Knowledge, Dynamic Capability and System Thinking: An Integrated Framework for Industrial 4.0 Transformation in Organisations
List of Authors
Yong Chan Huang
Keyword
Industry 4.0; Dynamic Capabilities; Soft Systems Methodology; Knowledge Diffusion; Organisational Learning
Abstract
The growing pace of technological disruption brought about in Industry 4.0 (IR4.0) has forced organisations to continually adapt and reconfigure their organisational capabilities in order to stay competitive. However, existing literature tends to analyse this transformation through fragmented theoretical lenses. This paper proposes a conceptual framework that combines Mokyr's theory of useful knowledge, the multiple schools of thoughts of Dynamic Capabilities (DC) theory and Soft Systems Methodology (SSM) in order to offer a more comprehensive understanding of knowledge-driven transformation. Mokyr's perspective provides the macro-historical foundation, emphasizing the role of the accumulation and diffusion of useful knowledge, assisted by a culture of growth and institutional learning, in facilitating sustained technological progress. The DC framework - including Teece's strategic perspective, Eisenhardt and Martin's process-based view, Zollo and Winter's learning-based approach and Helfat and Peteraf's capability lifecycle - provides the meso-organisational mechanisms through which organisations sense opportunity, seize it and change their resource base. SSM complements these viewpoints by addressing the interpretive and human dimensions of change, allowing it to reconcile different worldviews and resistance that is often seen from digital transformation. Collectively, this is an integration of theoretical fragmentation in the DC literature, as well as a reflective systems perspective on how organisations can institutionalise learning, develop dynamic adaptability and build knowledge-based competitiveness in the IR4.0 era.