THE DYNAMIC NATURE OF KNOWLEDGE CREATION AND INNOVATION, AND THE ROLE OF SOCIAL RELATIONS IN SAUDI ARABIAN KNOWLEDGE-INTENSIVE ORGANISATIONS

Abstract

The transforming business environment and competitive market dynamics result in organisations needing to adopt tools for knowledge creation, as it fosters innovation, solves problems, and develops products and services. Evidence suggests that organisations that continually create new knowledge are better positioned than their counterparts. Knowledge creation is a social process with a nonlinear nature due to its dynamic and interactive elements among individuals. This research aims to understand the dynamic nature of knowledge creation within the social settings of organisations and to explore the mechanisms by which knowledge emerges. This research focuses on social relations rather than structural conditions to understand how employees contribute to these social relations, thereby influencing knowledge creation processes. The emphasis on social relations seeks to investigate the engagement of social actors and identify factors that either facilitate or hinder knowledge creation in organisations. Furthermore, one of the aims is to enhance our understanding of the complexity of knowledge creation in the specific context of Saudi Arabia. Saudi Arabia is a country in an emerging market with ambitions towards innovation, with a complex social and business structure that includes Islamic attributes, gender challenges, cultural differences, and government involvement. This research project is based on an ethnographic study of two Saudi organisations, encompassing participant observations and interviews. The research findings highlight the significance of social relationships that underpin and drive informality, where socialisation plays a prominent role among Nonaka’s four modes of knowledge creation. Informality is illustrated in the form of informal and voluntary actions, which enhance employees' engagement in social settings conducive to knowledge creation. The research unveils the characteristics of social relations that either impede or facilitate knowledge creation within Saudi organisations. This character begins with trust, progresses to a higher level where employees are able to challenge each other due to trust, and involves top management behaviours that both enable and constrain knowledge creation. Furthermore, the findings shed light on the complexity of the Saudi Arabian context in relation to knowledge creation, which involves the relationships with ministries, the avoided relations with clients, and the differences in relationships between genders.