KNOWLEDGE MANAGEMENT

Ir. SHUHAILI CHE KOB

 

KNOWLEDGE MANAGEMENT

 

Purpose

 

This paper aims to get an information about Malaysian companies exploit their intellectual capital using different knowledge management practice, maximize their potential and to find out the categories which can give the impact on their practices.

 

Introduction

 

Knowledge is the full utilization of information and data, coupled with the potential of people's skills, competencies, ideas, intuitions, commitments and motivations and Knowledge Management is the collection of processes that govern the creation, dissemination, and utilization of knowledge.

The most important dimensions of knowledge are:

• Knowledge is a firm asset: Knowledge is an intangible asset requiring organizational resources and whose value increases as it is shared.
• Knowledge has different forms: Knowledge includes craft, skills, procedures, and understanding of causality
• Knowledge has a location: Knowledge resides with individuals, social groups, is difficult to transfer or extract
• Knowledge is situational: Knowledge may be applicable only in certain contexts or situations

Given the importance of knowledge in virtually all areas of daily and commercial life, a key distinction made by the majority of knowledge management practitioners is Nonaka's reformulation of Polanyi's distinction between tacit and explicit knowledge.

·         Tacit knowledge is knowledge residing in the minds of employees that has not been documented. This is including the expertise and experience of organizational members that has not been formally documented. 

·         Explicit knowledge is knowledge that has been documented.

 

The knowledge management value chain includes four main steps that add value to raw data and information as it is transformed into usable knowledge:

 

1. Knowledge acquisition: Knowledge may be acquired by building repositories of documents, enabling systems for expert advice, analyzing data for patterns, or by using knowledge workstations. An effective knowledge system requires systematic data from a firm's transaction processing systems and data from external sources.
2. Knowledge storage: Storing knowledge in databases and document management systems
3. Knowledge dissemination: Knowledge may be transferred to managers and employees via portals, e-mails, search engines, collaborative office systems, training programs, and other means.
4. Knowledge application: New knowledge must be built into an organizations processes and application systems and become a part of decision-making systems.

 

 

Review of the Literature

Knowledge management is a key concept in today’s business world.  Evidence of this fact is apparent if one only peruses the current business, management, and organization literature.  On the surface, it looks as if knowledge management just appeared toward the end of the 1990’s.  Some regard knowledge management as a business fad or craze (Swan, Newell, Scarbrough, and Hislop, 1999, p. 275), but a closer examination of the concept reveals that there has been considerable thought and research into it, and many of the world’s most successful corporations, businesses, and organizations are investing considerable resources in this enterprise (Alvesson and Karreman, 2001, p. 995).  Prusak (1999) estimates that approximately 80% of the Global 1000 businesses are conducting knowledge projects, and that “approximately 68% of the Fortune 1000 have defined knowledge projects underway.  Attendance at knowledge conferences…has reached over 10,000 in the U.S. alone.  There are at least six knowledge management newsletters, one fully developed knowledge management magazine” (p. 3).

            Many of the practices set up in organizations can be broadly construed as contributing to the knowledge agenda.  These knowledge projects range from setting up an intranet, using Lotus Notes or other team-oriented software, creating personal development plans, mentoring, or sharing information on best practices.  Increasingly, organizations are creating specific initiatives or programs with a knowledge focus.  Knowledge teams and knowledge leaders are emerging, but very few organizations are applying knowledge management throughout their organizations (Skyrme, 1999, p. 109). 

            Why are businesses and organizations devoting considerable money, time, and effort into knowledge management projects?  The answer is they want to survive.  McCampbell, Clare, and Glitters (1999) maintain that in an economy of uncertainty, the only sure source of lasting competitive advantage is knowledge.  “Successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products” (p. 172).  They argue that the new business environment is characterized by radical and discontinuous change.  The environment requires organization members to anticipate changes and carry out a faster cycle of knowledge creation and action based on the new knowledge (McCampbell et al., 1999, p. 173). 

            The McCampbell et al. characterization of the business world is also true for society at large (1999).  Operating any organization in the information age is a challenge made more difficult by the instantaneous nature of the flow of information.  Drucker (1993) calls our world a post-capitalist society, and in his writing about the economic, political, and social transformation’s taking place, he identifies a primary characteristic and resource – knowledge (pp. 4-8).  The post-capitalist society differs from past eras in how knowledge is applied.  In the early part of the 20^th Century, the industrial revolution applied knowledge to the use of tools, processes and products.  The productivity revolution began when people applied knowledge to human behavior.  Post-capitalist society is characterized by the fact that knowledge is being applied to knowledge itself (Uit Beijerse, 1999, p. 96). 

As Skyrme and Amidon (1999) write, “the knowledge agenda is new, yet not new” (p. 108).  Most organizations are already involved in managing knowledge and have been for a long time.  Many of them, however, do not realize the full extent of what they are undertaking.  The purpose of this paper is to provide an overview of the concept of knowledge management, identify key terms and concepts related to knowledge management, trace the history of the study of knowledge management, and explain the major areas of study and thought related to the phenomenon.

Defining Knowledge Management

While there are many organizations undertaking knowledge management projects, there is dispute over what exactly knowledge management is.  Some in the field define knowledge management simply as information that has value for action, but others, like Snowden (1999), maintain that knowledge management is not that simple.  He writes that it is the “identification, optimization, and active management of intellectual assets, either in the form of explicit knowledge held in artifacts or as trait knowledge possessed by individuals or communities”

(p. 63).  Swan et al. (1999) explain that knowledge management is about harnessing the “intellectual and social capital of individuals in order to improve organizational learning capabilities, recognizing that knowledge, and not simply information, is the primary source of an organization’s innovative potential” (p. 264).

            One cannot get a clear picture of knowledge management without studying the concepts of knowledge and information and other related terms.  Much of the confusion that surrounds knowledge management is due to scholars’ varied opinions on distinguishing knowledge from information.  The misconception that the two terms are interchangeable can have disastrous effects in the business world.   “The confusion between knowledge and information has caused managers to sink billions of dollars in information technology ventures that have yielded marginal results” (McCampbell et al., 1999, p. 172).   Snowden (1999) claims that it is not necessary to define knowledge, but points out that it is important to distinguish it from information (p. 52).  Other researchers find it necessary to have a thorough understanding of all elements that make up knowledge management.  Davenport, De Long, and Beers (1999) claim that knowledge “is information combined with experience, context, interpretation, and reflection” (p. 89).  Prusak (1999) describes knowledge as a human trait or attribute (p. 4), distinguishing it from information in that only a human can obtain knowledge.  For example, a bookshelf can contain many volumes of books on a particular subject.  It can be said that the bookshelf contains a lot of information, but one cannot claim that the bookshelf is knowledgeable.  Sveiby (1999) carries the definition a little farther by describing it as an activity and a “process of knowing” (p. 20).  The term activity brings up the notion of action, which Nurmi (1999) mentions in his definition of knowledge:

            Knowledge is something that is acted upon, that has an effect on the way things are.  We are not interested in information that lies passive on shelves, in files, or in archives.  A knowledge business is created when the know-how inside the firm

and the needs of customers outside the firm meet (p. 168).

Nurmi’s definition brings up the notion of know-how, which is akin to the deeper type of knowledge characterized by Ikujiro Nonaka, a business management expert and scholar from Japan.  Nonaka (1994) writes that information is a “flow of messages, while knowledge is created and organized by the very flow of information, anchored on the commitment and beliefs of its holder” (p. 15).  He also maintains the most important element in knowledge is action. 

Nonaka and Konno (1999) categorize knowledge as either explicit or tacit.  Explicit knowledge can be thought of as knowledge that can be expressed in terms of words and numbers.  It can be shared in the form of data.  Tacit knowledge, on the other hand, is highly personal, hard to formalize, and difficult to communicate (p. 39).  Much of Nonaka’s work is based upon the knowledge theories of Polyani (1966), who first came up with the idea of tacit knowledge.  He declared that “we have examples of knowing, both of a more intellectual and more practical knowing” (p. 6).  One can also see the similarity between the intellectual knowing and Nurmi’s know-how mentioned in the paragraph above.  Polyani further states that the two aspects of knowing have a similar structure, and that neither is present without the other (p. 7).  His explanation of tacit knowledge, “we can know more than we can tell” (p. 4), is best illustrated by police identification techniques.  If an individual is trying to identify a criminal but cannot fully describe him, the police might use a data base of images of facial parts such as eyes, nose, and mouth.  They will then show those to the individual, who will pick through the choices until he arrives at something similar to the features of the criminal he remembers.  In other words, the individual knows the information; he just cannot relate it without that process.  This illustration not only points out what tacit knowledge is, it also demonstrates that tacit knowledge can be conveyed through some type of process.

Nonaka (1994) expands on Polyani’s notion of tacit knowledge by asserting that tacit information has both cognitive and technical elements.  Cognitive elements can be thought of as mental models in which people form models of the world.  They can manipulate these models to help define their world.  The technical element is know-how or skills that apply to a specific context (p. 16).  Snowden (1999) helps further clarify the concepts of tacit and explicit knowledge by relating how each particular type of knowledge is evoked.  He writes that “the optimization of explicit knowledge is achieved by the consolidation and making available of artifacts.  The optimization of tacit knowledge is achieved through the creation of communities to hold, share, and grow the tacit knowledge” (p. 63).

            While knowledge management scholars have spent considerable energy into debating and defining knowledge, much less is written on the term management. Alvesson and Karreman (2001) assert this is because most researchers believe that the idea of management is something that makes common sense.  There seems to be a general consensus among scholars that management involves planning, organizing, coordinating, and controlling work (p. 1001). 

 

Study Methodology

 

Relevant literature review

Survey