Soft Systems Thinking, Intellectual Capacity and Social Capital - Coursework Example

Strategic Knowledge Management Name: Date: Table of Contents Introduction 2 Strategic Management 3 Soft Systems Thinking 4 Knowledge Management/ Environment 6 Intellectual Capacity and Social Capital 10 Communities of Practice 11 Conclusion 12 References 13 Introduction In the modern world, knowledge is regarded to be one of the most important assets to an organization (Rašula, Vukšić & Štemberger 2012, p. 148). Knowledge and its appropriate use is that one factor that creates a difference between a successful and unsuccessful organization. In the wake of increased competition in the global business world, it has become important for business organizations to develop and manage knowledge appropriately in such a manner that enables them to attain a competitive advantage in the market. In line with the need to enhance organizational competitiveness has been the need to develop and implement corporate strategies that ensure that organizations’ are in a continuous move to develop their business models and processes so as to enhance their competitiveness in addition to being sustainable. Strategic knowledge management has therefore gained much prominence in the recent past and is focused on identifying knowledge resources available to an organization, defining a desired state in the future and developing mechanisms on how to achieve and manage the desired knowledge levels (López-Nicolás & Meroño-Cerdán 2011, p.503). This critical study paper will give an in-depth discussion of knowledge management & environment, intellectual capital & social capital, communities of practice and soft systems thinking in relation to Checkland’s quote “We see in the world many examples of sets of human activities related to each other so that they can be viewed as a whole”. Strategic Management Strategy is defined as the direction and scope of a company in the long term that is geared up towards ensuring that the firm achieves an advantage that enables it to align its business processes with market dynamism and provision of value to stakeholders. Strategic management involves the integration of strategy concepts in the management of an organization (Bettis, Gambardella, Helfat & Mitchell 2014., p. 950). Strategy is made up of three main elements namely strategic analysis, strategic development and strategy implementation. Strategic analysis focuses on identifying the finite details related to an organization and the analysis of possible situations in the future. This stage is focused on ensuring that business organizations have a deep understanding of their current situations and expected ones in the future. Strategy development is the creation of a plan of action based on statistical evidence as identified from the strategic analysis (Parkinson, Bohemia, Yee & Smith 2012, p.2). Lastly, the implementation phase involves putting the plan into action so as to realize the goals identified. The process is cyclic and the phases are repeated in line with the need for continuous improvement. Strategic management of knowledge also follows the three phases. Owing to the fact that knowledge is not a tangible asset, its efficient management is realized by the appropriate management of other organizational functions and areas as it will be identified in soft systems thinking. Soft Systems Thinking Soft systems thinking is based on system theory as put forward by Senge in 1993. A system is a collection of resources that includes facilities, information, materials and personnel organized in a specific manner so as to realize predetermined results. Systems thinking points out that an organization should be perceived from a systems perspective (Senge 2006, p.45). On this point, an organization is perceived to be made up of various subsystems that are interlinked to each other. Therefore, any action in any of the subsystems has a direct effect on other subsystems and ultimately the organization at large. Systems thinking enable organizational leadership to get a better insight into how change happens in an organization thus enabling them to act in such a manner that creates positive ripple effects in an organization (Senge 2006, p.45).. Soft systems thinking therefore enable organizational management to address problems in such a manner it solves the ‘whole’ problem. Initially developed by Peter Checkland , soft systems thinking enables organizational leadership to have a better insight into their organizations and how their actions effect on various elements of the organization. According to Checkland, “We see in the world many examples of sets of human activities related to each other so that they can be viewed as a whole” (Checkland, 1999, p. 115). Checkland argues that what people see is the system that is ideally made up of a collection of interlinked human activities. Relating this to an organizational setup, soft systems thinking goes beyond subsystems and analyses finite things and actions that make up a specific function. Soft systems based problem solving is usually based on the understanding of how the system works and development of strategies aimed at achieving synergy among the interrelated elements. In this arrangement, the output realized by an optimized system is far much more than the collective outputs of all the subsystems. Human activity systems are key elements in soft systems methodology that influence the grand performance and output of an organization. Human activity systems are a corporate feature of a group of people who undertake social roles in a bid to take purposeful action. It can be argued that human activity systems should have concerted efforts all aimed at ensuring that organizations achieve their strategic objectives. From this point, it can be acknowledged that human resources are identified to be key elements in soft systems (Blackler 1993, p. 864). Ideally, human resources are as of today regarded to be key assets to an organization owing to their inherent abilities to influence organizational competitiveness. The reason as to why human resources are key sources of corporate competitiveness is due to the skills, experience and expertise that they provide to an organization. It should be noted that they are the engine to an organizations’ strategy since they are involved in the actual implementation of corporate strategy. Additionally, human resources provide knowledge and intellectual capacity to an organization (Blackler 1993, p. 866). Ideally, it can be appreciated that this is the bit where organizational innovation, competitiveness and sustainability is realized. Human resource management practices must ensure that they provide a good environment for the development of organizational knowledge that ultimately leads to corporate intellectual capital (Blackler 1993, p. 866). Therefore, soft systems thinking focus on how sub systems interact and come up with possible solutions that optimize the interactions thus attaining organizational competitiveness. The solutions as described by soft systems thinking should be based on organizational knowledge that is inherent to human resources. Some of the tools that companies can use to apply soft systems thinking principles include rich pictures, conceptual models and alternative definitions. Knowledge Management/ Environment Knowledge is information, skill or understanding that one gets from education or experience (Fuller 2012, p.23). Ideally, knowledge is regarded to be true as at the given conditions in which it is assessed. Just as human resources, knowledge is also regarded to be one of the key assets to an organization. On this point, it is worth highlighting that the modern world is often referred to as being an information age. As such, organizations or entities that have a bit more knowledge over their colleagues or competitors are more successful. Knowledge provides an organization with the strategic capability to be able to develop and implement strategies that give it a strategic advantage as compared to its competitors. In an explicit illustration, knowledge yield productivity when it is used on activities that are already known to an individual. On the other hand, it yields innovation when used in new things that were not previously part of an organization. Therefore, knowledge is only worth to an organization when it is used appropriated organization (López-Nicolás & Meroño-Cerdán 2011, p. 503). The successful utilization of this knowledge necessitates effective knowledge management strategies. Although knowledge is an intangible organizational resource, it can be managed just as other organizational resources. Knowledge management is the process of gathering, developing, distributing and using organizational knowledge effectively so as to make positive impacts on the performance of an organization (López-Nicolás & Meroño-Cerdán 2011, p. 503). There are two main types of knowledge; explicit and tacit knowledge (Hau, Kim, Lee & Kim 2013, p.360). Explicit knowledge is that knowledge that has been documented and stored in a formal system in an organization’s database. Transferring this knowledge from one person to another is easy since it is readily available in the codified format (Hau, Kim, Lee & Kim 2013, p.361). On the other hand, tacit knowledge is that which exists in the cognition of an individual. This is knowledge that has not being submitted formally to an organization and can only be exploited when the organization provides an individual with the chance to develop it. Ideally, tacit knowledge is the most important type of knowledge since it leads to innovation owing to the fact it is constituted of things that are not currently present in an organization (Hau, Kim, Lee & Kim 2013, p.360). It is the objective of efficient knowledge management systems to ensure that tacit knowledge is codified and documented so as to make it a property of the organization; hence easily transferrable from one person to the other. As pointed earlier, it is essential that organizations develop appropriate systems of capturing, developing, distributing and using organizational knowledge so as to realize the benefits associated with knowledge use. Soft Systems Thinking (SST) provides an organization with a platform to perceive a company as a whole; giving consideration to the finite systems and their interrelationships such as the capturing, development, sharing and utilization of knowledge is optimized so as to create the maximum possible benefits to an organization (Rubenstein-Montano, Liebowitz, Buchwalter, McCaw, Newmanm Rebeck & Team 2001, p. 6). The human resource management department has a huge responsibility in organizational knowledge management. First, it is responsible of collecting knowledge from all sources available. In addition to documenting explicit knowledge, the human resources (HR) managers are supposed to ensure that they source the best talent and skills from the labor market so as to enhance the chances of getting human resource capital with a high tacit knowledge base (Figueiredo, Pais, Monteiro & Mónico 2014, p. 353). Secondly, the department ought to have efficient work systems and environments to develop the knowledge collected (Figueiredo, Pais, Monteiro & Mónico 2014, p. 353). Such systems involve having research and development teams and allowing time for personal projects. Third, HR managers should provide channels that provide employees with a chance to share their knowledge with their colleagues in the workplace (Figueiredo, Pais, Monteiro & Mónico 2014, p. 353). Such strategies include team building and collective working sessions that demand the input of every individual to solve various problems. Lastly, the department should be able to document the knowledge developed and in turn provide it to relevant departments for use so as to realize organizational competitiveness (Figueiredo, Pais, Monteiro & Mónico 2014, p. 353). From the above insight, it can be acknowledged that soft systems thinking should be used in knowledge management so as to optimize all channels of collection, development, sharing and utilization of organizational knowledge. Google Inc. is one of the most successful companies in the world. Its success is based on its great knowledge management strategies. In a snip view, Google has continually been recognized as the best company to work for in the world (Google Inc. 2015, p.1). This is explained by its great human resource management strategies that enable the company gain maximum returns from their human resources in addition to providing them with a chance to develop knowledge that has translated to its great innovation. Google has rigorous recruitment and selection system that enables it to source for human resources from the global labor market (Google Inc. 2015, p.1). This ensures that Google gets the most competent human resources that match the needs of the company. The company also has strategic human resource management strategies that provide the employees with a good work environment (Google Inc. 2015, p.1). It can be acknowledged that it is this work environment that provides a good knowledge management environment (Google Inc. 2015, p.1). On this point, it is worth giving an insight into Google’s 70:20: 10 rule. Employees are supposed to devote 70 % of their time performing the company’s core business as outlined by their job descriptions, 20% time can be used doing personal stuff that is related to the company’s core business while 10 % time can be used on personal stuff that is not related to the company’s core business (Terry 2007, p. 370). This strategy has enabled the company to develop and manage knowledge by exploiting the tacit knowledge in their human resources. Ideally, this is a key source of the company’s innovation that is core to its competitiveness. From the above discussion, it can be acknowledged that soft systems thinking has been a key pillar in Google’s knowledge management practices; hence the high level of success and inn Intellectual Capacity and Social Capital Intellectual capacity is an intangible resource that provides an organization potential to create value. In the wake of an increased need for organizations to enhance their competitive in the modern information age, intellectual capacity has risen to be a key factor that drives corporate sustainability. Intellectual capacity is part of the larger organizational capacity that is a set of resources and facilities that provide a company with a holistic prowess to create value thereby achieving sustainability and providing value to its shareholders (Huggins & Weir 2012, p. 93). Intellectual capital, a collection of knowledge assets has therefore become of as much importance as other forms of capital. There is no ideal measure of a firms’ intellectual capital. However, it can be evaluated from three main angles namely human, structural and relational capital. Human capital can be measured with regard to the number, skills, experience and talent in an organization. It was argued earlier that organizations need to have in place human resource management strategies that enable them to source for the best talents, most competent and experience candidates from the labor market (López-Nicolás & Meroño-Cerdán 2011, p.503). Additionally, HR management should ensure that the organization is supplied by adequate human resources (López-Nicolás & Meroño-Cerdán 2011, p.503). The human resources should then be provided with a good work environment and also highly motivated so as to ensure that they are productive and also provide a good knowledge management environment as illustrated by Google’s case. The next element is the structural capital that is focused on ensuring that organizations have the best business models and processes to enhance value creation. Also known as organizational capital, this element ensures that an organization has the physical systems in place to support operations (Ramezan 2011, p. 90). Linking this with element with Google, it can be acknowledged that the company has in place working systems such as employee recruitment and selection, human resource management, innovation management and work process systems that provide the much needed structural capital. Last is relational capital that comprises of social and customer capital. The scope of social capital is unlimited and extends to relationships within and without an organization. Social capital is an important factor that influences the success of organization. This is in line with the argument that business are social in nature; hence the need for healthy social relationships. A practical illustration of social capital is the Guanxi networks in Asia that create tight relationships between business organizations hence ensuring sustainable markets and supplies. Guanxi has been identified to be a key source of business competitiveness that insulated Asian companies from the recent financial and market crises (Luo, Huang & Wang 2012, p. 143). On the other hand, customer capital focuses on creating healthy relationships with the market. Customer relationship management practices are practical examples of customer capital. Organizations use knowledge derived from customer contact data to provide them with better services (Raju, Bai & Chaitanya 2014, p. 2653). From the above, it can be acknowledged that the use of knowledge in developing and using organizational intellectual capacity makes use of soft systems thinking; thus leading to the creation of highly efficient business practices. Communities of Practice Communities of practice largely influence the development and management of knowledge in any set up. A community is defined by sharing. In the event that any sharing takes place amongst members of a society, a community is developed. The strength of the network ties defines the strength of the community (Su,Wilensky & Redmiles 2012, p. 113). On this point, it is worth highlighting that communities of practice are key units in social capital. Communities of practice COPs hold much value in knowledge sharing; a key element in knowledge management. There are four elements of COPs. The domain of interest provides focus and context within which the community bases its activities in. It is recommended that organizational management develops teams composed of individuals working on the same project so as to create COP on which knowledge management can be done. Next is interaction that forms a basis for knowledge sharing. Third is practitioner focus that improves member’s activities or human activity systems owing to the utilization of the shared knowledge. Last are any networks that provides a platform for organizational learning; hence development and management or corporate knowledge (Hislop 2013, p. 155). Organizational management should strive to influence COPs positively through the use of a soft systems thinking approach. However, the organic growth of COPs is a major challenge to their management. Conclusion In conclusion, this essay has given a deep insight into organizational knowledge management. It was argued that organizational knowledge is a source of corporate competitiveness. Knowledge management strategies are focus on the collection, development, sharing/distribution and utilization of knowledge so as to achieve an advantage. The need for a good knowledge management environment was emphasized with the analysis of Google’s innovation management strategy. It was also argued that knowledge resources provide organizations with intellectual capital; an intangible resource to create value. Communities of practice were identified to be social networks where sharing of knowledge is implemented. Concluding, it was argued that soft systems thinking provide companies with a chance to perceive organizations as a whole; identifying the interrelationships between them thus providing a platform for the development of efficient knowledge management solutions. References Blackler, F. 1993. Knowledge and the theory of organizations: organizations as activity systems and the reframing of management. Journal of management studies, Vol. 30, No. 6, pp. 863-884. Checkland, P. 1999. Systems Thinking, Systems Practice, Wiley, London Bettis, R., Gambardella, A., Helfat, C., & Mitchell, W. 2014. Quantitative Empirical Analysis In Strategic Management, Strategic Management Journal, Vol. 35, No. 7, pp. 949-953. 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Enabling staff to access the knowledge they need, when they need it. Industrial and Commercial Training, Vol. 39, No. 7, pp. 368-371. Read More