Abstract
Interest in knowledge-based perspectives on the firm has grown in both practitioner and academic realms, spurred by management bestsellers such as Senge’s Fifth Discipline (1990) and the acknowledgement that intangible assets are key to the firm’s sustainable competitive advantage. Knowledge management tools and processes are used by organizations to identify, create, represent, and distribute knowledge for reuse, awareness, and learning. One component of knowledge management is the “communities of practice” (CoPs) concept. CoPs are informal networks of individuals who possess various levels of a common capability and apply their knowledge in pursuit of a similar endeavor (Brown & Duguid, 1991). For example, Xerox technicians solve problems by relying on informal communication with colleagues in addition to formal user user manuals. Created as a response to bureaucratization, CoPs emerge from individuals’ passions for a particular activity and the term is used to describe a formal of organization that is distinct from traditional formal boundaries around geographic and functional business units or other institutional affiliations and divisions. For the most part, managers use the CoP concept to encourage informal, situated learning (e.g., Hildreth & Kimble, 2004). However, some managers developed highly formalized structures with regulated membership, prescribed roles, scheduled meetings, and technical tools. This formalization distorts the original concept—that CoPs are created as a response to bureaucracy and are, by definition, emergent. The formalization of CoPs defeats both the original intent and the ability to reap full benefits for the firm. The chapter reviews three models of communities of practice — pure, applied, and formalized — and explores how coordination, opportunity, and knowledge flow costs in formalized CoPs can impede organizational performance.
TopBackground
In practice, CoPs can take three forms. In the first “pure” case, the original construct is adhered to and CoPs are emergent in nature. A second, mid-spectrum “applied” group exists when original CoP theory has been slightly tweaked. Next, a mid-spectrum “applied” group in which original CoP Theory has been slightly tweaked. For example, a firm might establish a common area such as a water cooler, coffee pot, or plate of cookies where individuals meet spontaneously. In the third fully “formalized” case, CoPs are no longer chiefly fueled by individual passion, but rather by organizational mechanization. For example, spontaneous get-togethers are supplemented by set monthly meetings and agendas. Thus formally recognized CoPs function just like any other formal unit within the firm. The shift from the original pure intent to applied (in which there are some costs and benefits) and fully formalized (only negatives) construct is depicted in Table 1.
Table 1. CoPs: Pure, applied, and fully formalized constructs
| CoP: Pure Construct | CoP: Applied Construct | CoP: Fully Formalized Construct |
| Organization Type | Emergent Community | Supported Community | Formalized Community |
| How is the CoP born? | Emergent, from individuals’ passion, bottom-up | Emergent, especially in firm-enabled spaces | Emergent, but with strong top-down directives |
| Who are CoP members? | Self-selected individuals; choice | Both self-selected and strongly encouraged by others | Corporate assignations; restricted membership |
| How many CoP members? | Small core group | Small to medium-sized group | Small to large group |
| What is the goal of the CoP? | Learn and share knowledge about passionate individual interest | Share knowledge about area of strong individual interest that the firm also deems interesting | Share knowledge about area of interest that the firm also deems especially interesting |
| Who is in charge? | Individuals | Individuals and organization | Organization and individuals |
| What holds CoP together? | Shared interest and passion | Interest oriented to project goal | Some interest, also job requirement |
| Where is resource level? | Individual’s own time | Individual time, some funding at various organization levels | Funding at various organization levels, especially corporate |
| When are CoP interactions? | Spontaneous interactions | More regular, but spontaneous interactions possible | Scheduled meetings; spontaneous interactions if time |
| What type of learning? | Situated | Situated and classroom | Classroom |
| When does the CoP die? | Naturally, when interest fades | When project completed | When firm resources extinguished |
Key Terms in this Chapter
Opportunity Costs: Set of costs of passing up the next best choice when making a decision.
Formalization: Act of making formal, often for the sake of official or authorized acceptance.
Tacit Knowledge: Knowledge that people carry in their minds and is difficult to share with others.
Coordination Cost: Cost of processing information in an organization.
Community Of Practice: Informal network of individuals who possess various levels of a common capability and apply their knowledge in pursuit of a similar endeavor.
Knowledge Management: Set of practices used by organizations to identify, create, represent, and distribute knowledge for reuse, awareness, and learning.