Collective Knowledge Formation as a Dynamic Capability in Local Government

This article explores collective knowledge formation that supports socio-financial sustainability in local governments. The study aims to complement rationalistic and business-oriented knowledge management research by examining the social processes through which information is collected, interpreted, shared, and utilized. It addresses criticisms of knowledge management for its excessive internal focus, tackling tame organizational problems, and prioritizing data over meaning. In the context of local governance, characterized by complexity, hybridity, and a strong commitment to sustainability objectives, understanding factors that support collective knowledge formation is crucial for enhancing shared understanding of sustainability. The article applies the knowledge formation framework to analyze empirical data from three development workshops conducted in two Finnish cities. Preliminary findings suggest that leadership dialogue, which integrates political, strategic, and operational perspectives, can serve as an arena for collective knowledge formation. The findings also emphasize the importance of a shared knowledge base, recognition of core values, and a thorough understanding of organizational operations as enablers of effective knowledge formation processes. Additionally, these processes must occur at various organizational levels to effectively support the sustainability transition.