Knowledge-Intensive Firms

Conceptual Overview

The ideas of knowledge work, the knowledge worker, and knowledge-intensive firms are quite recent. Although one can argue that knowledge work has always been around, as has the knowledge worker, the categories have emerged as analytical tools in organization analysis the past 10 to 15 years. In particular, the recent explosive interest in knowledge management has fueled the interest in the rather awkward combination of knowledge and organization.

The concept of the knowledge-intensive firm is not unproblematic. The idea of knowledge-intensiveness is vague and tends to encourage interpretations of knowledge that erase the distinction between knowledge and other forms of human capacity, in particular if one considers so-called embodied and encultured versions of it. It is difficult to substantiate knowledgeintensive companies and knowledge workers as distinct, uniform categories. Nevertheless, differences exist between professional service and high-tech companies on one hand and more routinized service and industry companies on the other (e.g., in terms of broadly socially shared ideas about the significance of a long theoretical education and intellectual capacities for the work).

Typically, the literature suggests that the concept applies to organizational settings that share the following common denominators:

• 1.
  The personnel are highly qualified and have academic background or other comparable preemployment training and education.
• 2.
  Products and services are complex and/or nonstandard.
• 3.
  Product, market, and personnel development are significant activities within the organization.

The literature on knowledge-intensive firms generally pictures knowledge-intensive firms as a departure from the bureaucratic form, to the extent that bureaucracy sometimes operates as the antithesis of knowledge-intensive firms. The difficulties of employing valid and reliable rules and performance measures lead many authors to emphasize cultural-ideological or clan control instead of bureaucratic or marketlike (output) forms of internal control.

One central dimension of knowledge-intensive firms is ambiguity—persistent uncertainty (not easily reduced through more information), confusion, and contradiction. Ambiguity is present in several ways for knowledge-intensive firms. The concept of knowledge is, for example, highly ambiguous, thus making both the product in knowledge-intensive firms (knowledge) and its production processes (knowledge development and maintenance) ambiguous in character. The very idea of sophisticated knowledge—scarce expertise in a socially legitimated area—means that complexity and uncertainty prevail. This concerns the very nature of knowledge, calling for theoretical thinking and the exercise of judgment rather than the providing of objective facts. Because the results of knowledge work frequently are difficult to assess, this calls for subjective judgment—where variations among experts are not infrequent.

Critical Commentary and Future Directions

Knowledge-intensive firms are typically engaged in complex and difficult tasks, which cannot be perfectly converted into standardized work procedures and regulations. Thus, knowledge-intensive firms are forced to attract and retain qualified people who can adapt their repertoires to meet the demands of the task. As a consequence, to manage them strictly through a focus on behavior is difficult due to the nature of the work, as self-organization is necessary. Applying Blackler's terminology on knowledge forms means that the most important organizational knowledge is dislocated from the embedded form, typically present in the assembly line or the machine-bureaucracy, to the embrained form. In contrast to the bureaucratic form, [Page 757]mission-critical organizational knowledge is thus not “stored” or manifested in procedures and processes in knowledge-intensive firms, but rather in qualified individuals.

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