The division and organisation of knowledge

Abstract

Hume demonstrated the impossibility of proving any general empirical proposition, and turned to the question of how people acquired 'knowl- edge'. Adam Smith postulated a human need to make sense of phenomena by imposing patterns, which are replaced when they systematically fail; this process is accelerated by specialisation, which leads to a differentiation of locally-efficient frameworks of thought and action. Thus the division of labour results in the divi- sion of knowledge - both 'knowledge-how' and 'knowledge-that', or capabilities - and a consequential increase in the total knowledge in a community. Marshall added a principle of variation within an evolutionary cognitive process, and also the need for multiple forms of organisation. Learning is not a distinctive activity but a characteristic of human existence; it requires frameworks, or institution, which are themselves subject to evolution. Penrose analysed the growth of knowl- edge within a business, Richardson focussed on the importance of similarity and complementarity across capabilities, and the consequential need for linkages between businesses. Firms need both internal and external organisation; in an important sense, learning is collective as well as individual.