Performance Implications of Pure, Applied, and Fully Formalized Communities of Practice

Performance Implications of Pure, Applied, and Fully Formalized Communities of Practice

Siri Terjesen (Queensland University of Technology, Australia and Max Planck Institute of Economics, Germany)
DOI: 10.4018/978-1-60566-026-4.ch487
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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.
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Background

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 ConstructCoP: Applied ConstructCoP: Fully Formalized Construct
Organization TypeEmergent CommunitySupported CommunityFormalized Community
How is the CoP born?Emergent, from individuals’ passion, bottom-upEmergent, especially in firm-enabled spacesEmergent, but with strong top-down directives
Who are CoP members?Self-selected individuals; choiceBoth self-selected and strongly encouraged by othersCorporate assignations; restricted membership
How many CoP members?Small core groupSmall to medium-sized groupSmall to large group
What is the goal of the CoP?Learn and share knowledge about passionate individual interestShare knowledge about area of strong individual interest that the firm also deems interestingShare knowledge about area of interest that the firm also deems especially interesting
Who is in charge?IndividualsIndividuals and organizationOrganization and individuals
What holds CoP together?Shared interest and passionInterest oriented to project goalSome interest, also job requirement
Where is resource level?Individual’s own timeIndividual time, some funding at various organization levelsFunding at various organization levels, especially corporate
When are CoP interactions?Spontaneous interactionsMore regular, but spontaneous interactions possibleScheduled meetings; spontaneous interactions if time
What type of learning?SituatedSituated and classroomClassroom
When does the CoP die?Naturally, when interest fadesWhen project completedWhen 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.

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