Knowledge Transfer in Recycling Networks: Fostering Sustainable
(Karl-Franzens-University Graz, Austria
Institute for Information Science
(Karl-Franzens-University Graz, Austria
Institute for Innovation and Environmental Management
Abstract: This paper reports on long-term research work of recycling
networks in Germany and Austria from a knowledge-based perspective. Using
data from expert interviews, we discuss the key determinants of inter-organizational
knowledge transfer within networks. In particular, we highlight the factor
of mutual trust as important determinant of knowledge transfer in company
recycling networks. One important goal of our empirical research is the
institutionalization of knowledge transfer through the implementation of
a central recycling agency in order to build core capabilities and to create
Keywords: knowledge transfer, knowledge taxonomies, company networks,
knowledge networks, recycling agency, sustainable development
Categories: H.3, H.4, J.4
Knowledge management has been the subject of growing interest by academics
and practitioners over the last years, yet little empirical research has
been conducted to investigate inter-organizational knowledge transfer concerning
company networks with a common recycling strategy.
Our knowledge-based perspective of two regional recycling networks with
a total of 53 companies (31 Austrian and 22 German companies) focuses on
the transfer of existing knowledge about recycling practices of companies
within these networks. In this paper we discuss some important empirical
results of the long-term analysis of recycling networks which has been
conducted by expert interviews since 1996. We primarily present data from
the German network due to the latest empirical analysis. Furthermore, we
concentrate on the organization of an effective knowledge transfer process
by influencing key determinants such as mutual trust. As a result, core
competencies are created within the networks strengthening the competitive
position of the network members and decreasing the environmental burden
in order to satisfy today's needs without risking the satisfaction of future
generations, i.e. "Sustainable Development".
Drawing upon the literature review of knowledge perspectives and their
implications, we discuss knowledge as a process of applying expertise in
In this respect, we focus on the knowledge flow between the representatives
of the networking companies and a central network institution, we call
"recycling agency". Another important perception of knowledge
in our empirical research is the view of building core capabilities and
creating intellectual capital by the establishment of a recycling agency.
Intellectual capital is defined as human capital and structural capital
[Sullivan (00), 158]. The first type of capital focuses
on getting individuals together to share knowledge, whereas the second
one emphasizes moving knowledge from the individuals´ heads to a
tangible company asset through the implementation of technology-based tools
and techniques [McNurlin; Sprague (02), 444-445].
To succeed in leveraging intellectual capital in the long-term, the network
members need to do both: using different approaches to grow in the human
capital stages as well as in the structural capital stages. At present,
the main activities of the two recycling networks are in the stages of
generating new knowledge, creating a culture of sharing and encouraging
innovation. Structural capital is developed by building up a data basis
which will be fed into a Geographic Information System (GIS) in order to
develop a planning tool for the recycling agency.
2 Knowledge Taxanomies
Attempts to classify knowledge generally focus on the communicability
of knowledge in terms of the tacit/explicit dimension [Polanyi
(85)]. Therefore, we posit that knowledge is information kept in the
mind of individuals: it is personalized information, e.g. related to facts,
interpretations, ideas and judgements ("tacit" knowledge). Consistent
with this argumentation, knowledge becomes information once it is articulated
and presented in the form of text, graphics or other symbolic forms ("explicit"
The results of our empirical study provide evidence for the importance
of the transfer of the following knowledge taxonomies:
|Know how (tacit knowledge)
based on experiences
and often embedded in practice, i.e.
- pragmatic like best practices,
project experiences, etc.
|Accumulated practical recycling skills
and expertise of the network members, i.e. understanding
- how to organize a specific recycling solution, e.g. the separation
and storage of scrap oil in a company
- how to introduce it in a smooth and efficient way
Table 1 (part 1): Knowledge taxonomies and examples (Adapted
from [Alavi; Leidner (01), 113; and Merali
|Know what (explicit knowledge)
which can be codified
and transmitted without
loss of meaning
- declarative (know-about)
- causal (know-why)
- conditional (know-when)
- relational (know-with)
|Specific knowledge about the processes used for
a certain recycling alternative, i.e. understanding
- what recycling alternative is appropriate for a certain waste, e.g.
scrap oil from a company
- why the recycling solution works, e.g. material recycling of scrap
oil - when to choose the recycling alternative, e.g. purification of scrap
oil instead of incineration
- how this recycling alternative interacts with existing disposal solutions
of the company, e.g. the reuse of scrap oil with the recycling of waste
Table 1 (part 2): Knowledge taxonomies and examples (Adapted
from [Alavi; Leidner (01), 113; and Merali
3 Knowledge Transfer
The above described types of knowledge determine the knowledge transfer
mechanism within a recycling network. In this context, the understanding
of knowledge implica-tes the existence of a certain knowledge base, shared
by the members of a network. In our case, the networking individuals are
both the representatives of the companies (waste managers, work safety
officers, managing directors, heads of departments, etc.) - we call them
"gatekeepers" - and the agents of the central recycling institution.
There is empirical evidence that the individual (i.e. gatekeeper of a company)
is unlikely to accept the recommendation of the informant (i.e. recycling
agent) if he does not understand the underlying reasoning processes [Milchrahm
The content and the structure of the inter-organizational knowledge
transfer is also determined by the relationships between the individuals
of the network. At the individual level, the relationship is a filter for
relevance: the value attached to the piece of information by the recipient
is affected by the credibility with which he perceives the informant. This
perception of the informant is influenced by the factor of mutual trust
between the members of the network [Merali (00), 219].
Trust has its basis in individuals, however, there also exists a collectively-held
trust orientation by organizational members toward the exchange partner.
Drawing on the previous literature, we define trust in general as "one
party´s confidence that the other party in the exchange relationship
will not exploit its vulnerabilities" [Dyer; Chu
Based on [Shapiro; Sheppard; Cheraskin (92)],
Ba argues that in the beginning of a business relationship, trust is often
deterrence or calculus based [Ba (01), 325; see also
Ratnasingham (98), 315]. This behaviour was also shown
in the early stages of recycling networking. Companies had asked for extensive
information about the other partners of the network before they took part
in the analysis of their waste management activities. They only provided
a minimum amount of data about their disposal activities which they thought
to be essential for joint recycling programs. They also requested that
their data had to be published only within the network. With the development
of the relationship, the members of the networks gain more information
about each other through their experiences. This so-called "information-based
trust" describes the level of trust, growing over repeated communication
between the network members. At this stage, network members have provided
a lot of information about their disposal activities which they believe
is helpful for the planning of joint recycling action. They also have given
advice to other waste managers in the quarterly network meetings. In this
way, information asymmetries have decreased. Consequently, uncertainty
about the partners has been reduced.
The above two types of trust provide the foundation for the highest
level of trust: transference based trust. This stage occurs when the individuals
have taken on a common task considering joint goals. In both networks this
level of trust is represented by the establishment of joint recycling for
selected kinds of waste since 2001. Increasing complexity of the network
interactions and local distances between the partners require the further
development of mutual trust by the recycling agency.
As highlighted above, trust is an important determinant of knowledge
transfer in company networks due to the presence of uncertainty and incomplete
company information. In the context of company networks, confidentiality
and privacy of company data are important requirements for the establishment
of trust. It has to be warranted that key data about waste disposal activities
are only revealed to network members. Besides, company data must be protected
from indecent and unauthorized disclosure. Because of this, the whole data
base about the network is centralized at the recycling agency to limit
On the foundation of trust, one of the main goals of recycling networking
is set: the institutionalization of knowledge transfer through the implementation
of a central agency in order to use the recycling expertise of the individual
gatekeepers more effectively and to create new recycling knowledge.
According to [Nonaka; Takeuchi (95)] knowledge
is transferred through processes of (1) socialization, (2) externalization,
(3) combination and (4) internalization. Therefore, we state that the following
core processes are essential for the knowledge transfer in a recycling
- bringing the recycling experts together in meetings initiated by the
recycling agents in order to exchange experience about their recycling
- transforming this knowledge in a formal and explicit form,
- amalgamating the explicit knowledge about various aspects (organizational,
technical, etc.) of inter-company recycling systems for specific kinds
of waste such as scrap oil,
- transferring the explicit knowledge back to the gatekeepers.
The gatekeepers are responsible to put the recycling solutions into
action on the level of the individual company. By doing so, they gain experiences
which are shared again with other gatekeepers of the recycling network.
This strategic knowledge network is a long-term purposeful arrangement
among related organizations which allows them to gain competitive advantage
vis-à-vis their competitors outside the network. There are a number
of important distinctions between our emerging knowledge networks and other
models of institutional collaboration (e.g. internal knowledge management
networks). The spectrum of collaborations models ranges from networks of
individuals within a single organization to networks of many different
organizations [Creech; Willard (01), 10-17]. Our
knowledge networks are characterized by the following determinants:
- scope: recycling of waste from companies in order to create sustainable
advantages for middle-sized companies and for the region itself,
- membership: project team, networking companies, recycling agency,
- structure: based on joint recycling initiatives for selected kinds
- communications: telephone, fax, email and regular network meetings.
Within a wide portfolio of collaboration models, the Austrian and the
German networks can be classified by three characteristics:
- number of organizations: limited amount of participating companies
(31 in the Austrian network, 22 in the German network),
- transferred knowledge: narrowly focused on waste disposal and recycling
activities of the networking companies,
- stakeholders and audience: closed group of gatekeepers.
In order to understand the nature of the recycling driven knowledge
transfer it is necessary to take a closer look on these networks.
4 Recycling Networking
The networks are very effective instruments to create sustainable development
[Strebel (00)]. Distinguishing features are the
cooperative efforts of independent companies from diverse branches with
one common goal: to reemploy waste derived from the production and consumption
areas within the regional industry as a replacement for raw materials and
also as a substitute for primary energy sources [Schwarz
In the following, we give a chronological overview of the institutionalization
of the Austrian and the German recycling networks from a knowledge-based
The first scientifically researched and most developed recycling network,
the Industrial Symbiosis Kalundborg, is located on the Danish island of
Seeland. Primarily, the expected restrictions by environmental law [Elkington;
Knight; Hailes (91)] lead to "a broad based cooperation between
industry, government and citizens" [Little (91),
167]. The remarkable economic and ecologic benefits [Christensen
(98), 107-108] inspired in 1993 the Institute for Innovation and Environmental
Management to a systematic search for industrial networks in Styria (Austria).
This research work came to the conclusion, that no recycling networks existed
in this region.
As a result, the project "Recycling Networks in the Field of Production"
was started in the region of Upper Styria in 1996. Until project end in
1997, the Styria Recycling Network had been established in close cooperation
with 31 middle- and large-sized companies from different branches. An analysis
of the knowledge transfer within the network came to the conclusion that
almost all the networking gatekeepers avail themselves of three different
types of networks [Schwarz; Hasler et al. (96),
73-77]. In a personal network (e.g. professional associations) privately
maintained relationships of the decision-makers are simultaneously used
to exchange expert knowledge [Strothmann; Prüser;
Ginter (94), 3-19]. The transfer of recycling expertise also occurs
within a communicative company network. Here, the links between individual
companies serve to transport knowledge about recycling alternatives. If
companies work together in other areas beyond that of knowledge exchange
- particularly that of production - a technically determined network is
in place. This type of networking is represented by the Industrial Symbiosis
Kalundborg: the network members are not only linked by close knowledge
channels, but in many cases also by pipelines to transport different residues
like steam or gas. Despite these networks, the empirical results concluded
that the gatekeepers of the Austrian as well as of the German network do
not have sufficient information on hand to assist them in their decisions.
As a consequence, the project "Implementation of an Idea-Supported
Recycling Innovation Center (r.i.c.)" was launched in 1999. One important
project goal was to foster the transfer of knowledge about recycling alternatives
for specific kinds of waste within the recycling network.
The very positive empirical experiences from the Styrian network left
one important question open: Is the knowledge about recycling-oriented
networking transferable to other regions? In order to answer this question,
the Institute initiated the international research project "Protection
of Resources in the Region of Oldenburger Münsterland (RIDROM)"
in northern Germany. The project run from 1997 until 1998 and was co-financed
by the German Federal Foundation for the Environment. Project partners
were the Private Technical College for Economy and Technology in Vechta/Diepholz,
the Waste Disposal Society of the Vechta Region and Steinbeis-TZ Transfer
Marketing in Vechta. All three institutions have well established knowledge
channels with the regional industry. The corporate members of the planned
recycling network were selected within a radius of 50 kilometres to the
project office in order to lower the distance barrier of knowledge transfer
and to foster the "mental vicinity" of the gatekeepers. This
vicinity is considered to be a key factor of their successful recycling
cooperation [Schwarz (94), 110]. It also enabled
in the Oldenburger Münsterland Recycling Network the exchange of recycling
expertise in regular project meetings and expert interviews conducted by
the project team. An important precondition for this vicinity is the mutual
trust of the gatekeepers. In order to overcome the transfer barrier of
mistrust and to guarantee an intensive company care by the project team,
the number of network members was kept small. In addition, the know how
transfer was supported by the flat hierarchy of the recycling network.
The branch mix of the networking companies (plastic-processing industry,
(rubber-)metal-processing industry, agricultural and food industry, , etc.)
was grouped in view of the industrial structure of the region. This network
arrangement enabled the integration of a variety of different waste materials
into the network and created a portfolio of new recycling potentials.
Table 2 gives an overview of the branch mix of the network. Category
"unknown" means that the interview partner had no data, "no
statement" indicates that the person was not willing to provide data.
| plastic-processing industry
| (rubber-)metal-processing industry
| agricultural and food industry
| construction materials industry
| wood-processing industry
| service industry
| chemical industry
| no statement
| total of networking companies
Table 2: Branch mix of the Oldenburger Münsterland Recycling
Figure 1 shows the size of the companies which was another important
selection criterion for network membership. Data represented by the inner
circle were gathered from April 1997 to June 1998 in accordance with the
expansion of the network. The outer circle shows data of an empirical analysis
undertaken from November 2001 until February 2002.
Figure 1: Number of employees of the networking companies
The number of employees was chosen to measure company size because many
companies were not willing to provide turnover figures at the beginning
of the project.
In addition, these data are also better indicators for the total amount
of company waste than sales figures.
As shown in figure 1, medium-sized companies are the main target group
of the project team. The reason is that they often have - in comparison
to small companies - a more effective waste management which is another
precondition for recycling networking. On the other hand, they do not own
the bargaining power of large companies regarding waste disposal services.
Therefore, they have great interest to collaborate in the field of waste
management. The only large firm of the network was restructured to a medium-sized
company after the first expert interview because of economic restraints.
In the first analysis two companies were not willing to provide data which
lead to a share of 9 % of the category "no statement". In the
second analysis all firms delivered data due to the development of a trustful
atmosphere within the network.
This atmosphere has lead to the increasing transfer of recycling knowledge
within the German network. Again, as shown by the Styrian networking experiences,
recy-cling potentials had been raised in a remarkable way until project
end in 1998. For example, ash from an incinerator was successfully tested
as raw material in a cement production plant. Another important result
of the German networking project was a dramatic increase in the readiness
of the gatekeepers to provide recycling expertise.
All these projects described above come to the conclusion, that the
current communication networks do not suffice to provide gatekeepers with
all the relevant information concerning waste materials and their recycling.
Even the existing waste exchanges can only provide decision making assistance
in a small number of cases [Strebel; Schwarz; Farmer
et al. (97), 121]. The research work in Oldenburger Münsterland
underlines this conclusion.
5 Recycling Agency
The discussed knowledge gaps are considerable obstacles to the realization
of advantageous economical and ecological recycling solutions. They could
be closed by the creation of a recycling-oriented service business following
the concept of AMICA (Agency for Marketing, Information, Coordination and
Advice) [Hasler (98), 320-321]. AMICA highlights the
core functions of a recycling agency which we argue are essential for the
establishment of the Styrian as well as of the Oldenburger Münsterland
network. Eighty five % of the gatekeepers within the Styrian network and
ninety % within the Oldenburger Münsterland network would like to
cooperate with such an organization.
As a consequence, the implementation of a central recycling institution
is a focus of the project "Institutionalization of the Information
Exchange between Companies Concerning Avoidance, Reduction and Disposal
of Industrial Residues". This two year project has been started in
the region of Oldenburger Münsterland in March 2001 by the project
partners of RIDROM and is co-financed again by the German Federal Foundation
for the Environment.
The intensifying of the knowledge transfer between the network members
has lead to a dramatic decrease in the uncertainty of recycling alternatives
among the gatekeepers. Figure 2 highlights this shift
from forty % of very often perceived lack of specific knowledge at the
beginning of recycling networking in 1997/98 to zero % in 2001/02.
Correspondingly, the share of rarely experienced knowledge deficits
raised from five % to seventy seven %. The drop of the share of never experienced
knowledge gaps from thirty two % to nine % can be explained by the increasing
awareness of knowledge deficits because of the networking activities of
the gatekeepers. Again, all companies provided data in the latest survey.
Figure 2: Frequency of perceived knowledge deficits in recycling
At this advanced stage of knowledge transfer one important task of the
project team is the amalgamation and transformation of existing recycling
expertise into explicit knowledge to build up a Recycling Information System
(RIS) for the recycling agency. The key data of the individual recycling
processes will be entered into a Geographic Information System (GIS). This
system will support the planning and organization of inter-company recycling
systems for waste materials such as scrap oil or waste foils.
The results of our empirical study provide evidence that knowledge transfer
in recycling networks decreases the subjectively perceived high degree
of uncertainty among gatekeepers. They are encouraged to tread new recycling
paths which are coordinated and promoted by recycling agencies. Consequently,
their companies reap advantages such as cost and risk reduction because
of a staple stance on waste disposal and supply. The improvement of the
company´s image is another important reason for recycling activities
of networking companies. In this way, mutual interest can be established
in business-authorities and business-public relations.
The region as a whole benefits from the minimized use of harmful and
scarce resources. In addition, the ecological dangers caused by the emitted
waste materials are kept to a minimum [see also Strebel
(98), 3-4]. Taking this into consideration, recycling-oriented knowledge
transfer bridges the gap between economy and ecology in a sustainable way.
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