Knowledge Creation in Physical and Virtually Collocated Product Development Teams Johann ckh Riedel 1 , Melis Sakiroglu 2 , Priya Johal 1 , Kulwant S Pawar 1 1 Centre for Concurrent Enterprise, Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham, NG8 1BB, UK, {kul.pawar, johann.riedel, priya.johal}@nottingham.ac.uk 2 Marketing Department, Procter & Gamble, Wimbledon, London, UK, Sakiroglu.m@pg.com Abstract This paper reports on the findings from an empirical study of the knowledge creation process within physical and virtually collocated product development teams. Given that dispersed/ distributed/ virtual design teams are increasingly the norm in product development it is important to understand the dynamics of these types of teams. This study uses the approach reported on at a previous ICE conference (Sakiroglu, et al 2005). The approach uses a computer-based simulation of the product design process. The simulation is a role-playing ‘game’ with five participants: project manager, design manager, marketing manager, purchasing manager and production manager. This novel approach allows extensive data to be collected (video, audio, text, questionnaire, and observational) and for the conditions (physical or virtual collocation) to be varied. It thus creates a virtual laboratory for the study of behaviour and interactions during the product development process. A comparison of the initial findings and a model for the knowledge creation process is presented in this paper, for both the virtual and physically collocated teams. Keywords Knowledge creation, knowledge creation process, NPD Teams, Physical collocation, Virtual Teams. 1 Introduction This paper reports on the findings from an empirical study of the knowledge creation process within physical and virtually collocated product development teams. Previous writings on knowledge, information, creativity, etc have been dominated by definitional discussions, prescriptive models, and debates about the social basis of knowledge, etc. A large proportion of research has focused on technological means, in particular ICT, to provide the means for sharing information – in the hope to promote knowledge and knowledge creation (see for example AKT – www.aktors.org). This paper investigates the knowledge creation process in a virtual team and compares it to a physically collocated team. The approach adopted in this paper uses a computer-based simulation of the product design process. The simulation is a role-playing ‘game’ with five participants: project manager, design manager, marketing manager, purchasing manager and production manager. This novel approach allows extensive data to be collected (video, audio, text, questionnaire, and observational) and for the conditions (physical or virtual collocation) to be varied. It thus creates a virtual laboratory for the study of behaviour and interactions during the product development process. The simulation was originally designed and developed in a European research and technology development project Cosiga (see www.cosiga.com, Riedel, et al. 2001). In Cosiga the participants interact in a product development scenario where they have to specify, design and produce a simple truck for a specific market. A truck was chosen as the product because everyone knows what the main components of a truck should be (cabin, chassis, wheels, axles, gearbox, seats…etc.). The design process involves the players drawing up a market specification and a product specification, designing the truck, purchasing components, and allocating production processes. The product's manufacturability will be put to the test in the