How to use real option perspective on communities of practice.

• Author: Wang, Tz-Li
• Position: Report

1. INTRODUCTION

   In the era of a information based economy, and as technology and information continually develop; a problem occurs within organizations towards becoming overly complex. Hence the core question: what kind of activities can motivate an organization's learning ability and creativity with increasing complexity? Wenger, McDermott, & Snyder (2002) indicated that the idea of Communities of Practice (CoPs) has become an important strategy for organizational learning, both in ability and potential for creativity. Por (2004) suggests that through CoPs, formed through group knowledge, people gather many different types of information and can be innovative with their thought process to solve problems. Only through a continual learning process can an organization effectively infuse new knowledge, consequently, improving the organization competitiveness. While the World Bank considers CoPs as the "heart and soul" of its knowledge sharing system (ref), many top managers are reluctant to embrace and deploy CoPs within their organizations. The following paper examines CoPs and their value to organizations and delves into the risks for an organization not using CoPs.

   There has been considerable research about CoPs in recent years. Researchers have studied aspects of CoPs such as Anan, Gardner, & Morris(2007), Barth(2004), Sakkab (2002), Fenwick(2003) exploring the relationship between CoPs and innovation; Handley, Sturdy, Fincham, & Clark(2006), Lundberg(1995), Hayes & Allison(1998), Brown & Dugold (2001) exploring the relationship between CoPs and the organizational learning. Implementing CoPs into practice, scholars Cross, Laseter, Parker, & Velasquez (2006) considered social networking helpful to improving the efficiency of CoPs. Robert (2006) stated that when a CoP is put into use in knowledge management, it is necessary to understand the constraints of its development. A consensus amongst researchers clearly point to CoPs as being beneficial to knowledge learning and sharing, and the impetus to organizational transformation. However, CoPs are still uncommon in organizations or deemphasized. Possible reasons maybe the top managers lack the knowledge or necessary skill sets to manage this type of community structure. Unfortunately, the lack of CoPs involvement in organizations may result in the risk of under or over-management.

   According to Wenger and Snyder (2000), CoPs are an "unofficial group" formed by teams that share certain knowledge or develop effective strategies to maximize efficiency and profitability. CoPs are different from a team that has regular tasks. CoPs are not an organization whose goal is to finish a particular task or objective. The members of a CoP are volunteers and typically not assigned by top managers. A CoP can sometimes result in extra work for the participants. Therefore, the members' efforts are not apt to be regulated or evaluated. Hence, the operating modes of CoPs are different from the traditional formal groups or teams (Wenger and Snyder, 2000). While CoPs are a part of the organization, the sole reason for its existence is to turn profit for the organization and also its members. Top managers employ this community structure to stimulate the learning process and give an organization a competitive edge. If top managers do not place importance on the development of CoPs it may still have a place, but would likely lack the necessary resources falling short in its potential and influence. Additionally, if top managers ignore the development of a CoP it may become a groupuscule in the organization. Consequently, it would be an impediment to the organization. Comparatively, top managers cannot use the traditional strategies to regulate and evaluate the results of a CoP. That is because in traditional approaches, people shy from creativity, sharing, and spontaneity despite being the core values of community creation. Traditionally, the results of CoPs are even over-quantified and may cause the distortion in the goals and activities of a community (Wenger et al., 2002). Therefore, top managers should carefully use appropriate standpoints and measures to manage CoPs so that these problems will not occur in management. The following paper begins with the introduction of CoPs and there value. Followed with an explanation of the Real Option Perspective and its usefulness. Finally, a discussion is about the risks of this management mode and future issues.

2. THE VALUES AND PROBLEMS OF CoPs

   The discussion of CoPs' applicability in an organization started in the 1990s (Brown and Duguid, 2001; Wenger, 1998; Wenger and Snyder, 2000). The theory is based on the Social Theory of Learning. The primary focus of this theory is on learning as social participation that encompassing process of being active participants in the practices of social communities and constructing identities in relations to the communities (Wenger, 1998). It integrates four components which include meaning, practice, community, and identity. These are necessary to characterize social participation as a process of learning (Figure 1). On an individual level, learning is an issue of engaging in and contributing to the practices of their communities. While on an organizational level, learning is an issue of sustaining the interconnected communities through which an organization databases its knowledge.

   [FIGURE 1 OMITTED]

   CoPs develop their operating logic through the foundation of Social Learning Theory. There are three primary elements: the domain, the community, and the practice. The domain; CoPs are unlike clubs that are formed by people who have associations. CoPs are formed by a group of people who share the same fields of interest. The group effectively relates to one another and they have a certain ability and commitment in specialized fields. The community; members, while having their own domains, pursue their common interests. They participate in and discuss related activities, share information and help each other. In the community, members establish relationships so that they can learn from each other. The World Wide Web is not necessarily a CoP. People who have the same occupations or positions are not necessarily CoPs. Only those groups that the members interact and learn with each other can be called CoPs. CoP members do not have to meet every day, and they do not have to work together. For example, impressionist painters each work alone. However, if they gather at coffee shops or studios frequently to discuss painting styles, their paintings and the paintings of fellow artists--they, the group, function as a CoP. Their interactive relationship can be called a CoP. The practice: CoPs are not only "communities of interest". The members of CoPs should be the practitioners. Those practitioners often share their stories, experiences, solutions and outcomes to work problems. In this research we define CoPs as "an activity system about which participants share understandings concerning what they are doing and what this means in their lives and for their community. Hence, they are seen to emerge spontaneously from the networking among groups of individuals who have similar work-related activities and interests (Lesser and Everest, 2001; Lave and Wenger, 1991; Wenger, 1998). Wenger & Snyder (2000) conclude the functions of CoPs are: (a) strengthening the core ability of strategies, (b) giving the opportunity of starting a new business, (c) solving problems promptly, (d) shifting to best practice, (e) developing specialized techniques, (f) assisting the...