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Center for Effective Organizations

Working Paper

Designing Organizations to Lead with Knowledge

S. Mohrman, July, 2005

The nature of the knowledge firm and of knowledge processes are described, and a framework for understanding how the design of the organization impacts knowledge in practice is presented. It is argued that competing on knowledge demands work processes and organization design that fit that strategy. Attracting and retaining critical talent is not sufficient, since organizations can be significantly unequal in their ability to effectively utilize and enhance the knowledge of their talented workforce. These capabilities depend on how the workforce is deployed, and whether the organization and the work are designed to effectively derive value from, share, and combine knowledge, and to motivate employees to participate effectively in the knowledge system. Special knowledge management programs that are not related to the work processes of the organization will have limited impact and limited longevity. The effectiveness of the knowledge system depends on the creation of an organizational context that fosters the importing of knowledge, the generation of new knowledge, and the application and leverage of knowledge to deliver value to the customers. In today's knowledge economy, it is imperative for managers and organizational development practitioners to incorporate knowledge capabilities in organizational diagnoses and interventions aimed at increasing organizational effectiveness, and to support organizational transformations that require the development of new and enhanced knowledge-based capabilities.

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