Knowledge and the Theory of Organizations: Organizations as Activity Systems and the Reframing of Management*

ABSTRACT Recent developments in the theory of knowing and doing contrast with conventional rational‐cognitive assumptions about management and organization. This, and the emphasis that is currently being placed on the importance of esoteric knowledge for business success, suggests that a review of the relationship between knowledge, organization and management is timely. Activity theory offers a way of synthesizing and developing relevant notions. the approach has its origins in Russian psychology which endeavoured to avoid the dichotomies between thought and action and between individuals and society which have characterized Western theory. Activity theory examines the nature of practical activities, their social origins, and the nature of the ‘activity systems’ within which people collaborate. Modifications to Engestrom's contemporary presentation of the approach are suggested, and a theory of organizations as activity systems is offered. the theory reframes management by modelling the recurrent and embedded nature of human activities, by revealing the tentative nature of knowledge and its action orientation, and by highlighting the opportunities for individual and collective development that engagement and dilemma can provide. the article concludes by reviewing implications for the management of knowledge work, organizational capabilities and organizational learning.