Effective Knowledge Management System - Case Study Example

 Contents Knowledge Management Theory, Models and Framework 2 Application of Knowledge Management 4 Evaluation 7 References 9 Knowledge Management Theory, Models and Framework Knowledge management is a process of developing, sharing, capturing and effectively using organizational knowledge in the business field. An effective knowledge management system can help to achieve organizational objectives in a disciplined way. This concept was established in the year 1991 and since that period, the concept is used in information system, business administration, information science, management and many other related fields in any organization. Again strategic management, organizational performance measurement, organizational culture and behaviour, artificial intelligence, quality management of any company etc are depending on proper knowledge management practices. An organization can get competitive advantages in the market than other competitors by applying knowledge management efforts. It also helps to do more improved and innovative performance. Sharing of knowledge is a major part of knowledge management system which can overlap the traditional learning procedure. In this regard SECI model can be used by any organization to handle its knowledge management system in a better way. The model is mainly focusing on the tacit knowledge and explicit knowledge. In this model four modes of knowledge conversion are identified. These modes are Socialization, Externalization, Combination and Internalization (Becerra-Fernandez and Leidner, 2008). This model is describes as follows. 1. Socialization [Tacit to Tacit] – In this mode knowledge is passed on through practice, observation, guidance and imitation. Tacit knowledge is such kind of knowledge that is difficult to transfer to another person by verbalizing it or by means of writing it down. Here social interaction is an example of tacit to tacit knowledge transfer system. Sharing knowledge through face to face or through experience both come under this mode. Meeting, conference etc are the examples of socialization in which people can get knowledge through sharing experiences. This kind of knowledge sharing system is time and space specific and also difficult to formalize. 2. Externalization [Tacit to Explicit] – In this mode tacit knowledge is transformed or coded into manuals or documents so that it can distribute in a easier way throughout the organization. Every employee of a certain organization can get access of knowledge through this system. Here tacit knowledge is coded into explicit knowledge. Explicit knowledge means such kind of knowledge that is codified, articulated, expressed, stored in certain media and readily transmitted to others. For example - knowledge which is available in books, websites etc (Debowski, 2007). 3. Combination [Explicit to Explicit] – It is a specific process in which various sources of explicit knowledge are combined and create new knowledge for the organization. It is the simplest form of knowledge management system. Sources can be both inside and outside of organization which will help to gather knowledge for forming a new knowledge. For example this can be said that if an auditor will collect financial information from the different ends of an organization and put all those information in the financial report then that financial report will provide a new set of information to the management and related parties. 4. Internalization [Explicit to Tacit] – When all the explicit knowledge sources are learned and used then the knowledge becomes internalized and it also helps to modify user’s existing tacit knowledge. In this mode explicit knowledge becomes a part of individual’s knowledge and it also will be an asset for any organization. Now few advantages and disadvantages can be observed which are related to this model. Advantages – This model can create dynamic atmosphere for sharing knowledge in a proper way and provides a structured framework so that management can continue their work in an efficient way by using this model. Disadvantage – This model is especially formed on the basis of the Japanese organizations which are relied on the tacit knowledge. So it is inappropriate on the other country’s organizations (Dalkir, 2005). There are few steps for creating a proper knowledge management framework. These are as follows. At first, management of organization should identify the needs for which knowledge sharing or knowledge management is required. After that they should identify the knowledge resources from where actual knowledge can be accessed. These sources can be both inside and outside of the organization. Then management should do the work of creation, acquisition or elimination of knowledge related to organizational environment and business procedure. Then sharing of knowledge is an important step to spread the required knowledge in the organization. Last but not the least, storage of knowledge is required for future benefits of organization. This is hereby mentioned that all the above mentioned steps are independent by nature and those are also affected by countless factors (Liebowitz, 2012). Application of Knowledge Management McKinsey is a reputed global management consulting firm which is based on U.S. This firm generally offers its advices to its customers and works as an advisor to government, institutions and businesses. This company is using knowledge management system for supporting the consultants. McKinsey is an example of knowledge process outsourcing which was implemented by the former senior partner Anil Kumar. The knowledge management system of this company includes industry experts, generalist researchers, function specific experts, librarians and also access to databases and journals. They also maintain a separate organization which is famous as ‘McKinsey Knowledge Centre’. This centre provides rapid access to business information and specialized expertise (Novak, 2010). In this company recruitment work has been done with high importance. The company has recruited those talented individuals who are capable of receiving and spreading knowledge through person to person knowledge sharing mechanism within organization. They have recruited fresh graduates from top level business schools. Those graduates joined here as associates and after two to three years if they perform well, then they will get the positions of manager in the company. All the candidates have to face six to eight times interview to show their knowledge. The company considers that developing employees are as important as working with clients. So trainings are provided to the employees in this organization on the basis of wide range of topics such as industry specific skills, general subjects, presentation skill etc. These trainings helped the employees to gain knowledge by which they can deal with any kind of situation which they may face in their day to day activities. All new employees have to face a one week training program which is called basic consulting readiness. Again if any employees join from any non business background then they have to attend a complete mini MBA course conducted by this organization. Talent exchange is a common practice in this organization. Consultants can nominate their name for any particular project through inter talent exchange program and after that manager will select the final names. Through the talent exchange program, performers can share their experience and knowledge to other team members. Again through this program, consultants can move around different countries as well as different industries. So the method helped to spread knowledge among employees. On the other hand, employees are getting enriched with new knowledge through this system. The company has employed some editors to convert the tacit knowledge into explicit knowledge and store that knowledge by making power point presentation, documents and videos. So this can be said that the company is using Externalization mode of SECI model. Personalized knowledge is an important strategy applied by McKinsey. In this strategy one to one knowledge sharing process and brain storming sessions are applied. These will help to customize the offering of this company. Here the company is using socialization mode of SECI model as the one to one knowledge sharing process and brain storming session are the few forms of tacit knowledge sharing process. So it can be analyzed that SECI model is used in this company to manage its knowledge management system in an effective way. McKinsey can provide high quality customized services to its customers and charge a premium amount from them for providing this high quality services. Knowledge management helped the company as well as its consultants in the following steps. These steps are – define the problem, break the problem down, understand the client’s business, gather and analyze relevant data and information, work with the client team in an efficient way, make suitable and expert recommendations and help to implement those pre - defined recommendations in the actual business procedure. Again this can be said that the company is offering free access approach to knowledge seeking workers for doing their job in more efficient way than the earlier days. The knowledge management system of this company focuses on the need to connect people in an effective way. The company generally deals with high level management problems which are difficult to solve in a standardized format. Every day innovative works can be implemented and the company can get competitive advantages than its competitors in the market through the continuous innovative work (Wallace, 2007). Evaluation McKinsey has created an informal network within the organization for sharing knowledge among employees. The knowledge management approach of this company also helps to solve any kind of problems and so other organizations are demanding knowledge expertise from the consultants of this company. This can be said that McKinsey is a learning organization as they are hiring fresh graduates and train them to become an expert in this industry. Even if any employee is not from any business related background then the company arranges three months duration MBA course for them to provide knowledge in this regard. Again the management of this company is involved to convert tacit knowledge to explicit knowledge. They are maintaining a detailed database consisting of details of each project which are carried out for clients. Again the company is developing a database of 2, 000 documents which is representing core knowledge of this organization. They have also created knowledge resource directory which consisted a list of specialists and their key document titles. As it is already mentioned that the company uses SECI model so this can be analyzed that in this organization learning and knowledge management processes are increasing in terms of input, outcome, process, activities, tools, components, technologies and concepts. This model also describes that knowledge is an activity rather to consider it as an object. The model is focused on the knowledge creation, practice and collaboration within an organization like McKinsey. Again the company has developed some measurement for knowledge management system. One of those is Clientele and professional development. Main objective of this measurement is to replace the leader driven knowledge creation by self governing knowledge practices. They have formed client impact committee to ensure that experts are getting positive measurable result from each client engagement. Their knowledge management system has increased their corporate assets such as brand image in the market, corporate reputation, customer information and management system. Innovative knowledge sharing, free exchanges of ideas also create new knowledge and increase the opportunity of employment. Efficient knowledge sharing and knowledge storing procedure also help to build better relationship with customers and also increase the trustworthiness towards the organization. Experts and consultants can deeply understand the critical situation of clients and use their knowledge to solve those problems and also provide best services so the customers will be benefitted. In the knowledge centre of McKinsey, three major groups can be observed and those are Analytics, generalist research and practice research. Generalist research group is usually supported consulting teams which are spread across the world and they are doing work on some specific areas such as economic & financial analysis, industry & company overview etc. Practice research group is supported in the functional and industry practices of McKinsey. Here functional practices are manufacturing, finance and supply chain management and industry practices include financial institutions, telecom, pharmaceuticals etc. So the company is very much focused on the retention of experienced and knowledgeable employees. The knowledge management process in this company is still dependent on personal networks. In a sentence this can be said that people or employees are main assets of this company otherwise the company will face numerous challenges to provide knowledgeable expertise to its clients in the market. References Becerra-Fernandez, I. and Leidner, D. 2008. Knowledge Management: An Evolutionary View. New York: M.E. Sharpe. Dalkir, K. 2005. Knowledge Management in Theory and Practice. Philadelphia: Elsevier. Debowski, S. 2007. Knowledge Management. Beijing: John Wiley & Sons. Liebowitz, J. 2012. Knowledge Management Handbook: Collaboration and Social Networking, Second Edition. Florida: CRC Press. Novak, J. 2010. Learning, Creating, and Using Knowledge: Concept Maps as Facilitative Tools in Schools and Corporations. Beijing: Taylor & Francis. Wallace, D. 2007. Knowledge Management: Historical and Cross-disciplinary Themes. California: Libraries Unlimited. Read More