Enterprise Knowledge Management: Balanced Score Card - Term Paper Example

KNOWLEDGE MANAGEMENT INTRODUCTION As the era of knowledge is ushered in, new demands and standards for the appreciation of what is valuable to and for the companies have shifted. It has moved from mere balancing of tangible assets and resources to the valuation, balancing and measure of the intangible assets together with the tangible assets of the companies. And this trend has become one of the more innovative yet challenging changes in the analysis of a company’s capital. This particular idea may seem unorthodox. And its unorthodoxy is made apparent by the simple reason that academic discussions on theories pertinent to the progress of a company or organization in the business realm (even lay persons think of business success in this way) is always equated to the continued accumulation of wealth or profit in terms of monetary returns or other similar concrete and measurable outputs. There is, indeed, nothing wrong with the old, traditional conception of business success. But what is made crystal-clear is the fact that such measure is not enough to gauge real capital of companies or organizations at play in our era – the era of knowledge. James Brian Quinn, Philip Anderson and Sydney Finkelstein in their article Managing Professional Intellect: Making the Most of the Best have explicitly stated that “intellectual assets, unlike physical increase in value and use. Properly stimulated knowledge and intellect grow exponentially when shared.”1 And this claim properly presents the notion that the call and demand of the time among and between companies and organizations is to continuously destroy all boundaries and hindrances of knowledge via sharing of knowledge from within and from without. But what does it entail? BALANCED SCORECARD Robert S. Kaplan and David P. Norton in their article The Balance Scorecard: Translating Strategy into Action have highlighted the stark reality that if companies in the contemporary period want to be competitive, aggressive and progressive they should learn to project not only within short term perspectives but that they should also be able to come up with a viable and workable long term plans. The idea of having long term plans and projections entail the presupposition of having human resources being thrust in the center as the main and focal point in business environment, in the connection and collaboration of organizational and structural systems moving towards the establishment of a harmonious and friendly yet very, very competitive ambiance in the business world. However, if one is going to be honest to one’s self one may regard this idea as something ordinary. Since it is simply what we have in our textbooks. Classroom discussions and theories have frequently referred to the reality of the importance of the role of employees or workers in the field of knowledge management. But, what made Kaplan and Norton’s idea avant garde is the assumption that the entire process starts with the recognition of how employees see themselves as part of an organization that do not merely require that they perform a specified task day-in, day-out. Rather, under this particular framework, employees recognize that they are being asked to transcend their own individual limitations. That the drudgery and monotony of physical work is relegated as secondary only in importance and in rank if compared with the intellectual output that each and every individual employee may put into their work. This idea of recognizing the significance of utilizing the implicit knowledge of each person in the organization redounds to the long denied truism that the intellectual prowess of each employee is in reality an intellectual capital of the organization. That the intellectual capital provided by the employees may also serve as the weapon of the organization as it treads the highly competitive and global market of the 21st century. Further more, the notion that employees are no longer just demanded that they turn their knowledge from implicit to tacit on the basis that they see themselves as embracing the goal, mission and vision of the company. Rather when employees are asked to turn their implicit knowledge into tacit, it is because each employee is now appreciated as an integral part of the framework of the entire organization. Since each individual employee is seen as a potential source of intellectual insights that may help the organization propel itself in the market. This is made viable on the presupposition that the organization no longer sees the employees as dispensable tools in acquiring or reaching that which they deemed to be part of the goal of the company. Instead, it sees each and every particular employee as indispensable in the progress and growth of the company itself. Thus, motivating, driving each employee to continue harnessing their own personal intellectual capacities, their own skills that contribute not only to their own personal growth as human being but also promotes the objectives of the organization. In addition to this, the moment that employees are seen as concrete expression of the intellectual capital of the organization, it will reduce the fear that contemporary employees have as they try to evaluate their own personal performances vis-a-vis the performance of the computers and other electronic gadgets that have been invented in lieu of the advancements in science and technology. In light of this, what I would like to highlight is the fact that as human beings, again, are in the center of the discussion. As academicians and theoreticians do try to understand, interpret and create the possibility of coming up with a business environment that is fully responsive to the demands of the customer. And at the same time, being able to maintain the loyalty of its employees while holding on to the ideal that the stock sharers are happy is a playing filed that seeks to increase the happiness of every person taking an active part in the business and economic realm. Moreover, one can deduced from the discussion the notion that human beings are considered as a necessary ingredient in the organizational structure and design. Kaplan and Norton have shown us that the moment that human beings are placed in the center of the business climate, a new manner of appreciating the business realm is in the offing. Their article has come up with a viable means of analyzing and interpreting the various differences that cut across human similarities. And that the real challenge is coming up with a matrix that will provide the means with which we can measure the degree of effectiveness of each employee may be a very difficult task but it is not impossible. It is workable and something that may present itself as a formidable tasks the minds of scholars. In fact, I honestly think that the grandeur of the idea that human resources is in effect an intellectual capital of the organization and that out of this particular connection between the tangible and intangible capital of the capitalists, one now can venture on the idea that indeed all human endeavor in the realm of business enterprise is but geared to the recognition of the dynamism of human beings as they envision a better world for humanity. What do I mean? Let us take the case of Henry Ford. Ford envisioned a world wherein cars a re made available to everybody and not just to the limited few. He dreamt of creating an innovative standard that would enhance the manufacturing of cars so that the cost of which may be drastically reduced compared to the price of cars which were specially made suited to the whims, needs and caprice of the owners. With this as his guiding vision, Ford was able to come up with a system that would make manufacturing of cars a lot faster yet the quality was still the same. During the time that this revolution in manufacture happened, Ford was basically responding to a problem and a demand. It was all intellectual prowess. A problem was seen, and he looked for a solution. The large scale production of cars as a result of Ford’s engineering powers have made cars available to most middle class families who couldn’t afford a custom made one. While at the same time offering management a new taste of production. A new taste because workers from customized cars are removed from their chance to manifest their artistry but are now drastically reduced to mere robots, following the dictates of those who sits high in the ranks. Workers were not taught to ask or formulate ideas but were trained to basically follow all the dictates of those echelons from the top. Although, mass production as a result of fordism has introduced an era of production that were unknown prior to its time, what is disheartening from this fact is that employees under this mass production were also dehumanized for their creative prowess was stifled. But though such is the drawback of fordism, what is laudable with it is the fact that it is a response to what may be considered to a perceive problem. Regardless of its own shortcoming, it is basically an appropriate human undertaking in the face of formidable task. Aside from some technical problems intrinsic in the system itself, what is considered as its major failure is the idea that it failed to recognize the bulwark force of its human resources. And that particular resource, the human resources, is basically tapped, acknowledged and perceived to be vital as a new form of management has come into being – lean management. As creators of lean management correct the technical problems and waste that has plague fordism, it has created a new dimension in the human relations. It has deconstructed management in such a away that linear, autocratic leadership has become an impasse. And what became the fad is the democratic form of management. PROBLEM Fad. One of the strongest criticisms raise against the balanced score card idea in lieu of it being implemented side by side with notion that human intelligence is to be appreciated as part of the companies intangible asset - intellectual capital - is the claim that it is just a fad. Some scholars have maintained the claim that human resource, as the fountain of intellectual capital is nothing but a fad in the realm of management. It is sad to see that although developments in terms of management have been strongly supported by various leading organizations and companies worldwide there is still some uproar on the idea that human resources is an untap company asset. What is so fleeting from the idea that human resources are intellectual capital? Is it because there is an innate difficulty in coming up with a quantitative and qualitative analysis that will allow us to measure with minimal error the human input? The fact the human beings have been the consistent ingredient in an organization should have given the theoreticians the idea that perhaps if intellectual capital coming from the employee is a fad, then they should be doing something to make a it a part of the dynamics and processes of real and humane management. I cannot get the idea that it can be appreciated as a fleeting whim and caprice on some of the innovators in the realm of management. If it is a fad and not a growth in the realm of management why is it claimed that such an appreciation of intellectual capital as stemming from the human resources itself has developed side by side although independent from one another in both the United States of America and in Scandinavian countries. If it is just a fad, why is it that companies who are trying their best example Skandia have been exerting effort and have been sharing to other companies some viable metrics with which it is possible to measure intellectual capital. If it is just a fad, then why is it that companies who have shown its employees that they are indispensable part of the companies because they are its intellectual capital have created a business environment that is invigorated, robust and dynamic? And in the end if it is indeed it is a fad, then we may just hope that if it cannot be turned as viable and workable part of the theories in knowledge management and in leadership, then perhaps we can just hope that the next “fad” will be as cognizant, if not more cognizant, of the reality of the primordial importance of Human resources in the life of an organization. CONCLUSION Although, the discussions under balanced score card is far and wide and that we basically delve only on the first layer of the discussion, I still think that intellectual capital as part of intangible assets of companies is one of the biggest developments of our times. Whether the fact that there are some problems regarding the validity of measuring the actual output or the actual implicit knowledge of each employee or even the possibility of being able to do so. Still what is of major import is the fact that the recognition of human capital, of intellectual capital as being drawn from the workers themselves. And that these workers, employees have seen themselves as part of the organization, as they themselves sharers of the vision, goal and mission of the organization have presented to us that contemporary companies have been basically slowly, (but hopefully surely) move away from the image that organization or companies are to be likened to monsters whose greed is insatiable. As such, it only driving force is lust for money and that the people behind the very life of the organization are appreciated as the tool for securing profit. This negative apperception of companies is slowly being deconstructed in the light of developments similar to the idea of a balance scorecard. But the tail of the discussion is not yet near. As we have solely focus on human capital, there are other intertwining, interweaving kinds of capital that needs to be understood side by side with the human capital. And that the interaction among these other capitals namely social capital, structural capital and human capital as all integrated under intellectual capital has become a more feasible and strategic understanding of the global market. Funny it may seem but it appears that as the human wold continues to move forward, it is slowly creating a face of human enterprise that is no longer plague and tied down to the rudiments of the value and importance of the materiality of its own very existence. But, it appears to have come up with the idea that the human existence, power to create, liberate, discover, and other similar stuffs that affects and influence the vigorous experience of human life is the idea that people are no longer seen as mere objects either in the consumerist stance or from the manufacturing stand. Rather human beings are seen as creative forces in themselves, valuable on their own. REFERENCES: Bassie, Laura J. and Van Buren, Mark E. “New Measures for a New Era” in Knowledge Management: Classic and Contemporary Works ed by. Daryl Morey, Mark MayBury and Bhavani Thuraisingham. Massachusettes: MIT Press, 2002 Bontis, Nick. “Managing Organizational Knowledge by Diagnosing Intellectual Capital” in Knowledge Management: Classic and Contemporary Works ed by. Daryl Morey, Mark MayBury and Bhavani Thuraisingham. Massachusettes: MIT Press, 2002. Kaplan, Robert S. and Norton, P David. “The Balanced Score Card: learning and Growth Perspective” in Knowledge Management: Classic and Contemporary Works ed by. Daryl Morey, Mark MayBury and Bhavani Thuraisingham. Massachusettes: MIT Press, 2002 Quinn, James Brian, Anderson, Philip and Finkelstein, Sydney. “Managing Professional Intellect: Making the Most of the Best,” in Harvard Business Review on Knowledge Management, Boston: Harvard Press, 1998. Senge, Peter. “The Leader’s New Work: Building Learning Organizations” in Knowledge Management: Classic and Contemporary Works ed by. Daryl Morey, Mark MayBury and Bhavani Thuraisingham. Massachusettes: MIT Press, 2002 Seemann, Patricia, De Long, David, Stucky, Susan and Guthrie, Edward. “Building Intangible Assets: A Strategic Framework for Investing in Intellectual Capital” in Knowledge Management: Classic and Contemporary Works ed by. Daryl Morey, Mark MayBury and Bhavani Thuraisingham. Massachusettes: MIT Press, 2002 Sveiby, Karl-Erik. “Measuring Intagibles and Intellectual Capital” in Knowledge Management: Classic and Contemporary Works ed by. Daryl Morey, Mark MayBury and Bhavani Thuraisingham. Massachusettes: MIT Press, 2002 Takeuchi, H., and Nonaka, I. Hitotsubashi on Knowledge Management: Hitotsubashi University Graduate School of International Corporate Strategy. Singapore: John Wiley & Sons ( Asia) Pte Ltd 2004. Read More