Managing Knowledge - Coursework Example

Introduction Today's world is knowledge-based with dynamic changes taking place by the hour. In the current scenario, people are the differentiatorsof a business enterprise; human capital is the profit lever of the knowledge economy. With the changed business environment acquisition of business and technical knowledge has become vital to any organization. Information is an equally vital asset that an organization can possess and these days there is abundance of information flow within the organization. Strategic decisions are taken on the information and information changes by the minute. Knowledge is primarily a problem of capturing, organizing and retrieving information. Knowledge is passive, analytic and atomistic (Thomas, Kellogg & Erickson, 2001). This does not imply that knowledge is power, rather applied knowledge is power. To apply knowledge, to use the abundance of information that is available in any organization today, codification of knowledge is essential. Codification of knowledge into information implies making knowledge portable, re-usable and transferable within the organization (Hall, 2006). Only when this is possible can knowledge become power. Organizational knowledge can then be used to gain competitive edge over the rivals but the organization should know how to use that power. Technological advancements have made it possible to retain knowledge and transmit it to the persons concerned within the organization. Knowledge can be a powerful weapon when retained, transmitted, disseminated and applied. It is thus important to understand the implications and the ways of retaining and applying knowledge. Explicit and tacit knowledge Knowledge has been classified into two categories - tacit and explicit. Explicit knowledge is that which has been previously defined and codified. It is usually gained through formal education, training, books and now the internet. Explicit knowledge is static and does not have the capacity to renew itself (Ehin, 2008). It requires an outside entity to keep it current. Tacit knowledge on the other hand is acquired by interacting with others and is connected to life's experiences. Tacit knowledge is the basis for generation of new knowledge or "the key to knowledge creation lies in the mobilization and conversion of tacit knowledge" (Nonaka cited by Marwick, 2001). The individual tacit knowledge characterizes the human capital of an organization. Human capital is the combination of genetic inheritance, education, experience and attitude towards life and business (Bontis & Fitz-enz, 2002). Human capital is the source of innovation and strategy. Sustained competitive advantage can accrue from a pool of human capital. Human capital adds value and is not substitutable. An organization is not a passive repository of knowledge. The tacit knowledge in the form of organization culture may interact with the explicit knowledge of the individual. The core competencies of an organization incorporate both tacit and explicit knowledge and should be conceived as a mix of skills and technologies (Lindgren & Wallstrom, 2000). These interactions and combinations result in new knowledge as organizational learning or innovation. This knowledge has to be efficiently managed so as to derive competitive advantage. Managing knowledge Managing knowledge or knowledge management (KM) is nothing more than getting the right information to the right people at the right time. It is also known by other terms like organizational learning, organizational memory and expertise management. Most organizations may not even be aware of the knowledge they have, let alone knowing how to manage knowledge. They may under estimate the value and creation of knowledge; they may even unknowingly give away what they possess (Earl & Scott, 2001). They may defer the sharing of knowledge or under invest in the utilization of the knowledge. As organizations started recognizing these facts, they created the post of a Chief Knowledge Officer (CKO), whose popularity and demand has increased in the recent years. The role of a CKO involves identifying, capturing, retrieving, sharing, and evaluating an enterprise's information assets. These information assets may include databases, documents, policies and procedures, as well as the un-captured tacit expertise and experience stored in individual workers' heads (Hicks, Dattero & Galup, 2006). Data is combined to create information and information is combined to create knowledge. Again, this creation of knowledge itself does not result in power. This knowledge that has been created has to be applied at the right time and place without which it remains as information. Managing knowledge thus involves utilizing and exploiting the organization's information and application of people's skills, talents, thoughts, and imagination (Broadbent, 2003). It is a form of expertise-centered management focusing on using human expertise for business advantage. Knowledge is Power When knowledge is disseminated and utilized in the right manner by an organization the employees get a platform to market their competencies internally (Lindgren & Wallstrom, 2000). It also helps the strategic planners to see the current status of competencies and plan for future. It helps the organization to map the competencies and make expertise management possible. Knowledge assets or intellectual capital of their employees separates an organization from its competitors (Sunassee & Sewry, 2002). Managing this capital involves a change in mindset as earlier knowledge sharing was not practiced. Information that flows into an organization has to be created into knowledge through the process of VSR (variation, selection and retention). VSR is thus the mechanism for developing and organizing knowledge within a firm (Madsen, Mosakowaski & Zaheer, 2002). Variation is the creation of knowledge, which brings about changes in the firm's way of operating. Through dispersion the firm then leverages the new and past knowledge across space and time. The content that is retained represents its existing and past behaviors. A firm that can preserve the past via retention has to dedicate less resource in knowledge creation. The knowledge is stored in retention bins forming the firm's memory. In this process, the firm's retained knowledge is combined with new knowledge to generate a novel change. Tools to assimilate knowledge In a typical organization information is collected from the customer, the industry or the relevant business field as well as about the products and services available to meet the customer's needs (Mack, Ravin & Byrd, 2001). Firms now create knowledge portals for assimilating knowledge and storing it for use by the workers. Colleagues contribute expertise on this and knowledge is further gathered from internal and web information sources which may have been stored from previous projects. Organizations also conduct explicit search which involves formulating a query, reviewing the results and browsing through taxonomies that organize documents as topics. A dedicated project workplace is created where presentations and analyses are carried within the timeframe and budgets. The documents gathered have to be registered, managed and analyzed. Knowledge portals in the form of internet, intranet or extranets have the most common function in communication forms (Hall, 2006). Portals help to attain well-versed and speedy transportation of knowledge in any form. This improves interdepartmental communication, gives easy access to information which means informed decisions. Knowledge portals lead to enhanced performance as the knowledge of the personnel who leave the company can be preserved with the company. Socialization is another method through which socialization is a process through which tacit knowledge can be transferred effectively (Hall, 2006). The web2.0 technology now offers platforms like corporate wikis and blogs where information is exchanged and knowledge is easily retained. Web 2.0 has no 'walled gardens' which implies information can freely flow in and out of the web services (James, 2007). There is a rich user experience and data organization; it provides services and has characteristics that support and enhance interaction among users. Web 2.0 helps to create websites that look and can act like desktop programs. Examples of web 2.0 include Blogs and Wikis, IM Chat, tagging, RSS Feeds, Google Maps and Docs. Photos and video sharing and social networking are the web 2.0 tools, social office suites and podcasts (Carpenter & Steiner, 2005). It has been found that dissimilar groups through out the organization may both be sources of knowledge as well as major influencers and power sources in disseminating knowledge within the organization (McAdam & McCreedy, 2000). Knowledge workers do not work in isolation but in learning networks or communities. It is essential to recognize the employees as knowledge workers with increased power and emancipation and not merely treated as intangible assets that have to be fully utilized. Team working is another method through which personal experiences of the workers or the tacit knowledge can be shared within the organization to make it organizational knowledge (Sapsed, Bessant, Partington, Tranfield & Young, 2002). . The ideas of individuals are articulated and refined and once converted to organizational knowledge, it is embodied into new services, processes or products. Cross-functional teams, diversity of technical background, age and values appear to heighten project team performance. Team learning further requires that members are allowed to speak up openly and communicate freely with each other about the changes (Edmondson, 2003). This can lead to a multifaceted team learning process that can enable successful implementation of new technology. At Microsoft, virtual teams are formed for most of their product development work. These teams network together through out the company to accelerate design and testing of new software modules. By being able to share knowledge rapidly through out the organization, Microsoft has learnt how its new technology can be applied quickly to new business ventures like cable television, broadcasting, travel services and financial services. While Microsoft was engaged in double-loop learning, Sony Corporations demonstrated single-loop learning. Sony used the past experience and information to develop a new product. They wanted to produce a small portable recorder for use by reporters for recording interviews (Chaston, Badger & Sadler-Smith, 1999). The final design was found to have flaws and could not record and the design engineers did not see any potential commercial value of the product. They were concentrating on prior experience and knowledge but the founder demonstrated double-loop or generative approach to learning when he suggested that since the product produced an excellent sound, it could be used a portable device for listening to music. Double-loop learning implies that whenever a problem emerges, during the analysis new knowledge is sought which can be applied in the situation. Thus, the information or the knowledge that the workers had was not power till they decided to add new knowledge to it. Knowledge is power An organization has to be rich in information and knowledge to make informed, timely decisions. At Ford Motor Company, knowledge used in the design stage of the car impacts up to 90% of the car's total cost although the design itself only impacts 5% of the final cost of the car (Sunassee & Sewry, 2002). No records of Taurus, their best seller were found which demonstrates the importance of managing knowledge. This knowledge was lost forever forbidding Ford from replicating their success. This confirms that reusing valuable existing knowledge stored in a repository can leverage knowledge for competitive advantage (Watson & Hewett, 2006). For this individuals must be willing to contribute to the knowledge repositories. The social exchange theory serves as a lens for developing a model of knowledge contribution and its antecedents. Organizational knowledge transfer involves important social processes. Reciprocity is a common characteristic and the individuals involved expect that a balance will be maintained in the exchange. The case of Skandia Discerning knowledge, choosing a container, dissemination and the use made of the knowledge are the four stages through which valuable information can be identified and converted to knowledge. Knowledge has to be distributed to derive the benefits in the market place. Skandia focuses on the development of intellectual capital as they identified a need for development of knowledge intensive services. They invest heavily in upgrading knowledge because they believe that intellectual capital is "the possession of knowledge, applied experience, organizational technology, customer relationships and professional skills". They also invest in the development of information technologies leading to value added networks, global area networks. To day investors, vendors and customers are attracted to a company beyond the book value and this value is the intellectual capital. Intellectual capital is the non-financial capital, not an asset but a debt and is basically supplementary information to financial information. Skandia realized this valuable asset and started collecting information that was being lost within the company. They realized that these hidden values were not disclosed in the traditional accounting system and the companies were not even aware of what they possessed. On stock-taking tgeir list consisted of items such as trade marks, concessions, customer databases, fund management systems, IT systems, core competencies, key persons, partners and alliances, as well as about 50 more items. They realized that out of human capital grows the structural capital which combined together creates the intellectual capital of the organization. This led to the understanding that a firm requires the right leadership to convert the human capital into structural capital. This required a right reporting system and more information was needed in customer relations, distribution channels, structural development, human resources, IT and innovation. All of this information was assimilated into a single report which gave complete details of the financial as well as non-financial data of the company. Thus knowledge is power when an organization is able to capture and share knowledge to leverage and capitalize on the values. Barriers to effectively convert information to knowledge Changing people's behavior and culture has been found to be the biggest impediment to effective use of tacit knowledge (Marwick, 2001). The employees may experience and form new knowledge. The real value of the new information or knowledge can become tangible only when these are combined and new knowledge created. This new knowledge has to be disseminated and internalized by other employees who act on it and form new knowledge. Such discussions should allow formulation of metaphors and analogies which requires an informal and free-wheeling style. This style is possible through chat and other real-time interactions within teams. Newsgroups and forums also help in sharing of knowledge although in this case people understanding and acquiring knowledge may be total strangers. Conclusion Managing knowledge is as difficult as managing change. Hence knowledge needs to be systematically and efficiently managed so that it is easy to find and use in such a way that it is easily available to the right people at the right time for the right purpose. Knowledge can become power only when captured, stored and disseminated in the right manner. Technology is not important but a change of mind set and culture is essential to derive benefits of the knowledge that is within the organization. Individual human experience and information has to be converted to tacit knowledge that can be used in the future by7 organizations. A shift from the old pattern is not easy and this requires education and motivation. Interaction between members of an organization has been low which does not allow for transfer of knowledge. Companies are trying to convert tacit knowledge to explicit knowledge through various processes of internalization and externalization. Team working and the use or tools like web2.0 have been found to be effective in converting knowledge to power. For sharing of information with others, workers need to be motivated and be aware that they stand to gain out of it. This is the only way that knowledge can be power without which it remains as information. References: Bontis, N. & Fitz-enz, J. (2002). Intellectual Capital ROI: a causal map of human capital antecedents and consequents. "Journal of Intellectual Capital". Vol. 3 No. 3 pp. 223-247 Broadbent, M. (2003). The Phenomemnon of Knowledge Management: What Does it Mean to the Information Profession' [Online] Available at: http://www.contentdigital.com.br/biblioteca/gestao_conhecimento/broadbent.pdf [accessed 01 September 2008] Carpenter, C. & Steiner, S. (2005). Using Web 2.0 Technologies to Push E-Resources. [Online] Available at: http://www.smartech.gatech.edu/bitstream/1853/13640/2/236-fri-11_05.pdf [accessed 01 September 2008] Chaston, I. Badger, B, & Sadler-Smith, E. (1999). The Organizational learning system within UK small firms. "International Journal of Training and Development". 3:4 Earl, M. & Scott, I. (2001). The role of the chief knowledge officer. [Online]. Available at: http://www.providersedge.com/docs/leadership_articles/The_Role_of_the_CKO.pdf [accessed 01st September 2008] Edmondson, A. C. (2003). Speaking Up in the Operating Room: How Team Leaders Promote Learning in Interdisciplinary Action Teams. "Journal of Management Studies". 40:6 September 2003 Edvinsson, L. (1997). Developing Intellectual Capital at Skandia. "Long Range Planning". Vol. 30, No. 3, pp. 366 to 373 Ehin, C. (2008). Un-managing knowledge workers. "Journal of Intellectual Capital" Vol. 9 No. 3, 2008 pp. 337-350 Hall, M. (2006). Knowledge management and the limits of knowledge codification. "Journal of Knowledge Management". VOL. 10 NO. 3 2006, pp. 117-126 Hicks, R. C., Dattero, R., & Galup, S. D., (2006), The five-tier knowledge management hierarchy, Journal of Knowledge Management, VOL. 10 NO. 1 2006, pp. 19-31 James, C. (2007). WIKIS IN THE COLLEGE CLASSROOM: A COMPARATIVE STUDY OF ONLINE AND FACE-TO-FACE GROUP COLLABORATION AT A PRIVATE LIBERAL ARTS UNIVERSITY [Online] Available at: http://www.ohiolink.edu/etd/sendpdf.cgi/oyle,%20James%20E.,%20Jr..pdf'acc_num=ket1175518380 [accessed 01 September 2008] Lindgren, R. & Wallstrom, C. (2000). Features Missing in Action: Knowledge Management Systems in Practice. [Online] Available at: http://is2.lse.ac.uk/asp/aspecis/20000189.pdf [accessed 01 September 2008] Mack, R. Ravin, Y. Byrd, R. J. (2001). Knowledge portals and the emerging digital knowledge workplace. [Online] Available at: http://researchweb.watson.ibm.com/journal/sj/404/mack.pdf [accessed 01 September 2008] McAdam, R. & McCreedy, S. (2000). A critique of knowledge management: using a social constructionist model. New Technology, "Work and Employment", 15:2 Madsen, T. L. Mosakowaski, E. & Zaheer, S. (2002). The Dynamics of knowledge flows: human capital mobility, knowledge retention and change. "Journal of Knowledge Management". Vol. 6 No. 2 pp. 164-176 Marwick, A. D. (2001). Knowledge management technology. "IBM SYSTEMS JOURNAL". VOL 40, NO 4, 2001 Sapsed, J. Bessant, J. Partington, D. Tranfield, D. & Young, M, (2002). Teamworking and knowledge management: a review of converging themes. "International Journal of Management Reveiws". Vol 4 Issue 1. pp. 71-85 Sunassee, N. N. & Sewry, D. A, (2002). A Theoretical Framework for Knowledge Management Implementation. "Proceedings of SAICSIT 2002" Pages 235 - 245 Thomas, J. C. Kellogg, W. A. & Erickson, T. (2001). The knowledge management puzzle: Human and social factors in knowledge management. "IBM SYSTEMS JOURNAL". VOL 40, NO 4, 2001 Watson, S. & Hewett, K. (2006). A Multi-Theoretical Model of Knowledge Transfer in Organizations: Determinants of Knowledge Contribution and Knowledge Reuse. "Journal of Management Studies". 43:2 March 2006 Read More