People-focused knowledge management

ery of the Brain and have generally been substantiated by later research.
However, from other perspectives it is becoming quite clear that the
mind/brain functions are complex beyond any known computers.
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Actions Are Initiated by Knowledgeable People
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2. Not all attempts to provide integrated understanding are successful. 
The case story educational method pursued at many business schools has
come under criticism from proponents of integrative management
because the case stories are often not interdisciplinary. They mostly
provide integration within single disciplines such as finance, human
resources, logistics, and information systems, instead of also addressing
the interrelatedness of all these areas within the real world of the func-
tional enterprise.
3. Each person’s brain develops different neural connections — it rewires
itself — as new experiences, understandings, etc., are internalized. Also,
as people gain expertise, different parts of the brain are developed and
may even increase in extent (Schwartz & Begley 2002).
4. Little (some say nothing) is known about how knowledge is encoded in
our minds. Therefore, many knowledge characteristics discussed in this
book may represent speculative, qualitative, illustrative, and operational
aspects of knowledge based on system science models and lack founda-
tion in reality.
5. We are indebted to Argyris and Schön (1974) for introducing their 
theories of action with the view that people have mental maps — mental
reference models — with regard to how to act in situations.
6. The concept of metaknowledge is also well known in artificial intelli-
gence but is different from personal metaknowledge, which is discussed
here.
7. See Denning (2000), Kotter and Cohen (2002), Ready (2002), Snowden
(2000), Solomon (2000), and Wright (2000).
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4
M
ENTAL AND 
S
TRUCTURAL 
R
EFERENCE 
M
ODELS
Premise 4-1: People Imitate Prior Behaviors
When people make sense of situations, make decisions, act to
implement decisions, and monitor the acceptability of their work,
they will, to the largest extent possible, imitate something that is pre-
viously known to them. In particular, people think and act by adapt-
ing, operationalizing, and executing mental reference models —
scripts, schemata, abstract generalizations, and metaknowledge — of
memorized approaches according to which they can handle the
current situation and context naturally and feel comfortable about
their approach. People prefer to act in ways that are easy and have
low psychological costs.
Premise 4-2: Organizations Re-enact Past Practices
Organizations strive to provide stable and comprehensive 
operating environments with practices that will ensure effective and
beneficial handling of all normal and many less normal situations. To
that end, they attempt to encode best practices and structural intel-
lectual capital assets into systems and procedures for broad use, instill
appropriate “this is how we do it here” thinking into its culture and
leadership, and teach desired behaviors to employees at all levels.
Organizations prefer to choose practices that are effective by being
resource efficient, delivering quality results, and creating good value,
while at the same time providing easy-to-manage operations that are
readily acceptable to employees.
The Personal Memory Example
Shawn is an experienced shipping dispatcher for ChemCo, a bulk
chemical producer. She has recently been transferred from
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Dispatching to Shipment Planning where she generates the short-term
shipping schedule. Much of what she knows from dispatching is of
direct use to her in the new position. However, there are new con-
siderations and requirements with which she is unfamiliar and that
she needs to learn — and learn quickly.
A week into her new position, after Shawn has generated her first
short-term schedule, a large high-priority order comes in and requires
that she reschedule immediately to get the shipment out as early as
possible. The material is in inventory, but the trucks needed are
already committed for other shipments. Although the problem is
similar to dispatch situations with which she is very familiar, short-
term scheduling introduces additional considerations. Shawn must
identify which other shipments would be candidates for delays if she
were to free up the trucks needed. She works with Sales to determine
problems and relative priorities of potentially delayed shipments. She
works with Production to explore possible manufacturing impacts.
As she does this, she also searches for possibilities for subcontract-
ing shipments to outside truckers.
While she assesses ChemCo’s options, Shawn, with the help of her
manager and colleagues in the other departments, weighs the advan-
tages, costs, and issues associated with the options of delaying ship-
ments and buying outside trucking services. Many factors need to 
be considered. Delaying shipments in most cases impacts customer
relations. Delaying shipments also postpones revenues and at times
creates manufacturing, inventory, and storage problems. It is also
more costly to use outside trucking than ChemCo’s own trucks.
All of this is new territory for Shawn, but she learns fast and her
manager is of great help in guiding her along. Sally, Shawn’s manager,
does not work directly with Shawn to show her in detail how to deal
with the issues. Instead, Sally tells stories about how she pursued
similar problems in the past. She also tells Shawn what to watch out
for and what impacts the scheduling decisions might have on depart-
ments, operations, customers, and on ChemCo overall. She tells
Shawn with whom to network — who her good friends are in Sales,
Production, Marketing, and Contracting. Sally’s stories also include
examples of situations and indicate how it all fits together. Without
being directly aware of it, Sally helps Shawn develop an integrated
understanding of how to deal with a whole range of issues from both
an overall perspective and a detailed approach.
During this experience, Shawn automatically builds a library of
mental reference models that she can use to tackle this kind of situ-
ation in the future.
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People-Focused Knowledge Management
Mental Model Preview
As indicated in Premise 4-1 and earlier in Chapter 3, when people
make decisions, they tend to the largest extent possible to rely on
prior experiences. They adapt and execute reference models that
make it possible to imitate prior successful behavior — or, in the
words of Bechara et al. (1997, p 129): “[They carry out] covert acti-
vation of biases related to previous emotional experiences of com-
parable situations.”
People and organizations build and remember large collections —
“libraries” — of behavior patterns that are formed from experiences
and internalized by positive or negative feedback and reinforcement.
Many patterns are also built from the experiences of others, such as
when companies obtain descriptions and understandings of best prac-
tices from other parties. People and organizations react alike in that
they will repeat behaviors that were successful and reinforced posi-
tively. They will avoid behaviors remembered as unsuccessful. 
Personal and organizational behavioral patterns often represent
memorized chains of separate expected situations and actions, each
being an expected outcome or a response to handle a situation within
a particular context.
For similar problems, the context often makes a difference. For
example, within the same enterprise, there may be one policy (or
pattern) for handling a dissatisfied large repeat customer who has
received a major shipment later than expected. This customer may
receive top priority for the next shipment and even compensation for
estimated loss. The policy may include procedures for estimating loss
and for assessing other aspects needed to handle the situation.
Another, less accommodating policy may be in effect for handling the
same kind of problem for smaller occasional customers and may not
include any special favors.
Personal Reference Models
“Give me an example that I can adapt to fit my problem!” This
is a statement that is expressed by many people when they encounter
a new situation. They are seeking a reference model to aid them to
handle the situation easily and effectively.
As we discuss in the next chapter, in situation-handling mental
models are used as references to past experiences — hence the term