated the present research and we
sought a new perspective on service development. From a theoretical point of view new ideas are
gathered from the knowledge management research field. As known, in a knowledge-based
economy, an organization’s capability to create new knowledge by combining new and existing
knowledge is one of the key success factors. In this study, we define knowledge management (KM)
as a collection of organizational activities and knowledge management methods which assists
forward identification, catch, organization, storage, transfer, application, and measurement of
knowledge and speeds up knowledge creation with respect to organizational strategy. Thus, KM is
the systematic and active management of individuals’ and groups’ knowledge, experiences and
learning, which have an in important role in the service development.
So far there is no consensus on a definition of KM due to its diverse aspects and roots in several
scientific disciplines. However, most authors agree that there are substantial benefits to be gained
from the systematic and conscious treatment of knowledge management in and outside
organizations (Maier, 2002, p. 49). The sources of the new service development can be both internal
and external (Johne & Storey, 1998, p.202). In this study, knowledge creation, sharing, combining
and utilizing in the network context can be viewed as potential to generate new ideas and develop
new business opportunities through social interaction and learning in co-operation. The knowledge
management in the network is studied with reference to the SECI/ba models of Nonaka, Toyama
and Konno’s (2000) because the model distinguishes between explicit and implicit knowledge
processing and emphasizes how organisations actually create and manage knowledge dynamically.
The data analysed and the results reported in this paper are part of a more extensive research project
conducting qualitative, theory-building research to explore collaborative service development in B-
to-B networks in various service business fields. Section 2 describes the theoretical background of
the different kinds of knowledge, the knowledge management SECI model and the SECI/ba model.
Section 3 empirically presents the knowledge sources of service development and how knowledge is
created, shared and utilized in networks in the creation of new innovative services and current
services. Section 4 summarizes the primary contribution of the paper, which is how the knowledge
management models support new service development and innovations, and outlines areas for
future research.
2 Literature review: Knowledge management in the new service development
2.1 Tacit and explicit knowledge from the service development perspective
According to Davenport & Prusak (1998) knowledge is “a fluid mix of framed experience, values,
contextual information, and expert insight that provides a framework for evaluating and
incorporating new experiences and information”. According to Nonaka, Toyama and Konno (2000)
knowledge is dynamic, because it is created in social interactions amongst individuals and
organisations. Knowledge is context-specific, as it depends on a particular time and space.
Knowledge is merely information if it is not put into a context. Nonaka and Takeuchi (1995)
consider knowledge to be “a dynamic human process of justifying personal belief toward the
‘truth’”. Next we present some differences between tacit and explicit knowledge and their
implications for service development.
Explicit knowledge is fully encoded, conveyed by signs and symbols, and hence easily shareable
(Boisot; 1995; Nonaka, 1991; Nonaka & Takeuchi, 1995; Polanyi 1962, 1977). According to
Nonaka, Toyama and Konno (2000): “explicit knowledge can be expressed in formal and
systematic language and shared in the form of data, scientific formulae, specifications, manuals and
such like”. Explicit knowledge can be processed, transmitted and stored relatively easily. From the
service development point of view, explicit knowledge can be a result of customer satisfaction
surveys and/or service operational performance measures from an enterprise resource planning
programme (e.g. service utilization rate).
Tacit knowledge refers to an individual’s cognitive abilities such as beliefs, insights, intuitions
hunches and mental models as well as know-how and skills rooted in experience (Salvatore, 2009).
Thus, tacit knowledge is highly personal and hard to formalize. Tacit knowledge is deeply rooted in
action, procedures, routines, commitment, ideals, values and emotions (Schon, 1983). It is difficult
to communicate tacit knowledge to others, since it is an analogue process requiring a kind of
simultaneous processing. Therefore tacit knowledge cannot easily be made explicit, is difficult to
imitate, and hence potentially enables knowledge-based competitive advantages (Connor &
Prahalad, 1996; Grant, 1996). Polanyi (1962) understood tacit knowledge as ‘people know more
than they can say’. In the service development tacit knowledge may mean service producer’s
insights about customer reactions or a key account manager’s intuitions about customer business
development. In this study, we want to emphasize the meaning of tacit knowledge in the service
development process, because services are people oriented and service knowledge is developed
when the service is produced and developed.
2.2 The SECI/ba model of knowledge management in support of service development
So far there is no consensus on a definition of KM due to its diverse viewpoints and roots in several
scientific disciplines. However, most authors agree that there are substantial benefits to be gained
from the systematic and conscious treatment of knowledge related processes in organisations
(Maier, 2002, p. 49). The literature abounds in knowledge creation models (Demarest, 1997,
Pearlson, 2000; Ruggles, 1998; Nonaka et al. 1995, 1998), of which the most famous is that by
Nonaka & Takeutchi (1995) the SECI model (Kleemola, 2005). Generally, according to Amaravadi
& Lee (2005) the main and common parts of the knowledge creation model are: identification,
generation, codification and transfer of knowledge. The strength of the SECI model is the
differentiation between explicit and implicit knowledge processing. Thus, the SECI model is taken
for detailed examination.
The model known as SECI is based on the conversion of explicit and implicit knowledge. Through
the conversion process, tacit and explicit knowledge expands in both quality and quantity (Nonaka
& Takeuchi, 1995). The model emphasizes the activation and utilization of tacit knowledge. The
theory of the SECI model concentrates on new knowledge creation, which is realized through
interactions among individuals or between individuals and their environment (Nonaka, Toyama &
Konno, 2000). According to Nonaka Toyama and Konno (2000) “knowledge creation is a
continuous, self-transcending process through which one transcends the boundary of the old self
into a new self by acquiring a new context, a new view of the world, and new knowledge”. The
SECI model describes the four knowledge conversion modes:socialization, externalization,
internalization, combination (Nonaka & Takeutchi, 1995), all of which are necessary for the
creation of new knowledge (Kleemola, 2005) (Figure 1).
In addition to a dynamic process, knowledge needs a context to be created. This is where the
concept of ba emerges. Ba is the place in which knowledge is shared, created and utilized during the
SECI process. However, ba is not necessarily a physical space. It is a time-space nexus, where the
key concepts are action and interaction. Ba combines physical space like an office, virtual space
like e-mail and mental space like shared ideals. (Nonaka, Toyama & Konno 2000.)
Socialization:Informationtransfer
between people
Originatingba:place where individuals
share experiences, feeling, emotions
and mental models
Externalization:group members to
articulate hidden tacit knowledge using
common method and tools
Dialoguing ba:place where individuals´
mental models and skills are shared
and converted into common terms
through dialogues amongst
participants
Internalization:createdexplicit
knowledge is shared throughout an
organisation and converted into tacit
knowledge by individuals
Exercising ba:place where individual
and virtual interactions realized. It does
the same thing dialoguing ba but in
forms of action instead of through
thought
Combination:converting explicit
knowledge into more complex and
systematic sets of explicit knowledge
Systemising ba:place for collective and
virtual interactions in which
information technology plays a great
role
Tacit knowledge TO Explicit Knowledge
Tacit
knowledge
FROM
Explicit
Knowledge
Figure 1. Four modes of knowledge conversion also known as the SECI/ba model (Nonaka &
Takeutch, 1995; Nonaka, Toyama & Konno 2000).
Socialization is the process of sharing individuals’ tacit knowledge (Nonaka, Toyama & Konno
2000). Tacit knowledge can be acquired only through shared experience, such as spending time
together or living in the same environment, because it is difficult to formalise and often time and
space-specific (Nonaka, Toyama & Konno 2000). Sharkie (2003) has stated that in order to create
new knowledge an organization must encourage individuals to share their tacit knowledge with
each other. From the perspective of the network of service development, socialization can mean
interaction with the suppliers or customers to acquire and benefit from their tacit knowledge.
According to Nonaka, Toyama & Konno (2000) originating ba is a space for socialisation through
individual and face-to-face interactions. Originating ba is a place where individuals share
experiences, feeling, emotions and mental models.
Second, the externalization mode describes the conversion of tacit knowledge into explicit
knowledge. The externalization helps group members to articulate hidden tacit knowledge, which is
otherwise difficult to communicate (Kleemola, 2005). Externalization necessitates common
methods and tools to assist the communication and individual’s knowledge reflection and
distribution in the group (Hytönen & Kolehmainen, 2003). When tacit knowledge is made explicit,
according to Nonaka, Toyama & Konno (2000) “knowledge is crystallised”, because then it can be
shared by others, and it becomes the basis of new knowledge. The quality control cycle (PDCA
cycle also known as the Deming cycle) is an example of a tool which supports externalization.
Dialoguing ba offers a context for externalization through collective and face-to-face interactions.
In dialoguing ba, individuals´ mental models and skills are shared and converted into common
terms through dialogues among participants. The articulated knowledge is then brought back to
each individual and further articulation occurs through self-reflection. (Nonaka, Toyama & Konno,
2000.)
Combination is the process of converting explicit knowledge into more complex and systematic
sets of explicit knowledge ((Nonaka, Toyama & Konno, 2000; Nonaka & Takeuchi, 1995). The
pieces of explicit knowledge are handled by classifying, codifying and integrating them. The text,
verbalization and diagrams facilitate and support the combination of the knowledge. Explicit
knowledge is gathered from inside or outside the organisation and then combined, edited and/or
processed into a form of new knowledge, which is shared among the members of the organisation
and beyond its boundaries if necessary ((Nonaka, Toyama & Konno, 2000; Nonaka & Takeuchi,
1995). In practice, the combination phase of knowledge conversion can include the ‘breakdown’ of
concepts. A concept such as service development vision can be broken down into operationalised
business or service concepts, thereby creating systemic explicit knowledge. Nonaka, Toyama &
Konno (2000) describe systemising ba as a place for collective and virtual interactions where the
combination of existing explicit knowledge happens. Information technology plays a crucial role in
systemising ba by offering a virtual collaborative environment.
Internalisation is the process of converting explicit knowledge into tacit knowledge. Through
internalisation, created explicit knowledge is shared throughout an organisation and converted into
individuals’ tacit knowledge. Internalisation is closely related to ‘learning by doing’. (Nonaka,
Toyama & Konno, 2000). For example, service development can be actualised though development
projects and plans. When knowledge is internalised and becomes part of individuals' tacit
knowledge, it becomes a valuable asset.Exercising ba offers a context for internalisation and is
defined by individual and virtual interactions. Exercising ba does the same thing as dialoguing ba
but in forms of action instead of through thought. (Nonaka, Toyama & Konno 2000.)
As the information exchange and communication between the actors plays a great role in the service
development, the SECI/ba model is an extensive tool to evaluate the knowledge conversion within a
network while developing new services. Knowledge can be either tacit or explicit and the SECI/ba
model shows how knowledge converses from tacit to explicit and vice versa. SECI/ba model has
four modes:socialization, externalization, internalization, combination,which are all necessary to
create new knowledge. Knowledge also needs a context, a ba, to be shared, created and utilized
during the SECI process. The SECI/ba model is used in this article as a theoretical frame of
reference which we use to analyse the case-companies´ knowledge creation, sharing and utilization
while developing new services within a network.
3. Service development in a B-to-B network from the knowledge management perspective
3.1 Research questions and method
The research was conducted 2009-2010. The research questions are:
 What are the knowledge sources of the service development?
 How is knowledge created, shared and utilized in networks when creating new innovative
services and developing current services?
As the second research question is descriptive (how) in nature, the case study is the most
appropriate research strategy (Yin, 1994). A case study is considered to be a strategy that yields
deep and detailed information on a contemporary phenomenon from a distinct real-life context. A
qualitative research approach is used to describe how the knowledge is created, shared and utilized
in networks when creating new innovative services and developing current services.
This is an exploratory case study intended to identify phenomena and their relations with possible
causalities (Voss et al., 2002; Alasuutari, 1999; Olkkonen, 1993). The empirical part the study
answers the research questions and outlines the case companies’ network knowledge management
model. In the development of a theory it is not necessary to find statistical evidence to substantiate
single issues; the aim is rather to understand and to conceptualise a phenomenon (Voss et al., 2002;
Yin, 1994). Case studies are a typical method for theory development.
3.2 Data collection and processing using the SECI/ba model
In order to respond to the research questions, the authors interviewed 4 representatives of service
firms in various fields of service business. Nonaka, Toyama & Konno´s (2000) SECI/ba model was
used when the research data was collected and processed. In this study,socialization of knowledge
was arranged by interviewing key persons in the case companies, their partner networks (e.g. key
customers, service and product suppliers, manufacturers of original equipment) and research
institute collaboration. The interviews were semi-structured. A total of 2-12 interviews were
conducted in a case company depending on firm size and number of key persons. The key persons
represent the firms’ various functions, such as as marketing (e.g. key account managers),
procurement (e.g. procurement manager), service production (e.g. service managers) and research
and development (e.g. service development manager). The key persons gave real life experience of
the service development and the possible sources of service ideas and innovations. The key person
described how service knowledge is created, shared and utilized in networks when creating new
innovative services and developing current services. The key partners’ interviews were also semi-
structured and number of interviewees depended on the partner’s position. The key partners
described how service knowledge was shared and utilized in the B-to-B network.
At the same time, interviewers externalized tacit knowledge to explicit knowledge by encouraging
interviewees and workshop participants to share their tacit knowledge with the researchers, and
motivated individuals to think and evaluate the collaborative service development more extensively
by giving real life examples of service development opportunities, which can also be called the
researchers’ tacit knowledge. Interview notes, tapes and transcriptions are the results of the
externalization.
After that, the service explicit knowledge was combined into more complex and systematic sets of
explicit knowledge using process models, common management decision-making tools such as
SWOT and portfolio analyses and interview reports. The text conceptualization and pictures
facilitate and support the combination of the knowledge. The research institutes’ arrange together
workshops, which also support the combination of explicit knowledge. Thus, the explicit
knowledge was processed by classifying, codifying and integrating As a result,explicit knowledge
from different kinds of knowledge sources developed into a more extensive explicit entity about
how knowledge is created, shared and utilized in networks when creating new innovative services
and developing current service. Finally, in the internalization phase knowledge was presented to the
companies’ members participating in the research project in order to understand the meaning of the
gathered implicit and explicit knowledge. In these meetings, the explicit knowledge was converted
into individual implicit knowledge resulting in new collective and individual knowledge.
3.3 Empirical findings
3.3.1 Case-companies’ knowledge sources of the service development
Table 1 presents descriptions of the case companies and the role of service business in their
business operations. In case company 2 the service knowledge development is concentrated on
internal service network development. Thus, the importance of their employees as a knowledge
source in service development emphasizes and internal knowledge creation and sharing methods.
Instead, in case companies 1 and 3 the development is focused on both internal and external
knowledge management. In case company 4 the development is focused on internal knowledge
management, but the internal network consists of separate companies co-ordinated by the parent
company. Thus, the knowledge has to be shared among different companies.
Table 1. Description of case companies.
Company 1 Company 2 Company 3 Company 4
Company
description
Service i ntegrator offering
services i n the energy and
tel ecommuni cati ons
industri es and the
manufacturi ng sector.
Engi neering consul tancy
company offering
technical desi gn,
consul ti ng, R&D and
expert servi ces for several
sectors.
Finnish mul ti sectoral
group offeri ng desi gn and
consulting servi ces that
support maintenance and
spare parts servi ces.
Group of companies i n the
fi eld of marketing
services.
In the case companies the most important knowledge sources of the service development are:
customers and especially key customers. Often customers’ needs and changes in these directly
affect service development. For example, a customer may redefine its core competences, thereby
giving rise to new service needs. The second important knowledge source is a company’s own
employees, who develop new ideas and innovations in their everyday work in the field. The case
companies have also formed service development function and cross functional teams whose main
task is to gather and develop new service innovations and enhancements. Table 2 presents the case-
companies’ service knowledge sources.
Table 2. Case-companies service knowledge sources.
New service and current service development
knowledge source
Customers x x x x
Employees x x x x
Competitors x x x x
Knowledge intensive business service x x
Public information x x x
Product and material suppliers x
Whole salers x
Service suppliers x
Legislation x
International companies x
Retailers x
Trainings x
Other companies in the group x
Foreign subsidiary x
Company 1 Company 2 Company 3 Company 4
The other knowledge sources are:suppliers, original equipment manufacturers (OEM),
competitors, public information sources and legislation. The importance of these knowledge
sources depends very much on the case-company’s business. Service integrator places special
emphasis on suppliers’ roles in service development. Suppliers may be service, material and
product providers. OEMs develop their machinery, which creates new service innovation and needs.
The division of labour between the OEM and case company creates new service needs. Most of the
case companies analysed the competitors and public information sources regularly to ensure their
competitiveness in the market. Often changes in the legislation occasion new service needs for
customers. In practice these service needs have to be met quickly. Overall, the knowledge sources
utilised are quite the same in all case companies and every company uses more than two knowledge
sources.
3.3.2 Service knowledge and innovation creation, sharing and utilization in networks using the
SECI/ba model
The second research question:how is knowledge is created, shared and utilized in networks when
creating new innovative services and developing current services is analysed using the knowledge
management SECI/ba model, because it is founded on the conversion of explicit and implicit
knowledge and takes account of the context, in which knowledge is created (ba). In utilizing the
SECI/ba model, the study endeavours to concentrate on new knowledge creation, sharing and
utilization. The new knowledge is realized in interaction among and/or between individuals and
their environment. In this study, the aim is to identify knowledge creation in B-to-B networks.
The SECI model includes four knowledge conversion modes: socialization, externalization,
internalization and combination, which support the organization’s ability to create, share and utilize
knowledge.These four phases are all necessary for the creation of new service knowledge and
innovations. In this article the methods are divided into formal and informal to show that knowledge
can be conversed both in formal ways and in everyday interaction between the actors.
The formal methods are characterized as
follows:
 planned & prepared
 objective-oriented
 results driven
 decision-making in group
 agenda
 beginning and end are specified
The informal methods are characterized as
follows:
 unplanned
 ad hoc procedure
 not result driven or objective-oriented
 small talk
Figure 2 presents the knowledge conversion methods used in the case companies in different
knowledge conversion modes. Figure 2 shows that socialization is arranged using formal and also
informal methods, which support tacit service knowledge creation, sharing and integration.
Development forums are arranged notably with the key customers and other partners. These forums
reveal the needs for change in the customers’ services and their change of strategic directions,
which creates new service innovations and needs. A development project makes it possible to
create, share and integrate knowledge with the expertise of a research centre, other participating
firms and partners. Internal workshops and meeting are methods to share tacit knowledge.
Socialization& Originating ba:
Formal method:
Internal workshops
Development project
Internal (cross-functional) teammeetings
Development forums
Retailers day
Informal method:
Everydaycommunication and interaction
(phonecalls, email, etc.)
Coffee table –conversations and ”sauna
evenings”
Conversations with customers
Externalization & Dialoguing ba:
Formal method:
Initiativesystems
Worshopmemos
Management teammeetings
Apprentice-journeyman thinking
Company on the roadconcept
Media
Intranet or internet (discussion forums)
Informal method:
Transferring the memos etc. to third
parties inside the company
Plays, stories, tales
Internalization& Exercising ba:
Formal methods:
Education and training
Service pilotingand testing
Networkingworkshops
Development forums
Informal methods:
On-the-job learning
Learning by doing
Combination&Systemising ba:
Formal methods:
Service innovation standard evaluation
methods
Service ideas and project categorization
Project and research reports
Tacit knowledge TO Explicit Knowledge
Tacit
knowledge
FROM
Explicit
Knowledge
Figure 2. SECI ba-model utilization in case-companies service development in the network.
Externalization was arranged using initiative systems, which were not felt to be a “good” way to
produce new service innovation in all case companies. The initiative systems emerging were the
importance of reward systems and ideas for evaluation methods. The new service innovation and
ideas were gone through in management team meetings. In the case-companies intranet and Internet
are also ways to externalize own employees’ tacit knowledge. Apprentice-journeyman thinking is
used in sharing knowledge between novice and experienced employees.
The two last phases in the SECI cycle, combination and internalization, are not as well supported as
the earlier two phases, socialization and externalization. The combination phase, where explicit
service knowledge is converted into more complex and systematic sets of explicit knowledge,
requires standard methods to handle explicit knowledge. One case company was developing a
standard evaluation method to assess service ideas and innovations. Another case company has
nominated people to take charge of new service ideas and innovations categorization. Project
reports and surveys are also one way to classify, codify and integrate the explicit knowledge. The
methods used are quite formal, because in the combination phase the knowledge is explicit.
Finally, in the internalization phase the explicit knowledge created is shared throughout an
organisation and converted into individuals´ tacit knowledge through training and education, service
piloting and testing. Generally, service piloting and testing are executed with the customer. Some of
the case companies also arrange networking workshops and development forums with customers,
suppliers and OEMs to share the explicit service knowledge. However, the case companies did not
have standard and regular methods to support the process of converting explicit knowledge into
tacit knowledge. These methods are only used as need arises. Overall, new service knowledge and
innovations are the outputs of the methods used in the SECI cycle.
4. Conclusion
In this article, we reviewed the sources of service knowledge and how organizations´ service
knowledge is created, shared and utilized in networks in the creation of innovative services and in
developing present services. From a theoretical point of view, the article traced the origins of the
knowledge management field distinguishing between tacit and explicit knowledge and describing
the SECI/ba model. The two primary contributions of the paper are that the SECI/ba model was
shown to support new service development and innovations in the network from both research
methodological and case-companies´ points of view.
The overall view of the case companies´ service development in the network was formulated
methodologically using the SECI/ba model by Nonaka, Toyama & Konno (2000). The SECI/ba
model supported the understanding of the dynamic nature of service knowledge creation in the case
companies. The SECI/ba model supports the researchers´ development work and new knowledge
creation according to the service development and innovations in the case environments. This kind
of methodologically based development process has been identified as one of the most important
characteristics of an effective service development process (Shostack, 1984).
Moreover, the case-companies´ knowledge creation, sharing and utilization were analysed using the
SECI/ba model. The results reveal what methods, both formal and informal the case companies
used to create new service knowledge and innovations. The results showed that the socialization
and externalization methods are quite well known and standardized in the case companies. Instead,
the internalization and combination methods are lacking. However, each knowledge conversation
mode is necessary for the creation of new service knowledge and innovations. We propose that
companies should define and standardize different kinds of knowledge management methods and
tools to support each knowledge conversation mode. Thus, knowledge creation, sharing,
combination and utilization can be ensured, all of which are necessary for the creation of new
knowledge.
In this article, we focused primarily on describing network knowledge management methods in case
companies. The next research step could be to explore what kinds of standard and regular methods
support the combination and internalization modes in service development within the network.
According to our research, these modes are not as well supported as the earlier two phases,
socialization and externalization so it would be vital to study which methods could support these
phases in the companies.
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