Knowledge criteria for organization design

Purpose – The purpose of this paper is to provide a conceptual and practical basis for developing new organization structures by augmenting the old through virtual knowledge based structures. While organization structure has a major impact on knowledge exchange, its design nevertheless continues to be governed by criteria that are often in conflict with the needs of knowledge management. In an era where knowledge is increasingly acknowledged to be a central factor of production in the modern enterprise, the resulting deficiencies in the design often lead to sub‐optimal capability for organizational performance.Design/methodology/approach – Borrowing from Drucker's elucidation of the characteristics and determinants of a successful organization in the new economy, the consequences of the transition from an economy of goods to that of knowledge are analyzed briefly in the background of KM. The study highlights an enduring deficiency in present day organizations, wherein structure is relatively uninfluenced ...