Iv) Knowledge-Based Organisations

There has been a change from the corporate to creative economy. The corporate economy organised capital and labour to optimize continuous production of identical goods at the lowest cost; putting a high premium on cost, repetition and style. Managers worked hard to improve control, efficiency and cost-effectiveness. The staff were fiercely loyal to the corporation. On the other hand, individuals in the creative economy value agility, innovation, novelty and flexibility above price, repetition and strategic planning; they are more intuitive than rational; more subjective than objective. Mistakes are regarded as useful learning experiences necessary for success. Furthermore, their loyalty is primarily to themselves:

"...the greatest value in the creative economy is added when people use firms rather than when firms used people......strategy is no longer a reliable source of business success. Today's innovation can be bottom-up, rapid and eventually free. It is no accident that a lot of innovation comes from users doing it for fun. The game industry now actively encourages gamers. Mountain bikes were developed by frustrated riders, not by corporate planners. Many successful online companies have been developed by frustrated users, not corporate strategists..."

John Howkins, 2006

With knowledge-based organisations growing in importance for future prosperity, the concept of entrepreneurship (creation of the resource) and organisational learning (acquisition of useful knowledge by an organisation) are strongly linked. Generally entrepreneurial research has concentrated on the characteristics of an entrepreneur and the context in which is the entrepreneurial process is enacted. Central to this is understanding how entrepreneurs are made; Richard Harrison et al, (2005), observes:

- organisational learning is experiential (entrepreneurial traits are forged through active learning)

- learning permanently alters behaviour (once an entrepreneur, always an entrepreneur)

- while organisational learning is individual, it occurs in a social context (no entrepreneur is an island)

- learning is regulated through standard procedures and rules (creating entrepreneurs can be managed or mismanaged)

The knowledge-based worker is motivated by a set of intangibles that include trust, autonomy, constant feedback and meaningful work. These are crucial indicators of high-performance environments

Knowledge-based organisation is linked with the development of the internet

"...The fruits of the information society are easy to see, with a mobile phone in every pocket, a computer on every desk & big IT systems in back-offices everywhere..."

Victor Mayer-Schonberger et al, 2013

Owing to Internet's global connections, it has given access & voice to individuals that they never had before, & given

- consumers unprecedented power their habits

- democratisation of innovation/information

- demolished traditional barriers to entry

- US Securities & Exchange Comm. (2013) allows firms to release their financial results on social media like Twitter, Facebook, etc

- firms like Google, Amazon, Facebook & Twitter are internet utilities


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