One Company – Two: Outcomes Knowledge Integration vs. Corporate Disintegration in the Absence of Knowledge Management

Abstract

Purpose – To learn to avoid pitfalls there is need to accept and understand failures. This anonymous case study aims to report a major organisational failure due to the absence of effective knowledge management, where both the reasons for, and organisational consequences of, the failure are fairly clear.

Design/Methodology/Approach – Within a theoretical framework of organisational autopoiesis, the case study compares knowledge management styles from two eras in the history of one engineering project management company: as it grew from an acquired site with a single project to a multi-divisional leader in its regional market, and then as it failed in its original line of business to the point where it divested most of its assets.

Findings – In the first era, the executive and line managers were permissive, allowing project teams to work out local solutions for business problems as they arose producing successful and profitable solutions. The decline began and accelerated when management strengthened hierarchical command and control that stifled knowledge sharing and solution development at the work face and exceeded line managers’ limits of rationality.

Research limitations/implications – This study has the limitations of any historical study of a single case, exacerbated by a need to maintain the anonymity of the surviving company.

Originality/value – Few studies so clearly highlight the critical importance of personal knowledge and its sharing in knowledge intensive organisations for maintaining successful operations. Success may have many parents, but in this case the internal comparisons identify specific factors that caused a successful organisation to disintegrate.

Keywords: Knowledge Transfer, Project Management, Knowledge Management, Business Failures, Case Study

JEL Classification: D23, D70, L20, L69, M12, M51, M54, O33