The Concept of KM and OL – Likely Costs and Benefits of Developing the Concept in an Organisation

A new concept in the business world, knowledge management (KM) is surrounded with controversy as to what it is and with numerous definitions. Few of such definitions are as given below:

“Knowledge management is the explicit and systematic management of vital knowledge and its associated processes of creating, gathering, organizing, diffusion, use and exploitation. It requires turning personal knowledge into corporate knowledge that can be widely shared throughout an organisation and appropriately applied”[1]

“Knowledge management caters to the critical issues of organisational adapt ion, survival and competence in the face of increasingly discontinuous environmental change. Essentially; it embodies organisational processes that seek synergistic combination of data and information processing capacity of information technologies, and the creative and innovative capacity of human beings.”[2]

“a discipline that promotes an integrated approach to identifying, managing and sharing all of an enterprise’s information assets.These information assets may include databases, documents, policies and procedures, as well as previously unarticulated expertise and experience resident in individual worker”.[3]

Davenport and Prusak gave the following description to ‘knowledge’ as used in this context; “knowledge is a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers.In organisations; it often becomes embedded not only in documents or repositories but also in organisational routines, practices, processes, and norms”.[4]

In appreciating all the above definitions and many more that could not be written here, it must not be overlooked here that many different disciplines and professions are trying to get a grip of the concept and so it has been littered with different definitions and that is the reason why there are so many diverse and varied opinions as well.

Some of the schools of thought on Knowledge Management (KM) may include knowledge economy, knowledge building, intellectual capital, information management, and so on.

Knowledge is too often confused with information or data. Since the traditional concept of information systems is based on seeking a consensual interpretation of information based on socially laid down norms of companies, it has resulted in the confusion between ‘knowledge’ and ‘information’. In, therefore, trying to tone down the confusion, there must be a distinction drawn between ‘information’ and ‘knowledge’. While information is generated by a computer system or processed from available data, knowledge resides in the individual based on the information.

A more important distinction between the two is that given by Davenport and Prusak on the basis of value-adding processes. Information is the processing of data whilst knowledge is the processing of the information in a meaningful way to the user. Furthermore, the explanation by Ikujiro Nonaka, on the distinction between explicit and tacit knowledge is of utmost importance to the concept of knowledge management.Nonaka explained that explicit knowledge is formal and systematic. For this reason it can be easily communicated and shared, in product specifications or a computer program. Tacit knowledge is highly personal. It is hard to formalize and therefore difficult, if not impossible, to communicate. Thus, tacit knowledge or implicit knowledge is both unrecorded and unarticulated.

It is believed that factors like downsizing leading to loss of corporate memory, global competition and the speed with which the business world is changing are some of the main reasons up till now which has given corporate executives and academics the cause for adopting formal KM practices.KM is seen as a means of avoiding repetition of mistakes, reducing duplication of work, save time on problem-solving, stimulating innovation and creativity, and getting closer to their customers.

There is an undisputing increasing confusion about knowledge management.

In his paper The Nonsense of knowledge Management[5].D.Wilson, Professor Emeritus University of Sheffield, UK cites numerous examples from management consultancy firms, writers, to Business schools; and on various fields of studies that confuse the basis of the concept with information management being replaced with knowledge management. The following are some few of such contention;

“Knowledge management has inspired a shift from a transaction to a distributed knowledge management perspective on inter-organisational information processing�026Each player in the network acquires specific knowledge from other players for decision support”. Pederson & Larson (2001)

He then turned his attention to some academic researchers for their view on the concept of KM.The following are some of their views:

“I don’t believe knowledge can be managed. Knowledge management is a poor term, but we are stuck with it, I suppose. Knowledge Focus or knowledge Creation (Nonaka) are better terms, because they describe a mindset, which sees knowledge as activity not an object. It is a human vision, not a technological one”.(Sveiby, 2001b)

“….Drucker…scoffs at the notion of knowledge management.’You can’t manage knowledge’, he says. Knowledge is between two ears. To that extent, Drucker says it’s really about what individual workers do with the knowledge they have. When employees leave a company, he says, their knowledge goes with them, no matter how much they’ve shared”.Kotzer, (2001)

“….knowledge is the uniquely human capability of making meaning from information-ideally in relationships with other human beings…

Knowledge is, after all, what we know. And what we know can’t be commodified.Perhaps if we didn’t have the word knowledge and were constrained to say ‘what I know’, the notion of ‘knowledge capture’ would be seen for what it is-nonsense!” Miller, (2000)

Wilson also considered some corporate views as expressed by well-known organisations like Deloitte and Touch under a definition provided by Gartner Group:

“Knowledge management is a discipline that promotes an integrated approach to the creation, capture, organisation, access, and use of an enterprise’s information assets. These assets include structured databases, textual information such as policy and procedure documents, and most importantly, the tacit knowledge and expertise resident in the heads of individual employees”.

Cap Gemini Ernst and Young appears to equate ‘knowledge management’ with the management of ‘intellectual Capital’ and this in turn means

Encouraging information exchange among staff, for example, through formal and informal networking following training;
Building intranets to provide access to information resources;
Creating ‘yellow pages’ or indexes to expertise; and
Creating newsgroups for employees to encourage information exchange.
There were similar difficulties of definitions in the business schools as well. For example the course on ‘knowledge management’ at the Stuart Graduate School of Business at Illinois the company’s of Technology is described as covers:

Basic concept of intelligent systems for improving business decision/problem identification, data mining, visual model building, expert systems, neural networks and their successful implementation. Students will build prototype knowledge- based systems using commercial software. Case studies address knowledge management system implementation and benefit measurement challenges.

Again according to Wilson, at the Harvard Business School, ‘organisation learning’ is replaced with ‘knowledge management’ and the course of ‘knowledge management’ is described as

Learning processes determine how individuals and organisations create, acquire, interpret, transfer, and retain knowledge; they too may take a variety of forms. The approaches examined in this module include experimentation, benchmarking, and learning from past successes and failures.

Irrespective of the terms or meanings assigned to KM, the practical management objectives are similar: to convert human capital to structural capital i.e. organisational knowledge or information ‘left when people go home’, such as documented processes and knowledge base.

Thus, the concept of KM is not new. Even though it is still shrouded in confusion as to whether it is synonymous to information management, it can be considered as a convergence of ideas postulated over the past decade, including core competences and resource-based theories of the firm,info-mapping,balanced scorecard, information resource management, boundaryless firm, total quality management, the learning organisation and intellectual assets, it is arguably an evolutionary development with several aspects of this phenomenon pointing to the fact that it is merely a significant change in the way organisations manage people, processes and information.

In spite of the synonymous use of ‘information’ and ‘knowledge’ in most of the papers and articles so far examined, writing under the view that constructive conflict in organisations that aspire to lead in innovation and knowledge creation, the writer contended that the ‘wicked environment’ of the new business world imposes the need for variety and complexity of interpretations of information outputs generated by computer systems. Due to uncertainties and unpredictability of business in the future, Gary Hamel underscored that assertion by saying that non-linear change imposes upon organisations the need for devising non-linear strategies, which cannot simply be ‘predicted’ based on a static picture of information residing in the company’s databases. Rather, such will depend upon developing interpretive flexibility by understanding multiple views of the future by using techniques such as scenario-planning.

In spite of the confusing on KM,KM as a strategy can be used to support organisational learning.Organisational learning(OL) is based on the notion of ‘knowledge-sharing’ within an organisation.Many managers see OL as a powerful tool to improve the performance of an organisation. Generally,there are two different processes of organisational change that are associated with OL:

1. Adaptive learning,i.e.changes that have been made in reaction to changed environmental conditions; in general adaptive learning comes along with a lower degree of organisational change; thus it is seen as a process of incremental change, more automatic and less cognitive induced; and

2. Proactive learning, i.e.organisational changes that have been made on more willful basis. This learning goes beyond mere reactions to environmental changes. It is thus considered as a process of strategic change

Furthermore, Cyert and March (1963) consider OL as mainly an adaptive process in which goals, standard operating procedures like for example which parts of the environment the organisation should listen to and search rules that stir the organisation in a particular way to find problem. Solutions are adapted to the experiences that are made within the organisation.The writers focused on the problem solving quality of the standard operating procedures and search rules. Thus, even in stable environments, organisations can learn how to adjust their procedures in order to perform.

The other school of thought i.e. behavioural school emphasises that OL is executed on the basis of rules and that organisational decisions depend on certain rules. If the rules no longer fit the experiences they have to be changed.

According to Argyris and Schon (1996) “generally an organisation may be said to learn when it acquires information (knowledge, understanding, know-how, techniques or practices) of any kind by whatever means. In this overarching sense, all organisations learn, for good or ill, whenever they add to their store of information, and there is no structure on how the addition may occur”.

On the basis of the above and citing the common principle of learning, i.e. before there can be a change in behaviour there must be learning taking place, KM can be used to support organisational learning in the following ways:

1. Instead of the traditional emphasis on controlling the people and their behaviours by setting up pre-defined goals and procedures, they would need to view the organisation as a human community capable of providing diverse meanings to information outputs generated by the technological systems.

2. De-emphasise the adherence to the company view of culture and values so that such ways and practices are continuously assessed from multiple perspectives to agree with the changing external environment

3. Invest in multiple and diverse interpretations to enable constructive conflict mode of inquiry and, thus, avoid simplifying issues or abandon decisions very early.

4. Encourage greater proactive involvement of human imagination and creativity to facilitate greater internal diversity to match the variety and complexity of the environment. There is an increasingly accepted view that much knowledge within an organisation is constructed by the individuals working within it(Blackman,2001)Therefore, it becomes logical that if there is to be requisite organisational learning required to develop new behaviours in an organisation,there must be a recognition of the constructed nature of knowledge within the system.

5. Make the organisational information base accessible to organisation staffs that are closer to the action while simultaneously ensuring that they have the skills and authority to execute decisive responses to changing conditions.

6. Thus the new knowledge that is accessible to all would encourage learning and new behaviour.There is a suggestion that merely enabling the provision of more information is in itself learning.

Like anything, the introduction or development of knowledge management concept to support my organisation’s OL, would certainly bring about costs and benefits for doing that. Some (of the) considered judgments of the likely benefits, basically as a result of incremental or strategic changes, are

1. The intrapreneurs in the company can use the new ideas from others to bring about couple of innovations and tactics that might work well for us.

2. There is also the opportunity for the company to share its cultural values and thereby places itself at a good position which can minimise setbacks in organisational changes.

3. Training and development helps many an organisation in so many ways.OL is an effective platform to encourage training and development which will bring about a long term benefits for the organisation.

4. The company also stands to get a successor with ease from within the organisation when some key personnel leave the organisation because of the OL.

The following are some costs that the company must expect:

1. There is the risk that sharing knowledge with the people in the organisation might put the company’s strategy at the disposal of some competitors in the event that someone leaves our organisation.

2. There is also the tendency that some experts in the organisation might be offended in being asked to share what they know with others “continually”. In the same vein like any change in management, there will be some form of resistance and negative reaction with its attendant problems like some staff leaving the organisation this can affect the organisation in an adverse way.

3. There is also the likelihood that some staff might abuse the ‘knowledge-sharing’ rule meant to support organisational learning.

One way or the other developing the concept of KM for use in an organisation is worth doing in the fact that the process could from time to be reviewed in order to work to overcome the costs of its utility. Of course the benefits are in my personal opinion greater than the costs.