.c1. 4. interpretation of the case.

In this chapter I interpret the case by asking these questions:

.c2.4.1. 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.

.c3.4.1.1. 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.

.c3.4.1.2. 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.

The .i.journalistic process-of-knowing; was influenced by the computer in two major ways.

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.

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.

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.

The infoduction process in Affärsvärlden was affected:

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:

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.

.c2.4.2. 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?

.c3.4.2.1. 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 Sweden moved slowly around its own axis. There were no databases, no PC´s, no global networks of information. In 1975 Affärsvärlden had one knowledge that made it unique: It "possessed" an analytical knowledge in the form of specific Affärsvärlden .i.rules ;which were articulated, and the transfer of which were not tied to individuals. The definitions, calculation rules and table formats were examples of a tacit .i.process-of-knowing; that had been made .i.articulate;.

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 Sweden was the rapidly growing financial analyst community. During the deregulation years 1984-1989 new financial instruments were invented on an almost daily basis. This development made Affärsvärlden´s stock evaluation model less used and consequently the impact of Affärsvärlden´s analysis on the market declined. Affärsvärlden was far ahead any other media but the unique - relative to the readers - competence to develop new definitions, and new analytical tools as during the Founder Phase was never regained.

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.

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.

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 Sweden than in other countries where the p/e-ratio analysis tended to be more influential.

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.

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.

.c3.4.2.2. 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).

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.

.c3.4.2.3. 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. Sweden is a collective oriented country, in 1975 it was even more so, and two members of the founder team were social democrats.

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 Sweden in the 1970s the first financial .i.analysts ;in Affärsvärlden were not recruited from the financial community but from industry. The analysts therefore brought with them experiences and values from outside the publishing industry. Affärsvärlden thus from the start had writers who were more business minded than any other journals. This business (here interpreted as ".i.knowledge:organisational;") orientation among the analysts was probably one of the main reasons behind their interest in building and managing an organisation.

.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.

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 Dublin .i.Conference; in 1980 as the "water-shed". From then on the dialectic between Professional and Organisational knowledge traditions shifted from being based on the values of the profession to being more and more based on the values of the organisation. I.e. from then on the values of organisational knowledge more and more set the agenda of discussion.

The Dialectic shifted over to the agenda of Organisational Knowledge via three forces:

Owning one´s own company was an idea that felt very natural and tempting for many reasons:

The Partner System that was created had a threefold objective.

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.

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.

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.

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.

.c2.4.3. 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:

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:

Three vehicles or systems for indirect .i.transfer of organisational Knowledge; can also be distinguished:

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:

One illustrative example of the difficulties involved in renewing the Affärsvärlden business is the Findata case below.

.c3.4.3.1. 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:

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.

.c2.4.4. 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;.

.c3.4.4.1. 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. Sweden became a country of stock punters in the 1980s - and they all needed financial information.

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).

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 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).

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...

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:

.c4. 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:

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.

.c3.4.4.2. 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:

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 Sweden grew from around 60 in 1975 up to perhaps 80-100 in 1979. The Affärsvärlden editorial team of six had a larger share of the know-how market than the absolute number indicated because the journalists with academic degrees at this time were no more than perhaps 15 growing to around 20-25 in 1979. Affärsvärlden´s six academics in 1975 thus represented almost half the total academic knowledge among the media.

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.

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).

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:

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:

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.

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 creat