Free Ride in Knowledge Management? Ethical and Moral Dilemmas!

Gonçalo Jorge Morais da Costa, Mary Prior and Simon Rogerson


A new paradigm is sweeping the business environment across the world. In this emerging paradigm, terms like information, communication, knowledge, and learning have acquired a critical relevance to an understanding of the nature of contemporary business. The business world is moving from its tangible bases to intangible ones (Sonnenberg 1994).

In fact, knowledge management is a multifaceted discipline that requires culture, process, and technology to work together on a large scale (Moore and Birkinshaw 1998; Khanna, 1999; Wenger and Snyder 1999). However in our understanding, ethics should be a component of such discipline contrarily to the pure technological view.

Given the previous scenario knowledge management strategy should be part of a company strategy. To Michael H. Zack claims (1998) an organization strategic context helps to identify knowledge management initiatives that support its purpose and mission, strengthen its competitive position, and create shareholder value.

According to a recent industry survey (KPMG, 2000), 81% of the leading organizations in Europe and the U.S. say they have, or are at least considering adopting, some kind of knowledge management system. The majority of these firms get involved in knowledge management initiatives with the goal of gaining competitive advantage (79%), increasing marketing effectiveness (75%), developing a customer focus (72%), or improving product innovation (64%).

However, what does it mean strategy? And, does knowledge management strategy imposes new challenges? The word “strategy” is usually associated with activities and decisions concerning the long-term interaction of an organisation with its environment. While competitive-based and product-based strategy formulation generally makes markets and customers the starting point for the study the resource-based approach tends to place more emphasis on the organisation’s capabilities or core competences.

A knowledge-based strategy formulation should thus start with the primary intangible resource: the competence of people. People are seen as the only true agents in business; all tangible physical products and assets as well as the intangible relations are results of human action, and depend ultimately on people for their continued existence. People are seen to be constantly extending themselves into their world by both tangible means, such as craft, houses, gardens and cars and intangible corporate associations, ideas, and relationships. Plus, knowledge is a nonrival good par excellence and one that in the longer run is also difficult to maintain in an excludable form. Yet, in order to encourage innovation and promote dynamic efficiency, intellectual property rights are used to grant knowledge producers a temporary exclusive right to control the use of knowledge they generated. This limits the use of knowledge, and, without complementary measures, it entails inefficiency and challenges to people.

Due to the previous explanations we may state that a knowledge strategy incorporates unforeseen challenges, and therefore we could claim that ethics plays an important role on such analysis.

In accordance to Sveiby (2001) we can differentiate nine basic knowledge transfers/conversions, which have the prospective to create value for an organisation. Activities that form the “spine” of a knowledge strategy are to be aimed at improving the capacity-to-act of people both inside and outside the organisation:

  • knowledge transfers/conversions between individuals;
  • knowledge transfers/conversions from individuals to external structure;
  • knowledge transfers/conversions from external structure to individuals;
  • knowledge transfers/conversions from individual competence into internal structure;
  • knowledge transfers/conversions from internal structure to individual competence;
  • knowledge transfers/conversions within the external structure;
  • knowledge transfers/conversions from external to internal structure;
  • knowledge transfers/conversions from internal to external structure;
  • knowledge transfers/conversions within internal structure.

Therefore, the aim of this paper is deploy the possible ethical and moral dilemmas that may arise through the creation of intellectual property rights and patents in a knowledge management strategy regarding, considering knowledge as a nonrival and common/public good.

The tragedy of the commons is usually referred to as a resource dilemma given that “collective cooperation” that leads to a serious threat of the depletion of future resources (Van Lange et al, 1992). Another type of social dilemma is the public good dilemma. A public good constitutes a shared resource from which every member of a group may benefit regardless of whether or not they personally contribute to its provision, and whose availability does not diminish with use (Olson, 1965).

According to several researchers of knowledge management (Wasko and Faraj, 2000; Connolly and Thorn, 1990; Connolly, Thorn and Heminger, 1992; Kalman, 1999; Monge et al., 1998), organizational knowledge can also be considered a public good. Since access to a public good is not restricted to contributors only, there is a temptation for individuals to free-ride, to enjoy the resource without contributing to its provision (Sweeney, 1973). After all, withholding from cooperating yields the best individual utility regardless of what everyone else in the group does.

If everyone else cooperates and I do not, I enjoy the good for free. If no one else or very few others cooperate, I will be saving a wasted contribution. For this reason, defecting, or not contributing, in a public good dilemma is technically considered a dominant strategy, which means a strategy that yields immediate positive returns to any participant at any time during the interaction, regardless of what other participants do (Dawes, 1980).

However, what characteristics have this social dilemma- knowledge creation and sharing? And what ethical and moral dilemmas impose? Are such dilemmas affected by the free ride theory?


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