Strategy as Practice & Leadership, Intellectual Capital and Social Capital - Coursework Example

Strategic Leadership Management (Surname) (Professor) Management 24 July 2015 Strategy as Practice & Leadership – Section B: Strategic Knowledge Management Introduction According to the statement, “The only way to cope with a changing world is to keep learning” (Dixon 1998), there is an evident allusion that learning is a continuous process in the society. Over the years, the nature of learning and working has continued to evolve exponentially accompanied by organizational de-layering, re-engineering and self-managed teams as well as home-based working that is IT enable just to mention a few. All these changes point towards the creation of flexible and lean organizations with the main aim of understanding how they work, learn from the experience of change as well as assist it constituent members to grow and develop form this change process. Change has the ability of affecting an individual’s skill set enabling them to work effectively and efficiently (McDermott, 1999). Training is concerned about the transfer of knowledge to help in the perpetuation of a leaning culture; appropriate action therefore has to be taken to improve the learning process in this changing environment. In his book, “Future wise: Six faces of global change’ Patrick Dixon explains that individuals ought to take a good hold of their future or else the future will get a hold of them. Although different researchers and writers in the field of knowledge management state that innovation is the best way of securing success, there is still an unclear stance on the exact changes that organizations are able to especially handle. It is interesting therefore to observe that even with the increase of human resource, technological development, strong product finances and portfolios, managers have still not given keen interest to organizational capabilities as compared to individual capabilities (Star & Griesemer, 1989). Discussion People in any group, community and even organization learn from and with each other through a firsthand experience that is also collaborative as they reflect upon it. This knowledge is usually passed on to help in the creation of an understanding through enlightenment, solidarity and the sharing of ideas for development and growth (Hasgall & Shoham, 2008). The main aim of this paper is to develop a pragmatic and theoretical illustration of knowledge management in organizations to aid in the implementation of better knowledge management (KM) especially in business organizations. This is necessary to help in the facilitation of the vision for sustainability in growth and development. The paper will also explore the relationship between knowledge, people, information and environment drawing on the existent knowledge management framework literature and models (Ulrich & Kerr, 1995). This will be accomplished through a keen analysis of what a knowledge intensive organization is and how it utilizes information use where values affect knowledge management outcomes through four significant themes which are knowledge management and environment, intellectual and social capital, communities as practice and soft systems thinking. It will explore the topic of organizational advantage through intellectual and social capital. Recent research work has discovered a strong link and connection between social and intellectual capital. This reading will explain how through intellectual capital, social capital is facilitated and how institutions and organizations can create the conducive environment needed for the growth of intellectual capital. A connection will then be drawn between firms that immensely invest in their intellectual capital and their success rate and development particularly due to the social capital that thrives from the same. Additionally, the dissertation will also explain how the success of organizations is largely dependent on its ability to design itself as a social learning system and also through its participation in much broader learning systems which can either be a region, industry or a consortium as part of communities of practice. Finally, an evaluation of the structure of the social definition of learning will also be made. Three constructive elements of these systems will be analyzed which include identities shaped by participation in these systems, communities of practice and boundary processes within these communities. Knowledge Management and Environment Knowledge management to begin with is a term that emerged in the organizational realm in the late nineteen hundreds and was mostly used by information technology managers. Knowledge management entails ideas that are communicated, shared, collaborated, innovated and retrieved in an endless perpetual activity within organizations (Ruggles & Holtshouse, 2001). The continuing transition that organizations are currently experiencing to knowledge-based is a clear illustration of the global knowledge evolution. It signifies a paradigm shift to information-based organizations that are based on knowledge assets. This is in accordance to the statement by Dixon, that “to cope in this changing world, continuous knowledge is of great importance”. This section of the paper analyzes the significance of the environment in addressing knowledge based problems in organizations with changing environment (Dorothy, 2000). The ability of an organization to create new knowledge is considered as its primary edge for competitive advantage, therefore its top priority should be to support organizational knowledge creation (Qiang, 2002). Various techniques like system analysis, social network analysis, focus group sessions, processing mapping as well as interviews with employees together with other methods of creating and re-using new knowledge are used by knowledge management experts. According to research work from a multitude of disciplines, it is explained that an access to a wide variety of knowledgeable information helps in the sustainable development and survival of an organization (Nonaka and Takeuchi, 1995). There have however been significant debates and confusion on the topic of knowledge management in organizations and how well they can be efficiently and effectively implemented. The relationship between knowledge management and environment is found in the problems that most organizations encounter with the increasingly changing environment. The implementation of knowledge management in these organizations is being hindered by limitations from the organizational network environment (Zhongtuo, 2004). Knowledge management environment is significant for effective information use and the achievement of performance results. This helps to influence information values and behaviors which impact information use and outcomes positively. An effective and efficient knowledge management is regarded as one of the most powerful criterions for judging the performance of an organization. It is furthermore regarded as one of the most important organizational assets especially in the current transformation towards knowledge based economies. In businesses for example, parameters like financial performance, market share growth, innovation level and reputation of superior company all depend on the utilization of intangible assets to the maximum. These intangible assets are also referred to as intellectual knowledge which accounts for the increasing market valuations of enterprises that are knowledge based. These have a competitive advantage due to the effective use of information and people (Malthotra, 2000). For effective utilization and deployment of information and people, there is need for a dependence on information use, the user of information and its context whereby users make the choices on what information is important for them. These are choices that are based not on the subject but also on other elements of knowledge management of users (Choo, 1998). Knowledge management as a coordination system is a factor of production in organizational management to support individual knowledge and is therefore inclined to overall management. KM includes a mixture of contextual information, experiences, values together with expert insight for the provision of a framework that incorporates and evaluates new information and experiences (Lynda, 2005). KM operates as ether explicit, tactic or implicit knowledge. Explicit is the technical ‘know how’ while implicit is about the capture and codification of information. Tactic knowledge on the other hand cannot be codified and captured as information and therefore for the success of KM, it ought to viewed not as an activity but as an object. KM information use is consequently an important process that encompasses the selection and processing of data for the purposes of responding to questions, making decisions, solving problems, negotiating positions as well as understanding certain scenarios and situations. There are generally eight classes of information use (Lynda, 2005). The first one is enlightenment when the knowledge is used for the development of a context to help understand a situation through a process of answering questions. The second class is the understanding of a problem whereby the information is used more precisely for the development of a better understanding of particular problems. Thirdly, there is the instrumental class where the knowledge is used to help individuals recognize what and how they are supposed to work (Davenport & Prusak, 1995). The fourth factual information class is about finding out the facts and reality of an event or phenomenon. In the next class there is confirmation for the verification of information then there is the projective class as the sixth for the prediction of how KM may assist the organization. The seventh class is about motivation for the knowledge to be initiated and maintained at a personal involvement level. Lastly, the personal class looks at the developed relationships for the enhancement of reputation, status and personal fulfillment (Choo, 1998). It is therefore conclusive that KM environment has an influence on both the information behaviors and organizational values outcomes. It also influences the outcomes of information use. Intellectual Capital and Social Capital Since the ancient times, it has been common practice to unsystematically dispose-off anything that has intellectual value as a measure of financial endeavor. It is a concept that has stemmed from the belief that manual labor and funds are of greater worth compared for instance worker training gatherings in the modern times (Marchand, 2004). All these operate on the notion that the eliminating obsolete equipment and methods is necessary for increased employee productivity. It is important to note that business majorly survive on capital and most especially, intellectual and social capital, although there are still many other factors that can be attributed to the financial success of an organization. However, the truth is that there are in essence many components in organizations that work together for its growth and development and for the systematic flow of businesses. According to Wood, they described an organization as a group of social community that works in efficiency and speed to create and transfer knowledge (2002). This is however in contrast to the transaction cost theory that is more established and is penned on the assumption that the resulting conditions of human opportunism are what the determines the success or failure of a market system (Wood 2002). Proponents of the importance of intellectual capital argue that organizations have the capability of creating and sharing knowledge which helps to give them a better competitive advantage over other types of organizational advantage like markets. This perspective has enabled the ongoing shift that focuses more on value creation rather than appropriation. The ability of an organization to create and share knowledge is derived from a number of factors which include the special facilities these organizations may have for the creation and transfer of their tacit knowledge. Social capital analysts base their concerns on the significance and crucial nature of relationships as the necessary tools for the development of social capital (Baker, 2011). Putnam (2012), recently observed that social capital is in fact a non-unidimensional concept that is not only reliant on the relational resources of social affairs but other significant facets as well. Social capital is a term that initially appeared in community studies to refer to its significance in the proper functioning and survival of communities through networks of strong personal relationships that are developed over time based on cooperation, trust and collective action (Jacobs 2010). Social capital has been used to explain a wide range of social phenomena but in the modern times it is connected not only to the growth of human capital but also economic growth. The main proposition of the social capital is that the relationship networks are a valuable resource for the conduction of social affairs and hence providing members with a capital and credential that is owned collectively and hence an avenue for them to acquire credit in its different capacities. A larger percentage of social capital is embedded within mutual recognition and acquaintance (Ulrich & Kerr, 1995). The durable obligations that arise from feelings of gratitude, friendship and respect can be related to those acquired from institutional guaranteed rights within an organization based on members. Other social connections are also acquired through networks and connections which are strong links for the acquisition of an endless list of opportunities and information. There is also a significant level of social capital present from social status and reputation that is significantly derived from membership to restricted networks (Burt 2012). ` From the above analysis it is safe therefore to define social capital as the sum of all the potential and actual resources that are embedded and made available through relationship networks that are possessed by either individual or social units. It is therefore composed of both the networks and the assets acquired from these networks. To clarify the significant role of social capital in the creation of intellectual capital, three facets of social capital can be explored which are its structural, functional and cognitive dimensions. Granovetter (2012), separates the structural and relational facets of social capital by explaining that structural facet is about the properties of the social system and the relational networks as a whole. It is the overall patterns of connection which define how people meet and who they meet. The relational facets is concerned about the type of relationships people form their friendships, the respect they have for each other and their emotional attachments. Trust and trustworthiness are some of the most important units of emotional attachments which are explored and exploited for the social capital resource (Granovetter, 2012). The third cognitive dimension of the social capital is what particularly provides for its relationship and connection to the intellectual capital. It is the section that explains the interpretations, representations and meaning. All these three clusters are constituents of the social structure and facilitate the formation of the social structure. Initially, economists noted the human and physical resources as the key components needed for the facilitation of economic progress. However, today, knowledge is increasingly being considered as one of the most important tools needed to even enable a smooth functioning of the human and physical capital. Marshall explains that knowledge is a powerful tool for development and that an organization is equal to its level of knowledge (2014). Communities of Practice Competence in social learning systems is socially and historically defined. Knowledge is therefore defined by competencies present in social communities. Socially defined competence on the other hand is connected to our experiences. In accordance with the statement made by Dixon, it is indeed true that the only way people can cope with a changing environment is by ensuring that they continue to learn (Wenger & Snyder 2000). For instance it is important to note that whether we are pioneers or apprentices, old timers or newcomers knowledge in the basis of communities as practice is dependent on two parts, the first one is the competence that is communally established with time which is basically the foundation of how communities act and what unites them as competent members and secondly the individual ongoing competence as a member of a community. Social systems of learning in communities of practice take various different forms and levels. Engagement is the first one and it entails the way people in a community do different activities together, produce and communicate for example assist each other with problems and participate in a meeting. The way people engage with each other and the world significantly shapes their experiences and who they grow to become. Secondly there is imagination whereby individuals are able to create new ideas of their communities and those of the world to align them to multiple opportunities (Wenger & Snyder 2000). Lastly, there is alignment which helps to ensure that local and communal activities are in sufficient coordination with other different processes beyond their own engagement. This can for example be illustrated by a scientific experiment that is done in accordance to certain internationally acclaimed standards, the negation of a labor division in a company and work plan of a project just to mention a few. Since history, human beings have always formed and worked in communities which basically share various cultural practices that are all dependent on collective learning. It is participation in these communities of practice that is very crucial for continual growth, learning and development. COP is at the very core of what makes humans able to acquire meaningful knowledge (Giddens, 1991). Communities of practice is the basic building block of social learning systems due to the fact that they act as the ‘containers’ of all the competences which make up a complete system. When an organization participates in these communities, they are able to define to each other what exactly constitutes competence in any given context. COP therefore defines competence through the combination of three key elements (Wenger, 1998). First, all the communal members are bound together as a result of the collectively developed knowledge of their community what is all about and what exactly holds them together and accountable to each other such that they are able to work as a joint enterprise. Competent members are therefore those who are able to understand the operations of the enterprise and how they can be responsible. Secondly, these distinct members are able to build their community to grow through a mutual form of engagement such that they are able to interact with others to establish relationships and norms of mutuality that enable a clear reflection of these interactions. In this section, competence is the ability of members to engage with their community in trust and produce a shared repertoire. When such members have access to this repertoire and are able to use it well, it is also considered as competence (Beer, 2009). Soft Systems Thinking Soft Systems Methodology which now acquiring international acclaim is an approach used to tackle various multi-faceted problems that managers face. It helps to establish a difference in the soft and hard systems of thinking (Ackoff, 2004). Soft Systems Methodology (SSM) is a process that is based on systems thinking and views problems holistically rather than in the conventional reductionist way and hence recognizes the inter-connected nature of various component parts. Systems thinking is generally a framework that sees interrelationships as compared to things and patterns rather than snapshots that are non-relational and static (Churchman, 1970). The aim of systems thinking is to propose a flexible language which is able to shape, expand and change individuals to have a normal way of thinking that enables them to tackle complex matters. Ackoff (2004), explains that soft systems are composed of a large number of soft components that include personal, historical, institutional and cultural factors form the foundational basis of organizational learning. Through the soft systems thinking therefore, an individual is able to have a holistic approach which generally requires the ability of an individual to distance himself from daily operational problems and observe the overall patterns which underlie specific events and details. Choo (1998) refers to this process as "systems thinking'' arguing that individuals ought to look beyond their immediate environment and explore the options and possibility of different perspectives. Churchman the pioneer of modern systems thinking (1979) stated that the systems approach can only be achieved when an individual sees the world through the eyes of another. The soft systems’ thinking tackles problems that are faced in the real world scenario through exploring the social reality of the process. Conclusion From the discussion it is important to realize that all these sub units should be met with critical and social awareness as well as with dedication to the emancipation of individuals and finally complementarism on the theoretical and methodological level (Southon, Todd & Seneque, 2002). Therefore from the statement, “The only way to cope with a changing world is to keep learning…” (Dixon, 1998 p.31), we can conclude that successful change in an organization is created by a dynamic sense of stability. This helps an organization to deal with major change initiatives which can be interspersed with periods that are carefully paced amidst the incremental organizational change. Individuals and communities therefore ought to embrace change, embed individual and organizational learning, aim at learning from the experienced change events, reinforce their lessons from the change and finally focus on the outcomes they desire. Although the complexity and pace of organizational change is often problematic, it is able to yield a significant opportunity of learning from the change. It is conclusive that this then can only be achieved from within an organization to help it provide for itself a realistic action case for learning (Southon, Todd & Seneque, 2002). When an organization is able to capture and explore these contentious issues of change that really matter, a customization can be made available for a learning agenda which connects individuals to one another and hence small groups and individuals are able to share knowledge, challenge and confront t different issues at work. Once individual outputs as well as the collective organizational work are certified and recognized, then the opportunity to learn from the change becomes inevitable. References ACKOFF, R.L. (2004). The social responsibility of operational research. Operational Research Quarterly, 25 (3). P. 361‐71. BAKER, W. (2011). 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