How Effective Knowledge Management Is Helping an Organization to Achieve Its Goals - Coursework Example

Knowledge Management Table of Contents Introduction 3 Knowledge Management and the Challenges 3 Conclusion 7 References 8 Introduction Knowledge management is defined as an effective use of organizational knowledge. It involves gathering individual knowledge, developing them and sharing them with rest of the individuals in the organization. Knowledge management uses the combined knowledge of all the individuals and uses it in an efficient way to achieve organizational goals. It is a collaborative approach of using organizational knowledge to improve the current business processes and introduce efficient ways of developing new ones. Proper knowledge management in an organization increases clarity of business operations among the employees and promotes openness to innovation. This study is focused on how effective knowledge management is helping an organization to achieve its goals, what are the necessary steps to a proper knowledge management system and what are the challenges faced by an organization for managing organizational knowledge. It also focuses on the necessary steps an organization should take in order to implement the knowledge management process efficiently and without hassle (Asoh, Belardo and Neilson, 2002) Knowledge Management and the Challenges Knowledge creation is based on two fundamental aspects: Theory of Knowledge or Epistemology and Knowledge conversion. Epistemology deals with different ways of knowledge gathering, and it also focuses on the validity and limits of knowledge. Knowledge conversion is a process through which an individual acquires new knowledge and gradually develops himself (Nonkana, Krogh and Voelpel, 2006). Although Knowledge management seems to be fruitful in helping an organization to achieve its goals seamlessly, but several studies have shown that a successful implementation is very rare. A few companies are quite satisfied, whereas for most of the others, they had below average satisfaction. Another study of some of the British and American companies showed a disturbing result that only 13 percent of them were satisfied with their implementation. They stated that they were not been able to channel the existing knowledge among the employees (Ruggles, 1998). The organizations often fail to describe their current efforts of knowledge management. Efforts on knowledge distribution or knowledge sharing are taken by most of the firms, but somehow the result does not yield satisfactory results, because the knowledge distribution is limited to a particular network of people only (Nonaka, 1995). The employees, who interact with each other on a regular basis in a social network, are the only ones who share the knowledge, whereas the new employees or the ones who are isolated from the network are deprived from knowledge sharing. To put it simple, knowledge share takes place in an organization but only among certain groups or networks of people. In order to have a clear idea of an organization’s current status on managing knowledge, it must monitor and compare all the groups, subsidiaries, accounts and networks (Birkinshaw, 2001). Misalignment of knowledge management with strategic objectives of the organization often leads to inefficient business activities and sometimes the primary needs are not addressed. Fontaine and Lesser (2002) explained with an example where a manufacturing company fails to align its business activities with a subsidiary, which is newly acquired and as a result the parent company fails to leverage the skills of the new subsidiary. Thus, a company needs to pay attention on proper monitoring of all the business activities, to gain the maximum advantage of its present resources. Social interaction via internet and telecommunication has taken over the traditional form of interaction. Several writers have claimed that communication through electronic medium will improve knowledge transfer and sharing. Malone and Laubacher (1998) predicted that the number of freelance workers will increase, due to the rise of internet communication. Maintaining digital databases are supposed to make access to knowledge easier, but Brown and Duguid (2000) argued that technology may change the operational activities but a proper knowledge transfer requires face to face interaction between people. This results in poor use of databases, because people would like to have a conversation about something they want to know, rather than going through pages after pages. Incorporating organizational knowledge into a database is not enough for proper sharing of information; it should be coupled with developing a strong social network within the organization. There should be a strong linkage within each subsidiaries and groups in the organization, so that the network of knowledge sharing is wide spread among all of its employees. Knowledge management practices in most of the organizations focus on working with existing knowledge, like some of the successful business models from the past or transaction histories. Traditional methods assume that the answer to any problem at hand lies in the past experiences of the organization; however a modern approach dictates that a new problem demands new information or knowledge to solve it. Using existing knowledge to solve a problem may in some cases bring in efficient operational activities but only for a short term basis. In order to grow and sustain for a long term in the ever changing market environment, a firm needs to generate new information and make necessary changes in the existing ones (Soo, Midgley, and Devinney, 2002). An organization can only develop when it acquires new knowledge and implements it in the management practices. Knowledge acquisition plays an important role in problem solving, as it enables the firm to look at a problem from new perspectives, which is not possible with existing knowledge. Accepting and incorporating new ideas into the management system requires transformation of organizational culture, because it may not be easy for the stakeholders to implement new ideas with traditional mind-set. Most organizations work on internal knowledge, which circulates within the organization only, however Fontaine and Lesser (2002) argued that the organization must also include external elements within the sharing network as well, as a result it will widen the scope of gathering new useful data. The knowledge creation process is often hindered by the management’s attitude to stick to the traditional organizational knowledge, as a result most of the newly implemented knowledge management procedures eventually turn into a traditional one. Employees are encouraged to discuss about ideas to promote knowledge sharing, but what they discuss are old ideas only, as a result the entire goal of new idea generation fails. Birkinshaw (2001) have stated an example in this regard where an insurance company in Sweden, named Skandia, developed its own capital foundation model called “Navigator,” however in due time it ended up looking like Balanced Scorecard. Implementation of a new process to manage organizational knowledge often comes with new challenges which are not entertained by traditional managers, as a result, this unresolved issue pushed the organization back into using the traditional methods and the new processes are overlooked. In order to avoid this situation, the management needs to break out of the traditional paradigm and embrace the new knowledge management methods, despite of the challenges that come with it. The transitional phase often becomes a moment of decision for the company, i.e. whether it will continue with the new methods or roll back to the old one. Thus, this paradigm decides the effectiveness of the knowledge management process (Wenger and Snyder, 2000). Application of new knowledge management methods also depends on the absorptive capacity of an organization. Cohen and Levinthal (1990) believed that the ability of a firm to recognize new information from the prevailing ones is measured by the firm’s absorptive capacity. The absorption capacity also controls the amount of information sourced in to the firm from external sources and it is directly proportional to the firm’s problem solving capacity. The firm can access deeper into the knowledge pool for alternative and efficient solutions to a particular problem. Conclusion Knowledge is one of those assets which determine the competitive advantage of a firm. An organization promotes sharing of knowledge among the employees to generate new ideas to be used in the management. However, there are certain challenges that come during the successful implementation of the knowledge management processes. The firms are often not aligned with their business activities; as a result they lack information of their current status. The knowledge sharing network is incomplete most of the times, i.e. all the groups or employees are not a part of the sharing network. Lack of face to face interaction in an era of internet and social media also leads to poor knowledge sharing. In order to improve the knowledge management of a company, it must create proper communicational channels among its subsidiaries or groups. It should promote building of social groups, where employees are encouraged to generate new ideas. The traditional managers should break out of the old paradigms and adopt the new ideas that are generated (Marr, 2003). The effectiveness of a knowledge management system is dependent on its successful implementation, so if the management is reluctant to welcome new ideas, then the entire motive goes to waste. References Asoh, D, Belardo, S and Neilson, R., 2002. Knowledge Management: Issues, Challenges and Opportunities for Governments in the New Economy. School of Information Science and Policy. 35, pp.3-6. Birkinshaw, J., 2001. Why is Knowledge Management So Difficult? Business Strategy Review. 2001. 12(1), pp.11-18 Brown, J. S. and P. Duguid., 2000. The Social Life of Information. Harvard Business School Press. Boston Cohen, W.M and Levinthal, D.A., 1990. Absorptive capacity: A new perspective of learning and Innovation. Administrative Science Quarterly. 35(1), pp.128-152 Fontaine, M and Lesser, E., 2002. Challenges in managing organizational knowledge. [online] Available at:< http://www-935.ibm.com/services/au/igs/pdf/g510-3234-00-esr-managing-organizational-knowledge.pdf > Malone, T.W and Laubacher, R.J., 1998. The Dawn of the E-Lance Economy. Harvard Business review. September. Marr, B. 2003. Consider the culture when benchmarking KM Processes. KM Review. 6(5), 6-7. Nonkana, I, Krogh, G. V, Voelpel, S., 2006. Organizational Knowledge Creation Theory: Evolutionary Paths and Future Advances. Organizational Studies. 2006 (27), pp.1180-1183. Nonaka, I. 1995. The knowledge-creating company. Oxford University Press. New York Ruggles, R., 1999. Knowledge Management: The state of the notion. California Management Review. 40 (3), pp.80-88 Soo, C.W, Midgley, D.F and Devinney, T.M. 2002. The Process of Knowledge Creation in Organizations. INSEAD. February, 2-6. Wenger E. and W. Snyder. 2000. Communities of Practice: The organisational frontier. Harvard Business Review, Jan-Feb, 139-146. Read More