Higgins, David (2008) Learning as a Social Process of Social Interaction in the Knowledge-Based Small Firm. In: 2008 International Council for Small Business World Conference, 22-25 June 2008, Halifax, Nova Scotia, Canada. (Unpublished)

The influence of globalisation, dynamic environments, the use and expansion of information systems and technology, has placed a huge influence on how the knowledge-based small firm uses and develops knowledge, (Leonard-Barton, 1995; Brown and Duguid, 1998). Such a focus on firm knowledge and knowing is particularly appropriate in the consideration of the demands which have been placed on the knowledge-based small firm to be innovative and creative, especially in competitive environments where the development and delivery of new services and products is of huge importance and represents an ongoing firm challenge. Dealing effectively with such challenges requires a focus away from the firm’s knowledge base, which currently occupies much of the traditional discussion on organisational knowledge, and towards a focus which draws attention to organisational knowing as an emerging process from the continuous and situated practices of firm agents as they interact and engage with each other and the dynamic environments in which they function. By viewing organisational knowing as a process in which agents are understood to act knowingly as an element of their routines and day to day activities. A firm agent is viewed to be purposeful and spontaneous, continually and routinely reviewing the flow of their actions and of others, coupled to the social contexts in which their own activities are intertwined. As Giddens notes “such activities suggest an immense knowledge ability involved in the conduct of everyday life”, (Giddens and Pierson, 1998, p.90).

The knowledge-based small firm constitutes a common interpretative of visions, values and experiences in the form of processes and routines which help to ensure how agents learn. However what an agent learns when sharing a common experience is not the same nor identical, and initial differences multiply over time. This gives way to the understanding that the process of knowledge creation and learning is supported by the development of distinct bodies of diverse firm knowledge. Knowledge in the small firms becomes distributed as an unavoidable consequence of the way by which it is produced; in which agents have varying perceptive, experiences, divergent insights and attitudes. As a result, the firm agents develop a variety of solutions as an intricate part of the ongoing process of learning by doing.

The growth of the social network discipline has been aided by various developments in the business world such as technology, and globalisation. Whereas the structure of the traditional industrial sectors is represented to a large extent, by a resourced-based view and materiality – through products, machinery, processing systems, in the modern knowledge-based economy, in which we live, even if bureaucratic models of organisations still exist, the different ways of organising emerging are more fluid and dynamic than traditional structures. Networks have been viewed as a mechanism by which these two groups can develop and sustain relationships. These networks are viewed principally in functional terms as the channels through which knowledge is developed, placing huge emphasis on the practical value of the network itself. As a consequence there is very little data gathered in relation to the agents and relationships which are developed within the network and a lack of focus on its dynamics.

The paper will put forward the perspective that in order for the small firm to become a distributed evolving knowledge system, the promotion of social interactions amongst its components and agents is required. Whereas individual agents in the firm can individually create knowledge, the greater challenge is to promote social interaction amongst these agents which not only facilitates learning but also the creation of explicit and tacit knowledge, (Hansen and Haas 2001). The paper argues that creation of knowledge in the small knowledge-based firm is better accomplished through the interaction amongst individual agents with diverse knowledge sets rather than agents with similar knowledge domains. Thus the possibility of exchanging knowledge and through processes of reflection on existing firm knowledge in order to create new understanding is greater when agents involved have diverse understanding which is questioned. This perspective requires multidirectional interaction amongst agents of knowledge diversity, and high levels of connectivity and interdependence, enabling agents to become both sources and recipients of knowledge.

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