"Communities of Practice, Social Capital, and Organizational Knowledge" Summary

By Eric Lesser and Laurence Prusak
From: The Knowledge Management Yearbook 2000-2001
James W. Cortada and John A. Woods (eds), pp. 251-259.

 

Summarized by: SDTalisayon

“Communities of practice”

  • Informal, spontaneous, self-organized groups of people who share knowledge, solve common problems and exchange insights and frustrations
  • Groups of individuals bound by informal relationships, that share similar work roles and a common context.

“Social capital”

  • Informal resources individuals in a community draw upon to provide value to themselves and the group.
  • The web of social relationships that influences individual behavior and thereby affects economic growth (Karen Pennar)
  • The sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit (Janine Nahapiet and Sumantra Ghoshal)
  • The capability that arises from the prevalence of trust in a society or in certain parts of it (Francis Fukuyama)
  • Examples: familiarity, trust, shared language, common context.
  • Example of benefits they provide:
    • Reducing the time to locate an expert within the organization
      minimizing the costs associated with validating expertise
    • Reducing time and effort needed in forging an agreement between individuals in an organization

Hypotheses of this paper 

  • Communities of practice foster development of social capital, which in turn is necessary for knowledge creation, sharing and use. 
  • Organizations will stand to benefit if they officially recognize and extend support to communities of practice within their midst. Organizations that have done so:
    • British Petroleum, for their drilling specialists
    • World Bank, for their poverty specialists

Essential characteristics of communities of practice

  • Relationships are formed on a personal basis (=community)
  • Not constrained by geographic, business unit or functional boundaries; unbounded by, and interpenetrates, the formal organization
  • United by common tasks, contexts and work interests
  • “Practice” connotes how individuals actually perform their jobs, not how the work should be performed according to formal policies and procedures; also connotes socially-defined practices that a worker learns in the context of his participation in a community of practice.
  • Membership is informal, fluid and self-organizing, in contrast to formal or canonical work teams and functional groups which are sanctioned by the formal organization for a specified purpose, following formal rules, task definitions and requirements of membership
  • Often without formal charters or organizational mandates

Essential characteristics of social capital

  • Proposed to fill the explanatory gap that traditional economic theory is unable to address in fully understanding problems of economic development
  • Three dimensions of social capital (according to Nahapiet and Ghoshal):
    • Structural: informal networks that, for example, allow individuals to identify others with potential resources
    • Relational: interpersonal dynamics between individuals in the network, involving issues of trust, shared norms and values, obligations and reciprocity, expectations and identification
    • Cognitive: common context and language, shared use of common objects and artifacts, telling/retelling of stories that convey a sense of shared history and context.
  • Likely to influence how organizations create and share knowledge, through (1) access to people to combining/exchanging organizational knowledge, (2) anticipation of value from combining/exchanging organizational knowledge, (3) motivating people to combine/exchange organizational knowledge, and (4) ability of the organization to change according to the needs of its outside environment.

How communities of practice (CPs) help build social capital

Structural:

  • CPs provide individuals the opportunity to develop a network based on work interests
  • CPs serve as an intra-network clearinghouse, by identifying experts with relevant knowledge and making connections between experts and those who need information
  • CPs act as reference mechanism, quickly enabling individuals to evaluate the knowledge of others
  • CPs can help connect to individuals outside the network
  • CPs very useful for new recruits in an organization

Relational:

  • CPs foster interpersonal interactions that build trust and mutual obligations
  • CPs provide opportunities for testing trustworthiness and commitments of members
  • CPs build its own form of “informal currency”, with terms and conditions for social exchange and “payments” for reciprocal assistances
  • CPs provide repeated interactions for developing empathy and rapport among members

Cognitive:

  • CPs evolve their own language or “vernacular”, the actual terminologies members use in every work-related conversations
  • CPs facilitate sharing of knowledge objects or “artifacts” (manuals, memos, tools)
  • CPs generate and transmit stories that convey the values of the group and the formal organization, thus perpetuating a community memory that could remain after older members leave

Implications for knowledge management

  • Identify CPs that influence critical or strategic goals of the formal organization
  • Provide CP members with more opportunities to meet face-to-face
  • Provide tools to enable CPs to identify new members and maintain contact with existing members
  • Identify key “experts” with the CPs and enable them to provide support to others
  • Remember that “capital” in “social capital” implies investment with expected returns: support CPs through money, time, technology, etc.