Knowledge Management - Essay Example

?Running head: KNOWLEDGE MANAGEMENT Knowledge Management Knowledge management is a popular topic of scholarly and empirical analysis. Knowledge is rightly considered as the main source of organizations’ competitive advantage. This paper is the analysis of the Siemens case study and its knowledge management practices. Two questions are analyzed: (1) knowledge management as human resource management; and (2) the effects of the wrong organizational culture on knowledge sharing. Recommendations to create a perfect knowledge culture are provided. Keywords: knowledge management, organizations, Siemens, organizational culture. Knowledge Management Knowledge management is one of the most popular objects of scholarly and empirical analysis. Much has been written and said about the principles of effective knowledge management in organizations and factors affecting it. Despite the growing body of literature, many organizations fail to implement KM practices properly. “The major problems that occur in KM usually result because companies ignore people and cultural issues” (Geisler & Wickramasinghe, 2009, p.12). For organizations that seek to establish themselves as repositories of knowledge, creating a culture that rewards individuals for knowledge sharing and recognized the value of tacit knowledge is crucial (Geisler & Wickramasnighe, 2009). This paper presents an analysis of the human and cultural issues involved in knowledge management in Siemens and, actually, many other organizations. In this paper, the examples of Texaco, Semantech, Xerox, Hewlett Packard, General Motors, BP Amoco and others are used to substantiate the argument. Knowledge Management as Human Resource Management Randall Sellers stated that “the challenge is managing the people who manage the knowledge”. In other words, the human dimension is believed to be an essential ingredient of knowledge management practices in organizations. Knowledge management is often blamed for neglecting people who generate and disseminate knowledge (Swan, Scarbrough & Preston, 1999). The basic understanding of KM is associated with the recognition of knowledge as the defining element of the postindustrial era (Swan et al., 1999). The rise in KM popularity is logical and reflects an ongoing tension between the growing role of knowledge and increasingly distributed structure of modern organizations (Swan et al., 1999). KM had to reduce this tension and enhance organizations’ capacity to generate and share knowledge. Unfortunately, failure to understand the basics of KM creates a situation, when organizations hide behind technologies and do not notice human resources which, in the meantime, are primarily responsible for creating this knowledge. Many organizations rely on the systems and tools that codify and commodify knowledge (Swan et al., 1999). Managers in these firms adopt an information-based perspective on KM, which interprets knowledge management in terms of information, not people, and emphasizes the importance of accessibility, availability, and real-time changes of information (Alavi & Leidner, 1999). In reality, the main challenge of knowledge management is in managing people who produce this knowledge, and there are several reasons for this. First, knowledge is a human act (McDermott, 1999). Therefore, no knowledge management is possible without people. The essence of knowledge management is in generating knowledge, piecing information together, reflecting on individual and collective experiences, generating insights, and using the results to solve acute organizational problems (McDermott, 1999). “From the point of view of the person who knows, knowledge is a kind of sticky residue of insight about using information and experience to think” (McDermott, 1999, p.106). Yet, many organizations make one and the same mistake, when they limit their knowledge management solutions to IT systems and networks. The real challenge of KM is to manage people, who generate and possess this knowledge. Well-known is the example of the Lotus Notes system, which was developed and implemented by Texaco’s Information Technology group. The company hoped that the new system would enhance collaboration, cooperation, and knowledge sharing among employees (McDermott, 1999). Months passed, but Texaco workers continued using the Lotus Notes system for e-mails only; it was not before the company realized the importance of HR and cultural changes that Lotus Notes became an important tool of collaboration at Texaco (McDermott, 1999). Unlike Texaco, Semantech always placed a special emphasis on face-to-face meetings among research sponsors and researchers; at Semantech, technology is an essential but complementary ingredient of knowledge management frameworks (Davenport et al., 1998). Second, KM presents a serious human resource management challenge, since employees should be motivated to generate and, more importantly, share their knowledge. Motivational practices exemplify a solid predictor of KM success in organizations (Davenport, Long & Beers, 1998). Motivation has been acknowledged as the basic source of failure in adopting knowledge sharing frameworks and groupware in organizations (Thomas, Kellogg & Erickson, 2001). Organizations keep rewarding their employees for competitive achievements and talents, instead of praising them for their decision to share their knowledge with others. Back to the notorious Texaco’s Lotus Notes: one of the reasons behind the Lotus Notes’s failure was the lack of motivation. The company continued praising individual employees for their competitive talents, and incentives their ideas with colleagues and managers were absent (Thomas et al., 2001). Managing knowledge resources is all about managing human resources, which is a serious problem because knowledge is inextricably bound with employees’ strivings, characters, and egos; knowledge does not emerge easily, nor does it flow smoothly across employees’ functional and role boundaries (Davenport et al., 1998). This is why successful organizations seek to go beyond information technologies and fine-tune their cultures and reward systems, to meet the demands of knowledge generating and sharedness. For example, “McKinsey and Company went beyond their document management systems and built a human network-response system” (Prusak, 2001). Again, technologies played an important but supplementary role: companies like Merck, Hewlett-Packard and Xerox relied on their experience and intellectual resources, using technologies to expand and disseminate these sources (Prusak, 2001). Nowadays, managers express concerns about the cultural aspects of KM; frequently, how to convince people to volunteer their knowledge is a matter of the major concern (Alavi & Leidner, 1999). At Siemens, employees were motivated by the fact that they could access and use knowledge and, simultaneously, they would also provide what they knew about the problem. Short-term incentives to share knowledge should be highly visible, where people who engage in knowledge sharing must be recognized and rewarded (Davenport et al., 1998). All these problems and challenges imply that knowledge management in organizations must be human-oriented. Knowledge sharing goals necessitate the adoption of human capital approaches to KM (Prusak, 2001). The human capital approach relies on extensive theoretical bases although, in practice, managers’ ideas of human capital are misbalanced, diluted, and distorted (Prusak, 2001). The financial benefits of investing in human capital have been abundantly documented. Investments in human capital always result in higher rates of return (Prusak, 2001). These returns express and manifest through increased productivity, greater innovative capacity, and improved workplace skills (Prusak, 2001). Knowledge belongs to and flows through the community (McDermott, 1999). The General Motors Corporation is well aware of this face. The company invested huge resources in the development of employee capacities and knowledge sharing skills, followed by the deployment of company-wide collaboration technologies (Prusak, 2001). Therefore, in terms of managing people, knowledge organizations face two important challenges: (a) to realize that knowledge is entirely human; and (b) to motivate individuals share their knowledge with others. The current state of literature provides a wealth of recommendations, concerning knowledge management and motivation, but it is clear that the development of an appropriate organizational culture can become a relevant response to knowledge sharing difficulties in organizations. Knowledge Sharing: Wrong Cultures Matter Organizational culture is a matter of serious concern in knowledge management. Culture is believed to cause huge impacts on how organizations run their KM systems. Geisler and Wickramasinghe (2009) claim that establishing a culture that favors tacit knowledge sharing is vital for the success of all KM initiatives. According to Bob Buckman, former CEO of Buckman Labs, “What’s happened here is 90 percent culture change. You need to change the way you relate to one another (De Long & Fahey, 2000, p.113). More important are organizations’ knowledge and perceptions of organizational culture. To understand how wrong organizational cultures distort KM systems, the meaning of organizational culture needs to be explained. Basically, the breadth of the organizational culture construct does not allow producing a single, universal culture framework (Alavi, Kayworth & Leidner, 2006). More often than not, organizational culture operates at three different levels: the first level is made of assumptions; the second comprises values; and the third covers artifacts (Alavi et al., 2006). At the very depth of any organizational culture are the basic assumptions that provide schemes to interpret events, behaviors, activities, and relations between individuals (Alavi et al., 2006). Then come values, which exemplify a visible and almost tangible set of cultural beliefs, which define what is the most important for a particular cultural group (Alavi et al., 2006). Third, there are cultural artifacts; they are visible and audible (Alavi et al., 2006). Values, assumptions, interpretive schemes, and artifacts produce serious effects on the quality and contents of KM decisions in organizations. To understand how the wrong organizational culture reduces the effectiveness of knowledge management, one should first understand how cultures affect knowledge management practices. To begin with, cultural values and assumptions affect the ways in which individuals adopt and use KM technologies (Alavi et al., 2006). Furthermore, culture influences the choice of KM technologies in organizations. Thus, individuals working in different organizational cultures and using different KM technologies will, most likely, face different KM outcomes (Alavi et al., 2006). Most probably, these outcomes will also reflect the values and assumptions pursued by individuals and their cultures (Alavi et al., 2006). Unfortunately, it is not clear how organizational culture affects knowledge sharing patterns and how it relates to the human dimension of knowledge management. Simultaneously, it is clear that organizational culture can either facilitate or impede the implementation of relevant KM frameworks. Organizational culture is “the principal barrier to leveraging and retaining unique intellectual assets” (De Long & Fahey, 2000). The relationship between organizational culture and knowledge management was widely documented. The links between culture and knowledge management can be interpreted in four different ways. Barriers to knowledge management in the wrong organizational culture will differ, depending on the quality and essence of these links. First, organizational culture predetermines individual assumptions on what knowledge is the most important (De Long & Fahey, 2000). Subcultures are claimed to serve the source of the major influences on individual perceptions of the most important and valuable knowledge (De Long & Fahey, 2000). A wrong organizational culture is that which fails to manage and reconcile cultural variations across different subcultures. Each subculture, be it sales, R&D or engineering, runs a distinct set of values and assumptions about knowledge (De Long & Fahey, 2000). Some subcultures may pursue values that differ from those of the organization; as a result, functional conflicts and miscommunication become part of the organization’s KM routines. Communication is a foundational construct in KM: effective communication facilitates and encourages knowledge donating, knowledge collecting, and affective commitment to KM (Van Den Hooff & Ridder, 2004). For example, Leidner, Alavi and Kayworth (2006) analyzed the association between cultural values and KM approaches in two global firms and found that employees in various divisions held different perceptions of organizational culture; as a result, they could not find a consensus on what constituted knowledge management and how it had to work. BP Amoco once decided to investigate the reasons behind the dramatic performance differences across its deep-water drilling rigs (Prusak, 2001). As a result, the company found huge variations in local knowledge and skills – the variations that were tacit and, for this reason, undocumented (Prusak, 2001). BP Amoco developed a global KM program that facilitated the transfer and exchange of local knowledge among units, and led the company to achieve an outstanding position in the KM field (Prusak, 2001). Thus, the culture of subcultural conflicts impedes all knowledge management processes and principles. Organizational culture is the main factor of management at various levels of knowledge (De Long & Fahey, 2000). Culture is what links and transforms individual knowledge into structural knowledge, which is owned and used by all members of the organization. Organizational culture predetermines the direction and patterns of knowledge distribution (De Long & Fahey, 2000). In this sense, a wrong culture is the one which rests on the superiority of individual knowledge, does not promote trust, and reinforce status differences, which reduce the efficiency of knowledge management initiatives. In cultures which encourage individualism and the supremacy of individual competition, knowledge sharing cannot be effective. Back to the study by Leidner et al. (2006), individualism was the basic impediment to the implementation of relevant KM frameworks in global corporations. Modern organizations take steps to reshape their norms and practices. At Siemens, collectivism and sharing had always been part of the organizational reality. The ShareNet web-based solution was a reflection and a relevant supplement to the culture of knowledge sharedness at Siemens. Moreover, organizations with low levels of trust face serious knowledge management challenges. The amount of knowledge shared among employees is directly associated with the degree to which employees trust one another (De Long & Fahey, 2000). Wrong cultures experience the lack of trust among employees. Employees are not motivated to share their knowledge resources with colleagues and managers. The situation is particularly problematic in organizational cultures, which emphasize status differences. At Siemens, all departments and units are equally involved in knowledge sharing practices and have equal opportunities to access and learn from what others have to say. Simultaneously, the importance of trust in other organizations is persistently overlooked. Of the 109 participants of an executive development program at a Northeast University, none recognized trust as an important antecedent of effective knowledge management (Alavi & Leidner, 1999). It is no wonder that these executives treat trust and collaboration as secondary to the technological and information features of KM systems. When organizations value some functions over others, they automatically impede the progress of knowledge sharing among these functions: functions that are valued less than others spend additional time and unnecessary effort, fighting for their status and, simultaneously, experience the lack of trust toward those who exercise a superior organizational position. Organizational cultures are responsible for the creation of new knowledge and shape social contexts in which knowledge sharing occurs (or does not occur). Effective cultures establish social contexts for trust and interactions (De Long & Fahey, 2000). By contrast, ineffective “wrong” cultures shape vertical and horizontal interactions in ways that make knowledge sharing virtually impossible. Wrong cultures are those which “deny the opportunity to discuss sensitive topics and reduce the approachability of senior management” (De Long & Fahey, 2000). In horizontal interactions, “wrong” cultures fail to develop and implement knowledge-promoting behaviors and do not allow employees and managers learning from their mistakes (De Long & Fahey, 2000). All these issues discourage open knowledge sharing and communication in organizations; they do not allow using mistakes as the source of new knowledge and create interaction contexts that discourage employees from teaching one another. Finally, wrong cultures prevent organizations from recognizing the value of new knowledge (De Long & Fahey, 2000). Without doubts, organizational cultures play the primary role in how knowledge is generated and shared. If wrong cultures reduce the efficiency of knowledge sharing practices, a logical question is what cultures can be considered effective and appropriate for knowledge sharing. De Long and Fahey (2000) and Davenport et al. (1998) provide a good answer to this question. Cultures that foster knowledge sharing rely on several important pillars. First, in ‘knowledge sharing’ organizations, knowledge operates as the means and not the end of innovations and progress (De Long & Fahey, 2000). In these cultures, employees and managers seek to acquire and implement knowledge, instead of merely absorb it (De Long & Fahey, 2000). Knowledge-sharing cultures encourage open debate on the most important strategic issues (De Long & Fahey, 2000). Knowledge-sharing cultures encourage participation and involvement in knowledge generation and sharedness, at all levels of organizational performance. Eventually, successful organizational cultures use the knowledge they generate and share to challenge established behavioral patterns and beliefs (De Long & Fahey, 2000). These cultures motivate employees to teach each other and trust each other (Davenport et al., 1998). The case of Siemens suggests that the relationship between organizational culture and knowledge sharing is reciprocal and bidirectional. Organizations that seek to establish relevant knowledge sharing frameworks automatically have their cultures change. Organizations must also realize that knowledge sharing is impossible without cultural change. Conclusion The basic understanding of KM is associated with the recognition of knowledge as the defining element of the postindustrial era. In terms of managing people, knowledge organizations face two important challenges: (a) to realize that knowledge is entirely human; and (b) to motivate individuals share their knowledge with others. Knowledge is a human act, and no knowledge management is possible without people. KM presents a serious human resource management challenge, since employees should be motivated to generate and share their knowledge. Knowledge is inextricably bound with employees’ strivings, characters, and egos; knowledge does not emerge easily, nor does it flow smoothly across employees’ functional and role boundaries. Here, culture plays a huge role in how organizations share their knowledge. Simultaneously, organizational culture is the principal barrier to leveraging and retaining unique intellectual assets. A wrong organizational culture is that which fails to manage and reconcile cultural variations across different subcultures. Each subculture, be it sales, R&D or engineering, runs a distinct set of values and assumptions about knowledge. The culture of subcultural conflicts impedes all knowledge management processes and principles. In cultures which encourage individualism and the supremacy of individual competition, individuals use knowledge to compete with each other. As a result, they are not willing to sacrifice a promise of reward and recognition for the sake of collective knowledge sharing benefit. Organizational cultures are responsible for the creation of new knowledge and shape social contexts in which knowledge sharing occurs. Ineffective “wrong” cultures shape vertical and horizontal interactions in ways that make knowledge sharing virtually impossible. Wrong cultures deny an opportunity to discuss sensitive topics and reduce the approachability of senior management. The case of Siemens suggests that the relationship between organizational culture and knowledge sharing is reciprocal and bidirectional. Organizations must foster the development and implementation of cultural frameworks that motivate employees to generate and share their knowledge with others. References Alavi, M. & Leidner, D.E. (1999). Knowledge management systems: Issues, challenges, and benefits. Communications of the Association for Information Systems, 1(7), 1-35. Alavi, M., Kayworth, T.R. & Leidner, D.E. (2005). An empirical examination of the influence of organizational culture on knowledge management practices. Journal of Management Information Systems, 22(3), 191-224. Davenport, T.H., De Long, D.W. & Beers, M.C. (1998, Winter). 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