4.
INTERPRETATION OF THE CASE
In this
chapter I interpret the case by asking these questions:
• 4.1. What was the role of
knowledge in processing information?
• 4.2. How did the dichotomy between Professional and
Organisational knowledge traditions develop?
• 4.3. What was the role of knowledge transfer in
organising?
• 4.4. What was the role of knowledge in the relation
with markets?
• 4.5. What was the role of knowledge in strategy?
4.1.
The Infoduction Process.
What was
the role of knowledge in processing information? I regard the core process to
be the journalist writing an article.
The world
of business can be regarded as a chaos of physical objects, people, empirical
data, facts, other people´s knowledge, theories, etc. The task of the
journalist is to first translate this chaos into something that he or she
understands himself. This tacit understanding is then to be articulated via a
text to a number of readers.
The work
usually starts with reading other journalists´ articles. There is thus an
ability to read texts filled with "economic jargon". This
.i.intellective ;.i.skill ;involves one part that comes from vocational
training, (perhaps an academic degree). To be a fast reader (glancing through a
text at high speed and still grasping the content) and to know how to read
foreign languages are intellective skills that probably are partly personality
traits but which can be improved a lot by practise. To be receptive, fast
absorbing relevant facts are very valuable skills for a journalist.
Much of
the journalistic .i.know-how; is to interpret the context in which other
texts have been written and to interpret the answers from the interviewees. The
"suspicious mind" is a know-how almost entirely acquired by
experience. When was the text written? Why, for what purpose? By whom (what
vested interest)? Also the ability to write texts is similar. We learn the
rules of writing at the age of six and spend a lifetime to master them.
There is
also a social agentive know-how involved. The best journalists develop
sensitivity and empathy as tools for understanding as well as creating an
atmosphere of trust. They listen much more than they talk and the senior
business journalists therefore often become trusted confidants (!) to top
managers who are very lonesome in their roles and in need of neutral advice.
The ability to entertain a network of good and friendly sources in the right
places is important and the personal network is guarded as the most valuable
asset of any journalist.
The
journalist tacitly knows many of the elements involved in the article. This is
focused during the process. Many of the facts about the companies involved,
their track record, perhaps their latest forecasts, who their managers are etc.
are probably already tacitly known. This knowledge is first used as a
subsidiary tacit knowledge in the focusing process preparing for gathering more
information. The tacit knowing guides the search for new information and the
questions for gaining new knowledge.
The
outcome of the information gathering is an abundance of information. The
information is reduced and structured into as short texts as possible
using the journalistic techniques. The techniques are intended to help the
writer to penetrate noise and to reach the reader´s eye through information
chaos. One of the tools for this is "the .i.peg;" or the angle.
Metaphors, which might capture a lot of meaning in only one word, are also used
as tools. People skilled at producing "sound bites" or catchy
metaphors therefore receive more attention, because they help the journalist in
making the text more interesting both to write and to read.
The
article must be written so there is a manual .i.agentive ;skill involved:
typing, i.e. how to move the fingers on the key board as fast as possible.
Practise is the only way to improve the skill. The typing skill becomes tacit
knowledge "sitting in the fingers". The tacit typing skill improves
reflection. Many journalists "think with their fingers".
There is
an element of .i.creation ;- and thereby inevitably emotion - involved. The
ability to bend the rules of the language is an aesthetic art; a combination of
the technique of the hand, the rules of the grammatics and the disobedience of
the mind. The outcome is not given on beforehand and this gives the journalist
something like a "creative kick", perhaps comparable to an artist´s
or a scientist´s. The most .i.competent ;journalists are even able to
articulate their tacit knowledge in such a way that the readers are emotionally
moved.
The structured
text in the article however contains less knowledge than the writer knows, less
information than the writer acquired and less information than the real world.
The words of the final text do not contain the full tacit knowing of the
writer, only an inaccurate reduced structured version (articulation) of
it. (C.f. the discussion about information in Chapter 2.1.3.1).
I call
this process Infoduction. The metaphor has an intentional double meaning
derived from Information plus both reduction and production.
The production of articles in magazines or texts in other media can thus be
seen as an infoduction process.
.i.Infoduction
:definition of;= Information chaos is being reduced to structure by an
individual´s process-of-knowing.
The notion
of infoduction therefore gives a plausible interpretation of the common
conflict over the difference between the journalist´s version and the actor´s
version of the same event. The two versions can never be the same.
This is because
the reader reads the words, but since he/she can not read the writer´s mind,
the reader´s tacit knowledge will blend with the writer´s .i.articulated
knowledge; and form the reader´s own individual tacit knowing. The reader´s new
.i.process-of-knowing; can never be the same as the writer´s, not even if they
were present during the same event. How close their knowing will be, depends on
whether they share the same tradition, language, education, etc. This
difference has nothing to do with the technical communication, the noise level
etc. - the difference occurs because of the limitations of our language to
convey reality.
Texts are
thus not very efficient vehicles for transferring knowledge. It also follows
that facts, news etc., conveyed in a text are not objective since they have
been mixed through two tacit processes, the writer´s and the reader´s. The
reader must reconstruct the meaning in a tacit process and since the writer and
the reader are not in direct contact much of the writer´s intended meaning gets
lost.
Most of
the work that .i.journalists ;do is connected with acting with their minds
rather than acting with their bodies. It is intellective doing rather than
agentive doing. Of course the Affärsvärlden journalists and analysts talk a lot
with other people. But for most of the time their body presence is not crucial
even when talking or listening.
Another
ability is to ask questions that the interviewee dislikes or to be persistent
against people who try to conceal facts. This agentive "hard-headedness"
is partly acquired through training into the journalistic tradition, partly a
personality trait. The journalist also develops the natural human curiosity
into a (fine?) art, thriving on the unusual, the extreme, the conflicts and the
accidents.
To be a
financial journalist is to try to master two professions: a
financial/business analyst profession and the .i.journalistic profession; with
overlapping but different traditions and values.
The
financial journalist is therefore not fully socialised into any of the two
traditions. In addition, the interaction between the top managers of the
companies and the financial journalists are often very close. The financial
journalists become very dependent on some of them. Friendship has corrupted
many journalists. For the financial journalists there is also money corruption
involved. A piece of information received a little earlier than the stock
market can be worth gold. The journalistic ethics should in principle hinder
abuse but there are always weaklings. The financial analyst is even further
away from the journalistic ethics and may thus more easily fall victim to the
temptation of insider trading.
4.1.1. Productivity
in Infoduction.
A simple
measure of productivity in .i.infoduction:productivity; is the number of
written pages per person (See Chapter 3.7).
Why was
Affärsvärlden´s journalists productivity twice that of Veckans Affärer´s
through out the whole period of 15 years?
One factor
was the lean format of the magazine (see chapter 4.5.1) which, compared to
.i.Veckans Affärer;, used less input of human effort into design, pictures etc.
I estimate that about one third of the difference in productivity was due to
this difference (measured as the difference in numbers of people involved in
such work).
What role
could knowledge have? One obvious factor was the high academic level of the
Affärsvärlden journalists compared to those of Veckans Affärer. (See further
Chapter 4.4.2). One of the aims of academic education is to improve the
individual´s ability of infoduction. The academically trained
journalist/analyst in Affärsvärlden was able to ask more penetrating questions,
to move faster towards the critical issues and to make more work at home
through reading and analysing the figures, than the less educated journalist in
Veckans Affärer who had to rely on finding the right persons to ask.
Given the
academic level of the staff, Affärsvärlden´s focus on analysis rather than news
therefore paid off. An third factor behind the difference in productivity was
therefore Affärsvärlden´s focus on analysis, which the academically trained
journalists were able to do much easier than Veckans Affärer´s.
It is more
difficult to estimate the effect of such knowledge on productivity, but I
assume that about half the difference was due to the higher education level of
the Affärsvärlden journalists/analysts.
During the
Founder Phase this advantage in productivity was further enhanced by the long
hours put in by the Affärsvärlden staff.
4.1.2. Technology
Impact on Infoduction Process.
The rapid
development in computer .i.infoduction:technology during the 1980s impact;had
profound effects on the infoduction process and affected both the journalistic
and the analytical process-of-knowing.
4.1.2.1. Impact on
Journalistic Process-of-Knowing.
The
.i.journalistic process-of-knowing; was influenced by the computer in two major
ways.
• 1. The computer replaced the
typewriter as the individual tool. Many of the journalists found to their surprise
that the word processing program liberated their .i.creativity;. They were no
longer restricted by the sheet of white paper in the typewriter and the need to
produce a clean manuscript. Since structure could be introduced afterwards,
writing turned into an interactive reflective process within an seemingly
unlimited space.
• 2. Page make-up is the process by which full
pages are designed from material like texts, advertisements, pictures, lines,
logotypes etc. The first ".i.Gutenberg;" generation of this
technology was based on physical material like wood, later metal and physical
tools for handling the material.
Affärsvärlden changed into the second generation paper
based phototype setting in 1978 which was late compared to the larger
competitors. The most important tools were physical, wax and knife. The process
was speeded up and there were no more trips to the printing plant Katrineholm.
But the articles were still typed twice.
The third generation arrived in the mid 1980s. The
page make-up was now entirely made by the computer. The text could be entered
straight into the computer and transferred into the typesetter. The tools were
now entirely abstract and had to be mastered intellectively, not agentively.
Printing
had never been considered a strategic issue at Affärsvärlden until the third
generation. A "strategic line" between the editorial staff and the
printer had been drawn already in the early 1970s, partly probably because the
board of the Foundation did not want to bring the conflicts with the graphic
profession into the house, partly because printing was an entirely different
knowledge and very far from journalism.
Other
magazines and the big newspapers switched over into the new page make-up
technology as soon as it was available after some fighting with the graphic
trade unions. But despite the opportunities offered by the new technique
Affärsvärlden kept the line. Management knew that they did not master the
graphic .i.process-of-knowing; and they did not want to recruit it in order not
to bring in a new professional knowledge with its potential .i.dichotomy;.
It was not
until 1990, after the merger with Ingenjörsförlaget that Affärsvärlden acquired
the fourth generation of the page make-up program, now in the personal computer
and with the "mouse" as the tool.
The transition
was not felt as a major step. The main reason why the decision was not
difficult and why it went so well was probably that the latest technology had
become very well suited for the intellective capabilities of the Affärsvärlden
staff. The technological development had turned the demand for .i.agentive
knowledge; transferred into a demand for .i.intellective knowledge;. Almost all
of the agentive knowledge of the graphic profession was now handled by the
computer.
This
transfer in kind of the demand for knowing made it possible for Affärsvärlden
to move the editorial room closer to the printing shop without moving people
physically. (Affärsvärlden still had the same printer in Katrineholm). The
Affärsvärlden journalists were able to increase their graphic knowledge with
the aid of the computer and they were able to do things that they were unable
to before with the texts. The lay-out of the magazine was also improved and
speeded up since the graphic work was now made in conjunction and integrated with
the page make up.
It is also
possible to distinguish an age difference in how the new computer tools were
accepted. That the older seemed to be more reluctant than the younger was no
surprise. But I think today that the reason was not simply that the younger
generation were more "computer literate".
The new
word processors, took time to master and some of the experienced in
Affärsvärlden journalists avoided them because they sensed a reduced
efficiency. They already knew how to type fast and they knew how to write an
article "in their mind". They had developed a number of personal
rules and patterns of action that worked very efficiently for them. To change
this tacit knowledge involved a great effort, which they naturally avoided. The
young reacted differently to the computerisation, because they had no .i.tacit
knowledge; that hindered them.
For the
same reason the new databases were also used very little by the older
journalists because the efforts of learning the commands were not considered
worth the time compared to phoning the well established network.
4.1.2.2. Impact on Analytical
Process-of-Knowing.
The
.i.analytical process-of-knowing; was partly computerised already in 1978 with
the assistance of Findata. The computerisation process can be illustrated by
the .i.Investment Indicator;.
The
Investment Indicator began with one journalist subordinating to the rules of a
competent "master" analyst in the mid 1970s. The apprentice
transformed the rules into an articulate system of tables, the Investment
Indicator. The inventors of the Investment Indicator had the legitimacy of
.i.competence ;to change the tables at will (and often did in the beginning to
"fit reality") but the analysts after him made more and more strict
categorisations. When the companies did not publish figures in suitable format,
the analyst had to call them and ask for the numbers or make own assumptions,
"fill the empty cells".
When they
computerised the rules of calculating (in a mini-computer 1978) it reduced the
time they had to spend on calculations but they also lost the power to change
the rules without calling in additional professional assistance. They found
that the computer and the computer specialists became involved in their
analytical process-of-knowing. The table had begun to rule the analyst rather
than the other way round.
The
PC-technology (from 1984 onwards) gave the power over the
.i.process-of-knowing; back to the analyst and also made it possible to open up
the analytical models for individual experiments. The spread sheet technology
enabled Affärsvärlden analysts to cover much larger infoduction volumes. This
in its turn gave rise to new applications of the analytical models and new
business opportunities (analytical supplements), which generated new revenues.
However,
during periods when the analytical competence of Affärsvärlden was weakened,
no-one existed to question the categories and the Indicator was felt to loose
in relevance. During periods when the categories met internal challenge from
competent analysts the categories were changed, i.e. it was by changing the
rules of knowledge formation that the process-of-knowing was changed. This
could only be done by competent analysts.
4.1.2.3. Impact on
Productivity.
The
productivity of Affärsvärlden´s journalists went down by 15% between 1983 and
1990, that of Veckans affärer by 13%. The two magazines increased their volume
of pages, but the staff increased even more. This was a period of most
intensive technological change in the graphic industry. One would therefore
have expected a .i.productivity ;improvement. Why did this not take place?
The main
reason is probably that the writers used the new technology for processing more
information than before, i.e. their infoduction level increased. The
journalists of both Affärsvärlden and Veckans affärer were thus reducing more
information in 1990 than in 1983 in order to write the same amount of
articulated text. Productivity measured as the volume of reduced information
per hour therefore probably increased, whereas the output of structured text
per person remained the same or went down.
Financial
journalists today say that the competitive climate has hardened, they have to
work harder in order to come up with interesting pieces that not have been
covered by someone else. I.e. just as the other actors on the financial
markets, the journalists/analysts had to reduce more information for the same
(or even less) output as before.
There is
no evidence that the .i.effectiveness ;of financial information (how well did it
fulfil its purpose to depict reality for its readers) improved during the
period.
4.1.2.4. Summary of Technology
Impact.
The
infoduction process in Affärsvärlden was affected:
• The individual writer
experienced a creative liberation in text processing.
• The processing of numbers, calculations of key
ratios etc., was vastly improved.
• The demand for agentive skills was replaced by
demand for intellective skills.
• New page make-up technology made Affärsvärlden
independent of print supplier.
• New business opportunities and threats were created.
• Productivity improvement was used for
processing/reducing more information, while the output in pages per person was
unaffected or went down.
• There is no evidence that the output of financial
journalists improved in effectiveness despite the larger amounts of information
being processed.
The
computer first took over more and more of the jobs that demanded .i.agentive
skills;. The computer then took over some of the jobs demanding .i.intellective
skills;. It thereby increased the pressure on the level above, intellective
know-how. In the 1970s a financial analyst could make a unique analysis by just
being able to do the calculations. In the late 1980s every analyst had at least
one PC on the table filled with programs that in no time could make any
conceivable chart or calculation.
The
influence from technology in Affärsvärlden´s journalistic
.i.process-of-knowing:journalistic ; was slow in the page make-up area compared
to other media because of the long tradition of playing down the design and
because Affärsvärlden bought page-making from the printer. Therefore other
magazines computerised their page make-up several years ahead of Affärsvärlden.
On the other
hand, Affärsvärlden was probably one of the first actors on the Swedish
information market to use computerised technology for text and number
processing. The area was considered a key strategic area and the intention was
to keep the lead by investing in the joint venture with Findata. The computer
also increased demand for intellective individual skills in the
.i.marketing;/sales area. The computer technology forces further introduced new
competitors in advertising and forced the publishing industry to respond by
creating own address banks. The loss of Findata in 1988 meant a set back in the
ambitions but the magazine still benefited from the new technology.
There was
thus a difference in how the development in technology was regarded:
• Technological development in
the .i.agentive ;area was considered as potential cost decreases.
• Technological development in the .i.intellective
;area was considered as potential revenue increases in the form of new
business opportunities.
Thus, when
the computer directly changed the .i.infoduction ;process it also changed the
conditions for doing business in the information sector and thereby affected
the strategy. See further Chapter 4.5.
4.2.
The Dichotomy Profession - Organisation.
A conflict
between a more commercially oriented (organisational) tradition versus a more
journalistic (professional) tradition is common in publishing companies. How
did it develop in Affärsvärlden?
4.2.1. Professional
Knowledge in Affärsvärlden.
The
concept "professional knowledge" depicts knowledge used in the
infoduction process aimed at the readers. In Affärsvärlden there were two kinds
of such professional knowledge: Journalistic and Analytical.
Journalistic
.i.process
of knowing:journalistic; is generally based on a number of rules which are
aimed at penetrating information noise and at receiving attention. Young
journalists learn the rules by practise. The specific rules-of-thumb of the
journalistic profession are learned when entering the profession and then
applied irrespective of the magazine that the journalist happens to work for.
These rules are universal, even global. They can be identified at the Wall
Street Journal or the Times as easily as at Affärsvärlden, Expressen or
Östersunds Posten. Here are three:
1. The
"angle" or the "peg" is often contained in the first few
lines of the article and should also be visible in the headline. The peg is
intended to catch the reader´s attention. It is therefore often linked to a
current issue. It must also tell the reader what the journalist wants to say
with the piece.
2. Making
abstract events personalised increases attention.
3.
Dramatising events by concentrating the article on conflicts increases
attention.
Affärsvärlden
has never been admired for its journalistic finesse among journalists. At
Affärsvärlden the rules 2. and - to some extent - rule 3. were not followed
during the period. Other journalists often criticised the Affärsvärlden writers
for not even following rule number 1. Affärsvärlden´s style of .i.journalism
;was regarded as more solemn and the journalistic profession would often
criticise it for being boring and old-fashioned. The articles have always been
considered hard to read and incomprehensible for readers outside of business.
Affärsvärlden
also developed a number of own local .i.journalistic rules;. They covered a
broad spectre of topics, like "never use the word ´shall´", "a
headline must not consist of more than four words", "a table with the
latest four year´s profits must accompany all articles about companies",
etc.
The rules
were once invented by someone who was energetic and persistent enough to
persuade a number of the other journalists to follow. The editor then added
this rule to the others on the list of .i.rules;. The list was mostly tacit and
was transferred to the newcomers by means of tradition. It thereby became an
element in their tacit knowing. The list changed all the time. Some of the
rules were just forgotten, others were focused from time to time and brought up
for reflection among the staff. There was no institutionalised routine for
this. Anyone felt free to focus and reflect on the rules. However, some felt a
closer kinship to some of them, observed "his/her" rules more closely
and even watched how the other writers complied.
In
addition to these rules we must add a number of .i.values ;of a higher order.
They are often referred to as ".i.ethics;" by the journalists
themselves. These values are elements of the professional tradition and tell a
journalist what general attitude he or she should take, they are widely
known and they change very slowly. Some important universal values are:
"You
must have high personal integrity".
"You
shall be independent" (of the owner of the newspaper, of the readers, of
the advertisers).
"You
shall be the reviewer, not the actor".
"You
must always be suspicious of all information", (because everyone wants to
use your pen to convey his or her meaning).
Below are
some of the universal journalistic .i.values:universal; that have been
observed. They express how journalists assumed they ought to work in 1990:
|
Has
great importance in job |
Ought to have |
Has today. |
Diffe-rence. |
|
Uncover power misuse. |
94% |
38% |
56% |
|
Be a
broad source of information to public. |
82% |
26% |
55% |
|
Put events
into a larger context
|
77% |
10% |
67% |
|
Lend a
voice to the weak. |
77% |
15% |
62% |
|
Be an independent critic. |
74% |
11% |
63% |
|
Give a
neutral picture of events. |
69% |
17& |
51% |
|
Depict
the unusual and the sensational. |
17% |
73% |
-56% |
|
"Set
the agenda" for the political debate. |
13% |
30% |
-17% |
The ideal
of the journalist seems to be the independent chivalrous knight who uncovers the
misuse of the powerful and like a Robin Hood helps the poor. (The reality is
however that they feel they are forced to do the opposite).
Polanyi´s
notion of .i.values ;is primarily tied to a professional .i.tradition;,
independent of organisation. But it is useful to distinguish also local
.i.values. Theylocal; are tied to a local tradition but not independent from
the more universal tradition. There thus exist local written and unwritten
values of a particular magazine or subsegment of newspapers. Some might be:
"We
defend the small people". (Most tabloids i.e. Expressen or Aftonbladet).
"We
have a positive bias towards business". (Business magazines, i.e.
Affärsvärlden or Veckans Affärer).
The journalists
at Affärsvärlden usually tried to obey the universal rules. By doing so they
felt like journalists. They also knew that if a journalist broke one of the
universal rules or values, he/she was often chided publicly by his/her
colleagues, There also exists a formal procedure, Pressens Opinionsnämnd, which
however is not as strict as among lawyers.
The
universal values could also be translated into more specific rules for a
specific purpose. Here is one that translated the value of integrity into an
articulated rule of action (maxim) for Affärsvärlden´s financial journalists:
"You
must not trade in shares in the company that you are writing about until after
the article has been published".
i.Journalists
usually form a professional group that have a lot in common, irrespective of
nationality or private interests. In every big city in world, there is a press
club which gives assistance to newcomers, serve cheap meals and runs a bar in
which one meets colleagues for socialising and gossiping. Journalists feed on
information so this is one of the .i.information markets; where you trade
gossip. Journalists thus tend to form a breed of their own, which reinforces
tradition. The tradition is further reinforced by the fact that many
journalists prefer the company of other journalists also in their free time.
The
financial analyst in Affärsvärlden had an even more .i.intellectively
;oriented profession than the journalist. The job demanded skills that were
close to the scientist´s. The financial journalist covered a narrow segment of
society: the companies, the stock exchange, the other financial markets and the
macro economics. It was a world where one must be a specialist in finance or
business. At the same time he or she must be able to write as a journalist.
Many of
the .i.financial analysts; in 1994 consider databases, archives, tables and
analytical tools on computer screens more efficient than talking when they wish
to process large amounts of data. They spend most of their working days
interpreting the movements of stock prices, currency rates, interests rates,
the news and the GNP-figures that they see flickering on their screens. And in
the evenings they like to meet their professional colleagues because they are
the only ones who really understand them. Unless they have a healthy
relationship with other worlds, their reality is the information flow.
Twenty
years ago it was a different world. The small financial world of
• First, Affärsvärlden had
already in 1921 developed a .i.General Index; based on all shares on the
.i.Stockholm Stock Exchange;. It was Sweden´s oldest stock price index with
data available from 1901.
• Second, the magazine had a long track record of being
the only magazine to publish all the accounts and financial reports of the
listed companies. One might say that this "publishing duty" was the
main editorial idea of the magazine at that time. This duty had forced the
previous editors to develop a set of standard definitions, i.e. .i.rules ;that
were applied to the figures in the annual accounts. The definitions covered balance
sheet items and profit & loss items, like "adjusted equity",
"profit" etc.
• Third, Affärsvärlden "possessed" a
.i.stock evaluation model; which distinguished the analysis from that made by other
magazines. The model turned out to be very successful in the inflation years of
the 1970s and Affärsvärlden got a reputation for being good at stock price
evaluation. The image was strengthened by the yearly portfolio which beat the
General Index every year 1978-1993 except for one year.
The unique
feature of the analytical Affärsvärlden .i.rules ;were their public status. The
weekly publication of tables, indices and definitions therefore influenced the
way of thinking in the financial community, an example of the power of
journalistic/analytical knowledge. The public status also made it difficult for
other media to use the "Affärsvärlden model", without quoting the
competitor Affärsvärlden, (which they disliked). Thereby the model got a protection
similar to a trade mark.
During the
Founder Phase the analytical .i.knowledge:analytical; was developed further by
the four most competent members of the team in co-operation with their network.
Many long hours were put into this development out of pure personal interest.
They were also active in the Society of Financial Analysts affecting the rules
of the .i.profession:analytical;. They were thus .i.competent;, since they were
able to affect the rules of the analytical system of both Affärsvärlden and of
the profession outside.
In 1982,
when two of them founded Consensus and the third left, Affärsvärlden suffered a
great loss in terms of financial analytical competence. As an example, nobody
in the editorial staff knew how to calculate the General Stock index anymore;
it had been delegated to an outside analyst. Affärsvärlden staff had become
unable to develop their own analytical tools.
The
intention with the Findata project in 1983 was an infusion of new analytical
.i.competence;. With Findata´s assistance the computerised version of the
Investment Indicator was developed in 1984. New young analysts were also
recruited. However in the years to come, the lack of analytical competence was
deeply felt.
But the
most important reason for Affärsvärlden´s weakened relative position in the
analytical knowledge area of
Still, the
original stock evaluation model, served very well during the whole period as
evidenced by the success of the yearly portfolio.
As I see
it today, Affärsvärlden was able to transfer the know-how to use the rules of
the analytical knowledge but the competence to change them seemed impossible to
transfer, so new rules had to be rediscovered by new competent individuals.
4.2.1.1. Tradition of Knowing.
According
to the journalistic tradition journalists should sit in one big room in order
to improve transfer of .i.information ;from one person to another. The
journalists are thus exposed to a constant dim of voices, sounds and a chaos of
sensory clues. The .i.tradition ;thus fit the financial restrictions during the
Founder Phase.
I think
today that the most important function of the open space was not the
.i.information flow; but the .i.tradition ;of knowledge. The one-room space
improved the tradition of rules, beliefs and values, since the juniors learnt
from observing how the more prestigious and experienced of the editors talked,
moved and behaved. It was also easy to get a quick response to questions or
problems. The team was thus exposed to a daily intensive transfer of
.i.knowing:transfer of;, without being aware of it.
The
editorial room with its intense atmosphere was probably one of the prime forces
during the first years behind the creation of the Affärsvärlden tradition with
its very strong .i.values;.
Several of
the new Affärsvärlden recruits in the first years were inexperienced as
writers. The milieu and the strategic situation of being vulnerable and small
encouraged the writers to involve each other, especially with longer articles.
This created a shared knowledge.
Another
more managed knowledge transfer method might be called the
".i.pickabacking ;method". It implied that more than one journalist
went to interviews or important press conferences than just the journalist who
was on duty. The pickabacking method had several advantages: One was that the
infoduction technique was learned on-the-job, another that the network improved
fast for the new staff, a third that the article could be discussed among more
well-informed people.
Pickabacking
is thus a practical and quite efficient way to transfer a
.i.process-of-knowing:transfer of;. It was (and still is) however not common in
the media industry. It often came as a surprise to the interviewees that the
little Affärsvärlden arrived with two or three reporters, rather than with just
one, which was the normal case for other journals. The trend towards building
up images of individual journalists instead encourages competition and reduces
willingness to share knowledge in this way.
The
pickabacking idea was articulated into a .i.maxim ;and during the Expansion
Phase 1980-86, the young and new recruits were introduced to both the
Affärsvärlden style of writing and to the most important top managers in this
way.
Training
in how to write was also considered very important so the manuscripts of the
new recruits were "washed" down to the smallest comma sign in a very
personal and intense way by one of the seniors.
There was
tradition of .i.knowledge:tradition of; in all areas, also in .i.marketing;.
The team developed their own rules (Chapter 4.3) which were transferred in a
social interaction from master to apprentice.
The
partners involved in marketing had to combine both intellective and agentive
abilities. The intellective abilities were needed in order to make the
information interesting for the readers, the agentive abilities were needed in
order to build a surviving business. This combination was very rare, however,
and the problem to find individuals with the necessary combination of
.i.intellective;/.i.agentive ;knowing for being managers of .i.information
;products/projects was perceived as very difficult to solve and as impeding
growth.
Direct
psycho-social tradition of .i.knowledge:tradition of; thus dominated entirely
during the Founder Phase in all areas. It was perceived as very effective but
it was also time consuming, and its main drawback was that it made the
organisation vulnerable to changes in staff. The problem of how to transfer the
professional knowledge from one individual to another therefore became a very
important managerial issue during the Expansion Phase, when the pace had to be
speeded up.
A more
structured approach to training was perceived necessary and was introduced
1984. A .i.Trainee System; covering two years of on-the-job training in
the Group, (Consensus, Findata, Ledarskap and Affärsvärlden), was introduced.
The .i.AFV-School; was instituted. It was a program of courses open to
all employees of the Group. Staff from all the companies in the group
functioned as teachers and mentors and the system thus functioned as a part of
Affärsvärlden´s knowledge tradition.
The
effectiveness of the more structured approach was never tested at length,
though. In 1986, .i.Consensus ;crashed and 1987 the .i.Findata ;crisis got
acute. The need for rapid addition of new staff and for building cross border
understanding disappeared and both systems were folded in 1987.
4.2.1.2. Power of Professional
Knowledge.
The power
of Affärsvärlden´s journalistic knowledge was (and is) a .i.power ;of
.i.symbolism ;and it was of great importance in the whole period. The power was
used both professionally in the articles and organisationally for the internal
power play.
Professionally,
journalists tend to be rather naive participants in what might be called
"the .i.reification ;game". The importance of being the first (see
Chapter 1.1.4) puts a high premium on time, which speeds up the pace on the
information markets and reduces time available for the necessary process of
knowing. i.Catchy metaphors become objects with a life of their own and, once
invented, they tacitly steer the work of the journalists until a newer concept
is invented.
The
.i.journalist ;has one predominant desire: to be read, seen or heard,
preferably by as many as possible. In order to secure this desire, the journalist
tacitly subordinates to the competitive factors (see above Chapter 2.3.3).
These factors can be seen as forces which drive the journalist to subordinate
to well-known people, to "fall for" funny metaphors or to seek fame.
Receiving attention might become more important than conveying a relevant
message, the form might take over the content.
At least
on the financial .i.information markets; I think this tendency has to do with
the present overload of information and the readers´ growing unwillingness to
allocate time for reading, which make many journalists feel that they have to
raise their voice in order to be heard.
Because of
the Affärsvärlden tradition, the magazine did not take very active part in this
game
Affärsvärlden
was (and still is) an organisation where the actors lived by producing words.
The journalistic skill in using the language is a professional ability which
can be used for infoduction directed outwards as well as for internal power
games. The skill was frequently used in the years I have studied and one
protocol is analysed in detail. There the symbolic powers come to surface. The
leaders were very skilled in using the semiotic powers of language and they
were fast thinkers. The conferences during the Founder Phase were a kind of
"battle ground" on which the professionals fought over the
organisational power.
The power
of symbolism was greater in periods when the profession decided the agenda.
Later, when the management troika had taken over, the "battle" disappeared
as well as the perceived purpose of the conferences. The powers of symbolism
seemed to have followed a cycle between the professional and organisational
knowledge.
The power
of analytical .i.knowledge:power of; is also a power of symbolism, although
with numbers rather than words. Analytical models influenced the behaviour of
investors. Affärsvärlden´s legitimacy in this area made the Affärsvärlden
version of fundamental analysis more used in
During the
period I am analysing in this thesis, the scarcity value of financial
analytical knowledge evolved rapidly, from being close to zero in the early
1970s to a peak in the late 1980s and down again in the 1990s. During the peak
years some of the actors were able to considerably affect the strategy of
Affärsvärlden. The "Power of Knowledge" was a reality in those years
both in the inner and outer contexts.
. 4.2.1.3. Journalistic vs.
Analytical Knowledge.
Affärsvärlden´s
editorial idea was to blend financial analysis and news. This idea was
represented in the editorial staff as two sets of knowledge traditions, two
sets of values and two modes of working, one more deep and reflecting, one more
fast-moving and superficial. A .i.dichotomy ;therefore existed within the
professional knowledge tradition, between those editors who were more
.i.knowledge:analytical ;in their approach and those who were more
.i.knowledge:journalistic;.
The
dichotomy did not cause any severe internal conflicts within the editorial
staff. One reason was probably that the editors-in-chief were able to balance
them. The most important reason might have been that the first analysts were
recruited from industry and therefore more biased towards the organisational
tradition.
However,
the most important aspect of the dichotomy was that it affected the strategy.
See below Chapter 4.5.
4.2.2. Organisational
Knowledge in Affärsvärlden.
The
Affärsvärlden I first met in 1979 tended to focus on the .i.infoduction
;process. The team often translated (a demand for) .i.agentive; action into (a
supply of) .i.intellective ;action. They were good analysts and writers but
"simple" agentive actions necessary to get projects going seemed very
difficult to accomplish for most of them.
It seems
as if the case confirms that one individual rarely possesses both
.i.intellective ;and .i.agentive ;knowledge. However, two of the founders plus
one of the recruits in 1978 proved by their action that they were able to
combine both intellective and agentive action. They therefore affected
organising and business strategy more than others.
The
organisational knowledge .i.tradition ;in 1975 contained very little of
organisational knowledge. That was the main reason for recruiting an
administrative manager in 1979.
On the
other hand, some of the team members had begun to develop a unique general
management .i.knowledge:management; in the media industry. This knowledge was
growing organically in an almost complete freedom from formal systems of
control and with few financial restrictions after the two first tough years
(because the markets developed favourably).
4.2.2.1. Marketing and Sales
Knowledge.
Affärsvärlden´s
advertising sales .i.knowledge:sales; in the Founder Phase 1975-1980 consisted
of two former editors, probably the most unusual sales "department"
in the publishing industry. They were both individualists and they had no means
of and no interest in developing the organisational .i.know-how; necessary for
running a sales department.
Despite
the growth in advertising, advertising sales knowledge was thus the weak point
in Affärsvärlden and the team perceived that they were living with a high risk,
since the knowledge .i.tradition ;was tied only to the individuals.
Nor was
subscription marketing .i.knowledge:marketing; abundant in the start. The first
campaign in 1975 involved some luck. The tricks of the trade were later learned
by trial and error. A number of experience based .i.rules ;were developed like,
"an ad in a daily newspaper never sells more than 50 subscriptions",
"a direct mail-shot to a narrowly defined target group should yield
minimum 1% response".
Most of
the rules were not unique to Affärsvärlden; any experienced marketer from the
publishing industry would probably know them too, but the rules got a distinct
"Affärsvärlden flavour" from the .i.values ;that infused them. An
example is that the "USP´s" (Unique Selling Propositions) in most of
the ads and the campaigns were the content of the articles, i.e. a journalistic
value. Also, the Affärsvärlden values would never allow them to use "cheap
tricks" like pens as give-aways, rules which were taught in marketing
courses, (c.f. recipes, see Ch. 2.1.4.). The image of the articles in
Affärsvärlden was thus reconfirmed by the marketing since the same people were
writing both the articles and the copy in the ads.
The
overall implicit strategy of cost control by doing-it-ourselves thus existed
also in marketing. Being writers, they wrote their own copy and often also designed
their own ads. One effect of the do-it-ourselves .i.value; was thus that
Affärsvärlden developed its own knowledge .i.tradition ;also in the
organisational .i.knowledge:organisational; area (see also Ch. 4.5.1).
The cost
efficiency of the Affärsvärlden marketing .i.know-how; was later proved in
connection with the Financial Weekly project. An estimate made by UK-based
independent marketing managers in 1986 was that an English approach to
marketing would have cost about three times the money that Financial Weekly
spent but would have yielded no more subscribers. In 1989 Eurexpansion spent as
much money on marketing in one year as Affärsvärlden had spent in four years
but received no more subscribers.
4.2.3. A Hierarchy of
Values Develops.
During the
Founder Phase 1975-1979 there was no strong formal .i.power ;structure since
the board of the Foundation accepted to be kept at a distance. The prime
question of power therefore concerned how the team were to manage themselves
independent of the Foundation and - most important - by whom?
Several of
the leading team members regarded Affärsvärlden primarily as a tool for
self-fulfilment, i.e. the space of individual freedom (= power) was very
important. Therefore no one could accept any of the others as the "Boss".
In such an atmosphere power became a question of who had (or could achieve) the
.i.legitimacy ;in the eyes of the others to extend his (no woman achieved high
legitimacy in Affärsvärlden´s organisation during the whole period) particular
space of individual freedom. The values of the individuals with the highest
legitimacy became more influential, so a kind of hierarchy of values was
established.
The
strains of the first two years made it natural to demand very high loyalty
among the original team members and hard work was seen as a necessary
prerequisite. (Journalists not working long hours became outcasts.) One of the
.i.values ;was also influenced by the environment, the collective
"all are equal" value.
Also the
journalistic values were visible, the pride of being independent and the
demands for high personal integrity.
Because of
the general lack of analytical .i.knowledge:analytical; in
.i.Intellective
;.i.know-how;, being a necessary prerequisite for good analysis and working
capacity also ranked high.
The
members were personal friends and shared many of the .i.values ;but they were
individuals. Between them they held several conflicting strong values. There
were many potential conflicts. Should for instance the company be a vehicle for
individual fulfilment or should the individuals subordinate to the goal of long
term commercial success for the company? The more individually oriented
often found themselves against the more collectively oriented.
The
.i.tradition ;of the organisation is therefore probably best described as a
system of individual value .i.dichotomies ;within a hierarchy. The hierarchy of
.i.values:hierarchy of; decided who among the actors were allowed to decide the
agenda of the discussion.
If the
individual values are clustered into the .i.dichotomy;, a kind of dual
hierarchy emerges. The dichotomy goes between those among the staff who were
more ".i.journalists;" and those who were more of
".i.businessmen;" here called the dichotomy of the professional
.i.values:professional; versus the organisational .i.values:organisational;.
A
subjective ranking of the values during the Founder Phase looks like this:
Values with:
|
Professional bias |
Both |
Organisational bias |
|
3. Intellective knowing |
1. "Hard work" |
4. Loyalty towards organisation |
|
4. Individual Independence |
2. "All are equal" |
4. Organisational independence |
|
6. Loyalty towards profession |
3. "Make money" |
5. Agentive knowing |
One would
perhaps have thought that fights over each one of these dichotomies would have ground
the small organisation to a halt. Especially if one considers the fact that no
outside power or formal authority really existed.
But the
team kept together and the ranking above gives one interpretation of the reason
why. The .i.values ;that were influenced by an organisational
.i.tradition:organisational ;were higher ranked than journalists normally tend
to do. The Affärsvärlden journalists (especially the analysts) were also
businessmen and the managers were journalists as well. Therefore the values
that emphasised "keeping it all together" overruled the other values
in the discussions. The team was thus never split between a management with
primarily organisational values versus a team of journalists with mainly
professional values, which is the .i.dichotomy ;so common in publishing. One
other reason was of course that the dichotomy was not as clear-cut as it looks
in the table.
The
dichotomies were in fact never solved. During the first years most conflicts
drowned in the hard daily work. Some dichotomies were re-solved (= solved over
and over again), others were "kept under the carpet". The way to
.i.re-solve; was via discussions, or other .i.intellective ;acts like
committees, research etc. A kind of "coffee table .i.democracy;"
developed organically with .i.consensus ;as both the informal and the formal
basis for decision making. In the .i.conferences ;the formal agenda covered the
days, the informal agenda was discussed during the nights. Sometimes the two
procedures collided and then no decision could be made.
Today I
believe that the open .i.editorial room; had a very important moulding
function. It created an feeling of intense teamwork which overruled the
dichotomies and contributed in keeping the organisation together. It functioned
as an "non-managed" .i.knowledge: transfer of; system (See further
Chapter 4.2.1.1.). The editorial room of the magazine Affärsvärlden functioned
as the organisational and the professional core, both in terms of knowledge and
pow.i.;er.
One might
therefore regard the editorial room as a metaphor for the whole Affärsvärlden
.i.tradition;. For instance, the .i.marketing department; was much later (1990)
organised as en editorial room with the marketing manager sitting in an open
space while the sales staff occupied their own rooms around him. (See further
Chapter 4.2.3.2.3. Sales Department).
However,
later during the Founder Phase the team more and more established a .i.value
;structure that incorporated the dichotomies by not discussing them in the
open. This was how conflict avoidance evolved into an important shared
assumption of how to deal with conflicts.
In this
kind of atmosphere taking the .i.initiative ;became an important tool of power.
Initiatives could be both .i.intellective ;and .i.agentive ;oriented. If the
initiative was taken within the hierarchy of values a team member could be
rather certain that no one would stop it. But this also implied that in order
to achieve the .i.legitimacy ;one had to accept the hierarchy of values and be
seen by the others as "living the .i.values;".
In the
first implicit power ranking the level of individual intellective knowing
ranked high. However the power shifted depending on the current issue. If the
issue was about the layout of the magazine, one of the team had legitimacy. If
it was about marketing, another had the highest legitimacy, etc. The salesman
had a lower informal power rank but in questions regarding advertising .i.sales
;he was indisputably very important and he achieved legitimacy by being the
best salesman in the organisation. The power of .i.intellective knowingpower
of; was most clearly noticed during the conferences. Those with the highest
legitimacy in a certain issue found that the others accepted their authority
and they could steer the discussion. Those with no intellective legitimacy at
all often perceived that their contributions were neglected in most
discussions.
Still,
during the Founder Phase everybody felt the individual power that accompanies
scarcity. Everybody felt as (and often indeed was) a key-person and felt an
ability to influence at least some of the discussions. This feeling changed
during the Expansion Phase, especially after 1984 when the management troika
was formally installed.
4.2.4. Organisational
Knowledge Takes Over the Agenda.
The
.i.professional knowledge; thus determined the agenda during the Founder Phase
and as mentioned in Chapter 1.1, Affärsvärlden in 1979 had become a very odd
creation indeed.
There were
no outer pressures for a change, because the company prospered and was
perceived as a success both internally and externally. Still, the members
carried the seed of change within themselves. Is it because they could not
resist the norms of the environment and the publishing industry?
Today I
regard the
The
Dialectic shifted over to the agenda of Organisational Knowledge via three
forces:
• The .i.Partner System;.
• The .i.Management Troika;.
• The .i.Sales Department;.
4.2.4.1. The Partner System.
Owning
one´s own company was an idea that felt very natural and tempting for many
reasons:
• The Swedish tax system taxed
income at marginal rates of 75-90% but "only" 40% on capital gains.
• The fluid power structure was assumed to be clearer.
• It would improve the competitive edge on the markets
for recruiting financial and journalistic know-how.
• International trends influenced the revival of the .i.entrepreneur;.
For the first time since the early 1960s it felt nice to regard oneself as an
"entrepreneur".
The
Partner System that was created had a threefold objective.
• 1. To keep the growing group
of companies together by allocating .i.added value; fairly among the owners
(most important).
• 2. To be attractive as a tool for .i.recruitment;.
• 3. To keep .i.personnel turnover; at a minimum.
The formal
Partner System added legal stability to the organising efforts. But it was
gradually challenged by the changes in the environment. In 1987-1988 a number
of partners felt it was time to change the system. Five of them offered to take
over the company in a management buy-out, an attempt that failed.
4.2.4.2. The Management
Troika.
With the
decision in 1979 to recruit the first full-time administrative "real"
manager, the Affärsvärlden team entered a route that was a challenge to the
existing organisational structure.
A
management "troika" grew into power during the first years of the
Expansion Phase. In the beginning it was an entirely organic process but the
troika was formally elected in the autumn 1984 when the Partner System also
came into function. The .i.management troika; was to remain in power all until
the merger with Ingenjörsförla-get in 1990 and the formation of E+T Förlag. The
three members of the troika were collectively functioning as a "Joint
Chief of Staff" and divided the work load accor-ding to a very informal
and fluid order by which they stepped in for each other depending on the issue
and the work load of the others. Profit responsibility was divided between the
three. The other managers within the organisation, like accoun-ting and
marketing, reported to the troika.
However,
the installation of the management troika changed the information pattern. The
change in the .i.information flow; was of utmost importance in the inner
context of Affärsvärlden for two reasons. First, because journalists feed on
information. Second, because "to be informed" had a great symbolic
value in an organisation, in which no formal hierarchy existed and where the
actors were both owners and employees at the same time. Therefore, access to
the inner core of information also became an important symbolic measure of
one´s .i.power ;ranking.
The
conferences were thus regarded as very important during the Founder Phase and
the first years of the Expansion Phase. At the .i.conferences ;every piece of
information was shared so everybody - also the most powerless - could feel
close to the inner core. In case of a conflict issue, the inner core of course
made up in the wings afterwards, but that was often so late in the night that
only those with a burning interest were able to be awake. The most significant
feature of the conferences thus was that most team members sensed that they
were informed and that they at least had an honest opportunity to join the
power game, at least as spectators.
The troika
was however, perceived by the partners as keeping more and more information to
themselves. The conferences were no longer perceived as real decision making
events but they evolved into forums for information.
4.2.4.3. The Sales Department.
The
advertising revenues had rapidly become the single most important source of
income and scarcity of knowledge in this area was considered a risk. The
recruitment of the marketing manager in 1984 was a critical decision because it
was again a challenge to the hierarchy of the Founder Phase.
The
decision was not accompanied by so much conflict as the recruitment of the
ad-ministrative manager in 1979 since the organisational knowledge now
determined the agenda. The sales staff thus protested heavily but they were
ignored by the partners.
Over a
period of five years the new marketing manager created a professional
advertising .i.sales department;. In 1986, after three years, it had grown into
a department of 11 people, comprising one third of the total Affärsvärlden
magazine staff. It was a very strong department compared to the competition.
The value of the sales department was shown later when the competitive climate
moved into full depression in the beginning of the 1990s.
However,
in 1986 the .i.sales department; employed an increasing number of young and
hungry sales people who dressed differently, looked differently and had different
.i.values;. Some of the editorial partners did not like the difference in
climate between the editorial staff and the sales department and they
complained about both their manners and the unaccustomed .i.management ;style.
If the
editorial staff was characterised by its analytical and intellectual
discussions and freedom, the sales department was young, hungry, competitive,
and very target oriented. The editorial .i.partners ;liked the money and their
target orientation but they regarded the climate quite vulgar and the
management style far too "authoritarian". Some of the partners feared
that this style might contaminate the editorial room.
Figure 17. Affärsvärlden Group experienced a rapid growth in staff
employed in part-owned joint ventures during the Expansion Phase. Numbers are
not comparable after the creation of E+T Förlag in 1990.
The growth
if the sales department was accompanied by the growth of other non-editorial
employees as well. Employees with an organisational bias in their .i.process of
knowing ;(administration including the management troika, accounting, marketing
and sales), had thus grown into 50% of total staff in 1986. The hierarchy of
values:hierarchy of , based on the .i.values ;of the first editorial staff, was
thus gradually challenged by the rapid growth of other employees.
In 1986
the partners amounted to only 27% of the total number of employees in the Group
as against 90% in 1980. The core (= the editorial staff of the magazine
Affärsvärlden) was even smaller, around 20%.
Today I
interpret this rapid growth of employees with an organisational bias as one of
the reasons behind the crisis in 1987. The hierarchy of values from the Founder
Phase (Chapter 4.2.3.1) was no longer in accordance with how the new ranking
looked like.
4.2.4.4. Summary.
It is
possible to distinguish a .i.cycle ;between two .i.traditions ;of knowledge,
.i.professional ;and .i.organisational ;in Affärsvärlden. During the transition
periods there were conflicts over which values were to determine the agenda of
discussion. The transition periods were also marked by increased personnel
turnover (except 1990-1991 when the depression held it back). Conflicts of
values arose when the values of the previous tradition were no longer deciding
the agenda of discussion and new values and symbols marking the other tradition
had to be invented.
The
Founder Phase was as an era when the professional .i.values ;determined the
agenda of discussion. The dialectic also changed slowly at first so the first
transition period was long. For instance, when the Partner System was first
suggested in 1982, it was still the values of professional knowledge that
decided the agenda of discussion. The formal symbols of power in the new
company formed in 1983 could not challenge the existing hierarchy of values.
Therefore the new management team was called "Sub-committee with
responsibility for getting thing done" and despite the new company being a
limited company, no .i.Managing Director; was appointed.
In 1985
the organisational values were entirely deciding the agenda, i.e. the
manage-ment troika and the non-editorial staff. One example is that the small
business magazine (.i.Affärer & Företag;) was initiated by the marketing
manager. Another is that Affärsvärlden appointed a formal editor in chief for
the first time.
Later, the
pace speedened up. The crash of .i.Consensus ;in the autumn 1986 and the loss
of the close link with the two partners employed there, came as a chock to the
partners of Affärsvärlden and triggered off something like a chain reaction.
The partners had up till then felt immune to the turbulence on the financial
markets. The crash added to the disappointment with Affärer & Företag and
the growing worry about the risks in .i.Financial Weekly; and the
discontentment in .i.Findata;. Affärsvärlden was still very profitable and
still growing, but not as fast as before. The slower growth was now perceived
as a problem by the Partners and the Partners lost confidence in the management
and the diversification strategy. The newly recruited young generation added to
the crisis by questioning the .i.Partner System;.
The road
towards a greater influence of the .i.organisational knowledge; suddenly halted
and reversed. See more about the crisis in Book 2: Chapter 8.1. The
professionals dominating the Partner Group took back the initiative and set the
agenda for the strategy. "Save the core" and Retreat became
the new strategy.
The same
.i.management troika; were in power but they no longer set the agenda for
discussion. The vision that had carried the troika as a joint management
disappeared. They felt that they were back to square one, in charge of an
organisation positioned in a strategic corner and still with Bonniers as the
dominant player, more powerful than ever.
Figure 18. The dialectic between professional and organisational
knowledge determined the agenda for discussion.
The third
transition period was short. The failure of the management buy-out eventually
led to the invitation of .i.Eurexpansion ;as minority shareholder and the
merger with Ingenjörsförlaget into the new .i.Ekonomi + Teknik Förlag; AB in
1990. In E+T Förlag a new organisational hierarchy took over the agenda, now
firmly based in an institutional ownership. The conflict over values was not so
strong this time, perhaps because the depression cast its shadow over the
period and perhaps because the old partners were still owners. Therefore, the
inherent conflict between the two traditions of knowledge is probably still to
come in E+T Förlag.
4.3.
Knowledge in Organising.
What was the
role of knowledge transfer in organising?
The
Founder Phase was characterised by the work in one editorial room. There were
daily individual double interacts as .i.Weick ;suggests, because the
organisation was small. Most of the organising was thus tacit and interactive.
A direct individual to individual tradition of knowledge took place in all
areas (see above 4.2.1, 4.2.2) much in the way described by .i.Polanyi;´s
theory in Chapter 2.1.3. The main ingredients were:
• Values that encouraged
non-competitive behaviour.
• Open office spaces with few walls.
• Management sitting in the offices in which
infoduction took place.
• Small teams.
• "Pickabacking". (I.e. doubling of people
in situations which were "learning intensive", even if it meant short
term efficiency loss, see Chapter 4.2.1.1.).
• Master-apprenticeship in key knowledge areas.
• New knowledge developed by competent individuals.
• Many meetings and conferences, despite the loss in
short term productivity.
However,
there was also a transfer of knowledge in a more indirect way. I distinguish
four such vehicles or systems for indirect .i.transfer of professional
Knowledge; below:
• The Format of the magazines. The format of any
publication is a very powerful vehicle for .i.indirect transfer; of the process
of "how to make the magazine". The content of Affärsvärlden had to be
new and creative every week but the format remained the same. The same page lay
out, the same table formats, the same article flow etc. were repeated every
publishing day. The .i.format ;remained the same irrespective of the
journalists and functioned as a framework within which the process of knowing
was taking place.
• The Editorial room. The .i.editorial room; itself
had a very important "moulding effect". Its physical existence was a
prerequisite for the direct interactive .i.tradition ;of the whole process of
knowing for infoduction.
• The Computer systems. When a .i.rule;, a table or a
analytical calculation was computerised it transferred the knowledge
irrespective of the individuals. The .i.competence ;in how to change the rules
could get lost, but the transfer of the existing .i.know-how; was secured.
• The Analytical definitions. As mentioned above
Chapter 4.1., Affärsvärlden´s own definitions were articulated in the magazine
and functioned as a transfer in how to do analysis.
Three
vehicles or systems for indirect .i.transfer of organisational
Knowledge; can also be distinguished:
• The .i.Partner
System;. The partnership implied a formal ownership, articulated
rules in a partner agreement and scheduled regular meetings on organisational
matters in a large group of key people. These formal procedures functioned as
transfer of knowledge.
• The Editorial room. As mentioned above the
editorial room itself had a very important "moulding effect". Its
physical existence was also a prerequisite for the constant re-solving of
dichotomies which kept the organisation from exploding.
• The .i.Trainee System; and .i.AFV-School;.
The team installed a number of more structured procedures during the Expansion
Phase. Two examples were mentioned above, the Trainee system and the
AFV-School.
In the
early days of Affärsvärlden a local tradition emerged, largely without
managerial intervention. The Affärsvärlden tradition encouraged individuals
with a high professional .i.competence ;to share their knowledge in a rather
unusual fashion compared to other publishing companies (See Chapter 4.2.1.1.
and also Book 2). Management relied on .i.tradition of knowledge; as the main
element in organising and needed little reporting and other indirect transfer
system for control.
The
ability of Affärsvärlden´s knowledge tradition to keep the organisation from
falling apart was tested on several occasions during the period 1975-1993. The
tradition of professional knowledge seems to have functioned fairly well in
this respect. In the editorial room of Affärsvärlden, knowing was (and still
is) transferred in an open unstructured way. The messy, unorderly and open
space of the editorial office functioned as an non-managed .i.knowledge
transfer; milieu. i.
By holding
on to the strategy of Affärsvärlden magazine as the core, the Affärsvärlden
magazine was working efficiently, despite the changing environment. Today I
believe that it was the well functioning transfer of professional knowledge
that kept the organisation intact and the magazine competitive.
The
knowledge transfer systems were however less successful when they were tested
in the .i.diversification strategy;. As a slight exaggeration one might say
that Affärsvärlden was left with the failures whereas the successes were lost
(as was evidenced in both the Consensus case, see 4.7.2, and the Findata case,
see below).
A
conclusion I draw today is therefore that the Affärsvärlden organising depended
to quite a large extent on how well the tradition of the
process-of-knowing:tradition of functioned. The organisation was built on
tradition of knowledge, the roles were designed according to the people, not
the other way round. It contained in itself the processes of change;. It was
therefore able to survive the whole investigated period, despite the rapidly
changing environment and the large number of various activities.
It was
productive (4.1.1.) and it was also quite .i.creative. A number of new
solutions, both organisationally and professionally were invented as
"Affärsvärlden-specific" approaches.
The
drawback was however that it became very dependent on the people. It was also
very difficult to move outside the core. When they became aware of this
drawback, the partners tried to find a balance by traditional organisational
measures. They tried to reduce .i.uncertainty ;by introducing an amount of
structure and appointing managers. i.harmony;. However, measures, rational or
irrational, "worked" for a period but they never ended in the desired
stable situation. Some examples:
• Conflict avoidance emerged
as a belief of how to solve conflicts during the Founder Phase, but the
inherent .i.value ;conflicts emerged on the surface as soon as the environment
changed in the mid-1990s.
• The implicit assumption of .i.re-solving; conflicts
worked well on the individual level, but it also encouraged a
.i.diversification strategy; that later caused disharmony.
• The .i.partnership system; "solved" many
of the disharmony problems on individual level when it was created, but
partnership was soon felt to prevent necessary change and was abandoned few
years later.
• The .i.Findata ;team achieved periods of internal
harmony at the cost of creating a conflict with the mother organisation. The
same happened in .i.Financial Weekly; during periods when the venture was
perceived as moving towards success.
• The management´s efforts to create a balancing
structure between formal management and influence of the profession via
ownership created forces which later resulted in other .i.dichotomies ;like:
"yuppie-partners" vs. "oldie-partners" or partners vs.
non-partners or management vs. partners.
• The efforts of the .i.Consensus ;team to achieve harmony
between their process of knowing and their markets moved them in directions
that later resulted in new .i.dichotomies;, ethical conflicts and fights with
the mother organisation.
One
illustrative example of the difficulties involved in renewing the Affärsvärlden
business is the Findata case below.
4.3.1. The Findata
Case.
Findata
was a financial database containing public financial data from the annual
accounts of the companies listed on the Stockholm Stock Exchange. .i.Findata
;was originally a research project at the Stockholm School of Economics and
Affärsvärlden entered into a (25%) joint venture with the school (35%) and the
five founding members of the staff (40%) in 1983.
The
customers were brokers and banks, i.e. the same as Affärsvärlden´s, but they
were no more than 25-50. The financial analytical knowledge needed, was the
same but Findata was specialised in interactive on-line analysis with computer,
which implied an additional .i.professional knowledge;, computer technology.
Findata
was selling both the process-of-knowing of their computer experts and the
database as an information product.
The
explicit intention with the joint venture was to merge the analytical
.i.knowledge:analytical; of Affärsvärlden with that of Findata and to use Affärsvärlden´s
financial resources and the magazine as a channel for marketing. Affärsvärlden
was to learn from Findata´s electronic analysis methods and Findata was to
learn from Affärsvärlden´s more journalistic analysis of companies.
The joint
venture also implied transfer of Affärsvärlden´s network of customers as well
as management. Further, Affärsvärlden´s financial resources were needed for
buying new computers.
Findata
was a rapid growth business from the start, investing all the surplus into
development. The business went from 5 employees in 1984 to 16 employed in
1987/88, its first year of reported profit.
The
managers of Affärsvärlden tried to transfer the Affärsvärlden
.i.tradition:transfer of; but immediately ran into problems:
• Findata was placed in the
same office as Affärsvärlden close to the editorial staff, (and got the
"best" room as the Affärsvärlden journalists complained).
• One of the leading members of Affärsvärlden was
placed in Findata as managing partner working together with Findata in order to
secure the tradition. (The partner had to be changed three times in three
years).
• The five professionals were offered partnership in
Affärsvärlden (but declined).
• The Findata team was encouraged to write articles in
Affärsvärlden (which they denied although one of them found time to write
articles in Dagens Nyheter).
• Findata was actively encouraged to join the
conferences, celebrations etc. (which they perceived as a waste of time).
• Affärsvärlden changed its computers into Findata´s
computer system.
So, the
managerial efforts to install .i.knowledge transfer; systems were not
functioning for building a lasting organisation as a combination of the two
partners. The joint venture was dissolved in 1988 and the Findata team were
allowed to buy the shares from Affärsvärlden and .i.IFL;. Two years later the
team sold their shares to the database company .i.Dextel; (owned by
.i.Bonnier;-dominated .i.Dagens Nyheter;).
Today, I
see several reasons for the failure of the joint venture:
The intended
strategy of Findata agreed at the time of the merger was to invest heavily in
developing the databases and to find new customers. The emerging strategy was
however moving Findata into something more like a computer service bureau with
on-line data. The Findata team were recruiting computer programmers rather than
financial analysts. This created a growing tension between two different
professional traditions, which undermined the possibilities of knowledge
transfer.
It turned
out that Affärsvärlden probably got more in analytical knowledge transfer than
Findata did which made the Findata professionals disappointed. The marketing
channel of Affärsvärlden was of limited value in Findata´s business because the
clients of Findata had to be approached in a very different manner (see below
chapter 4.4.2) than the Affärsvärlden readers and advertisers. The different
knowledge requirements of the two markets were not quite perceived at the time
when the agreement was signed.
Affärsvärlden´s
emerging dual .i.strategy ;(not perceived at the time, see below Chapter 4.5.5)
made the Findata team uneasy. They probably felt that Affärsvärlden went
further and further away from their core, financial analysis.
The
financial risk was diminishing after the initial year, which made the Findata
team feel more brave. The Findata team saw the growing market value of their
own shares in Findata and wanted to keep it for themselves rather than sharing
it with the other owners.
In the end
Affärsvärlden management had the choice of conflict but did not want to take
it, perhaps because conflict avoidance was one of the values, perhaps because
the troika had their hands full of other problems at that time.
4.4.
Knowledge in the Market.
What was
the role of knowledge in the relation with markets? This is not a place to
question the validity of the market concept. I use it in this chapter in order
to shed some light on the commercial market value of knowledge and information
respectively.
Affärsvärlden
started as a magazine selling information in 1975 but the team soon found
itself on also another market. The most competent of the team began to do
consulting, selling their knowing as a process. Although the customers were the
same they thus implied two different relations with the customers; one more
indirect, the other more interactive. I call the first Information Market, the
other .i.Know-how Market;.
4.4.1. The
.i.Information Market;.
The outer
context has been described as a metamorphosis in Chapter 3.2.
The growth
of the stock markets increased the interest for financial information also
among the non-professionals.
During the
decade 1980-1990 the supply of information increased at an exceptional rate.
The number of writers, authors, scientists and journalists increased very
rapidly. New electronic media using the computer as medium - databases and
various on-line services - entered the market. Therefore the number of media
increased too - magazines, newsletters, international TV-channels using the new
satellites - at an almost exponential rate.
Also the
demand grew (but not that fast). There was an inflow of new consumers of
information supported by the boom in the financial markets. The existing
readers also began to read more financial information. For instance many of the
readers of .i.Veckans Affärer; added Affärsvärlden to their reading lists,
thereby perhaps doubling or even trebling their total financial consumption of
information.
Towards
the end of the decade the financial information markets began to display the
typical behaviour of saturation. Circulation figures stagnated, prices came
under pressure. The readers were less and less willing to pay for information
and the freebies were regarded as tough competitors for advertising money.
A new
group of entrants were the "freebies" i.e. free (for the reader)
media taking their revenues only from the advertising - direct marketing,
customer magazines, in-flight magazines, etc.
One might
categorise the market for financial information in 1990 by the two dimensions
.i.time delay ;and .i.infoduction level;. The time delay
measures the time between infoduction and (potential) reading or
listening/viewing. The infoduction level measures the amount of information
reduced. It gives an indication of both the amount of work and the level of
knowing behind the text.
Figure 19. The market for financial information in 1990 categorised by
the two dimensions time delay and infoduction level.
The new
computer based media occupied a new profitable and ultra fast niche. They had
pushed the other media further out into the lower profit areas. In order to
keep up with the competition, the other media had to speed up their
.i.infoduction ;processes.
The Figure
20 below indicates that the customers paid higher prices for higher infoduction
level and faster media.
However,
there seemed to be a premium on time. When having the choice between fast news
or slow analysis the readers seemed to prefer fast news. Some computer based
media were already offering fast interactive financial analysis. This had
forced the other media to increase their .i.infoduction per hour;. For
instance, a new financial daily .i.Finanstidningen ;was launched in 1989 aiming
at becoming a daily analytical Affärsvärlden.
Figure 20. The prices paid on the markets for financial information
could be categorised into three clusters. They indicate that both time and
infoduction level are important factors for determining prices. The scale is
logarithmic. (Level 1.= stock prices only. Level 3. = highest level of
infoduction).
4.4.1.1. Competitive Factors.
During the
Founder Phase Affärsvärlden came up against several competitive restraints: The
writers found that their articles were not seen because Affärsvärlden was so
small in volume. The Affärsvärlden staff were unable to produce a magazine
using a more easy-to-read form because of the costs involved. Affärsvärlden was
also lacking the financial resources to scoop up interesting new facts. The
advertisers wanted to buy space in media that had a high reputation, a special
readership or a dominant position.
Affärsvärlden
staff soon experienced the significance of:
• The form of presentation. A small article
had a greater likelihood to be read. Pictures and charts etc. have a high
reduction value, i.e. "tell more than a thousand words". They tried
to reduce the length of the articles or the reports, added more sophisticated
charts and pictures and by improving the technical quality of the print.
• The "surprise effect". By knowing a fact
before somebody else a company or a person could establish a small
"time-window", during which the information had a scarcity value. The
scarcity value has always been very important on the markets for financial
information, but computer technology changed the context during the 1980s. The
financial industry was enabled to move funds (= copy information contained in
computers) at a very fast pace. The same technology gave the media the
opportunity to report from a broader area of the world (= reproduce
information) over longer distances at a faster pace to more people.
• The .i.legitimacy ;of the writer (or the
medium). If the writer or the medium was well-known or had a high
reputation or can influence the reader´s space of freedom (= was percevied by
the writer to "have" power) the likelihood was greater that the
article would be read. The massmedia made their journalists well-known by
giving them photo by-lines. Affärsvärlden, on the other hand, tried to make the
medium itself legitimate.
• The dominance of the medium. It was important
for the financial actors to appear being well-informed because it added an
image of power and a feeling to belong to the inner circle of "the
club". A fragment of new information shared by the many was sometimes more
valuable than a lengthy text seen and understood by the few. A dominant medium
with many readers or viewers, like .i.Veckans Affärer; until beginning of the
1980s or .i.Dagens Industri; from then on, therefore easily became the
world.
The only
.i.competitive factor; that ran in Affärsvärlden´s favour during the Founder
Phase was the name of the magazine, which was well-known and gave a legitimacy
to the articles. It was natural to build on that strength.
During the
Expansion Phase the same factors ran more and more to the advantage of
Affärsvärlden but against new magazines that were launched. The 1980s were very
active in terms of magazine launches in the business segment, all aiming at the
booming advertising markets. But almost all of them failed. The readers were
seen as being more and more reluctant to pay for information. Dagens Industri
was the only really successful new publishing venture during the 1980s on the
financial markets and it was designed to be fast (daily) and easy to read (less
than ten minutes).
4.4.1.2. Two Sources of
Income.
The media
produce two kinds of information, which generate two sources of income: from
the advertisers and from the readers.
.i.Advertising
;can be regarded as .i.information ;paid by the writer rather than the reader.
The advertisers pay an amount to the medium for gaining access to the time of
the reader. The idea is of course that the readers, who buy the media for its
editorial content, will be exposed to the information in the advertisements and
read, see or listen to also their message.
The
advertisers aiming at the financial community of readers therefore compete on
the same information market as the other actors. The problem for the advertiser
is the .i.legitimacy;. Why should the reader allocate precious time for
reading the information somebody else pays for?
Most
readers do not want to waste their time, unless provoked by the form of the ad
or by the surprise effect. This was indicated by the readership figures. The
adver-tising pages in Affärsvärlden (as in other media) had in general only
25%-50% of the readership of the editorial pages.
The
advertising pages however, accounted for some 2/3 of the revenues of the
financial press during the period. Had the advertisers not been willing to pay
for the mere possibility of their information reaching the eyes of the readers
the whole financial press, including Affärsvärlden, would have been in quite a
different business.
This
leaves the .i.media industry; with a serious dilemma. The media sell their
space for messages not authorised by them to readers who are not paying for
them. The two kinds of information even compete for the same limited space on
the pages. But their business idea depends on those revenues. Hence the reason
why the dichotomy of .i.values ;between the .i.journalistic profession; and the
advertising .i.sales department ;develops into such a so heated atmosphere
found in many publishing companies. The atmosphere becomes no less heated by
the fact that most journalists know (somewhere) that the efforts of the
advertising sales people pay 2/3 of their salaries...
4.4.1.3. Information as a
Resource.
During the
1980s .i.information ;was gradually being perceived as a resource for all kinds
of businesses, not only as an instrument for control and decision making. Four
examples illustrate:
•1. Selling addresses for direct mail
campaigns was a business established already in the 1970s. .i.Direct mail; (DM)
offered a way to approach customers directly, without advertising. DM-companies
were using new data base technology as a business idea aiming for advertisers´
money. Affärsvärlden felt a threat, because the DM-companies were able slice
their address banks on more levels and offer new services than Affärsvärlden
and other media were unable to do. Both .i.Bon-niers ;and the DM-companies
invested heavily in the technology. Affärsvärlden did not want a Bonnier system
- on the other hand the investment was too big for Affärsvärlden. There was
also a value question involved. The partners felt that Affärsvärlden´s readers
should not be surprised by mailings from other sources.
•2. Another idea was to see the computer as a support
tool
for the sales, i.e. to store information about the customers supporting the
salesmen´s contacts. Affärsvärlden´s intentions to use own addresses for new
business and/or sales support were however delayed partly because large scale
advantages in the earlier developments of computer technology. Affärsvärlden´s
weak organisational knowledge in this area also gave advantages to large
publishers like Bonniers or to the big direct mail houses or the big
newspapers.
•3. New business spin-offs based on infoduction were
enabled by computer technology. The journalists were able to analyse large amounts
of data in a short time so they collected information from industry segments
normally not covered in Affärsvärlden and composed special issues. The sales
staff used the addresses and approached the same companies asking them to
advertise in the special issue. Most of these combinations became both
financial and editorial successes.
•4. The first electronic financial media, the full text
data bases, had been available since 1980. But in 1982 a large number of new
competitors decided to move in, assisted by new computer technology. Within
merely a few months practically "everybody" was there with their
claims. .i.Esselte;, Bonniers, .i.Swedish Telecom;, the banks and the
.i.Stockholm Stock Exchange; were the biggest, but there were also many new
small entrepreneurs. Affärsvärlden´s response, was the investment in .i.Findata
;(see Chapter 3.4 and 4.5.2.1).
4.4.1.4. A Summary.
As soon as
tacit knowing has been articulated for communication to a broader public it can
be said to enter a market for information. The outcome of the infoduction
process are pieces of structured information, in the form of texts, pictures,
numbers in an article, books, pictures, charts, tables etc.
The
following metaphors taken from market theory should be valid:
• Product = Financial
Information.
• Customers = Readers, listeners, viewers.
• Suppliers = Reducers of information.
Time can be seen as the
"price-mechanism". This notion is based on the idea that the
reader/listener or viewer puts such a high price on his/her time that .i.time
;- rather than money - is the limiting factor determining whether a piece of
information will be consumed or not.
.i.Information
;is a "product" with limitations. The text in an article or book or a
TV-program is an attempt to communicate knowledge, but the value lies not in
the text or program itself but in what is not there, in the work the writer did
when he/she condensed the chaos. Also the reader contributes a significant
.i.added value; when reading or viewing. The visible part of the knowledge, the
.i.information:value of; in the article, is therefore not worth much in itself.
Its value lies in the potential new knowledge that it might yield.
Therefore
the reader does not know before-hand, whether the article is worth spending
time on, (a feature also shared by services). The potential reader only knows
that the value differs according to what new tacit knowing might occur as a
result.
The main
restriction on the financial information market is that the customers of
information are characterised by limited time to read, not by limited money to
buy. Because the readers must decide beforehand whether it is worthwhile to
spend their limited time on reading a particular piece, this creates a
threshold that the producer of information must overcome. This means that a
piece of information from an unknown source with low legitimacy is then worth
very little - it might even have a negative time value which might be
translated into a negative commercial market value.
The four
factors of competitiveness are:
Competitive
Factor Low Market Value High Market Value
.i.Surprise
effect; Old facts New facts.
Legitimacy
Unknown
writer Well-known writer.
-""-
Unknown
medium High reputation.
Form Complex.
Fast-to-read.
Volume Small readership
Dominant readership.
4.4.2. The Know-How
Markets.
There is
an important difference between transferring the .i.tacit ;knowledge
.i.transfer ;in how to do a process as compared to transferring the outcome of
it. Information is easy to copy and transfer at high speed, whereas it takes a
long time and much effort to transfer the knowledge how to create it. Knowledge
seen as a process is not an independent object that can change owners on a
market. This difference can be noticed in the commercial value of the
process-of-knowing in the financial markets. It comes out in a more indirect
way. The most common way is as remuneration of the actors.
The
relationship between consultant and client resembles transfer of knowledge in
the .i.Polanyi;an sense. A consulting relationship with a client is very close,
direct from individual to individual. It is an interactive relationship
(.i.Gummesson ;1977), as compared to selling information. The art of selling a
process of knowing is like selling a complex service. Consultants therefore do
not market and sell their knowing with the same methods as producers of
information products.
Still,
they have to consider conditions in which the market may serve as an analogy.
The clients choose between alternate suppliers of processes. They can be seen
as operating in a space of competitors.
In this
thesis this space is called a .i.Know-How Market;, because what is sold
and bought is not knowledge in its general sense, but the action oriented
.i.know-how; in how to create/produce information and/or knowledge
Affärsvärlden
had to consider two Know-how markets:
• Acquisition of know-how,
i.e. recruiting new staff or buying problem-solving advice.
• Selling of know-how in the form of individual
process-of-knowing, i.e. selling problem-solving advice.
Already
from the start the Affärsvärlden editorial staff was a blend of two kinds of
professional knowledge; .i.journalistic knowledge ;and .i.analytical
knowledge;. During the Founder Phase the staff increased from six at the start
in 1975 to twelve at the end of 1979.
I
estimate. that the total number of financial .i.journalists ;in
Their main
contender was .i.Veckans Affärer;, the editorial staff of which was 30, thereof
four academics.
The
financial community also employed analysts. In the beginning of the 1970s they
were around 50-60 and their number increased to about 100 in 1979. They worked
exclusively for their employer and did not produce newsletters etc. The demand
for financial know-how in the financial community was more directed towards
financial advice than information products.
The market
for financial advice got an injection from the new OTC-market which increased
the number of publicly listed companies from 135 by the end of 1980 to 238 by
the end of 1986. These new companies needed prospectuses to be written,
financial advice and annual reports. A growing private interest in the stock
market further increased demand for investment advice.
The
increased demand encouraged a large number of new entrants on the financial
markets. The new companies were stock brokers, securities dealers, investment
banks portfolio managers and various other financial advisors. All needed
financial experts. At first the know-how was recruited from the banks. The
management of the banks were slow in realising that they were sitting on an
valuable knowledge in strong demand. The banks therefore lost their people who
went to the newcomers, tempted by very handsome salaries and other fringes.
Consequently the banks lost market share to the new entrants.
The
students were quick to respond to the rapid development and they poured in
large numbers into the academic financial courses which were doubled and
trebled in volume. But it took several years before the newcomers came to
market and in the meantime the financial analysis knowledge was very scarce
indeed compared to the demand. The market value of financial analysis knowledge
therefore increased rapidly.
The same
forces (to a somewhat lesser degree) were valid for financial journalism. So the
business journalists offered their .i.know-how;on the hot market and started
"job-swapping spirals" with rapidly increasing salaries, just like
the financial analysts, not mentioning the stock brokers.
Affärsvärlden
management discovered that the brokers and the merchant banks were able to pay
much higher salaries than the magazine could afford. This difference in market
value was because when used for a buy/sell decision of large funds a piece of
good analysis had a much higher potential market value than when it was used
for writing an article.
The most
severe competition for Affärsvärlden therefore did not come from the media
industry.
4.4.2.1. Acquisition of
Professional Know-How.
Recruitment
was a key issue during the whole period not only because of the expansion but
also because each new journalist was a potential partner and owner in the
business. The recruitment process was therefore lengthy and painful for
everybody involved.
One might
say that the first .i.recruitment ;policy "just happened" as a
function of those present at the restart in 1975: All the founders had academic
degrees in business administration and they believed that this gave them a
competitive edge over the main competitor .i.Veckans Affärer;. The first
intended recruitment policy was later articulated as the rule:
We recruit people with an academic degree in business administration and teach them how to write.
The recipe
in the media industry was normally the other way round: to recruit jour-nalists
and teach them business. The competition in the Founder Phase from other media
was therefore not high, but growing. The challenge was to find any financial
analysts at all and Affärsvärlden went outside the media industry.
Affärsvärlden´s first five analysts were recruited from .i.Unilever ;(1),
.i.Exxon ;(2) and .i.Perstorp ;(1), not from the financial sector. Other media
would not consider such unusual recruitments at that time.
Affärsvärlden´s
choice of its "own" .i.Know-How markets; thus had profound effects on
the magazine (and also on the corporate strategy see Chapter 4.5).
• The emphasis on content
rather than form in Affärsvärlden was emphasised.
• It underlined the image of the magazine as being
good at analysing companies.
• It made the differentiation of the magazine very
clear to the readers. The Affärsvärlden style was easy to recognise both in the
articles and the design of the magazine. The anti-Veckans Affärer assumption in
the strategy was not an empty belief. The staff of Affärsvärlden were simply
unable to produce a Veckans Affärer - even if they had wanted to.
During the
Expansion Phase Affärsvärlden developed a special method for finding know-how
by narrowing in on the editors of the university magazines. They were offered
summer jobs and several of them stayed. The relations were considered valuable
sources of know-how even if they did not stay, so the network was entertained
actively. One of the summer trainees in 1983 was in 1993 appointed
Editor-in-Chief after a period in the financial community.
The
overall recruitment policy thus remained the whole period but the
implementation changed. Three examples:
• When the universities began
to graduate larger volumes of young financially trained graduates,
Affärsvärlden switched over to that market, because it was felt to be easier
than recruiting good young analysts from industry. This enforced some changes
in the hierarchy of .i.values ;that gradually opened up a new .i.dichotomy;. It
was at that time labelled the "generation rift".
• However, on the new market Affärsvärlden experienced
a much tougher competition for new talent. The media and the publishing
industry were not considered a problem, but Affärsvärlden´s aim was to recruit
financial analysts who at the same time knew how to write. They were a rare
species and the booming financial community picked the students straight from
their classrooms and offered them much higher salaries than Affärsvärlden
could. They were also offered profit sharing and stock option schemes, just
like Affärsvärlden had.
• Another example was the emerging problem of the
.i.age pyramid;. Managing the Age pyramid emerged as a complement to the
recruitment policy around 1983 and was formed into a management policy from
1984 and onwards. The implementation of this policy managed to keep the average
age at around 35 years for almost fifteen years until the business climate
changed the whole picture in 1990.
The
recruitment of young graduates kept the average age down in the .i.editorial
staff;. However, the .i.values ;of the new and young recruited in 1985 were not
the same as the values of the founders and the other "Oldies" that
had been recruited in 1978-1980. The old senior partners were of roughly the
same age and many of them had experience from industry, whereas the younger
came straight from school. The new were of the "yuppie" generation
and they felt that there was a growing tendency among the older to answer the
questions from the younger with the classic. . .
. . .we already tried that in 1978 and it didn´t work.
Figure 21. With the aid of recruitment policy and growth, the average
age was kept on a stable level until the crisis on the financial markets forced
Affärsvärlden to reduce its staff. NB also the heavy shift marking the
beginning of the Founder Phase.
A new
.i.dichotomy ;of values at that time interpreted as a generation rift began to
open up around 1985-86. The "Yuppies" did not want to wait for their partnership
and from 1986 they pressed hard for a change of the Partner System.
Being so
vulnerable to personnel turnover in all knowledge areas was also regarded a
problem since the start. During the Founder Phase everybody was a key person,
which is why an articulated objective of the new formal partner system became:
Keep
.i.personnel turnover; down.
The
company was seemingly successful with this strategy all until the crisis in
1987-88.
The personnel turnover appears quite low compared to the volatile situation on
the financial markets and the competition.
As the
years passed the low personnel turnover was attributed to three main key
factors in varying degree:
• 1. The profit sharing
system, later the .i.Partner System;.
• 2. The high .i.professional knowledge; level of the
staff.
• 3. The "Affärsvärlden spirit" or
"Culture". (Here called .i.Tradition;).
All three
factors contributed, but their perceived importance seems to vary over time.
During the Founder Phase the first factor was regarded as the most important
and the formal partner system was therefore designed to keep the partners
locked in for a long time.
Figure 22. Personnel turnover was kept low during the whole period, with
the exception of the crisis years in 1987 and 1988.
The image
of being the magazine with a high quality helped both .i.recruitment ;and also
prevented people from leaving. During the fifteen years 1975-1990, including the
crisis in 1987/88, only two people left to be employed by other media. Most job
offers for business .i.journalists ;did not feel like a step upwards so unless
the staff were offered very handsome profit sharing in a brokerage firm or a
top management job they tended to stay.
The
competition on the .i.Know-How market; from the brokerage firms was more
severe, however. It became obvious when Consensus crashed in 1986. None of the
trainees that at time happened to work in Consensus wanted to join Affärsvärlden
but preferred the brokerage firm .i.Alfred Berg Fondkommission;.
Affärsvärlden´s
own local .i.Tradition ;was the third factor that tended to keep personnel
turnover down. Once socialised into the hierarchy of values it was very
difficult to break out of the taken-for-granted, despite the large external
network.
Later, in
the crisis years of 1987-1989, the Tradition boomeranged back in an unexpected
way, however. The Founders of .i.Consensus ;in 1982 brought many of the Founder
Phase values with them, recruited accordingly and moulded Affärsvärlden´s
Tradition into a modified "brokerage-form". When Consensus crashed in
1986 most of the Consensus staff joined Alfred Berg Fondkommission. They
created a tempting organisation with a tradition similar to Affärsvärlden´s
right in front of the eyes of potentially discontent Affärsvärlden members.
During the Retreat Phase Alfred Berg Fondkommission was able to recruit no less
than four of the most competent people.
4.4.2.2. Selling Know-How -
the Consensus Case.
The
.i.Consensus ;case illustrates the problems involved in selling the same
knowledge on two different markets, one that may be regarded as a know-how
market, the other an information market.
The first
intended strategy of Consensus in 1980 was to assist listed companies in
creating financial image advertising. Such .i.advertising ;was unknown in
Sweden in those days and by teaching the companies how to create good ads,
Affärsvärlden thought that companies would more willingly spend some of that
money on buying space in Affärsvärlden. The perceived .i.know-how market; was
thus something in-between consulting and journalism and it was to assist
Affärsvärlden core business.
A year
later the Consensus team proposed to develop their business in the direction of
investor advice, which put Affärsvärlden in an awkward .i.ethical ;dilem-ma.
The journalistic value of integrity prevented editorial staff from first
writing pro-spectuses and afterwards reviewing them in the magazine. The
compromise was to allow the team to go ahead and to move to an office outside
the Affärsvärlden premises.
Their new
strategy proved successful from the start. The Consensus team were selling
their competence as problem solving in direct relation with a few clients.
Consensus had thereby entered a know-how market which was different in kind
from the information market they had been on before.
However,
the Consensus team found out that the underwriters were the real money makers
on this market and they felt that they ought to found a brokerage company. They
proposed a joint venture with a leasing firm. This again created an ethical
dilemma. The Affärsvärlden partners decided that a financial magazine could not
own a brokerage firm. The new venture also needed a large amount of capital, much
more than Affärsvärlden had. The compromise was that individual partners were
allowed to buy 11% of the new securities broker, Consensus Partner. The
previous Affärsvärlden subsidiary had now turned into a brokerage firm, no
longer owned by the partnership.
Consensus
had thereby entered a new know-how market. The same professional knowing was
still needed, but the new venture had to add brokerage knowledge and also
organisational knowledge of another kind. This took a year of administrative
chaos to build up in 1984-85.
In 1986
the original founders of Consensus fell out with their new mother company and
they and most of the revenue creating personnel went to the Volvo subsidiary
.i.Alfred Berg Fondkommission,; which thereby stepped up as one of the three big
brokerage firms in Sweden.
Financial/Journalistic
Competence was thus at the core of both Affärsvärlden´s .i.strategy ;and
Consensus´ strategy at the start. Consensus started close to Affärsvärlden´s
traditional information market, with a key people dependent strategy. However,
Consensus found that they had to select one out of two very different
strategies, one more capital intensive and the other more key people intensive.
They chose to go for the more capital intensive, underwriter, which promised more
profits. Once the Consensus venture was on its own, the mother company was
unable to prevent the Consensus team to move in its own direction and to choose
a strategy which was incompatible with Affärsvärlden´s.
The
organisational ties, which relied mainly on .i.tradition;, proved insufficient,
when the two organisations were separated both physically and later also in
strategies.
4.5.
Knowledge in Strategy.
This is
not the place to problematise the concept of .i.strategy;. I regard strategy as
an incremental process (Quinn 1980) in which actors cycle between
proactive, articulated rational intentions leading to actions and
justifications in retrospect. The researcher can then analyse a pattern. For
the analysis I use Mintzberg´s (1978) notions of emerging, intended
and realised strategies respectively. The intended strategies are
normally articulated, the others not.
What was
the role of knowledge in Affärsvärlden´s strategy? As mentioned above (Chapter
4.2.3) the dialectic between knowledge and power was being entirely based on
the professional agenda during the Founder Phase. This could be seen in the
first intended strategy. It was oriented from-the-inside-and out with
infoduction as the core.
The
professional .i.values ;were reflected in the ideas for new projects which were
primarily regarded as vehicles for self-fulfilment and knowledge growth. There
was an articulated reason too; the notion that Affärsvärlden would sooner or
later fill its niche. They felt a need for "a second leg". Therefore
already in 1976, feeling the success, the team began to discuss diversification.
The first
.i.diversification strategy; was articulated in a document in June 1977. The
intended approach to diversification was to keep Affärsvärlden as the centre of
knowledge and spin off products from there, aimed at the readers of
Affärsvärlden. The intended expansion strategy looks logical and rational, free
from environmental forces and void of personal values, but in fact the
diversification had already emerged when the document was written.
A silent
implicit motive for the diversification strategy was also to be a tool in the
strive for independence from the Foundation. The second new venture, Sweden
Business Report, was thus started as a separate company owned by the team
members privately.
The
strategy emerged from the founders and it mirrored their knowledge, the power
relations and their values. It is possible to distinguish three tracks of
expansion. I call them: a publishing track, an analytical track and an
international track.
There was
also a strong inclination to keep all costs down to a minimum: I label it the
.i.cost control; strategy. The cost control strategy was linked
to the do-it-yourself assumption. It was inherited and it was natural because
of the history and the competitive situation. An inherited assumption ,that
also influenced most strategy decisions, was "anti-Bonnier". The
Swedish publishing industry was dominated by the .i.Bonnier;-sphere and the
Foundation had once been created as a counter-force against .i.Veckans
Affärer;.
The
assumption about the importance of profit sharing and ownership had developed
into such an important feature of the organisation that I regard them as the
emerging strategy of .i.Partnership;.
The
strategic process thus emerged based on the .i.professional knowledge; and the
professional .i.values;. It was a process from the inside and out, although the
ideas originated in discussions with the readers and the financial analysts.
It is
possible to distinguish several impacts from the perceived environment on both
tradition and strategy. However, the team held a hierarchy of values that was
different from that of the rest of the publishing industry and the journalistic
establishment. This made their strategic choices seem untraditional from a
.i.publishing industry; point-of-view.
Being
outsiders in the publishing industry and being more analysts and journalists
than publishers, they almost entirely got their prime feedback from some
influential readers in their networks, i.e. the journalistic tradition was not
very influential. The networks consisted of the actors in the financial
community and the top managers of the Swedish big publicly listed companies,
rather than other journalists or publishers.
A summary
of the main elements in the corporate strategy is thus:
• 1. Affärsvärlden magazine as
the core.
• 2. .i.Partnership;.
• 3. .i.Cost Control;.
• 4. .i.Diversification ;along three tracks.
4.5.1. The Business
Strategy of Affärsvärlden Magazine.
The strategic
history of the Affärsvärlden magazine in 1975 was to be small and to be on the
defensive. The choice to build further on the analytical image of Affärsvärlden
and the analytical knowledge was thus not a revolutionary idea. Neither did the
team wish to upset the board of the Foundation by too drastic measures. The
intended, .i.explicit strategy; of the relaunched magazine may even be regarded
as a straight continuation of the past.
The
decision (not regarded as strategic at that time) not to allow by-lines in
Affärsvärlden, just meant following an old tradition prevailing in traditional
media. Affärsvärlden´s anti-by-line idea fit very well with the all-are-equal
value. The past was thus mixed with the new emerging Affärsvärlden .i.Tradition
;into a number of very firm assumptions about how the magazine
"should" be designed. One example is that the articles in
Affärsvärlden of 1993 still carry no by-lines.
Affärsvärlden
possessed few - if any - industry .i.recipes;, the team developed its own
knowledge, and the company was therefore confusing to the publishing industry.
It was looked upon with awe by the journalists, with respect by the analysts
and with ridicule by the publishers (until the profits soared). This fed back
and reinforced the feeling of being unique, which made the Tradition more
entrenched.
Being an
outsider in an industry had its merits. The team designed a magazine that they
would like to read themselves, which was far from a recipe approach to magazine
design, but which in the end proved very successful. Their idea to .i.recruit
;mainly business academics as journalists, was unheard of in the publishing
industry, but soon other newspapers and magazines followed suit.
On the
other hand they were inexperienced as publishers and their insistence on
do-it-yourself made them invent the wheel over and over again. Their power
struggles occupied much energy initially and they would probably have gained
from a more professional design function, a knowledge they ranked lower than
other publishers would have done.
The
editorial idea and the commercial concept of Affärsvärlden of 1975 was a direct
response to the competitive situation in the publishing industry. Affärsvärlden
magazine was designed as anti-.i.Veckans Affärer;. One simple reason was that
Veckans Affärer´s magazine design was far too costly to copy. The rational
response was to compete on content rather than design and low cost black &
white pages rather than colour. A text page of analysis made by relatively
low-paid editors cost less than a page with pictures and colour.
Veckans
Affärer´s news orientation (the yellow pages) was also far too costly to copy.
News hunting cost many man-hours spent on fruitless phone-calls, whereas
analysis could be done in-house and cost less, even if the analyst was higher
paid.
Veckans
Affärer held a large share of the .i.Information Market; and could benefit from
economy of scale (see also Chapter 3.7). Affärsvärlden, on the other hand, had
a larger market share than its competitor in the financial .i.Know-how Market;.
It gave them a high .i.legitimacy ;also in the Information Market and
Affärsvärlden was thereby able to carve out its own analytical niche in the
Information Market.
The
strategy proved successful, the volumes and the profits increased each year. In
fact, the business strategy of the Affärsvärlden magazine was so successful
that it remained the same all through the decade. It is still (1994) the same,
whereas Veckans Affärer suffered severely during the depression 1990-1993 and
had to change strategy and format, (see Chapter 3.7-8).
4.5.2. Partnership as
Strategy.
The
agreement with the Foundation gave the staff the right to dispose all profits.
Partnership emerged as a strategy based on the assumption that shared profits
were essential for attracting highly competent people and keeping them from
leaving the company. The .i.partner ;system was constructed accordingly.
Therefore, ownership by leading actors was actively encouraged, in
Affärsvärlden as in all joint ventures. See also below Diversification
Strategy.
However,
it turned out that partnership was a double-edged strategy. On the one hand. .
.
• . . .it was a powerful tool
for recruiting scarce knowledge to a small unknown venture. This was evidenced in
Affärsvärlden, .i.Consensus ;and .i.Findata;.
• . . .it was an effective instrument for making
individuals feel as belonging to a team, as was evidenced by both .i.Findata
;and Affärsvärlden.
• . . .it was an efficient way of avoiding the extreme
marginal taxes on profit sharing in
• . . .it was a system that in a transparent way
directly translated the effects of individual efforts into profits shared,
thereby reducing the conflicts over profit allocation.
But on the
other hand. . .
• . . .the power of the system
as a recruitment tool diminished when competitors like the brokers offered even
better systems. Also the .i.Financial Weekly; case showed that .i.partnership
;as a strategy was contextual; very few
• . . .the Findata and Consensus cases highlights the
conflicts inherent in competing ownership structures.
• . . .the Swedish tax system was reformed and made
i.e. profit sharing an equally attractive system for allocating added value.
• . . .it had a conserving effect, which made it
difficult to respond to changing competition and environment.
The
partnership strategy therefore began to loose its relevance during the Retreat
Phase and it was eventually abandoned when the partners sold their shares to
.i.Wolters Kluwer; in 1994.
4.5.3. The Cost
Control Strategy.
Keeping
costs down was an assumption of success inherited from the tough years before
1975 and it still (1994) is despite the profit improvement. It was such an
essential assumption underlying most important decisions, that I today regard
it as an intended strategy, although it was not regarded as
"strategy" until management realised that it was one of Porter´s
(1980) generic strategies.
Affärsvärlden
was able to keep lower costs than the competition because of a higher
productivity in the editorial staff (see above Chapter 4.1.1.) and a low cost
lay-out. The development of the cost control strategy is probably best
evidenced by the comparison between Veckans Affärer and Affärsvärlden in
Chapter 3.1.7.
The
cost-control strategy was successfully implemented in the whole period. Today I
regard the .i.cost-control strategy; as a one of the most important factors
behind Affärsvärlden´s success compared to Veckans Affärer´s, when the
depression hit the information market in 1990.
4.5.4. The
Diversification Strategy.
The
.i.dichotomy ;between the two main professional knowledge traditions, the
.i.analytical knowledge; and the more .i.journalistic knowledge;(publishing)
knowledge, gave rise to a dual diversification strategy, comprising two tracks
of expansion: the .i.analytical track; and the .i.publishing track;.
Figure 23. The Publishing Track added new businesses based on the same
organisational knowledge as Affärsvärlden but demanded new journalistic
knowledge. The Analytical Track added new businesses based on the same
analytical process of knowing as Affärsvärlden but demanded new organisational
knowledge.
Two of the
four first projects had an international intention. This intention was based on
strong international oriented values held by several members of the team to be
more international in all areas.
I thus
distinguish three tracks of diversification:
• The Analytical Track.
• The Publishing Track.
• The .i.International Track;.
• During the Founder Phase 1976-1979 several small new projects
were started as individual initiatives by the professionals. The process was
organic, from the inside and out. There were two main professional knowledge
.i.traditions ;plus an international desire, which guided the team into three
tracks of expansion. The most influential founders possessed both
.i.intellective ;and .i.agentive ;.i.know-how;.
• During the Expansion Phase 1980-1986 several
big projects were started and they followed one of the three tracks initiated
during the Founder Phase. The organisational .i.values ;took over more of the
initiative and the process was more from the outside and in and was more
actively "administered" by the management. Financial risk taking was
much greater.
• During the Retreat Phase 1987-1989 no diversification
projects were started, except as spin-offs from one of the magazines. Financial
risks were avoided.
• .i.Joint ventures; became the prime
implementation method for all the tracks of diversification. This was because
Affärsvärlden had limited financial resources and the troika felt that the only
way to grow was to form alliances. It was implementing .i.partnership ;as a
strategy. Joint ventures also fit with the intention originating from 1977
which was to keep Affärsvärlden as the core combined with a network of
alliances and relationships between individuals.
4.5.4.1. The Analytical Track.
The
.i.Analytical Track; added new businesses based on the same analytical knowing
of Affärsvärlden, but demanded new organisational knowledge. As it turned out,
the track involved almost zero in money risk, but high "personnel"
risk, since the analytical knowledge was scarce. The markets were growing fast
and in the first years there was little competition.
.i.Aktiemarknadsbevakningen
;(AMB) was launched in 1980 as a "stock watch" newsletter.
The customers were brokers. It was half information product, half consulting
service. AMB was quite profitable most of the period but very sensitive to
changes in key-people. AMB survived the whole period and is still (1994)
profitable.
.i.Consensus
;started in 1981 as a consulting business. It turned into a stockbroker 1983
and Affärsvärlden sold out in 1986 after a clash with the joint venture
partner. (See more in Chapter 4.4.2.2. and Book 2:6.8.1.1.)
.i.Findata
;was a joint venture with five professionals, Stockholm School of Economics and
Affärsvärlden. The company was founded in 1983. After a clash with the
professionals Affärsvärlden sold out to them in 1987. (See more in Chapter 4.3.1.
and Book 2:6.8.1.4.)
4.5.4.2. The Publishing Track.
The
.i.Publishing Track; added new businesses based on the same organisational
knowledge as Affärsvärlden, but demanded new journalistic knowledge. This track
involved a high money risk, but the knowledge was not scarce and the personnel
risk turned out to be quite small. The magazines were launched in (perceived)
growth niches, aiming at advertising revenues, which generally turned out to be
smaller than expected. The competition was very severe from the start both from
other magazines and from substitutes.
.i.Sweden
Business Report; (SBR) a fortnightly newsletter was launched in 1978. SBR
remained quite profitable all until the end of the 1980s when the brokers´ free
newsletters took over the market. SBR was then turned into a joint venture with
the Stockholders´ Association.
.i.Ledarskap;,
a management monthly, was launched in 1982. The reader niche was considered too
small for attracting advertisers, so it was started as a joint venture with
.i.Civilekonomernas Riksförbund; (an association of business school graduates).
Several Swedish competitors were launched in 1984-1986 (two from Bonniers) but
they all failed. Ledarskap, the only survivor in the segment, had a shaky
profitability however, and when the association cancelled the agreement in
1989, Ledarskap was folded in 1990 when the depression hit the advertising
markets.
.i.Affärer
& Företag; (A&F) was initiated by the marketing manager in 1985.
The small business segment was considered very promising in the early years of
the decade; successful small business magazines were launched all over the
world, ten only in
There
were also a number of Spin-offs based primarily on .i.advertising ;revenues
and they were (still 1994) mostly successful.
4.5.4.3. The International
Track.
The .i.International
Track;, was based on the values of some of the most influential partners.
Sweden Business Report (see above) might be regarded as a first approach.
.i.Financial
Weekly; 1985 was a weekly magazine aimed primarily at the financial centre
in
Eurexpansion came in as an
investor (15%) in .i.Ekonomi+Teknik Förlag; in 1990. Eurexpansion was building
a network of business magazines all over
4.5.5. Analysis of
Diversification Strategy.
I
distinguish between:
1.
.i.Product strategy ;(= strategy for a single book or supplement with no
employees).
2.
.i.Business strategy; (= strategy for a subsidiary or joint venture business
with separate staff).
3.
.i.Corporate strategy; (= strategy for Affärsvärlden Group).
When can a
strategy be perceived as a "success" or a "failure"? One
can´t answer this question without asking at least three questions first:
• Who is the judge? (The manager
him/herself, a scientist, an independent jury, the competitors, etc.).
• What do we use as the norm? (Content, Innovation
level, Profits, value for mankind, percent on sales, survival, etc.).
• When do we measure? (After a period, during a period
of years, eternity, etc.).
I choose
long-term survival (> 5 years) as the norm, assuming that management at the
time were the judges and made the judgements in a perceived context and also
assuming that five years is the longest period a manager dares to foresee.
As I
interpret the .i.Diversification Strategy; today, it was a failure from the
corporate point-of-view despite the fact that many of the product strategies
and business strategies were successes. (for details see Book 2, Chapter 6.8)
The .i.Publishing
Track; failed because the Information Markets developed much more adversely
than anyone in the publishing industry had foreseen. Since only one launch in
ten years can be considered a success among the readers in the financial
.i.information market;, (Dagens Industri);, one might conclude that the
Publishing Track - in retrospect - was more or less impossible.
The .i.Analytical
Track; failed because Affärsvärlden found itself on rapidly evolving .i.know-how
markets; with other customer/supplier relationships than in the Infor-mation
markets. The intended strategies were replaced by new emerging strategies which
caused ethical dilemmas or moved the businesses outside the scope of
Affärs-världen´s corporate strategy. The new businesses also demanded other
organisational knowledge transfer systems than publishing so despite the fact
that most of the new venture were successes, Affärsvärlden corporate management
were not able to keep the professionals from "running away with the
business".
The
analysis above displays my interpretation in retrospect. However, the documents
reveal that the majority of the partners (including myself) saw a different
picture at the time in question.
The first
small diversification ventures during the Founder Phase were perceived as
learning, not as successes nor as failures.
During the
Expansion Phase the diversification was speeded up with full consent among the
partners, (except the small business magazine A&F). Even the very risky
.i.Financial Weekly; project was regarded as a valuable opportunity for
self-fulfilment by all partners. The partners felt that it was well worth
spending the profits on such projects rather than paying most of them in taxes
and more in line with the Affärsvärlden .i.Tradition ;than engaging in
elaborate tax-evasion projects. (Affärsvärlden had 65% marginal corporate tax
at that time).
The
perception changed in the winter 1986/87. The partners began to perceive
.i.Ledarskap ;as a never ending disappointment, .i.Financial Weekly; was
perceived as a very big risk with no potential, A&F was regarded as both
uninteresting and as a disappointment and the conflict with .i.Findata ;was
tearing.
In the
crisis year 1987 almost every new venture was perceived as being on the brink
of failure and the partners, including the professionals employed in the
Findata joint venture, lost faith in the management troika.
Since the
diversification strategy was such an essential element in Affärsvärlden ever
since the start, its perceived failure rocked the foundation of the whole
Affärsvärlden Tradition and opened up for the Retreat Phase and later the joint
venture with Ingenjörsförlaget.
5.
Towards a knowledge perspective.
The
purpose of this research has been to indicate a path towards a Knowledge
Perspective by exploring a way of asking questions which focus on the role
of knowledge in various areas of organisations.
I believe
that many of the interpretations may be general for organisations that I have
labelled ".i.information processing organisations;." They can be seen
as hypotheses guiding research into similar cases.
The use of
a knowledge pespective is however not restricted to those organisations.
Information processing is increasing in society as a whole and it is an
important activity also in organisations, the output of which is not
information. It has for instance been estimated that among the big
manufacturing Swedish companies today, roughly half the salary costs are paid
to employees working with .i.information processing;. Research into subunits
within such companies might reveal similar processes as in the Affärsvärlden
case.
5.1.
Synthesis.
The
concepts introduced in Chapter 2. and 4. can be summarised as a picture.
Figure 24. The Information Processing Organisation operating on two
different markets.
Individual
actors are constantly involved in .i.processes-of-knowing; through
which they try to make sense of the world. The most .i.competent
;individuals are able to influence others by changing the .i.rules ;of
knowledge formation.
The actors
transfer knowledge within two main .i.traditions ;of knowledge:
.i.professional ;and .i.organisational;.
The professionals
are influenced by a .i.professional tradition.; They use their .i.tacit
knowing ;for creating a picture of reality, which they articulate
for their customers. This process is called .i.infoduction;. The
outcome of the infoduction process can be transferred in the form of .i.information;,
like articles, magazines, written or oral reports, seminars or books. Another
way is to transfer their process-of-knowing to customers in an
interactive process in a direct relation with clients.
The other
actors, (management, .i.marketing;, .i.sales;, administration etc.) are mainly
influenced by the .i.organisational tradition;.
Organising
takes place in a dichotomy between the two knowledge traditions. This may be
understood as a conflict over .i.freedom of space; between the actors.
Organising
develops in two ways: as tradition of knowledge between individuals and as
indirect transfer of knowledge. The latter consists of manuals, agreements, and
other formats of the infodction process which survive individuals´ coming and
going.
The
environment outside organisation can be regarded as markets with
competitors. The competitors are other companies in the same information
industry. There are two different kinds of markets to consider. Information can
be regarded as products on an oversaturated .i.Information Market.;- The
limiting factor on this market is reader .i.time;. The other
market is the .i.Know-How Market;. It involves a more direct transfer of
the process-of-knowing, i.e. recruitment of individuals, as well as the
transfer of their process-of-knowing through interaction with suppliers and
clients. The limiting factor on this kind of market is the human ability to
acquire .i.skills;, .i.know-how; and .i.competence;.
Competition comes from other organisations wishing to recruit people or with
intentions to involve in direct relationships with clients or suppliers of
knowing.
I have
used one particular conceptualisation of knowledge and it is of course possible
to base interpretations on other conceptualisations of knowledge. It is the
focus on knowledge and the role that knowledge plays in the business that is
important.
Below I
highlight four features of a more general nature:
• 1. .i.Infoduction ;as the
core process.
• 2. Relating to two markets.
• 3. The .i.dichotomy ;profession - organisation.
• 4. Non-managed Organising.
5.2.
Infoduction as the Core Process.
It is
common to regard journalistic work as adding new .i.information;. It seems a
common sense notion because the outcome of the work is a text that did not
exist before. This notion however, misses one important aspect.
From a
receiver´s point of view, one single piece of information might be very
clari-fying and indeed initiate (add) new tacit knowledge. However, if .i.chaos
;contains more information than structure, it means that increased volumes of
.i.information ;do not increase potential knowledge. The effect of the large
and increasing number of sources sending out information today is rather the
opposite; that chaos and entropy increases in the world as a whole.
When the
outcome of infoduction is communicated as information, it only adds to
information chaos. It might be a somewhat disappointing conclusion for many
pro-fessionals involved in information processing: while they improve their own
know-ledge, they add to chaos and increase entropy in society. They can not be
certain that the positive effects of their work, potential knowledge for some
people, offset the negative effects, information chaos for many people. The
efficiency and quality of their work does not necessarily mean a "better
world". The Affärsvärlden case highlights that information is not a very
efficient way of transferring a .i.process-of-knowing.; Knowing is best transferred
via tradition in an interactive psycho-social relation. Both the physical
premises and the human relations are thus crucial.
There is
no thus evidence that the increase in financial information volume during the 1980s
and 1990s really has improved decision making. The increased infoduction
capacity in the world is instead utilised for keeping track of a capital, that
turns faster and faster driven by the same computer technology that speeds up
infoduction. Today it seems as if the decision makers on the financial markets
need more and more info-duction in order to take the same decisions as before.
Is it just a zero-sum game?
Researchers
(i.e. Simon 1971) have since long sought the solution in automated buffers and
filters, which reduce overload. The empirical data highlight the effects of
computerisation on infoduction. That the effects of computerisation are
perceived differently depending on whether it affects the core process or the
support areas, is known (i.e. Quinn 1992) and confirmed by the case.
Computerisation of the info-duction process gives opportunities for additional
revenues and new businesses rather than cost reductions. It thereby directly
affects the strategy.
The
distancing effect of computerisation in a physical environment, Zuboff ;(1988)
Sotto (1990), are confirmed by the empirical data from the case. However, the
journalists have added a new dimension to their work. Because of their ability
to use intellective tools they perceive that they come closer to the production
of the actual physical pages in the printing shop, rather than further away.
The distancing effect is thus not so clear as Zuboff and Sotto suggest. Might
computerisation of the process-of-knowing in intellective oriented professions
function two ways: both decreasing distance and increasing it? Further research
might shed some light on this.
Computerisation
is known (i.e. .i.Göranzon ;& .i.Josefson ;1988) to reduce competence as
perceived by the individual (defined as the ability to change the rules of the
process-of-knowing). This is because computerisation makes knowledge transfer
independent of the individual by moving the process-of-knowing from an
interactive process to a transfer of information. This is not always the case.
E.g. the majority of those invol-ved in infoduction may perceive a considerable
gain in competence. They learn new graphic skills, they increase their creative
ability with the aid of word processing, they are able to do more comprehensive
analyses and they may find new business opportunities. (See Chapter 4.1 and
4.2.1.).
However,
the computer easily and efficiently takes over the computation element (part of
skills) in infoduction. This effect forces the individuals to renew and/or
redefine their work and move up the hierarchy of knowing, in order to keep up
with the competition from colleagues of other media. Data from the case
(Chapter 4.1.2.4.) suggest that when intellective skills are replaced by
computers the technolo-gy functions as a push "from below" on
intellective know-how. This observation might be valid for most intellective
professions.
The
empirical data confirm that the route to competence goes via initial
subordination, just as .i.Polanyi;´s theory suggests. By accepting the values
and the existing knowledge within a tradition, the individual junior journalist
starts as an apprentice and gradually gains more space of freedom in his/her
work. The paradox is thus that in order to gain the .i.power ;of knowledge, the
individual first must subordinate to it. It is not until professional had
reached the level of competence, that he or she is able to influence the
.i.process-of-knowing; by challenging the .i.rules ;and .i.values ;of the
profession.
Another
example of this complex relationship between knowledge and power is
Affärsvärlden´s knowledge in stock evaluation as depicted in the Investment
Indicator, (Chapter 4.1.2.2.). Affärsvärlden was thus able to transfer
.i.know-how; in how to use the rules of the analytical knowledge but not
competence to change the rules. This indicates that competence :transfer ofis
not possible to transfer between individuals - it has to be re-invented by
others in a new context. Interactive transfer of the process-of-knowing might
therefore be a precondition for building competence in information processing
organisations. Must one accept the organisational fragility that seems to
accompany it? This is one of the more crucial questions that needs to be
researched further. See also below chapter 5.4.
Another
crucial question is the validity of the .i.Infoduction ;metaphor itself. How
general is it? Can the concept catch the essentials of the production process
in other information processing organisations or in other professions? The
interpretations in this thesis are derived from the journalistic profession,
but many other information processing professions share the same family of
resemblance. The features of the process-of-knowing and the distinction between
.i.Intellective ;and .i.Agentive ;Knowing are similar to those that most
professions involved in producing, analysing or processing information display.
Such professions are found in organisations or departments involved in
research, in management consulting, accounting, advertising, architecture or
engineering, etc. But also in public authorities, universities and governments,
where most of the employees are involved in infoduction. Further research in
these areas is needed to validate the concept.
5.3.
Relating to Two Different Markets.
One of the
main assumptions brought forward in this thesis is that the outcome of
infoduction can involve two different customer relationships: a .i.Know-how
market; and/or an .i.Information market;. Affärsvärlden was active on both
markets. The different characteristics of the two markets, implied both
problems and opportunities for managers, as was evidenced in chapter 4.4.2.
The
financial information market revealed (Chapter 4.4.1.) a close relation between
time and value in money terms. Therefore, the notion of Information Market should
in principle be able to use for interpreting how other .i.infoduction ;products
will behave. It is thus possible to speak of a market for scientific
information, technical information, political information, etc. with similar
characteristics as the financial information markets.
This has
implications for transfer of, for instance, scientific
.i.knowledge:scientific;. The outcome of a scientific process-of-knowing must
be possible to articulate as information. However, scientific publications
enter the chaotic information markets, irrespective of the volume, the content,
the intention or the author. The characteristics of the information markets
unfortunately make it unlikely that a scientific publication will be carefully
read by any one, unless it addresses the competitive factors identified in
Chapter 4.4.1.2. What implications does this have for the relation between
science and society? Must new methods more appropriate for today´s societies be
developed?
The
editors of the massmedia react on information chaos and competition on
oversaturated information markets by exaggerating their messages and by cutting
them into small and incoherent bits and pieces (.i.Baudrillard ;1992). The
financial information market is a case in point. .i.Dagens Industri; became
very successful through a concept designed to follow this trend. .i.Veckans
Affärer; for a while tried to move against the trend, but had to redesign and
relaunch following the trend.
Affärsvärlden
on the other hand has so far been successful by not accepting the trend. One
possible interpretation is that Affärsvärlden´s share of the financial Know-How
Market was - and still is - larger than its nominal size and share of the
Information Market. Affärsvärlden´s legitimacy on one market trickles over into
the other. Affärsvärlden might be perceived by the readers as able to offer
knowledge - not only information. This gives one plausible reason why
Affärsvärlden was able to overcome the high entry barriers on the financial
Information Markets in the Founder Phase. (Chapter 3.3 + 3.7).
.i.Bourdieu
;(1987) advocates that there exist two kinds of capital in a culture: a
commercial and a symbolic. He suggests that book publishers have two choices of
strategic behaviour for reducing uncertainty: A "commercial" or a
"cultural". The commercial strategy means culture produced for the
massmarket. It is focused on short term pay off and concentration on
bestsellers backing them up with massive marketing. The cultural strategy means
a long term build-up of relations backing the artists, hoping that some of them
might turn into bestsellers. Bourdieu calls this build-up of relations with
authors and readers a "symbolic capital".
.i.Björkegren
;(1992) uses Bourdieu´s perspective in analysing the strategic behaviour of book
publishers, record companies and film industry. Such industries, he says,
produce potential meanings rather than finished products. The author or film
director can not decide how a book or a film will be interpreted. For a
cultural product to gain commercial success its potential meaning must become
"popular", which in its turn pushes up the volume and the profits.
Bourdieu´s
cultural strategy seems to be similar to the from-the-inside-and-out strategy
of Affärsvärlden during the Founder Phase (Chapter 4.5.5) which was based on
knowledge from the professional tradition determining the agenda of discussion.
The commercial strategy can be interpreted as a from-the-outside-and-in
strategy when the agenda is determined by the organisational tradition.
Bourdieu´s
dichotomy may also be compared to Affärsvärlden´s dual tracks of expansion. The
.i.dichotomy ;between the two main professional knowledge traditions, the
.i.analytical knowledge; and the more .i.journalistic knowledge;(publishing)
knowledge gave rise to a dual diversification strategy, comprising two tracks
of expansion: one more professional directed towards Know-how markets, the
other more organisational, directed towards Information markets. (They were
called the Analytical track; and the .i.Publishing track respectively in
Chapter 4.5.4);. Such dual strategy patterns have been found in other
industries like consulting and computing (Sveiby 1986, 1987).
Although
it is not entirely clear from their case descriptions, it might be possible to
bring Bourdieu´s analysis one step further by applying a knowledge perspective
on his and Björkegren´s cases. One might then see that the strategy has moved
in cycles (see below 5.3.2) between the .i.Professional tradition;and the
.i.Organisational tradition; of knowledge. Since the first strategy tends to
emerge (.i.Mintzberg ;1978), it depends on which knowledge the founders allowed
to decide the agenda of discussion when the company was formed.
5.4.
The Dichotomy Profession - Organisation.
One of the
most critical issues in publishing companies regards the dichotomy between the
professional and organisational knowledge traditions. The two traditions
encourage diverging opinions among the actors, because their processes of
knowing are influenced by cues and data from diverging environments.
The actors
of the professional tradition tend to have an intellective bias in their
process-of-knowing. Their job is infoduction and they are in constant
interaction with an environment outside what is perceived as (their own) organisation.
The actors who have this organisation as their main task, mostly the managers
and the office staff, tend to have a more agentive bias, because their job is
to organise, often through other people and mostly within what is perceived as
the organisation.
The
dichotomy between two areas of legitimacy via technical competence or position
is discussed already by .i.Weber ;(1983) followed by a/o .i.Etzioni ;(1961,
1964, 1972). Weber (1986) identifies the movement in the Western societies
towards structure as a human (based on Protestant religion) strive for
efficient (rational) solutions to managerial problems. Etzioni describes the
.i.dichotomy ;as a conflict between the experts and the administrators over the
legitimacy between informal and formal sources of competence. Etzioni claims
that many organisations therefore develop two leaders: one .i.informal
leader;and one formal.
Weber´s
and Etzioni´s research were made before the era of .i.information processing,; but
the conflict between the personal and the positional powers they found is
similar to the conflict between the professional and the organisational
traditions in the information processing organisations of our time. (The
professionals being "informal".)
Later
research also reveals the tensions between professional and organisational
norms, especially in large organisations (see .i.Hall ;1987 for a summary).
.i.Hinings;, .i.Brown ;& .i.Greenwood; (1991) suggest with an example from
change in an autonomous professional partnership, that the authority system
with the clash between the organisational and professional norms is a key
element for change in such organisations. The sociologist .i.Blau ;(1984)
concludes that professionals are not interested in organisation and .i.Lindmark
;(1987) draws the same conclusion based on studies in architectural firms.
Figure 25. A dichotomy between the professional tradition and the
organisational knowledge tradition affects what is perceived as organisation.
The
tension between two competing power structures is particularly evident in
publishing companies and has been acknowledged by Swedish researchers: a/o
.i.Engwall ;(1978), .i.Issal ;(1984), .i.Sveiby ;& .i.Risling ;(1986) and
.i.Sigfridsson ;(1993). .i.Argyris ;(1974) and .i.Martin ;(1981) notice the
same dichotomy, but interpret it in an American and
The main
reason why the dichotomy often becomes a severe clash in publishing companies,
is probably because journalists and (professional tradition) advertising sales
people (organisational tradition) have to interact on a daily basis, since they
relate to two different groups of customers and they have to compete for space
on the pages.
5.4.1.
Cyclic process.
The
Affärsvärlden case suggests that there exists a .i.cyclic relationship; between
the two traditions (Chapter 4.2.3.3) which can be distinguished only by using a
very long process perspective.
Examples
from other cases (.i.Sveiby ;& .i.Risling ;1986, Sveiby 1991), suggest that
the strategic discussions and early decisions of most new-born information
processing organisations in our days are based on the agenda of professional
knowledge. Also Affärsvärlden (of the new era from 1975) was founded on the
agenda of professional knowledge. Due to their lack of recipes, the founders
developed their own organisational knowledge in an organic process. Their
.i.process-of-knowing; was transferred as a tradition, under influence from the
.i.professional knowledge; which determined the agenda during the Founder
Phase. (See Chapter 4.2.1 and 4.2.2). Therefore the professional values of the
Founder Phase determined even typical organisational matters, like accounting
and marketing, also long after the organisa-tional tradition had taken over the
agenda.
Transition
periods in which the cycle moved and "tipped over" from one
.i.tradition ;to the other, were particularly filled with conflict over which
of the agendas should determine the future discussion. The triggers of change
were perceived bad results from the previous tradition. The results made the
actors change their perception by questioning the established values and
symbols from the other tradition.
In periods
when the organisational tradition determined the agenda the professionals among
the partners found that they were left outside the information flow, which they
perceived as a loss of competence. This was probably one of the main forces
behind the shift between the two agendas in 1986/87.
In
Affärsvärlden´s case the cycles lasted between two and six years. Some of the
perceived differences between old (in years) organisations and "new"
".i.virtual;" or ".i.imaginary;" organisations might
therefore be due to the fact that the latter are so young, that their
strategies are still based on the agenda of professional knowledge.
During
periods, when the profession decided the agenda, the competent journalists in
Affärsvärlden were able to influence the whole organisation. But at the same
time they perceived shortcomings in their .i.organisational knowledge;. Were
their perceived shortcomings perhaps more a result of the influence from the
values of the .i.organisational tradition; at that time (1970s)? Perhaps they
were too unusual (Chapter 4.2.3.2) compared to the environment so that they did
not trust their own knowing? Since they chose to "go the organisational
road" in 1980, we can not know.
The power
structure was fluid between organisational and .i.professional tradition;
during the Founder Phase which encouraged a process of .i.re-solving; dichotomies
(over and over again) in an interactive process, rather than trying to solve
them once and for all. Because Affärsvärlden had two competing professional
knowledge traditions sharing the same basic infoduction process, a dual
diversification strategy therefore emerged. The strategy was formed
from-the-inside-and-out with .i.infoduction ;as the main cohesive element.
Even if
businesses based on infoduction need both professional and organisational
knowledge, the empirical data suggest that strategy is more likely to be
successful if it is based on the agenda of professional knowledge rather than
organisational knowledge. That organic processes and emerging strategies are
superior to rational planning according to an .i.organisational tradition; during
the initial stages of ventures, has been acknowledged by entrepreneurial
research. Are new ventures, in which the .i.professional knowledge; is allowed
to decide the strategy, more successful than ventures based on the agenda of
organisational knowledge? This is an interesting area for further research.
Several
other cycle theories may shed light on a long process like Affärsvärlden
1975-1993. .i.Miller ;& .i.Friesen ;(1984) identified a cycle between two
archetypes in a (non-statistical) sample of 52 organisations. .i.Mintzberg
;(1978) sees organisations in constantly unstable environments as tending to
move in cycles between two extremes, one characterised of stability, planning
and bureaucracy, the other characterised by chaos and adhocracy. The transition
phases, recognised as a consequence of environmental impacts or changed
perceptions can be quite dramatic. Cycles are sometimes interpreted as the
well-known (product) life-cycle pattern by research into companies´ growth
patterns (.i.Ahrens ;1992).
The
contribution in this thesis is to specifically pinpoint the cycle between
profes-sional and organisational knowledge traditions as the most significant
in information processing organisations.
5.5.
Non-managed Organising.
.i.Uncertainty
;reduction has since (.i.Thompson ;1971) been seen as one of the most
signi-ficant forces behind managerial behaviour. A/o .i.Mintzberg ;(1983)
builds on this notion for explaining why .i.ad-hocracies; tend to move towards
professional bureau-cracies with growing age.
The growth
of organisational knowledge into .i.power ;in Affärsvärlden can be inter-preted
as a managerial strive for uncertainty avoidance, rationality, harmony, etc.
Thereby harmony should have been achieved. This was however not the case.
Managerial measures "worked" for a period but they never ended in
harmony.
The
failure to reduce uncertainty in Affärsvärlden might therefore be seen as
mana-gerial failure. An interpretation more in line with the basic assumptions
of this thesis is that actors´ efforts to reduce uncertainty are always deemed
to fail because their actions create disharmonies on other levels and in other
areas.
Many
actors in .i.information processing organisations; today probably perceive the
conflict between the two knowledge traditions as a competition between the
personal power of the highest informally ranked professionals and the
positional power of the highest formal officials. It is a dichotomy which
therefore must be "solved", in order to reduce uncertainty in
organising and to achieve clear lines of authority.
By
interpreting their situation through a knowledge perspective, it is possible to
per-ceive it differently. The dichotomy of the two traditions can be seen as a
source of creativity rather than a problem to be solved. Managers might then,
as .i.Hampden-Turner; (1990) suggests, find creative solutions or businesses,
which go beyond both traditions. Affärsvärlden´s infoduction projects or
businesses were for instance more successful, when they were managed by people
who in themselves or as teams com-bined both agentive and intellective
abilities and both professional and organisational knowledge.
Organising
in Affärsvärlden was based on tradition of knowing in most areas. The roles
tended to be designed according to the people available, not the other way
round. When people changed or moved, the roles were changed. The company was
therefore able to survive and adopt to rapidly changing environment and a large
number of various activities. Organising therefore contained in itself the
processes of change, which made Affärsvärlden resemble a self-designing system
(.i.Morgan ;1986).
The
tradition of professional knowledge seems to have functioned fairly well. In
the editorial room of Affärsvärlden, knowing was (and still is) transferred in
an open unstructured way (Chapter 4.2.1.1). i.This way was judged so successful
that the marketing department in the newly merged .i.Ekonomi+Teknik Förlag in
1990; was organised with the editorial room as an ideal in order to improve
tradition of knowledge and creativity. (Chapter 4.4.2.3).
This way
of organising seems both efficient and creative. The efficiency of the
Affärsvärlden milieu is evidenced by the comparison with .i.Veckans Affärer;,
(Chapter 3.7). The creativity is shown by the large number of own solutions to
professional problems that were designed. Affärsvärlden was also able to keep
its professional knowledge reasonably intact compared to many other actors on
the financial markets during the turbulent years of the 1980s.
The
picture is not so clear when it comes to Affärsvärlden´s tradition of
organisa-tional knowledge. On the one hand it could be regarded as functioning
quite well, because Affärsvärlden was able to survive and to be profitable all
through the period. Several of the organisational solutions were quite creative
too. On the other hand .i.organising ;seemed weak. This is evidenced by the
failure of the diversification strategy. (See Chapter 4.3). Was the weakness
due to Affärsvärlden´s own local .i.tradition, ;which encouraged primarily
interactive tradition of knowledge rather than indirect systems? It does not
seem so.
In fact
there existed several quite strong indirect knowledge transfer systems. The
formats of the magazines and the other indirect systems, which were elements of
the infoduction process thus transferred (Chapter 4.3) the process of knowing
quite effi-ciently, independent of individuals. Very few other control systems
were needed. Much of the knowledge transfer in .i.information processing ;is
thus in the .i.format ;and in the process. The infoduction
process itself contains elements, which make organi-sing a natural part of the
professional process-of-knowing. Also, the formats of the information products
function as frameworks of organising. In a more general sense this suggests
that very few indirect control systems and few supervisory managers are needed
for the survival of an information processing organisation.
However,
the indirect knowledge transfer systems that functioned so well for Affärs-världen
were not possible to transfer to other ventures. They were of little assistance
when the team ventured into markets that had other relationships with their
custo-mers, like .i.Consensus;. Financial Weekly; failed for other reasons, but
the difficulties with cultural differences were obvious. The .i.Findata ;case
(Chapter 4.3.1) also under-lines that conscious "management" of a
tradition is very difficult, if not outright im-possible, when there exist
conflicting owner interests or diverging professional knowledge traditions.
Because of
the natural drive to increase their space-of-freedom, professional key people,
employed in businesses outside the core business, tend to question the
relevance of any existing power structure. The interpretations of
Affärsvärlden´s diversification strategy might therefore shed some light on the
complex problems involved in building large information processing
organisations with many subsidiaries in several countries or in different kinds
of markets.
As is
evidenced by Swedish consulting companies´ much publicised failures in their
efforts for internationalisation, such problems are very difficult to handle.
As long the company does not venture into areas outside the core, the
infoduction process and/or the formats of the information products function
seem to suffice.
The
tensions between the two traditions thus seem to be fruitful for both
infoduction and for coping with the uncertainties of the business environment.
The .i.publishing ;industry may perhaps serve as an example for other
information processing organi-sations. Publishing has for instance a tradition
to handle the dichotomy by appointing two top leaders, one editorial and one
organisational. They are forced to re-solve the tension on a daily basis.
Publishing
industry therefore shows features which might be valid for most busines-ses
based on infoduction. They should also be valid for public authorities,
universi-ties and other institutions, the production of which to a large extent
is .i.information processing;. Many of the efficiency problems in public
authorities might be due to a surplus of intellective oriented people, who
interpret demand for .i.agentive ;action into a supply of .i.intellective
;action. The case suggests that the creative tension is lost if one of the two
traditions is allowed to dominate, or if the tension is "solved" once
and for all.
Further
research into questions how .i.knowledge transfer;, .i.tradition ;and
.i.infoduction ;can be seen as key elements in .i.organising ;is therefore
needed. Such research may also shed light on the question why so many
information processing organisations today seem to allow the organisational
tradition take over the agenda of organising. In publishing the dichotomy is
for instance often "solved" by allowing the managing director to be
appointed publisher with also an editorial responsibility.
Managerial
measures which go against the findings and suggestions of this thesis are in
fact abundant in most information processing organisations. Competition between
individuals is enhanced as a means to enhance efficiency. Professionals - not
only journalists - are encouraged to become celebrities and as a consequence
are rewarded with own columns and own rooms. Managers do not share the same
floor as the professionals involved in infoduction, so they are left out of the
interactive knowledge transfer.
Non-managed
knowledge transfer is thus hindered and constant re-solving of the .i.dichotomy
;profession organisation is prevented. As a consequence the dichotomy is soon
not seen as a source of creativity but as a problem in need for
"management". Instead of dichotomies being constructive they become
destructive; the formats and natural processes of infoduction are seen as
obstacles in the organising efforts rather than opportunities. Managers may
feel forced to install indirect knowledge transfer systems like computer
reports or add levels of management for control. Instead of finding new
supporting roles, managers seem to seek security in the old supervisory role,
once designed for the factory of the beginning of the century.
Organisation
research tends to have a bias towards large and old organisations and the
(often implicit) norm is that harmony should be achieved.
To regard
disharmonies and dichotomies as norms rather than deviations from the norm,
might be a better basis for understanding especially the kind of organisations
I have in mind in this thesis.
Where
should research look for clues? Rather than being uncomplicated and not so
interesting for organisation theorists, small and new organisations in some of
fast growing information processing industries may display new ways of
organising, because they are based on human processes of knowing and they have
not yet been taught "how to organise properly".
One way to
see these new developments might be through a Knowledge Perspective.
.c1.6.
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.c1.appendix:
treatment
of empirical data.
I have
used three kinds of sources (in order of significance):
1. Written
documents.
2. My
memory.
3.
Interviews.
Documents.
My main
source of data are documents from three archives, the company archive, Ronald
Fagerfjäll´s private archive and my own private archive. I also made a few
interviews, sent out a small questionnaire and got eight essays from
Affärsvärlden employees.
The
documents were:
1.
Internal historic documents, letters, statistics, memos etc. from the three archives.
2.
Internal historic documents collected from colleagues.
3. Essays
written by colleagues.
4.
Documents from external public sources.
I
distinguish between personal and institutional sources and between public and
private sources respectively.
The volume
of the archives was approximately 8 meters of documents stacked in folders or
binders. It responds to roughly 18.000-20.000 pages A4.
The
volumes were:
1. The old
company archive (no longer in active use), ca 5 meters.
2. Ronald
Fagerfjäll´s personal archive, ca 2 meters.
3. My own
personal archive, ca 1 meter.
4. A small
number of documents collected from colleagues.
The first
problem was the problem of overview. On the other hand I was assisted by my
preunderstanding. This is how I treated the documents:
1. I
collected all the documents in one place.
2. I made
a preliminary disposition of my case story. After this I made a priority list
of the kind of documents that I wanted. Since I was primarily interested in
documents that could yield insight in the internal process I ranked personal
documents and confidential sources on top of the list.
|
|
Personal sources. Author: Myself. |
Personal sources. Author: Others. |
Institutionalsources. Author: Others. |
Institutionalsources. Author: Myself. |
|
Confidential sources |
-Private
letters I have received or sent. -Memos,
business-letters. -Memoran-dums
on documents. -My calendars. Ca 1% |
-Private
letters between others. -Memos,
business-letters. -Memoran-dums
on documents. -Essays. -Articles
in the house magazine. -Speech ma- nuscripts. Ca 5% |
-Internal
PM. -Supporting
documents -Confidential
reports. -Memoran-dums
on documents. -Management
information. -Conference protocols. Ca 10% |
-Internal
PM. -Supporting
documents -Confidential
reports. -Memoran-dums
on documents. -Management
information. -Conference
protocols. -Budgets. -Board protocols. Ca 60% |
|
Public sources |
-Published articles. Ca 1% |
-Published articles. -Photographs. Ca 1% |
-Annual Reports. Ca 1% |
-Statistics. -Pricelists. -Membership
registers. -Annual
Reports. Ca 20% |
3. I
sorted my own archive into order of disposition, like "Ledarskap",
Financial Weekly", "Recruitment", "Explicit Strategy" etc.
The most important documents were coded with a date code plus a code that
described whether the document was a memo, a letter etc. according to the table
above.
4. After
this I examined the old company archive. It contained documents from 1973 to
1986. The archive had been put aside and had remained unopened for many years.
It was locked and the key had disappeared. The largest volume, ca 1 meter, were
tax returns and employees´ files. Those files were excluded. I also excluded
advertising material, old agreements and consulting memos (produced by
Affärsvärlden partners for external clients). I excluded all duplicates of
documents found in my own archive. All accounting reports, both confidential
and public were put in a separate box.
5.
Fagerfjäll´s archive was the last. He had already ordered it into a chronology
and I retrieved documents according to the same principle as above. Now I found
a large number of duplicates which were excluded.
6. After
this process, the remaining documents were:
a) Ca 1000
pages A4 written documents containing mainly text.
b) Ca 500
pages accounting documents containing mainly numbers.
c) A small
number of photographs, brochures and charts.
The
documents were almost entirely in the category confidential. Old public documents,
such as public statistics, were not used as narrative sources (exceptions are
marked in footnote) but treated as remnants. I used the latest public
statistics in the analysis.
Computer
Aided Technique.
I used a
computer technique for some of the analysis. Some 2/3 of the documents were
scanned and stored in a personal computer. I registered the numbers in the
spreadsheet program Excel.
I used a
computer program for the text analysis called HyperQual. The program is
intended for researchers, who must process a lot of unstructured qualitative
data from interviews or documents. It can be regarded as an advanced document
sorter that creates "stacks" in which the researcher can put pieces
of the text. It can also be used for retrieving exemplars of texts (cutting and
pasting) and collecting/sorting them in a specified order under categories or
headings, "tags". These stacks can then ber resorted, merged and
recoded in as many iterations as wished.
The first
list of categories were based on my preunderstanding of the case. I thus used
codes like "Ledarskap", "Financial Weekly",
"Recruitment", "Profit sharing", the names of the actors,
etc. The list soon started to grow due to the findings. The next list therefore
contained codes derived from reflection, like "Collective value",
"Self-fulfillment", "Professional",
"Organisational", "Power". I had to divide too broad
headings into subcodes.
Now and
then the codes were sorted in chronological order. This revealed cycles, the
coincidence of apparantly unconnected events etc. Another kind of codes
appeared: codes based on reflected codes: "Strategy as articulated",
"Strategy as implemented", etc.
I then
stopped using the computer and went the other way, trying to distinguish a
pattern under a few "supercodes", like "Knowledge",
"Power", "Dichotomy Professional/Organisational".
I tried to
find particularly revealing textstrings that could be used as quotes. They were
collected in one stack. I then went ahead and wrote the "Source Case"
using as many of the quotes as possible.
The
computer is very good at speeding up the coding, sorting and structuring
procedure. The program coding was done by copying examplars, not cutting them.
Therefore the same piece of text could be found under several headings. The
volume therefore rapidly increased. But the computer is very efficient in this
and enables the researcher to cover a much larger volume of data in a short
time compared to cutting with scissors and pasting with glue, which is
otherwise the fate of the qualitative researcher.
However, a
researcher that uses scanned documents looses a lot of information, which can
not be stored, like coffee spots, hand written commentaries, bored scribbles
etc., that tell the researcher a lot about the context of origin. The computer also
adds information to the texts, invisible control codes for steering the
appearance on the screen and codes for controlling the printer. The document
that has been scanned, stored and then reprinted may look exactly the same but
is of course not a historic remnant.
I thus
found that the computer both enhanced and reduced the information intake of the
researcher. Therefore I was careful not to loose the original documents. They
were coded and stored in such a manner that they could be easily retrieved for
checking. This proved very important because I noticed that some of my memories
were intimately tied to the physical appearance of the documents.
Criticism
of the Documents.
I have had
an entirely free and unrestricted access to the archives. Problems of
authenticity or restricted access did not exist. The history was still fairly
fresh in my memory and I had seen many of the documents before. The quality of
the documents was thus highest possible.
I
distinguish between documents I have used as narrative sources and
documents I have used as remnants. I have used text documents as purely
narrative sources in relatively few cases. If I have done so I have marked them
in a footnote and tried to validate the truth of the content against later
development.
I have
used latest possible public statistics from external sources. Old public
statistics found in the archives have been used primarily as remnants, i.e. my
interest primarily being in what the actors were aware of at a certain point in
time.
Internal
accounting data suffer from the same weaknesses as regards truth content as
accounting data always do, new or old. They have been treated as the text
sources above. When I have encountered inconsistencies between the contents of
two documents containing accounting data I have as a rule relied on the latter
document, the logic being that errors have been corrected.
Memory
as a Source.
The human
memory is a fragile source of information. Still it is the most common source
of empirical data in social research, mainly because there often exist no
alternatives.
In this
thesis I rely on my own memory as a source and - to some extent - on the memory
of others. Tapping the source of memory of others is mostly done by
interviewing, a technique that adds to the fragility of the data.
Tapping
the source of my own memory as I did in the research process improved the
quality compared to interviewing. The first reason for that is that the process
of writing tended to bring forward memories that I did not know that I had. The
second reason is that the documents of the old archives triggered off a number
of memories that I was unaware of. The third reason is that the combined effort
of reading old documents and writing added a combined quality to the data from
my memory that I think was of a higher order than the data themselves.
I thus
think that the data I have retrieved from my memory using this process are of
higher quality than the data researchers normally get by asking people to tell
stories relying on their memories.
I therefore
regard the researcher´s own personal memories as one of the best possible
sources of qualitative data that are available. I think research benefits from
the use of data collected in practise. In this I agree with the view of action
researchers and the ethnographic approach.
The
problem with personal memories as data are of another kind; the validation of
the data are difficult.
Validation
of Empirical Data.
The
problem with empirical data collected from memory is that they are subject to a
number of inconsistencies, tendencies, rationalisation in retrospect etc. I
have used Miles & Hubermann (1984) as a guideline and - as a rule - tried
to validate memory data through triangulation, i.e. checking data against other
independent sources.
One
important source for triangulation was the book by Ronald Fagerfjäll, Affärsvärlden
1901-1990.
Another
source of triangulation were the documents themselves. There were numerous
cases in which two or more documents were covering the same event.
A third
method of validation has been to let one of my senior colleagues with a long
record in Affärsvärlden read and comment the Source Case. I have also allowed
some of my colleagues both still with Affärsvärlden and who have left the
company read the edited case story (Book 2) and comment on it before I
finalised the last version of it.
Quotes
from people have been validated individually. Comments regarding the sources
and the validation are found as foot notes in Book 2. A single code
"881213" as a foot note means that the source is a document from the
13th of December 1988 and that I regard the quotation as validated. Otherwise I
have made a separate comment.
Index.
Action Research 14
Ad-Hocracies 114
Added Value 76; 90
Advertising 45; 49; 88; 96;
103
Affärer & Företag 48; 79; 103
Afv-School 70; 81
Age Pyramid 94
Agentive Knowing 27; 29;
36; 59; 62; 64; 70; 72; 75; 102; 109; 116
Definition of 29
Agentive Skills 29, 64
Ahrens 46; 114
Aktiemarknadsbevakningen 48; 102
Albinsson-Bruhner 8
Alfred Berg Fondkommission 96; 97
Allén Sture 32
Alvesson Mats 38; 39
Analysts 73
Analytical
Knowledge 91; 101
Profession 68
Process-Of-Knowing 63
Track 101; 102; 104
Apprentice 30
Argyris Chris 28; 112
Articulated Knowledge 59;
67
Assertion 25
Authority 30
Bailey 40
Barabba 34
Baudrillard 110
Beliefs 26
Berger 9; 39
Björkegren 110
Blau 112
Bonniers 42;49; 50; 83; 89; 98
Bourdieu 110
Brain Research 23
Brown 112
Brunsson 38
Burrell 13
Business Strategy 104
Business Week 42
Chaos 33; 108
Civilekonomernas Riksförbund 103
Civilingenjörsförbundet 51
Cognitive Psychology 23
Competence 27; 35; 37; 63;
68; 81; 107
Definition of 28
Competent 59; 68; 107
Competitive Factor 88
Computer Science 23
Conference 75; 76; 77
Consensus 48; 70; 74; 79;
82; 96; 100; 102
Constructivism 2; 11; 12;
23; 32; 37; 37; 39; 40
Context 28
Corporate Strategy 104
Cost Control 98
Strategy 101
Creation 59
Creative Approaches. 82
Creativity 61
Crozier 41
CW-Communications 50
Cybernetics 32; 38ff
Cycle 79
Cyclic Relationship 112
Czarniawska-Joerges 12; 38; 40
Dagens Industri 45; 49; 55; 88;
110
Dagens Nyheter 83
Daudi 36
Dawidov 37
Deal Kenneth 39
Democracy 74
Dextel 83
Dialectic 19
Definition Of 17
Dichotomy 62; 71; 74; 82;
93; 94; 101; 107; 111; 116
Direct Mail 89
Diversification 98
Diversification Strategy
82; 97; 104
Double Interacts 39
Economic Historian 15
Economy-Of-Scale 53
Editorial Room 75; 81
Editorial Staff 94
Effectiveness 64
Ekonomi + Teknik Förlag 51; 80;
104; 115
Engwall 112
Entrepreneur 76
Entropy 33ff
Entry Barriers 53
Epistemology 23
Esselte 89
Ethic, Ethical 66; 96
Ethnographic Approach 15
Etzioni 111
Eurexpansion 42; 52; 80;
104
Event-State Network 20
Experience 26
Exxon 93
Fact 25; 33
Fagerfjäll 22
Family 10
Financial Analysts 67
Financial Weekly 48; 79; 82;
100; 103; 105
Finanstidningen 42; 49; 86
Findata 48; 70; 79; 82; 83;
90; 100; 102; 105; 115
Fitger 42
Focal
Dimension 24
Focal Knowing 25
Focal Knowledge. 24
Format 81; 115ff
Foucault 35
Freedom Of Space 107
Friesen 113
Gahmberg 38
General Index 67
Gestalt Psychology 25
Grounded Theory 16
Gummesson 37; 91
Gutenberg 61
Göranzon 23; 108
Hall 111
Hamel 37
Hammarqvist 37
Hampden-Turner 114
Hermeneutic 12
Heuristic Method 17
Hierarchy Of Knowing
Definition Of 27
Hinings 111
Hrebiniak 37
Huberman 20
Håkansson 37
Hägg 37
Identification 29
IFL 83
Imaginary Organisation 113
Imitation 29
Infoduction 10; 36; 48; 65;
72; 86; 107; 109ff; 113; 116
Definition of 59
Effectiveness 64
Productivity 60; 63
Technology Impact 61
Infoduction Level 85
Infoduction Per Hour 86
Informal Leader 111
Information 9; 32ff; 69;
70; 88ff; 107; 108
Definition Of 33
Flow 69; 77
Market 67; 71; 84; 99; 104; 107ff; 110
Processing 27; 106; 111; 115; 116
Theory 38
Potential Knowledge 34
Technical Problem 33
Value Of 90
Information Processing
Organisations 10ff; 106; 114
Professions 29
Ingenjörsförlaget 50
Ingenjörssamfundet 51
Initiative 75
Intellective 27; 29; 36;
58;62; 64; 65; 67; 70; 72; 74; 75; 102; 109; 116
Intellectual Tools 26
Intelligence 34
Intentional Researcher 19
International Track 102;
103
Interpretative Paradigm 12
Interviews 18; 122ff
Investment Indicator 63
Issal 112
Johannsesen 23
Johansson 37
Johnson 40
Joint Ventures 102
Josefson 24; 108
Journalism 65
Definition Of 16
Journalist 70
Journalistic
Approach 16
Knowledge 91; 101
Method 17; 19
Process-Of-Knowing 61; 64
Profession 60; 89
Rules 65
Journalists 60; 74; 91; 95
Kennedy 39
Know-How 27; 58; 72ff; 81;
91ff; 102; 107ff
Definition Of 27
Market 84; 91; 93; 95; 96; 99; 104; 107; 110
Knower 12
Knowing 25; 27
Transfer Of 69
Process of 23; 25; 32; 78
Knowledge
Acquiring 29
Analytical 68; 71; 73; 83
Articulate 25
Articulated 28; 31
Concept Of 23
Dynamic 25
Explicit 25
Functional 26
Interpersonal 28
Journalistic 71
Management 72
Marketing 72
Organisational 73; 79; 103
Power Of 71
Propositionary 25
Sales 72
Scientific 110
Tacit 24; 29; 62
Theory Of 21
Tool 26
Tradition Of 29; 31; 69; 70; 75; 81; 83; 116
Workers 10
Knowledge Perspective 9ff,
106ff
Presentation Of 18
Known 12
Language 25
Learning 25; 29
Ledarskap 48; 103; 105
Legitimacy 30; 73; 75; 88; 99
Liber 52; 104
Lindmark 112
LRF 50
Luckman 9; 39
Malone 37
Management 78
Management Troika 76; 77;
79
Managing Director 79
March 38
Marketing 64; 70; 72ff;
77ff; 83ff; 103; 107; 113
Department 75; 113
Martin 112
Mason 41
Master 31
Maxim 69
Maxims 26; 31
Media Industry 89
Metaphor 12; 23; 37
Metaphors 70
Method
Definition Of 16
Meyerson 39
Miles 20
Miller 113
Mintzberg 38; 40; 111; 113; 114
Mitroff 41
Morgan 13; 40; 114
Nilsson 42
Nordenfelt 17
Norm 26
Normann 37
Observant Participator 19
Definition Of 15
Olsen 38
Olsson 30
Organisation Theory 36ff
Organisational 79; 107
Knowledge 73; 79; 103
Tradition 36; 107; 111; 113
Organising 39; 115; 116
Paradigm 13; 19
Definition Of 13
Hermeneutic 12
Positivistic 19
Research 11ff
Taken-For-Granted 12
Participant Observation 15
Partner 100
Partner System 76; 79;
81ff; 95
Partners 78
Partnership 48; 98; 100;
102
Pedagogy 23
Peg 59
Personnel Turnover 76; 94
Perspective 9; 20
Definition Of 11
Perstorp 93
Peters 39
Peterson 40
Pettigrew 38; 40
Pfeffer 40
Phenomenological Reflection
17
Pickabacking 69
Planck 12
Polanyi Michael 11; 12; 23;
25; 26; 28; 32; 39; 80; 91; 109
Power 21; 35; 37; 47; 70;
73; 77; 109; 114
Definition Of 36
Of Intellective Knowing 75
Practise 13
Prahalad 37
Preunderstanding 10; 15ff,
23
Journalistic 65
Process-Of-Knowing 21ff;
32;; 59; 62ff; 67; 78; 103; 107ff; 113
Journalistic 64ff
Product Strategy 104
Productivity 63
Professional
Knowledge 30, 76; 79; 83; 95;
98; 107; 113
Tradition 36; 107; 111; 113
Propositionary Knowledge 32
Publishing 10
Publishing Industry 98;
116ff
Publishing Track 101; 103;
104
Quinn 37; 38
Re-Solving 74; 82; 113
Reality 11
Recipes 99
Recruitment 76; 93; 95; 99
Reification 70
Research Approach
Definition Of 14
Research Process 19
Definition Of 14
Risling 112
Rolf 27; 28
Rules 12; 24; 26; 27; 29ff;
34; 65; 67ff; 72; 81; 107; 109
Ryle 27
Sales 75; 107
Department 76; 77; 78; 89
Sandberg 28
Schein 38; 39
Selander 32
Selznick 37
Sigfridsson 112
Simon 37
Skill 27; 29; 58; 107
Definition Of 27
Snow 37
Source Case 18
Spender 30
Stimulus/Response Concept
32; 38
Stock Evaluation Model 68
Strategy 37; 53; 84; 97;
99; 103
Surprise Effect 90
Swedish Telecom 89
Symbolism 70
Tacit
Dimension. 24
Knowledge 24ff; 62
Knowing 25; 107
Technique 19
Transfer of 91; 115
Taken-For-Granted 17; 26
Techniques
Definition Of 17
Text Analysis 17
Thompson 114
Time 90; 107
Delay 85
Tradition 29ff; 66; 69;
72ff; 81; 95ff; 99; 102; 104ff; 107; 113; 115ff;
Trainee System 70; 81
Uncertainty 34; 82; 114
Unilever 6; 93
Values 30; 66; 69; 72ff;
78ff; 82; 89; 93ff; 97ff; 102; 109
Hierarchy Of 74
Organisational 74
Professional 74
Universal 66
Veckans Affärer 42; 45; 49;
52; 60; 85; 88; 91; 93; 98; 99; 110; 115
Virtual 113
Wallenberg 42
Waterman 39
Weaver 33
Weber 111
Weick 38; 39; 80
Weston 40
Wheatley 37
Wiener 32
Wikström 37
Wisdom 34
Wittgenstein 12; 23
Wolters Kluwer 52; 100; 104
Zaltman 34