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Book review:

The Knowing Organization


Chun Wei Choo
Adriaan Mosterman
Floor Scheffer
Rudy van Zuilekom
10 december 2003

Presentation Goal: Illustration of


Choos message
- What is the message of Choo?

- What about the knowing Corus organization?

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The Knowing Organization


Signals from the environment

Beliefs

Enactments

Shared meanings, and purpose

Interpretations

Sense making
Knowledge gap

Perceived problems, opportunities


Rule Gap

Cultural

Tacit

Preference

Explicit

Routines

Knowledge creating
External
Knowledge
Book Review EMIM Assignment 2003/2004

Rules

Decision making
New Capabilities
and innovations

Goal-directed
Adaptive behaviour
Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The Sensemaking process

To believe is to see

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The Knowing Organization


Signals from the environment

Beliefs

Enactments

Shared meanings, and purpose

Interpretations

Sense making
Knowledge gap

Perceived problems, opportunities


Rule Gap

Cultural

Tacit

Preference

Explicit

Routines

Knowledge creating
External
Knowledge
Book Review EMIM Assignment 2003/2004

Rules

Decision making
New Capabilities
and innovations

Goal-directed
Adaptive behaviour
Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The Protact case

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

Polymer Coated Steel


High degree of protection (internal & external)
and very little influence on the taste of the
product

Potential for a low volume, low capital cost


canmaking process avoiding conventional
lacquering and washing steps
Potential for down gauging by radical change
of dome design
Major environmental benefits associated with
a dry process with virtually no VOC
emissions

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

End products

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The Protact process


Protact

Book Review EMIM Assignment 2003/2004

Ferrolite

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

Chronological Highlights
Koninklijke Hoogovens
1988

PNM starts research of polymer coating steel

1990

TSK Ltd. (Jpn) succesfully introduces first polymer coated can in the world

1992

Research programme started on chromium plating steel

1994

Experiments extrusion of polymers on chromium plated steel

1996

Upscaled R&D pilot line

1998

Revamp an existing (aluminium) production installation in Duffel

British Steel/Corus
1992

Investment in production facilities polymer coated steel

1994

New product Ferrolite is introduced

1999

Merger of British Steel and Koninklijke Hoogovens

2000

Started market refocus of polymer coated steels (Protact & Ferrolite)

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The Protact Case: Findings


Signals from environment:
market (Japan, USA, EU)
environmental legislation
public image food safety
Shared meanings & purpose:
added value in downstream
integration
superior packaging solutions

Sense making
Knowledge Gap:
extrusion process
polymer technology
food safety

Rule gap:
Capex procedure
Tons paradigm

Knowledge creating
External Knowledge:
new employees
British Steel
Eastman
TNO
Book Review EMIM Assignment 2003/2004

Perceived problems & oppurtunities:


technology push vs. Market pull
Innovators Dilemma

Decision making
New capabilities and
innovations:
direct extrusion process
more complex products
organisational structure

Goal-directed adaptive
behaviour:
make or buy technology
investment in production line
market refocus
Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

Presentation Goal: Illustration of


Choos message
- What is the message of Choo?

- What about the knowing Corus organization?

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The message
1. Using broad scope of theories to substantiate
his 3-step model;

2. Centralizing idea of reducing ambiguity &


uncertainty;

3. Using the sensemaking philosophy (Weick 98);

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

Brainstorm session
Welke dubbelzinnigheden en onzekerheden kun je
uit de case opmaken?
Maximaal 5 punten
Noteer n punt per post-it
Daarna gezamenlijk opplakken en clusteren

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

Issues in Protact-case
1. Technology push (vs. market pull)

2. Tons Paradigm
3. Shrinking Market Paradigm
4. Innovators Dilemma
5. Cultural and organisational barriers to knowledge
sharing

6. Merger caused major disruption in organisational


structures and working procedures
Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

Dubbelzinnigheid en
onzekerheid in de Protact-case
Marktvraag

Tonnen paradigma
Milieu-aspecten

Publiek imago
Cultuurverschillen

Innovators Dilemma

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

Backup slides

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The sensemaking mode


PNM
(internal)
world

Philips

PNM started looking for new


combinations of steel with other materials
(like plastics) in the 1980s
Polymer coated steels were developed
in Japan, Germany, France and Great
Britain in the mid 1980s

Belief driven

Outside expertise was brought into PNM


in the form of a plastics technologist from
Philips Home Appliances (1986)
Both BS and KH are strongly production
oriented with a strong account
management-mentality as opposed to a

Tons Paradigm
sales-mentality)

Book Review EMIM Assignment 2003/2004

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The Knowledge creation mode


R&D (internal)

Eastman
BS

TNO

Development of Protact direct extrusion


process technology within R&D
Development of polymer coating materials
technology in partnership with Eastman
(polymer supplier)
Development of market knowledge within KH;
transfer of market knowledge from BS to CPP
Development of food safety knowledge in
partnership with TNO
Shift from relatively simple, low deformation
products to more complex shapes

Book Review EMIM Assignment 2003/2004

Double Loop
learning

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom

The decision making mode


Major decisions:
Make or buy direct extrusion technology
(1995)
Investment in production facilities Duffel
(1997/98)

Change from Boundedly


Rational (in KH) to
Progress Mode (or even
Anarchy) Decision Making
after the merger (in CPP)

Market refocus (2000)


Technology driven vs. market driven decision
making
BS/KH
(internal)

BS/KH
(internal)

The well-structured and detailed capex


investment procedure in KH was replaced with a
less detailed procedure after the merger;
responsibilities between corporate and BU
needed redefining
Cultural differences in governance and decision
making procedures between BS and KH

Innovators Dilemma
(see Christensen)

Put in place proper organisational structure to


support decision making on new product lines
Environmental regulations from the authorities

Government

Public image of safety of materials in contact


with food or drink

Society

Supply growing market for Protact

Book Review EMIM Assignment 2003/2004

Shrinking Market
Paradigm

Adriaan Mosterman, Floor Scheffer, Rudy van Zuilekom