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The 7C model for organizational knowledge creation and management

Article · January 2001

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 The 7C Model for Organizational Knowledge Creation and
Management

Harri Oinas-Kukkonen a,b

a
Infotech Oulu OASIS & Dept. Information Processing Science
University of Oulu, FIN-90014 Oulu, Finland
[email protected]

b
Stanford University, Center for the Study of Language and Information
210 Panama Street, Stanford 94305, CA, USA

Abstract

This paper proposes a conceptual model for organizational knowledge creation and
management, known as the 7C model. The model is based on the distinction of individual and
organizational knowledge and explicit and tacit knowledge. The 7C model suggests that the
seven Cs (Connection, Concurrency, Comprehension, Communication, Conceptualization,
Collaboration, and Collective intelligence) play a central role in the knowledge creation process.
The paper also analyzes the Web environment at technology, language and organizational
contexts. On the one hand, it is suggested that previous research has focused on the
technology and organizational contexts, and on the other hand it is found that some of the
Web’s inherent key features have not been utilized to the extent they should. The paper
suggests that better support for the largely neglected language context, i.e. the most human-
sensitive sub-processes of organizational knowledge creation (Comprehension and
Communication), may be achieved through deeper utilization of the Web’s hypertext
functionality. Moreover, this approach may help organizations to improve both their core
business activities and improvement capabilities as well as search for competitive advantage
from business alliances.

Keywords: organizational knowledge, organizational learning, intra-organizational knowledge,

communities of practice, knowledge management, knowledge networks
Suggested track: Knowledge creation and innovation.

1 Introduction

Today’s organizations are continuously faced with the challenge of complexity and
urgency in their core business activities. The business environment is very hectic and
organizations need to be able to cope with many different kinds of business,
technological, social, and human requirements. There is an inherent need for
organizations to improve their core business activities. In order to be able to solve

1
complex problems the individual and group problem-solving processes involved in
computer-mediated communication systems need to be integrated (Turoff, 1991). On
the basis of their studies of Japanese companies, Nonaka and Takeuchi (1995)
proposed their widely known model of the knowledge-creating company. They argued
that much of the innovation created and accumulated in a firm is actually based on tacit
knowledge, i.e. arising out of experience, and cannot be easily communicated by
workers within excessively formalized management procedures.

In the pursuit of organizational performance, an organization’s capability to improve its

core business activities becomes critically important. Engelbart (1992) proposes a
conceptual framework for enhancing organization’s capability, known as the
Concurrent Development, Integration and Application of Knowledge (CODIAK). This
framework emphasizes the harnessing of technology to achieve high-performance
capability. In this kind of an approach it becomes essential, even if admittedly
challenging, to improve the organization’s improvement capability. Yet, this may
become the high-payoff opportunity for organizations.

Organizations also need increased sharing of knowledge across organizational

boundaries within their business networks. This enables the sources of innovation
quickly to multiply as organizations are able to establish procedures to communicate
experience in the organization and its business network. As an example, the
electronics industry in the Nordic countries has been one of the forerunners in
developing intensive partnerships and alliances in its value networks.

This paper aims at deeper understanding of organizational knowledge creation and

management. It studies ways in which new knowledge management theory might help
the performance of knowledge-intensive organizations through improving their
capabilities to improve their own core business activities. Moreover, there are
possibilities for highly knowledge-intensive organizations, such as software companies,
for multiplying sources of innovation through business alliances, which requests new
inter-organizational knowledge management practices.

Section 2 proposes a conceptual model for organizational knowledge creation and

management based on the distinction of individual and organizational knowledge and
explicit and tacit knowledge suggested by Nonaka and Takeuchi (1995). Section 3
aims at providing an idea about the feasibility and applicability of the proposed model
for managing knowledge both within and across organizational boundaries, by giving
emphasis for the improvement of organization’s improvement capabilities as well as the
crossing of organizational boundaries through business alliances or networked

2
improvement communities. Finally, section 4 summarizes and discusses the
contribution of this paper.

2 Understanding organizational knowledge creation

This paper proposes a new conceptual model for understanding organizational

knowledge creation. This is known as the 7C model, which suggests that the following
seven Cs play a critical role in the creation of organizational knowledge: Connection,
Concurrency, Comprehension, Communication, Conceptualization, Collaboration, and
Collective intelligence.

The 7C model may be described through different abstraction levels. See Fig. 1.
Lyytinen (1987) defines the technology, language and organizational contexts as
follows: In the technology context an information system confines object systems to a
view of how efficiently data are processed and stored in a given material carrier, in the
language context it provides a means and environment for comprehension and
linguistic communication, and in the organizational context it supports, enables and
takes part in an organizational process involving human interactions and collaboration,
e.g. decision-making.

Collaboration
Organizational & Conceptualization
context supports Collective

Language intelligence
Communication
context
& Comprehension
enables
Technology
context
Concurrency
& Connection

Fig. 1. Organizational knowledge creation at different contexts.

The benefit of the 7C model is realized in the technology context through the fluent
connection that the Internet technology provides with information for several concurrent
users (the 1st and 2nd Cs).

In the language context, the hypertext functionality’s ability to promote options and
allow freedom of choice with contextual support provides users with a rich environment
for comprehending (the 3rd C) and communicating (the 4th C) the information they find
(Thüring et al., 1995). Information readers can access the information in the most
suitable order for their purposes instead of the pre-defined, sequential order implied

3
within many other electronic or printed documents. Likewise, information authors who
provide multiple relationships around a piece of information can themselves gain a
better insight through the enriched context.

In the organizational context, knowledge artifacts are conceptualized (the 5th C) as

knowledge artifacts, which serve as a collaboration vehicle through interaction between
information producers and consumers, within a team of co-workers or among other
stakeholders (the 6th C). In general, support for understanding and communication
helps in the individual learning of new things, and organizational learning mainly takes
place through individuals and their communication and collaboration efforts. All of these
six preceding Cs contribute to the growth of “togetherness” or collective intelligence
(the 7th C). This might also be called the organizational memory.

Language context

Individual Organization

Communi-
cation
Tacit
knowledge

Compre- Conceptua-
hension Collective lization
intelligence

Explicit
knowledge
Collabo-
ration

Organizational context

Fig. 2. Organizational knowledge creation.

The creation of organizational knowledge is not a linear process, but rather a multi-
cycle spiral process. See Fig. 2. The framework assumes that Concurrent Connection
of all stakeholders with the joint information space is provided in a technologically
sound manner, e.g. through the Web, Internet, wireless, mobile and other technologies.
The 7C model follows Nonaka and Takeuchi (1995) in that the integration of individual
and organizational orientations is emphasized and that knowledge is assumed to
create through interaction between tacit and explicit knowledge (Tervonen et al., 1997),
and Engelbart (1992) in the outcomes of the Comprehension, Communication and
Conceptualization sub-processes.

The four key phases or sub-processes in the knowledge creation are:

4
 Comprehension – a process of surveying and interacting with the external
environment, integrating the resulting intelligence with other project knowledge
on an ongoing basis in order to identify problems, needs and opportunities;
embodying explicit knowledge in tacit knowledge, “learning by doing”, re-
experiencing

Communication – a process of sharing experiences between people and

thereby creating tacit knowledge in the form of mental models and technical
skills; produces dialog records, which emphasize the needs and opportunities,
integrating the dialog along with resulting decisions with other project
knowledge on an ongoing basis

Conceptualization – a collective reflection process articulating tacit knowledge

to form explicit concepts and systemizing the concepts into a knowledge
system; produces knowledge products of a project team, which form a more or
less comprehensive picture of the project in hand and are iteratively and
collaboratively developed; may include proposals, specifications, descriptions,
work breakdown structures, milestones, timelines, staffing, facility requirements,
budgets, etc.; rarely a one-shot effort

Collaboration – a true team interaction process of using the produced

conceptualizations within teamwork and other organizational processes

Each of the sub-processes may also be regarded as the building of an artifact and
reasoning why it has been built the way it has. Going through these phases several
times in a seamless spiral-like way step by step leads into the growth of Collective
intelligence. Support for capturing deep individual thinking and recording the dialog
between team members may help create truly innovative knowledge products.1

While the Comprehension and Communication in the 7C model are similar with the
internalization and socialization concepts in Nonaka and Takeuchi (1995), the
Conceptualization and Collaboration in the 7C model do not have explicit
correspondences within their framework. Conceptualization in the 7C model includes
features of both externalization and combination, while Collaboration, i.e. the use of the
conceptualizations, has not been explicitly addressed in their framework.

1
The learning involved in the comprehension and communication processes is closely related
to the attitudes of the participants, i.e. whether they understand their weak points in the sense of
learning styles, for example.

5
In previous research on Web services and knowledge management, the technology
(Connection, Concurrency) and organizational (Conceptualization, Collaboration)
contexts have received relatively large attention, while the language (Comprehension,
Communication) context has received less attention. Admittedly, it may be easier to
provide support for technological and organizational contexts, but similar attention
should be given to supporting the most human-sensitive sub-processes of
organizational knowledge creation, namely Comprehension and Communication.

One of the most central features of Web information systems is its inherent hypertext
functionality. Hypertext functionality supports the relating of pieces of information to
each other associatively, its key features comprising enhanced linking, annotation,
orientation and navigation capabilities as a seamless part of the information system
(Oinas-Kukkonen, 1995). Quite interestingly, many of these features have not yet been
utilized to the extent they could in supporting the organizational knowledge creation
and management (Bieber et al., 1997).

For example, capturing annotations and building typed hyperlinks may support both
Comprehension and Communication. When users pay special attention for the true
semantic of a link, i.e. what really is the connection between the two pieces of
information that the link connects, they are forced to go deeper into the content and its
meaning for other users. A link may contain information about its type or other
attributes. Naturally, when navigating inside the joint information space the end-users
benefit from such definitions. In a similar manner, annotations may serve as an
important documentation and reasoning tool for the users and as a communication
vehicle between the users. Many other hypertext functionalities (Bieber et al., 1999)
may also be utilized to provide better support for organizational knowledge creation.
These may also facilitate product innovation.

3 Crossing organizational boundaries through networked improvement

communities

Douglas Engelbart proposes a strategic conceptual framework for enhancing

organization’s capability, known as the Concurrent Development, Integration and
Application of Knowledge or CODIAK (Engelbart, 1992; Engelbart, 2000).
Organization’s core activities are described as A, B and C-work. See Fig. 3. The goals
differ at each level. A-work denotes the core business activities, B-work tackles
improvement of the core business activities, and C-work addresses improvement of the
improvement capabilities. As such, the full approach in itself may be regarded as a

6
core business competence in the organization’s capability infrastructure and as an
ideal candidate for early improvement to achieve extra bootstrapping leverage.

C-work
Improvement of the
improvement capabilities

B-work
Improvement of the core
business activity

A-work
Core business activity

Fig. 3. The goals of A, B, and C-work (adapted from Engelbart 1992).

In Engelbart’s framework, much of the knowledge would be shared and distributed

through “knowledge workshops” or information spaces belonging to knowledge workers
and their groups. Special “community knowledge workshops” focus especially on C-
activities, and the use of computerized information systems enables a two-way transfer
of knowledge among the C, B, and A-communities. Each organizational unit needs its’
own working processes and knowledge domains, but at the same time they will all have
some knowledge elements and dynamics that are mutual. Ideally, the enterprise sub-
domain processes will benefit from being interoperable with other sub-domains.
Similarly, corporate-wide task forces and subcontractors, suppliers, alliance partners,
customers and others will become involved to the extent that knowledge-domain
interoperability is needed.

To accomplish this a very flexible, wide-area sharing of pieces of the knowledge base
is needed, such as the Open Hyperdocument System, which would provide for a range
of user interface options, varying in areas such as complexity, potential competence
level, difficulty of learning, types of interface devices and modalities (Engelbart, 2000).
An example of this is the ability to create and use information through Web-connected
mobile phones or palmtop computers independent of the time, place and context of
use.

Interestingly, according to Engelbart (2000) many of the practices and tools will be
regarded as natural and easy to use after they have become well established, even
though they may be initially viewed as unnatural and hard to learn. Engelbart (1992)

7
notes: “The graphical user interfaces have been heavily affected by the “easy to use”
dictum. This has served well to facilitate wide acceptance, but it is quite unlikely that
the road to truly high performance can effectively be traveled by people who are struck
with vehicular controls designed to be easy to use by a past generation.”

When the C-activity improvement takes place across organizational boundaries,

networked improvement communities may emerge as a new but natural way of forming
business alliances. Yet, the way to share business-related information with others is
naturally always a matter of serious concern. One immediate thought is often that it
would be impossible to share anything with competitors, because so many things are
proprietary. Another line of thought concerns what useful things there would be in
another business domain for a company to share. The A activities may be very
competitive, but B activity tends to be less so, many of the things being more basic and
generic, and the C activity even seems to focus on basic and generic matters. So even
competitors could consider cooperating at the B and C levels. On the other hand, B
activities differ less between businesses than A activities, and C activities may be
surprisingly alike.

In some cases collaboration may very clearly be of value in a business sense, e.g. in
the case of the procurement of appropriate systems and services. It might also be more
expensive for each organization to operate its own advanced pilots and develop
products privately than to do it within a networked improvement community. Moreover,
the C-activity leaders may find it valuable to compare experiences and basic
approaches with their counterparts in other organizations. As an example, they may be
considering how much it would help the B activity to document the way in which things
are done at present. Thus partner organizations may acquire value from C-community
access and dialog, and they may consider multi-party alliances. According to Engelbart
(1992), this improvement of improvement capabilities, and in particular through
networked improvement communities, is the high-payoff opportunity to create high-
performance organizations.

To a great extent, these networked improvement communities seem to operate

similarly to business alliances which denote high value integration and a high level of
self-organizing (Tapscott et al., 2000).2 High value integration means that collaborators

2
Five types of strategic business networks are discernible in a digital economy: supplier
networks, producer networks, customer networks, standard coalitions, and technology
cooperation networks. The strategic networks can be divided on two dimensions: self-

8
integrate value contributions from the members of the network in producing their
offerings. In self-organizing business networks the market and its dynamics define the
value and price level of the offerings. The main theme of alliance b-webs is creativity.
Value proposition takes place through creative collaboration with the aid of a goal
shared by a community of contributors, customers participate as co-contributors, the
focus of knowledge is on community and creativity as well as standards and roles, and
the main organizational process is innovation.

4 Conclusions

This paper introduced the 7C model for organizational knowledge creation and
management. The benefit of the 7C approach can be achieved in the technology
context through the concurrent connection of many participants with the information, in
the language context through support for human comprehension and communication,
and at the organizational level through conceptualizing the knowledge artifacts and
supporting collaboration. Yet, it is the seamless cyclic nature of the whole process,
which enables the true growth of collective intelligence.

This paper also integrated the model with Engelbart’s framework for concurrent
development, integration and application of knowledge within networked improvement
communities, demonstrating the applicability of the proposed 7C model both inside
organizations as well as at crossing organizational boundaries. A competitive
organization may implement support for A, B, and C-activities in its business processes
before their competitors. The improving of improvement capabilities is never-ending in
turbulent, competitive business environments with fast-evolving technology and rapid
changes in personnel as new employees march in and others leave. This also enables
the establishment of new kinds of business alliances through networked improvement
communities. These business alliances denote high value integration and a high level
of self-organizing, setting emphasis on creative collaboration, customer participation,
community knowledge, and organizational innovation.

Several important issues arise for further research. Since Web-based solutions are so
dominant today, the possibilities of standard and more advanced Web technologies for

organizing/hierarchical economic control, and low/high value integration. These two dimensions
define the fundamental characteristics of five different broad types of b-web: agora,
aggregation, value chain, alliance, and distributive networks (Tapscott et al., 2000).

9
supporting the seven Cs should be studied. It will also be important to study how the
key software functionalities and the different sub-processes of organizational
knowledge creation may be mapped with each other. Research should also be carried
out off the Web, if only because the solution space may be limited by the Web’s
dominance. One healthy off-the-Web research direction would be to study mobile and
pervasive technologies in relation to organizational knowledge creation processes. It
will also be essential to know how to motivate knowledge workers not only to carry out
their daily tasks but also to address the improvement capabilities of core business
activities and the possibilities for improving these improvement capabilities. Finally, the
described 7C model should be further elaborated and experimented with.

Acknowledgements

We wish to thank Douglas C. Engelbart for dialogue and comments at the early phases
of this research. This paper was mainly written while the first author was a Visiting
Scholar at Stanford University’s Center for the Study of Language and Information. We
wish to thank the National Technology Agency of Finland, Nokia Foundation, the
University of Oulu, Bootstrap Alliance and the CSLI at Stanford University for making
this visit possible.

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