A
critical review of creation, diffusion, transfer and application of Knowledge
and knowledge value chain Management for SMEs in Taiwan
一個評論性探討之知識創造,擴散,轉移及應用與知識價值鏈管理為中小企業在台灣
作者:國立南澳洲大學企管博士候選人
陳德富
學校:國立南澳洲大學國際管理研究所博士班
Author:
Chen Der Fu
Candidate
of Doctor of Business Administration, International Graduate School of
management, National University of South Australia
Email:
promise_future@sinaman.com; ia2001@pchome.com.tw
Abstract
This study deals
with a field, which gets little or no attention in the research done into
knowledge management for small and medium-sized enterprises (SMEs) in Taiwan. In
the first part of the study a conceptual model will be developed. This model can
be used to analyse the most important knowledge management processes (from
knowledge creation to its application) in corporation, a quantum of knowledge
progresses through four primary stages: creation, diffusion, transfer and
application of knowledge. The attention that SMEs pay to this progression
usually depends on the potential economic return associated with the quantum of
knowledge in question. In a knowledge-intensive industry, such as the high-tech
industry in Taiwan, incredible variation exists across firms in terms of the
systems they have in place to manage the progression of knowledge along this
chain. Even in a fiercely competitive industry like the high-tech industry where
product life often ranges from one to two years, within an industry, innovation
requires a firm to create knowledge and package it into concepts that lead to
the development of new products or processes. And we consider these concepts to
be useful ideas. This progression can be thought of as occurring through a
knowledge chain management (KCM). To help define some of the considerations that
firms face when developing their strategy for knowledge management, this paper
examines the link of the chain: how knowledge progresses
from creation to applications and what is the gaps
between them?
In
the second part of the study, a new framework for thinking about knowledge
creation and application is proposed and evidence of knowledge value chain
management is presented through an examination of literature theory citations to
practice. The first aim was to provide a framework for the discussion of KM with
value chain which will minimize confusion and allow for common understanding
among those activities and making KM value added in organizations. The emphasis
of this KVC (knowledge value chain) will be on the business applications of the
various KM value creation options. The second aim was to provide a checklist of
KM applications and technologies, Which can be used to assess an organization's
current level of KM performances and then plan and communicate future KM
implement in SMEs.
KCM
and KVC have been successfully applied in this capacity as an assessment and
strategic planning tool. The paper covers the KCM and KVC's theoretical
foundation, overviews the major components of the model, discusses how the KCM
and KVC can be used as a tool to assess and inventory an organization's current
KM-related investments and reviews its use as a strategic planning tool. The KCM
and KVC were developed in response to these questions. There are a number of
aims in writing this paper and in proposing the KCM and KVC as a framework for
understanding KM applications and technologies.
Finally,
I propose an integral KM model to use some simple presentations for enterprise
to use easy to follow models (input-knowledge process-output) and to illustrate
the process of knowledge creation, diffusion, transfer and application. The
procedures of all KM implement process are very detail and something new and
creative, only to link corporate strategy with KM and practice it into corporate
operation process (David J. Collis, Cynthia A. Montgomery, 1997), to form
Knowledge capabilities as the focus of organizational development and strategy
(Dawson, R., 2000). Thus KM initiative just can implement successfully. The
knowledge management processes which have the greatest effect on operational
processes are those for the creation of knowledge, diffusion, transfer and
sharing of knowledge and the embedding and application of knowledge.
The
study develops an integrated KM model for SMEs to further apply KM and to find
out what suitable KM strategies and processes can increase productivity,
employees’ satisfaction, customer satisfaction, improving quality of service
and product, reduce operating cost, accelerating technology & innovation
speed and increasing cooperation with suppliers etc. Through this model can
create a more detail, practice and completely KM structure and strategy for SMEs
in Taiwan.
How
to implement an optimal KM strategy and processes are not depending on corporate
scale (which is smaller, medium or large enterprise) but depending on corporate
core competence (i.e. handling and achieving abilities of customer satisfaction,
professional abilities, computerized degree, e-business degree, employees’
learning abilities, etc.) and interaction between technologies, technique and
corporate culture.
Keywords: KM,
KCM, KVC, KM performance, SMEs
摘要
本研究乃關於一個較少或沒人注意的領域:知識管理為中小企業在台灣,第一部份將發展一個觀念性的模型,此模型可用來分析大部分的知識管理流程
(從知識創造到應用)在企業中。一定量的知識進展經由四個階段:知識的創造,擴散,轉移及應用,中小企業注意到這些進展通常依賴潛在的經濟報酬與知識的量子之關聯在問題中。在一個知識密集的產業中如台灣的高科技產業,難以置信的變化以他們擁有的系統存在跨公司間,在適當的位置上沿著一條鏈去管理知識的進展。甚至在一個猛烈競爭產業如高科技產業,其產品生命週期經常是一到二年之範圍。在一個產業中,創新需要一家公司去創造知識及包裝它進入觀念中,去引領新產品或流程的發展,我們考慮這些觀念將會是有用的構想。這些進展可視為發生經由一知識鏈管理。為幫助定義一些考慮事務當企業面臨發展知識管理策略時,本研究檢驗知識鏈的連結:知識的進展如何從創造到應用與何者是它們之間每一個進展流程的缺口?
在本研究第二部份提議一個新架構:知識價值鏈管理,呈現經由文獻理論到實務的檢驗。第一個目的是提供一個架構為知識管理與價值鏈的討論,它將最小化困惑及允許為共同的理解在那些活動亦即使知識管理在組織中增值。知識價值鏈的影響將在不同的知識管理的價值創造功能之企業應用。第二個目的是提供一個知識管理應用及科技的檢查表,它能用於評估目前的KM績效與計劃溝通未來的KM實施在中小企業中。
KCM與KVC曾被成功的應用在當成一個績效評估及策略與流程規劃工具之容量,本研究涵蓋這二個範圍的理論基礎,綜述此模型之組成及討論KCM與KVC如何能被用做一個工具去估量及盤存一個組織的目前的KM相關投資及績效與重新探討它的使用當作一個策略規劃工具,此二理論被發展用來回應這些問題。寫此論文還有一些目的是在提議它們當成一個架構去了解KM之應用,科技與實施。
最後,我提議一個整合KM模型去使用一些簡單的展現,成為企業的容易跟隨模型(輸入-知識流程-輸出),與闡釋知識創造,擴散,轉移及應用之流程。這些KM所有的實施流程的程序是非常詳細且有一些新穎與創意,唯有連結企業的策略、流程與KM及落實它進入企業之營運流程
(David J. Collis, Cynthia A. Montgomery, 1997),形成知識能力當成組織發展及策略之焦點
(Dawson, R., 2000)。如此,KM的初始實施活動才能成功實行。而這些知識管理流程在組織流程中有最大的結果影響是那些活動為知識的創造,擴散,轉移,分享,栽種及應用。本研究發展一個整合KM模型為中小企業去進一步應用KM及找出何種適合的KM策略及流程能提高生產力、員工滿意度及顧客滿意度、改善服務及產品品質、降低營運成本、加速科技創新速度與增進與供應商的合作等等,經由此模型能創造一個更詳細的,實務與完整的KM架構及策略為台灣中小企業。
如何實施一個最適化的KM策略及流程並非依企業規模大小而定,但是依企業核心能力(如:處理及完成顧客滿意的能力、專業能力、電腦化程度,企業e化程度、員工之學習能力等等)及科技、管理技術與企業文化之互動而定。
關鍵字:知識管理,知識鏈管理,知識價值鏈,KM績效,中小企業
1.
Introduction
When,
in the early 1600s, Francis Bacon said: "Knowledge is power", we
imagine he was referring to the knowledge and power of individuals. Almost four
centuries later, we have begun to recognize how organizations, too, can succeed
or fail on their ability to effectively use and manage their "knowledge
capital" of data, information and knowledge.
Stepping
into 21st, whatever large or small enterprises all think about how to
implement knowledge management for increasing productivity, performance,
customer satisfaction and reducing operation cost. While the current literature
provides insight into the KM (knowledge management) strategies adopted by some
large organizations, most organizations differ from the large multinational
corporations (MNCs) from which KM principles have been drawn. Other than
differences in the number of personnel, they tend to be regionally or locally
focused, have a narrower scope of business, and have less financial and
administrative "slack". The management, who are often the owners of
these firms, tending to focus on the core business of their organizations and
pay less attention to other issues.
Most
of these organizations cannot afford (or do not want to commit to) the expensive
consultancy services used by larger firms. Few have dedicated information
professionals on staff. Many of them may be unaware of the potential of KM since
the KM "industry" looks primarily towards those larger organizations
with large budgets for consulting and technology. Small organizations can
benefit from attention to knowledge management. Their greatest acknowledged need
is for effective "knowledge repositories". The owners and managers of
many small organizations are just beginning to identify how information and
knowledge management may assist them. The availability of appropriate
technologies will make the value of knowledge management more tangible, as it
has in larger organizations. Small organizations, though, can seldom afford the
cost of being leaders in technology adoption, or of trial and error in
implementation. They will rely heavily on consultants and information
professionals for success, they should have sufficient sensitivity to
organizational culture and practices to design and implement systems that can be
embedded in daily activities. Finally, they must link and interact between
technology, people and technique.
In
past, Taiwan created admired economic miracle through superior productive system
and management ability. Nevertheless, following large environment and basic
conditions changing, recently, Taiwan faces the dilemmas of rising productive
cost and corporate moving out, especially after Mainland China a serious of
reforming and openness, their market’s quality and quantity all have
remarkable raising, and to form future places which most development potential
in global corporate development blueprint, furthermore, to make large pressure
to Taiwan industries. Therefore, Taiwan must seek actively the new positioning
and role in global industrial value chain.
There
are 95 % industries in Taiwan are small-medium sized enterprises (SMEs),
especially, even there are 80 % of them are traditional industries. Especially
now, Taiwan also faces the three mainly problems: 1. The recession of national
economic 2.Traditional industries need turn around 3. Industries shift out to
Mainland China, Therefore, domestic economy is worse and worse, unemployment
problems are serious increasingly. For solving these problems, Taiwan government
throws their whole being into advocate knowledge economy to help SMEs turn
around to knowledge enterprises and hope the root of enterprises can keep
staying in Taiwan, and doing their best to avoid all of enterprises move into
Mainland China, because that will cause more serious unemployment problems in
Taiwan.
If
the SMEs, especially those traditional industries want to sustained management
and not to be eliminate through competition, they must turn around from past
"labor density" and to current
"technology density" and "knowledge density", and launch to
implement Knowledge Management (KM), it seems that is the unique outlet for
Taiwan industries. After national economy to be revived again, Taiwan will
re-create economic miracle.
Josephine
Chinying Lang (2001) proposed five hindrances to knowledge creation and
utilization in organizations: First, there may be inadequate care of those
organizational relationships that promote knowledge creation. Second, there may
be insufficient linkage between knowledge management and corporate strategy.
Thirdly, inaccurate valuation of the contribution that knowledge makes to
corporation's bottom line renders the value of knowledge management ambiguous.
Fourthly, there may be a pervasive lack of holism in knowledge management
efforts. Finally perhaps not something ordinarily considered a problem for
managers to deal with poor verbal skills may hinder the actual processes of
knowledge. The task of knowledge management is to identify such barriers and to
overcome them.
For
achieve objectives of the study and to solve several barriers for knowledge
creation, diffusion, transfer and application in organizations exist when SMEs
implement KM. According above reasons and through a preliminary literature
review, the study summarizes, reviews and criticizes the literatures to focus on
developing two models:
1.The
knowledge chain management- the creation, diffusion, transfer and application of
knowledge.
2.The
knowledge value chain - knowledge management must match corporate operating
process and along corporate value chain to create value for customers, thus KM
just can achieve end of corporate goal: customer satisfaction, and due to this,
corporation can develop a really suitable strategy and process for themselves.
Under
these two models, scholars and practitioners argued that the greatest challenge
for the manager of intellectual capital is to create an organization that can
share the knowledge and measure KM performance. When skills belong to the
company as a whole, they create competitive advantages that others cannot match
(Stewart, 1997).
Next,
the study will emerge a detail literature review from definition and characters
of knowledge, various definitions of KM, knowledge chain and knowledge value
chain management, integrated conceptual KM models for SMEs and KM performance
measurement as following:
Defining
knowledge accurately is difficult. However, it is well agreed that knowledge is
an organized combination of ideas, rules, procedures, and information. In a
sense, knowledge is a "meaning" made by the mind (Marakas, 1999, p.
264). Without meaning, knowledge is inert and static. It is disorganized
information. It is only through meaning, information finds life and becomes
knowledge.
What
is the difference between data, information and knowledge?
This
is a term which is very easy to be confused by people so far, Information and
knowledge are distinct based on their internal organization. Information is
disorganized, while knowledge is organized (Koniger and Janowitz, 1995). The
distinction between information and knowledge depends on users' perspectives.
Knowledge is context dependent, since "meanings" are interpreted in
reference to a particular paradigm (Marakas, 1999, p. 264).
In a sense,
knowledge is a "meaning" made by the mind (Marakas, 1999, p. 264).
Without meaning, knowledge is information or data. It is only through meaning,
that information finds life and becomes knowledge (Bhatt, 2000a).
Beijerse
(1999, 2000) define knowledge here as follows: “Knowledge is seen here as the
capability to interpret data and information through a process of giving meaning
to these data and information; and an attitude aimed at wanting to do so. New
information and knowledge are thus being created, and tasks can be executed. The
capability and the attitude are of course the result of available sources of
information, experience, skills, culture, character, personality, feelings,
etc.”
Knowledge
are combination of data and information and learning
Cohen and
Levinthal (1990) explain this fact in arguing that knowledge expansion is
dependent on learning intensity, and prior knowledge. In other words,
accumulated prior knowledge increases the ability to accrue more knowledge and
learn subsequent concepts more easily. Therefore, we argue that knowledge is an
organized combination of data, assimilated with a set of rules, procedures, and
operations learnt through experience and practice.
Knowledge
are capability and action
Murray
(http://www.ktic.com/topic6/13_term2.html) says for instance: "Knowledge is
information transformed into capabilities for effective action. In effect,
knowledge is action." This aspect of capabilities resulting from
information is something we also see at Weggeman (1997), but he adds some other
aspects: "Knowledge is a personal capacity that should be seen as the
product of the information, the experience, the skills and the attitude which
someone has at a certain point in time".
Explicit
vs tacit knowledge
This difference
was first introduced by the Hungarian chemist, economist and philosopher Michael
Polanyi. He stated that personal or tacit knowledge is extremely important for
human cognition, because people acquire knowledge by the active (re)creation and
organization of their own experience (Polanyi, 1966). Tacit knowledge is that
knowledge which cannot be explicated fully even by an expert and can be
transferred from one person to another only through a long process of
apprenticeship. Polany's famous dictum, "We know more than we can
tell", points to the phenomenon in which much that constitutes human skill
remains unarticulated and known only to the person who has that skill. Tacit
knowledge is the skills and "know-how" we have inside each of us that
cannot be easily shared (Lim, 1999).
Tacit
knowledge evolves from people’s interactions and requires skill and practice.
Nonaka and Takeuchi (1995) suggested that tacit knowledge is hidden and thus
cannot be easily represented via electronics. Tacit refers to hunches,
intuitions and insights (Guth, 1996), it is personal, undocumented,
context-sensitive, dynamically created and derived, internalized and
experience-based (Duffy, 2000).
Figure 2-1 shows that one
of the main constituents of organizational knowledge is
"interactions". In an organization where the number of interactions
between organizational members is kept to a minimum, most of knowledge remains
in the control of individuals rather than the organization. However, a large
part of knowledge is internalized within the organization through informal
get-together and interactions between employees (Bhatt, 1998). In this
interactive process, not only do individuals enrich their knowledge, but also
make a part of knowledge available for the organization that is generated as a
result of the interactions. In other words, the knowledge that is internalized
within the organization is not produced by any of the organizational members
alone, but created through their interactions.
Figure 2-1:
Relationship between individual knowledge and organizational knowledge
2.2
What is knowledge management?
Process
viewpoint
KM
is the process of creating, capturing, and using knowledge to enhance
organizational performance; KM is the management of the information, knowledge
and experience available to an organization─its
creation, capture, storage, availability and utilization─
in order that organizational activities build on what is already known and
extend it further (Mayo, 1998).
A common definition of KM
is: "The collection of processes that govern the creation, dissemination
and leveraging of knowledge to fulfill organizational objectives". KM is a
framework within which the organization views all its processes as knowledge
processes. (Ching Chyi Lee, Jie Yang, 2000)
Organizational view
KM
is about encouraging individuals to communicate their knowledge by creating
environments and systems for capturing, organizing, and sharing knowledge
throughout the company, Thomas M. Koulopoulos and Carol Frappaolo (2001) used
‘knowledge management is bring collective intelligence influence ability into
full play, to increase enterprise response and innovation ability as a concise
definition. An organization’s work with KM should focus on transposing tacit
knowledge into explicit knowledge and see to it that individual knowledge
becomes organizational knowledge. This can be explained not only by a need for
organizations to better manage knowledge by establishing core competencies for
individuals, judging success and performance indicators via recognition of
invisible assets, but also for organizations to strive to become an innovative
organization and a learning organization with a knowledge sharing culture
Value viewpoint
Sveiby
(http://www.sveiby.com.au/ knowledgemanagement.html) for instance puts the
emphasis on intangible assets when defining knowledge. He therefore defines
knowledge management as "the art of creating value from an organization's
intangible assets". Beijerse (1999) developed the definition of knowledge
here puts more emphasis on the importance of tacit knowledge, and he saw this as
its added value. He defined knowledge management as follows: “Knowledge
management is achieving organizational goals through the strategy-driven
motivation and facilitation of (knowledge-) workers to develop, enhance and use
their capability to interpret data and information (by using available sources
of information, experience, skills, culture, character, personality, feelings,
etc.) through a process of giving meaning to these data and information.”
KM
is an emerging set of organizational design and operational principles,
processes, organizational structures, applications and technologies that helps
knowledge workers dramatically leverage their creativity and ability to deliver
business value. In fact, KM is about people and the processes they use to share
information and build knowledge (Hanley, 1999).
People,
technology and knowledge viewpoint
Arthur
Andersen consulting group (1999) have defined KM= (P+K) S, P is
people (knowledge loader), K is knowledge (include data, information, knowledge
and intelligence), S is share, + is technology, this formula means KM structure
includes organizational co-sharing, application and practice. Information
technology (+) can help to construct KM and to accelerate the process of KM.
System
view
KM is mean
“enterprise build a management system for apply effective knowledge capitals,
accelerate products or services innovation, the system include knowledge
creation, knowledge circulation and knowledge value added three functions.”
(Se-Hwa Wu, 2001)
Strategy,
structure, culture and system viewpoint
KM is the
management of information within an organization by steering the strategy,
structure, culture and systems and the capacities and attitudes of people with
regard to their knowledge. KM includes the entirety of systems with which the
information within an organization can be managed and opened up (Beijerse,
2000).
Knowledge
Management interacts between technologies, techniques and people
Knowledge
management shapes the interaction pattern between technologies, techniques, and
people. For instance, IT can capture, store, and distribute information quickly,
but it has its limit on information interpretation. Organizations which have
been successful in obtaining long-term benefits from knowledge management, are
found to carefully coordinate their social relations and technologies (Bhatt,
1998).
Technological
solutions can be captured and grafted. But to manage knowledge, organizations
need to construct an environment of participation, coordination, and knowledge
sharing. In general, implementing knowledge management programs requires a
change in organizational philosophy.
In sum, KM focuses on
"doing the right thing" instead of "doing things right", KM
is a framework within which the organization views all its processes as
knowledge processes (Ching Chyi Lee, Jie
Yang, 2000). Therefore, the study review and criticize knowledge chain
management and knowledge value chain as follows:
2.3
Knowledge chain management
Beijerse
(1999, 2000) define knowledge here as follows: “Knowledge is seen here as the
capability to interpret data and information through a process of giving meaning
to these data and information; and an attitude aimed at wanting to do so. New
information and knowledge are thus being created, and tasks can be executed. The
capability and the attitude are of course the result of available sources of
information, experience, skills, culture, character, personality, feelings,
etc.” He didn’t point out what detail about “through a process of giving
meaning to these data and information” in his definition for knowledge, and
Bassie (1997) didn’t propose complete process and how to link gap of each part
of knowledge chain flows, Melissa M.
Appleyard, Gretchen A. Kalsow (1999) in their study presents a new
framework for thinking about knowledge diffusion within an innovative community.
They define innovation as the operationalizing of new ideas, and they define
knowledge diffusion as the movement of useful ideas between organizations.
Within an industry, innovation requires a firm to create knowledge and package
it into concepts that lead to the development of new products or processes, and
they consider these concepts to be useful ideas. This progression can be thought
of as occurring through a knowledge chain management (Figure 2-2).
Therefore,
this study deals with a field, which gets little or no attention in the research
done into knowledge chain management, In the first part of the study a
conceptual model (knowledge chain management (Figure 2-3) will be developed.
This model can be used to analyze the most important knowledge management
processes in corporation. The model is used for analyzing from knowledge
creation to its application, a quantum of knowledge progresses through four
primary stages: creation, diffusion, transfer and application of knowledge. The
attention that firm pay to this progression usually depends on the potential
economic return associated with the quantum of knowledge in question. In a
knowledge-intensive industry, such as the high-tech industry in Taiwan,
incredible variation exists across firms in terms of the systems they have in
place to manage the progression of knowledge along this chain. Even in a
fiercely competitive industry like the high-tech industry where product life
often ranges from one to two years, within an industry, innovation requires a
firm to create knowledge and package it into concepts that lead to the
development of new products or processes. And we consider these concepts to be
useful ideas.
For
more complete to describe knowledge flow in the chain, here I propose a modified
model as figure 2-3, from knowledge creation, diffusion, transfer to
application, some firms can further to make knowledge innovation, some firms can
reuse knowledge to form a feedback to create new knowledge. Thus knowledge will
form a cyclic circulation to accumulate knowledge.
In
the whole process of KM, the innovation activity fits the product
differentiation strategy, which can enable corporation gains the
competitiveness, while reusing knowledge fits low cost strategy, by which
competitiveness gained again. Generally, managing knowledge assets should, like
patents, trademarks and licenses, even add knowledge to the balance sheet.
Figure 2-3: The knowledge chain
Source:
modified from Melissa M. Appleyard, Gretchen A. Kalsow, 1999
To
help define some of the considerations that firms face when developing their
strategy for management of knowledge to increase production, reduce cost and
increase customer satisfaction, this study examines the link of the chain: how
knowledge from creation to applications and what is the gaps between them? To
fill the gaps for the successful management of this knowledge chain becomes a
distinguishing characteristic of leading firms, particularly in a
knowledge-intensive industry like the semiconductor industry. A firm's stock of
useful ideas, its technical prowess, depends not only on its internally
generated ideas, but also on the absorption of ideas that originate outside of
its boundaries. Therefore, this study also examines the flow of useful ideas
between firms and constructs a new framework for the forces that drive knowledge
creation, distribution (diffusion), transfer to application.
2.4
The knowledge value chain
Another
good example of the link between the definition of knowledge and the way to look
at the management of knowledge is the work of Mathieu Weggeman (1997). Central
to Weggeman's work is "the knowledge value chain". In the process of
knowledge management, Weggeman distinguishes four successive constituent
processes (Figure 2-4).
First,
the strategic need for knowledge needs to be determined. Second, the knowledge
gap needs to be determined. This is the quantitative and qualitative difference
between the knowledge needed and that available in the organization. Third, this
knowledge gap needs to be narrowed by developing new knowledge, by buying
knowledge, by improving existing knowledge or by getting rid of knowledge that
is out of date or has become irrelevant. Fourth, the available knowledge is
disseminated and applied to serve the interest of customers and other
stakeholders.
It
is important to notice that knowledge management here does not refer to
information technology only. Attention is also being paid to strategic,
personal, organizational and cultural aspects, which are at least as important
as the technological side of the story. With this in mind, Weggeman defines
knowledge management as "arranging and managing the operational processes
in the knowledge value chain in such a way that realizing the collective
ambition, the targets and the strategy of the organization is being
promoted".
Knowledge
value chain model
One
good more example of the link between the definition of knowledge and the way to
look at the management of knowledge is the work of Ching Chyi Lee and Jie Yang
(2000). Central to their work is also "the knowledge value chain". In
the process of knowledge management, Lee and Yang distinguishes five successive
constituent processes (Figure 2-5: Knowledge
value chain model).
1. knowledge acquisition:
Organizational information acquisition through searching can be viewed as
occurring in three forms (Huber, 1991):
(1)
scanning; (2) focused search; and (3) performance monitoring.
1.
knowledge innovation:
(1) from tacit knowledge
to tacit knowledge, which is called socialization;
(2) from tacit knowledge
to explicit knowledge, or externalization;
(3) from explicit
knowledge to explicit knowledge, or combination; and
(4) from explicit
knowledge to tacit knowledge, or internalization.
3.
knowledge protection: (1) legal and IT protection (2) corporations should
contract with employees regarding confidential information and their tenure in
case of they leave (3)develop other protocols and policy guidelines which
recognize and promote rights of knowledge (4) and then implement them by staff
awareness and education campaigns.
4.knowledge integration:
This cumulative manufacturing, sales, and service experiences from
different departments, together with information gathered from outside sources,
can be integrated into the KVC of the organization, which is a inter-sub-KVC
integration process, eventually being the base of KM infrastructure.
5.knowledge
dissemination: (1) through systematic transfer: to create a knowledge-sharing
environment (2) to show its commitment for sharing knowledge (3) to foster the
employee's willingness to share and contribute to the knowledge base. (4) Reward
structures and performance metrics need to be created which benefit those
individuals who contribute to and use a shared knowledge base. (5) Those who
excel at knowledge sharing should be recognized in public forums such as
newsletters and e-mails. (6) By effective communication.
Differences
among competitor value chains are a key source of competitive advantage. In
competitive terms, value is the amount customers are willing to pay for what a
corporation provides them. Value is measured by total revenue, a reflection of
the price a corporation's product commands and the units it can sell. A firm is
profitable if the value it commands exceeds the costs involved in creating the
product (Porter, 1985). Creating value for customers that exceeds the cost of
doing so is the goal of any competitive strategy. Value, instead of cost, must
be used in analyzing competitive position since corporations often deliberately
raise their cost in order to command a premium price via differentiation.
Employing Porter's value chain analysis approach, we developed a knowledge value
chain model.
Knowledge
value chain consists of KM infrastructure (CKO & management, knowledge
worker recruitment, knowledge storage capacity, customer/ supplier relationship)
and the KM process's activities and knowledge performance. These infrastructure
components and activities are the building blocks by which a corporation creates
a product or provides service valuable to its customers. Knowledge performance
can be measured in two categories (van Buren, 1999). One is financial
performance. However, financial assessments such as ROI are particularly
difficult to make for KM activities. The other is non-financial measures
including operating performance outcomes and direct measures of learning.
Examples of operating performance measures include lead times, customer
satisfaction, and employee productivity. Learning measures include such items as
the number of participants in communities of practice, employees trained, and
customers affected by the use of knowledge.
As
the value chain itself implies, each element of activity can create value and
then all the value flows to the endpoint of the business value chain and joins
together, forming the overall value of business, which is usually expressed as a
margin (see Figure 2-6).
![]() |
Figure 2-6: Relationship between
business value chain and KVC
Source: Ching Chyi Lee and Jie Yang
(2000)
By
analyzing the above, we might note that competence is after all the measurement
of each sub-KVC. That is the reason why we feel that the core competence of the
corporation should be employed as the key non-financial measure of knowledge
performance.
KM
is a process that transforms information into knowledge, KM guides the way a
corporation performs individual knowledge activities and organizes its entire
knowledge value chain. It is suggested that competitive advantage grows out of
the way corporations organize and perform discrete activities in the knowledge
value chain, which should be measured by the core competence of the corporation
(Ching Chyi Lee, Jie Yang , 2000). In the end, we would raise another assumption
for further discussion, so that for KM to "open the black box" of a
corporation and examine its intricate details. We assumed that the corporation
should be treated more or less as a box of tricks producing the predictable
outputs of knowledge-based products and services from specific inputs of
information or/and knowledge.
For
better to understand details of knowledge in knowledge chain management and KVC,
there are detailed descriptions (from knowledge creation, distribution, transfer
to application) in next sections.
2.5
knowledge creation
Even though some researchers argue that knowledge creation is basically
an individual thought process (e.g. Crossan et
al., 1999), some others have recently shown that creativity can be learnt
and taught (Marakas and Elam, 1997). In either case, we believe that knowledge
creation in the organization is led through individuals, i.e. an organization
creates knowledge through its individuals, who learn and generate new
“realities” by breaking down rigid thinking and assumption (e.g. Argyris and
Schon, 1978).
Knowledge creation is not a systematic process that can be planned and
controlled (Lynn et al., 1996; Mayo,
1959, p. 59). The process is, rather, continuously evolving and emergent.
Motivation, inspiration, and pure chance play an important role in knowledge
creation. The success of knowledge creation is a chance event, based on the
convergence of the world reality and the structure of one's thinking (Horgan,
1996). Creation is only a fearful possibility of finding a meaningful relation
in uncovered combinations (Horgan, 1996, p. 153).
The
knowledge creation process is evaluated based on its originality and adaptive
flexibility to facilitate the solution of a problem in different contexts. The
process of knowledge creation and evaluation not only requires organizations to
alter their cognitive frameworks (Weick, 1979), but also forces organizational
members to view reality in new perspectives (Weick, 1995).
Nonaka
& Takeuchi(1995)assume
organizational knowledge creation that is a spiral process , call as
‘knowledge spiral’ (Table 2-1).
![]() |
Moreover,
knowledge creation start from individual layer, raise more and more and enlarge
interaction range, diffuse from individual to community, organization even
inter-organization. Therefore, knowledge creation diffuses more and more from
individual layer to community, organization, last to external organization. In
process, constant knowledge integration activity exists among socialization,
externalization, combination and internalization. Therefore, four different
kinds of knowledge are being created, over and over again.
Leonard-Barton
(1995, 1998) assume there are four items of knowledge creation:
1.
Shared Problem Solving: now
2.
Implementing & Integrating: inside
3.
Experimenting & Prototyping: future
4.
Importing Knowledge: outside
Knowledge
creation activity is get through above four activities, and accumulate or create
out core competence.
2.6
Knowledge diffusion
Melissa
and Gretchen (1999) defined knowledge diffusion as the movement of useful ideas
between organizations. Knowledge needs to be distributed and shared throughout
the organization, before it can be exploited at the organizational level (Nonaka
and Takeuchi, 1995). In reality, distribution and sharing knowledge is not an
easy task (Davenport, 1994). To what extent a firm succeeds in distributing
knowledge depends on organizational culture and the amount of explicit knowledge
available in the firm.
An
organization relying on traditional control and authority relationships finds it
difficult to distribute knowledge. Because a management mentality on supervision
and order often limits the opportunities for the formation of social-units and
groups to come together, considered necessary to convert individual knowledge to
organizational knowledge (Argyris and Schon, 1978; Huber, 1991). If knowledge
distribution channels are informal, developed based on trust and cooperation,
knowledge distribution can be quicker and honest, and consequently, it can be
put to a higher level of scrutiny.
Easy
degree of knowledge diffusion influence by amounts and high and low layers of
co-knowledge very large, the more and higher layers of organizational
co-knowledge then the easy for organizational knowledge diffusion.
Common
knowledge is one of necessary key factor of KM, Grant(1996)assume
knowledge diffusion depend on common knowledge. Co-knowledge include common
knowledge elements to all organizational members, like Nonaka & Takeuchi(1995)submitted
‘redundancy’, that is overload information need for organizational members
operation, make person can enter other’s function border.
Grant(1996)sort
five layers for common knowledge style in his study:
1.
Common language
2.
Other style of symbol communication
3.
Expertise knowledge of common base
4.
The meaning of co-sharing
5.
Recognize of personal knowledge domain .
In
practice, enterprise can through project-groups, team-cooperation or
master-slave way to diffuse individual knowledge to participate more and more,
in advance to diffusion into organization-wide. Some enterprises even through
internal training way to normalize knowledge diffusion.
Knowledge
diffusion strategy
The
depiction of the current-like nature of knowledge diffusion is presented in
figure 2-7, Melissa M. Appleyard, Gretchen A. Kalsow (1999) assumed
that a firm's position depends on its technical prowess, or the aggregation of
the experiences of the inventors it employs and other resource commitments.
Knowledge diffusion between firms can be thought of as a particle in the current
moving from one firm's position to another. Melissa M. Appleyard, Gretchen A. Kalsow (1999) hypothesize
that the attractive forces across firms with similar technical prowess overpower
the forces attracting companies with dissimilar technical prowess. In Figure
2-7, the arrows demonstrate the internal and external forces at work, and their
hypothesis suggests that knowledge should diffuse more readily across
organizations with similar attributes, i.e. in the same location of a
technological current.
Figure
2-7: The fluid dynamics framework of knowledge diffusion
Source: Source: Melissa M.
Appleyard, Gretchen A. Kalsow, 1999
2.7
Knowledge transfer
According
to Marshall et al. (1996), this implies the transfer of knowledge and expertise
throughout the organization within departments, plants, and countries and across
national borders. As Garvin (1993) suggests, for learning to be more than a
local affair, knowledge must be developed, retained and spread effectively
throughout the organization, on a national as well as global scale. New
knowledge is created by people who share and transfer their knowledge and
expertise throughout the organization from individual to individual, individual
to a team or group, team or group to individual, or team or group to team or
group.
According
to Davenport and Prusak (1998, p. 101), the transfer of knowledge then involves
both the transmission of information to a recipient and absorption and
transformation by that person or group. To be of value to the organization, the
transfer of knowledge should lead to changes in behavior, changes in practices
and policies and the development of new ideas, processes, practices and
policies. This makes it imperative for organizations to secure the efficient use
and application of the transferred knowledge. The successful transfer of
knowledge and expertise then around a business requires not just the
establishment of networks but also the transfer of people. People have to be
moved in order to get deep-seated, deep-routed ideas and knowledge into
circulation and to understand particular operations in specific locations (Prusak,
1998).
When
organization cognize lack of some knowledge within organization, it will produce
“knowledge gap”, therefore organization need bring in or transfer into
knowledge. Gilbert & Gordey-Hayes (1996)submit five stages mode of knowledge
transfer as follow:
1.
Acquisition
2.
Communication
3.
Application
4.
Acceptance
5.
Socialization
Gilbert
& Gordey-Hayes (1996) assumed knowledge transfer does not happen statically,
it must through constant dynamic learning just can reach goal. Besides, Harem,
Von Krogh & Roos (1996) assume knowledge concept of knowledge transfer
process can separate as four categories, have or not of these knowledge will
affect degree of knowledge transfer:
1.
To understand scarce knowledge
2.
To know knowledge about others’ knowledge
3.
Behavioral knowledge
4.
Task-oriented knowledge.
Nonaka
& Takeuchi(1995)from
tacit and explicit knowledge interaction gain four different knowledge transfer
mode as list below:
1.
Socialization:
from tacit to tacit through sharing experience to reach tacit knowledge transfer
process.
2.
Externalization:
from tacit to explicit, tacit knowledge through metaphor, analogy, concept,
assumption or mode to represent.
3.
Combination:
from explicit to explicit, systemization concept to form knowledge system
process, involve combining different explicit knowledge system.
4.
Internalization:
from explicit to tacit, use language, story transmit knowledge or build as
documents and manual all help for transfer explicit knowledge to tacit
knowledge.
2.8
Knowledge application
To
have value knowledge must be applied within a specific business context to
create value. This will be done differently depending on the industry, however
the underlying processes are often very similar, drawing on people with diverse
expertise and knowledge both to enhance existing value chains, and to create new
ones. Specific examples where knowledge is applied to create value include
product development, process enhancement, marketing, and all client
interactions.
Knowledge management as a management tool
KM is often described as a management tool. More precisely, it is
described either as an operational tool or as a strategically focused management
tool.
Knowledge management as an information handling tool
Knowledge
is often regarded as an information-handling problem. It deals with the
creation, management and exploitation of knowledge. Some of the literature fits
into a definition of KM that consists of separate but related stages.
Knowledge management as a strategic management tool
KM
can be seen as a way to improve performance (Ostro, 1997; Bassi, 1997),
productivity and competitiveness (Maglitta, 1995). A way to improve effective
acquisition, sharing and usage of information within organizations (Maglitta,
1995). A tool for improved decision-making (People Management, 1998; Cole-Gomolski,
1997a, 1997b); a way to capture best practices (Cole-Gomolski, 1998); a way to
reduce research costs and delays (Maglitta, 1995) and a way to become a more
innovative organization. (People Management, 1998; Hibbard, 1997)
Innovation/creation
KM applications
There
is still a role for individual innovation; however, innovations are increasingly
coming from the marriage of disciplines and teamwork. This category of knowledge
management is best summarized by Nonaka (Nonaka and Konno, 1999) when he says,
“Knowledge is manageable only insofar as leaders embrace and foster the
dynamism of knowledge creation. The innovation/creation of new knowledge is the
most popular topic in today's management literature. The focus of the business
and KM applications in this element is on providing an environment in which
knowledge workers of various disciplines can come together to create new
knowledge. The most common application referenced in the literature is the
creation of new products or company capabilities.
2.9
An integral conceptual knowledge management model for SMEs
Definition
of SMEs
Small and medium-sized companies,
meaning those that employ less than 500 people, are an economic force that
should not be neglected. In Germany, for example, much of the recent economic
growth has come from organizational form. According to statistics of the
Institut für Mittelstandsforschung, 97.9 percent of German companies fall
within this boundary, with an estimated 2.7 million jobs (41.6 percent of
Germany's current jobs) being dependent upon them. Furthermore, 36 percent of
all German industrial investments are being made by small and medium-sized firms
(Wimmer and Wolter, 2000).
The
forms of knowledge in SMEs
Small and medium-sized companies often
experience erosion of knowledge that can have many forms. The most obvious is
the leaving of a key employee, whether it is via retirement or leaving to work
for a competitor's firm. In these instances, and for smaller firms in
particular, Barchan (1999) states that:
...
you lose more than that person's knowledge. You also lose any investments you
have made in that person's professional development and competence - unless you
find ways to capture it.
Other
forms of knowledge erosion are particularly threatening to smaller firms.
Problems of succession in family-owned businesses can result in the abrupt
crippling of a company if its owner decides to quit or dies.
Aside
from these life-threatening issues, smaller companies are also often battling
the problems associated with acquisition, lay-offs, and other economic factors
that can lead to major knowledge erosion when key employees leave the company.
Retaining and acquiring knowledge in SMEs Smaller firms can employ many
techniques for retaining knowledge, these techniques include:
training;
job rotation; maintaining a repository of "lessons learned"; expansion
management;
recruiting
and human resource management; mentoring; knowledge maps; knowledge databases;
best practice sharing; customer relationship management; e-Business; intelligent
agents.
Knowledge
construction and creation (Figure 2-9) is a key element of effective KM. This
aspect of KM identifies what is constituted as knowledge and how such knowledge
is developed in the organization and its employees. Sternberg (1999) indicates
that successful SMEs are characterized by creating new knowledge within the
process of innovation. Embodiment and dissemination of knowledge is seen as
important for KM in SMEs as developing tacit knowledge into explicit knowledge
and diffusing such knowledge is essential in organizations with scarce
resources.
The
main objective of KM is its "use" or benefit (Figure 2-9). Demarest
(1997) describes "use" as ultimately "the production of
commercial value for the customer". However, Wilkinson and Willmott (1994)
argue that business improvement methods in general must widen their objectives
to embrace the mutually supporting objectives of increased business and employee
benefits. Innovation is a key "use/benefit" of KM. Henry and Walker
(1991) and Sternberg (1999) link innovation to "new knowledge" or new
constructed knowledge by showing how tacit knowledge can become explicit
knowledge.
Klobas
(1997) illustrated key relationships in a diagram, from which Figure 2-10 is
drawn.
Figure 2-10: A framework of characteristics from which to examine KM in small organizations
Source: Klobas (1997)
Several
thoughtful practitioners have developed guidelines for successful KM, putting
technology into its rightful place as an aid rather than an outcome. If an
organization's uniqueness and value are derived from its unique knowledge, there
is a need to create new knowledge and share the knowledge that exists. But
knowledge is situation-specific, and much knowledge is not shared but held by
individuals. Organizations therefore need processes and systems to promote
knowledge acquisition and knowledge sharing as well as knowledge creation.
Guidelines for KM, based on these needs, assume large, international
organizations, but differences in scale and scope of operation of smaller
organizations may result in differences in these organizations' needs for KM
processes and systems. We will therefore review prominent guidelines before
drawing on them, along with theory and practice, to develop a framework of
characteristics from which to examine KM in small organizations.
Beijerse
(2000) proposed three findings for his empirical study of SMEs:
1.
Strategy: hardly any systematic knowledge management policy on strategic level
in small and medium-sized companies
2.
Structure and culture: hardly any systematic knowledge management policy on
tactical level in small and medium-sized companies
3.
Systems: 79 different instruments with regard to knowledge management on
operational level in small and medium-sized companies
To summarize the findings,
can conclude that there is no explicit policy that is targeted at strategic
knowledge management within the 12 companies studied. Generally no goals are
included in the company strategy - if this is even formulated - with regard to
direct monitoring of available and necessary knowledge, nor of the development,
acquisition, locking, sharing, utilisation or evaluation of knowledge. This
brings with it that there is no explicit policy on a tactical level - that of
the organisation structure and company culture - in order to make the structure
facilitating to development, acquisition and locking of knowledge or to make the
culture motivating with a regard to sharing and utilising knowledge.
In
sum, current KM instruments for SMEs is enough, the urgent need of KM for SMEs
is how to measure KM performances? Next section will illustrate these
measurements as follows.
2.10
The measurements of KM performances
Organizations generally do
not sufficiently recognize knowledge contributions because the conceptualization
and measurement of knowledge capital as a primary organizational asset remains
rudimentary (Chinying Lang, 2001). Extensive traditional systems allow managers
to track their use of economic capital but such systems cannot easily
accommodate knowledge capital. Without realistic and robust measures of
knowledge capital, managers will revert to economic capital. Corporations that
are experimenting with such measures include the Canadian Imperial Bank of
Commerce, Skandia, Dow-Corning, and so on. Skandia details information such as
quality and quantity of customer relationships, training and development
investments to improve operational processes, relationships with partner firms
etc. in categories such as human focus, customer focus, process focus, renewal
and development focus, and so on. Across units, these categories are tracked in
terms of different variables tied to their strategic importance in specific
business units. The American Productivity and Quality Center in Houston is
similarly trying to track and benchmark such efforts in leading firms (Miles et
al., 1998). Suffice to say these efforts are very much in the very earliest
stages of development.
If employees are evaluated
and compensated based on what they know, it may be difficult to get them to
share their knowledge for the common good. Thus, it is important to reward
individuals for sharing knowledge and using collective knowledge. Because
Burson-Marstellar workers are compensated based on how much they can charge
clients, people have to be known across their practices in order to remain
sufficiently billable. This culture at Burson-Marstellar is also reinforced
through meetings aimed at getting geographically dispersed groups to work
together (Schwartz, 1999).
For
the measurements of KM performances, Davenport & Prusak (1998) in their
study pointed out: there are five criteria can be a successful or failed
reference for corporate KM measurement:
1.
Growth of plan relative resource includes employees and budget.
2.
Content of knowledge and growth of utilization frequency, i.e. document amount
in database, user access times, or how many people participate discussion type
database.
3.
Besides one or two people’s efforts, this plan can sustain or not? In other
words, this plan have not personal characteristic. But attribute all employees
common mission.
4.all
employees can accept ‘knowledge’ and ‘knowledge management’ concept or
not?
5.
Financial return possibility, like self of KM or corporate whole benefits
return.
Knowledge
performance can be measured in two categories (van Buren, 1999). One is
financial performance. However, financial assessments such as ROI are
particularly difficult to make for KM activities. The other is non-financial
measure including operating performance outcomes and direct measures of
learning. Examples of operating performance measures include lead times,
customer satisfaction, and employee productivity. Learning measures include such
items as the number of participants in communities of practice, employees
trained, and customers affected by the use of knowledge.
A
measurement model for knowledge
Businesses are
increasingly concerned with knowledge and managing the knowledge that they have
within their organization. On the basis of the theoretical insights and
understanding of the challenges facing companies worldwide, Lim,
Ahmed, and Zairi, (1999) posit a model to facilitate monitoring and
tracking of progress so as to allow leveraging of positive effects from managing
knowledge. They propose a model founded upon a continuous improvement
methodology. The model utilises a Deming type PDCA (Plan-Do-Check-Act) cycle.
They explain below what each of these of these terms connotes with respect to
managing knowledge:
(1)
Capturing or creating knowledge (plan).
(2)
Sharing knowledge (do).
(3)
Measuring the effects (check).
(4)
Learning and improving (act).
In order to operationalise
the model it is necessary to define the key areas that an organisation must
direct attention so as to capture all aspects for effective knowledge
management. These key elements are captured by Ahmed,
Lim, Zairi (1999) proposed a COST model (figure2-11), which is
elaborated next. In essence there are four perspectives to look at:
Customer:
what can we learn from our customers? How can we learn from our customers? How
can we become effective in learning from our customers?
Organization:
What are the key skills needed to make the business a success? Who has these
skills? How are these skills harnessed, and shared? How are we doing compared to
other organizations?
Suppliers:
how are our supplier links? Does the organization obtain an optimum quality,
cost and delivery service from the suppliers? Does the organization conduct
supplier quality programs?
Technology:
how many computer terminals (which are hooked up for information transfer) are
available per employee? And are these links being used effectively within the
customer-organization-supplier?
Figure 2-11: COST model
Source:
Pervaiz K. Ahmed, Kwang K. Lim, Mohamed Zairi (1999)
Combining the COST model
and the four steps for KM, Ahmed, Lim, and
Zairi (1999) obtained the matrix outlined in (figure2-12).
This matrix helps in
obtaining a deeper understanding of how KM affects the
organization as a whole and it also prompts practitioners to look at all
the various aspects of implementing KM. It forces the practitioner to consider
all factors, "soft" as well as "hard" factors and it also
forces managers to link KM to the overall organization's policy and strategy. It
also allows managers to list out the important functions that support knowledge
management and to prioritize them. The suggested measures are by no means
complete, but we list them as a catalyst for mangers to think of other measures
that are suited to their organization's current environment
(Ahmed, Lim, and Zairi,1999).
Customer
matrix
By comparing horizontally
across the matrix, the user can be prompted to think of further measures that
would indicate the success or failure of KM activities. These could include:
1.
customer satisfaction;
2.
customer retention;
3.
customer relations.
Organization
matrix
Organization
matrix is to give people a process to create new
knowledge, hence measures could include; number of workers participating in
process and number of workers rotated. Other measures that look at the cultural
aspect of behaviours and attitudes that support the environment of trust and
collaboration, hence a measure to ensure knowledge is being captured and shared
effectively is much needed.
Supplier
matrix
This is part of the
knowledge exchange that very much forms the foundation of knowledge management.
Measures which maybe useful include:
1.
supplier meetings;
2.
supplier development programmes;
3.
benchmarking activities between suppliers.
Technology
matrix
Is there an overload of
information? Is all of it relevant? How can we "police" the
information posted out, in terms of the accuracy of information? (Ahmed,
Lim, Zairi, 1999)
In sum, measuring
knowledge is vital for companies to ensure that they are achieving their goals.
Measurement provides an important mechanism to evaluate, control and improve
upon existing performance. Measurement creates the basis for comparing
performance between different organizations, different processes, different
teams and individuals.
A linkage between
strategy, actions and measures is essential and unless companies adapt their
measures and measurement systems to facilitate compatible introduction
implementation will fail to reap the expected benefits (Dixon et al.,
1990). Critically, adoption of the wrong measures and wrong measurement system
can severely circumvent performance. Thus care and diligence must be excercised
in the development of a measurement system for programs such as knowledge
management, since dysfunctional penalties of an inappropriate system can be
extremely heavy.
In
this Paper, the scope of research would be solely on secondary data review. It
include reviews of books in libraries, downloaded articles from reputable
journals and searches over the Internet for useful websites and information.
Through literature review and critique, the study developed some improvement KM
model and integral models for SMEs to better implement KM.
4.Critique
4.1
How knowledge is to be managed? What is suitable definition of KM in this study?
Knowledge
management is a specification of management as such now we know what knowledge
is and we know what management is. It is now time to look at what it means to
manage knowledge. Beijerse (1999, 2000) defined management as the
strategy-driven motivation and facilitation of people, aimed at reaching the
organizational goals, and defined knowledge as the capability to interpret data
and information through a process of giving meaning to these data and
information. When we look at this definition it becomes clear that knowledge
management is somewhat more specific than management as such. Whereas management
focuses on motivating and stimulating people, knowledge management focuses on a
certain aspect of people, i.e. their knowledge.
A
common definition of KM is: "The collection of processes that govern the
creation, dissemination and leveraging of knowledge to fulfill organizational
objectives". KM is an emerging set of organizational design and operational
principles, processes, organizational structures, applications and technologies
that helps knowledge workers dramatically leverage their creativity and ability
to deliver business value. In fact, KM is about people and the processes they
use to share information and build knowledge (Hanley, 1999). Marshall (1997)
considered that KM refers to the harnessing of "intellectual capital"
within an organization.
KM
focuses on "doing the right thing" instead of "doing things
right". In my thinking, KM is a framework within which the organization
views all its processes as knowledge processes. It is important to notice that
knowledge management here does not refer to information technology only.
Attention is also being paid to strategic, personal, organizational and cultural
aspects, which are at least as important as the technological side of the story.
With this in mind, here defines knowledge management as "arranging and
managing the operational processes in the knowledge value chain in such a way
that realizing the collective ambition, the targets and the strategy of the
organization is being promoted".
4.2
Integrated improvement models for KM
In practices of reviewing exist
literatures and case studies, what are their strength and weakness. The study
derived some useful theories and practices model for SMEs, and try to build some
improvement models as following:
The
gap fulfilling-COST model of Knowledge chain management
The first model
is the gap fulfilling-COST model of Knowledge chain management (Figure 4-1):
Knowledge is like
a river, it must be flowed smoothly in corporation just can increase knowledge
sharing and further transfer, apply, innovate and reuse knowledge to be a cycle
to recreate new knowledge. Therefore, the aim of the study here is to find out
the gap and to fulfil it to link knowledge flows to build a bridge and to
construct an integrated KM mode for SMEs. I propose five solutions to narrow and
fill gaps between knowledge seekers and providers as follows:
Gap1:
between knowledge entry and creation (solution: Motivation,
inspiration, pure chance, interaction, developing new knowledge, improving
existing knowledge or by getting rid of knowledge that is out of date or has
become irrelevant and buy-in. I.e. learning, teaching & training,
interaction of interpersonal and people-machine, outsourcing)
Gap2:
between knowledge
creation and diffusion (solution: interaction,
collaboration, and communication. I.e. knowledge database and community.)
Gap3:
between knowledge
diffusion and transfer (solution: communication and
trust. I.e. social intercourse and community of practice)
Gap4:
between knowledge transfer and knowledge application (solution: commitment and
sharing. I.e. partnership, strategic action and sharing best of practice.)
Gap5:
between knowledge application and innovation or
reusing (solution: independence and cooperation, incentive. I.e. teamwork and a
clear & definite incentive measures.)
Furthermore, for creating
core competences, knowledge flows need to add value through COST model, then it
just useful and helpful to corporations to produce core competences. It also
means producing corporate intellectual capital (IC).
"Turning knowledge into action" is a unique way to fill gaps of
knowledge creation to diffusion to transfer to application.
Therefore, how to manage knowledge effectively and practice knowledge in
corporations first needs to fill knowledge gaps for smoothing and accelerating
knowledge flows, second needs to measure KM performances and to reach corporate
core competences to through COST (Customer,
Organization, Suppliers,
Technology)
model.
Customer:
customer satisfaction; customer retention; customer relations.
Organization:
Number of workers participating in process to create new knowledge and number of
workers rotated, cultural aspect of behaviors and attitudes, trust and
collaboration.
Supplier:
supplier meetings; supplier development programs; benchmarking activities
between suppliers.
Technology:
overload of information? Is
all of it relevant? How can we "police" the information posted out, in
terms of the accuracy of information? Reduces the cost of development of a new
product/service; increases the productivity of workers by making knowledge
accessible to all employees; therefore increasing employee satisfaction.
Figure
4-1: The gap fulfilling-COST model of Knowledge chain management
Because
of knowledge flows focus on action and operationalizing knowledge, that notion
centers on a starting point for Pfeffer and Sutton: even though we know so much
and are smart in developing great concepts we often benefit from it only
marginally, because of failure in putting knowledge into action. Perhaps a
heritage of the Taylorist distinction between knowing and doing in the
organization of labor? Interestingly, Pfeffer and Sutton (2001) explain how
typical knowledge management practices may make knowing-doing gaps wider. A
focus on technology and transfer of codified information, limited possibility to
transfer tacit knowledge using formal systems and lack of understanding of the
actual work among knowledge managers (staff department, etc.) are among them.
Thus knowledge should be a responsibility of everybody and basic ICT
(Information and Communication Technology) infrastructures are not enough.
A
central underlying notion from Pfeffer and Sutton is that knowledge is not
easily transferred within and across firms. Memory/heritage, fear, measurement,
and internal competition hamper putting knowledge into action. Even though the
focus is on closing the gap and untapping the human potential the analysis
covers somewhat more don'ts and how things go wrong than it offers guidance for
KM.
When
an employee gets sick, his or her knowledge is unavailable for the company for a
certain amount of time. In some cases, especially in small companies that depend
on each employee, such situations can become threatening to the overall
operation. The only effective way to prevent such knowledge gaps is the
systematic training and rotation of employees in complementary divisions. Only
if other employees are able to take over, without a long period of "having
to figure out how to do the job", can smaller companies survive the
unpreventable short-period loss of an employee.
Modified
knowledge value chain model
For
fill the knowledge gaps, in practice, we can use the four main aspects of the
knowledge value chain - i.e. determining the knowledge gap (between needed and
available knowledge), developing and/or buying knowledge, sharing knowledge and
evaluating (the use of) knowledge As figure 4-7 illustrate in the model: First,
the strategic need for knowledge needs to be determined. Second, the knowledge
gap needs to be determined. In the third place, this knowledge gap needs to be
narrowed by developing new knowledge, by buying knowledge, by improving existing
knowledge or by getting rid of knowledge that is out of date or has become
irrelevant. Fourth, the available knowledge is disseminated and applied to serve
the interest of customers and other stakeholders. It is important to notice that
knowledge management here is combine knowledge chain and two kind of knowledge
value chain to increase KM performance and form a cyclical continuous process.
Figure
4-2: Modified knowledge value chain model,
Source:
modified from Mathieu Weggeman (1997), Ching Chyi Lee and Jie Yang (2000)
4.3
How these mixed together for SMEs to implement KM successfully?
Establish
the linkage of management of knowledge and corporate process and strategy in
organizational perspective, like knowledge chain, knowledge value chain, and the
integral KM models for SMEs developed in literature review, all for smoothing,
accelerate and adding value for SMEs to implement KM successfully. Which aspects
have been deeply researched from point, line to plane and from theory to
practice.
An
integral KM model for SMEs
Figure
4-3: A more complete framework for the KM
implement in SMEs
The
KCM and KVC have been developed to assist organizations to understand the range
of KM options, applications and technologies available to them. The KCM and KVC
is a model, which helps organizations understand KM in its broadest sense. It
provides a view of the totality and complexity of the various KM theories, tools
and techniques presented in the literature. It also provides a framework in
which management can balance its KM focus and establish and communicate its
strategic KM direction. Whether taking an organizational, national or global
view of knowledge management, the question will remain: “What is the right mix
of KM-related investments now and for all of our tomorrows?”
Organizational
conditions, attitudes, decisions, and activities believed to be crucial for
effective knowledge management in organizations can be classified in six
categories or factors: the balance between the need for knowledge and the cost
of knowledge acquisition; the extent to which knowledge originates in the
external environment; the internal knowledge-processing factory; internal
knowledge storage; use and deployment of knowledge within the organization; and
attention to human resources in knowledge processes (Klobas, 1997).
Obviously
it is important to examine what knowledge can relate to in an organization. In
principle, one should have knowledge of everything, but from a viewpoint of an
analysis of the organization, it is expedient to define a number of so-called
knowledge domains in which the entrepreneur can target himself in particular.
Five knowledge domains are defined here: organization, marketing, human resource
management, technology and R&D.
Knowledge
with regard to the organization has to do with things such as management,
policy, culture, internal processes, cut backs, best practice sharing, alliances
and teamwork. Knowledge with regard to the human resource management, such as
personnel, career planning, incentive knowledge sharing mechanism, When thinking
of marketing knowledge, one should think of things such as competition,
suppliers, customers, markets, target groups, consumers, clients, users,
interested parties, sales, after sales, trade and distribution and relation
management. When thinking of technological knowledge, one should think of
technological development, information and communications technology,
knowledge maps; knowledge databases
and e-Business. When thinking of R&D knowledge one should finally think of
knowledge of products, research and development, core competencies, product
development and assembly.
5.
Conclusions and Recommendations
While
many published anecdotes celebrate the success of knowledge-management efforts
in large companies, there are clearly many methods for achieving success in SMEs
as well. Technology has in many instances leveled the knowledge-management
playing field. However, there are also many conventional knowledge-management
techniques that afford additional gains for SMEs. On the other hand, SMEs have
the overwhelming advantage of being intimate and, since knowledge management
initiatives live from the buy-in of knowledge holders within the company, this
fact makes SMEs the perfect place quickly and effectively to try some of the
techniques because buy-in can be generated without as much effort as is needed
in bigger corporations.
Many
projects can be started at a grass-roots level, with employees gaining
enthusiasm quickly because results can be realized in a short period of time.
One key employee can often lead the whole company through an initial
knowledge-management project, especially if he or she is the owner of that
company. In these SMEs, the owner is then not only the chief operating officer
but also the chief knowledge officer, because he or she pushes these initiatives
through. Those of us engaged in knowledge management often take for granted the
resources needed to establish and run knowledge management efforts. Many
companies should see knowledge management, both externally and internally, as a
major opportunity to utilize their potential to the fullest degree possible.
Utilizing the knowledge the company has about itself and its customers and
suppliers, and applying it to the marketplace. Then, these companies, even if
very small, have the opportunity to outmaneuver all bigger players and come in
ahead of last year's champions. For the limited resources, SMEs especially need
step by step to construct their KM framework to link business process and
strategy, the study proposed two approaches: KCM and KVC to fit the goal for
SMEs.
Summaries
In
general, organizations may use technologies or may take an informal approach in
knowledge management. But to sustain long-term competitive advantage, a firm
needs to create a fit between its technological and social systems. Technologies
can be used to increase the efficiency of the people and enhance the information
flow within the organization, while social systems such as communities of
practice improve on interpretations, by bringing multiple views on the
information. Knowledge management is a comprehensive process of knowledge
creation, validation, presentation, distribution, transfer and application. The
coordination of these phases is critical; because short-circuiting any of the
above phases may result in less than optimum outcome of the knowledge
management.
The
real task of knowledge management is to connect people to people to enable them
to share what expertise and knowledge they have at the moment, given that
cutting edge knowledge is always changing. The solution is not to try to
warehouse everything one's workers ever knew. Instead, the goal is to connect
questions to answers, or to people who can help find answers (Stewart, 1997). To
enable competencies for building communication in people networks, and to
promote on-the-job learning and knowledge sharing, two new architectures will be
necessary. First, a new IT architecture is needed that includes new languages,
categories, and metaphors for identifying and accounting for skills and
competencies oriented toward problem-solving and representation, rather than
output and transactions. Second, there needs to be a new organizational
architecture that is more social, transparent, open, flexible, and respectful of
the individual users ((Josephine Chinying Lang, 2001). That is, both
technological and organizational initiatives are needed; if aligned and
integrated, they can provide a comprehensive infrastructure to support knowledge
management processes productively. Only by balance between technological and
social facet of the organization, can an organization gradually change the
pattern of interaction between people, technologies, and techniques, because the
core-competencies of an organization are entrenched deep into organizational
practice.
Outlining the
study is from knowledge management to knowledge chain management, knowledge
value chain management in advance to an integrated KM model for SMEs, the
process is from macro to micro. The procedures of all KM implement process are
very detail and something new and creative. How to choose an optimal KM
implement framework is not depend on corporate scale (which is smaller, medium
or large) but depend on corporate core competence (i.e. computerized and
electronically degree, employees’ professional degree, corporate technologies
and technique) and business process. The contributions for SMEs to implement KM
strategy in the study is described as following:
1.
Linking the
creation, diffusion, transfer and application of knowledge to form a complete
knowledge chain for SMEs to practice and combine KM in corporate process and
strategy.
2.
Fulfilling the gaps of knowledge chain management and making knowledge
flow more smoothly to further help corporate KM implement successfully.
3.
Practicing corporate process in knowledge value chain to create value for
SMEs and customer in each stage of corporate value chain, final to increase KM
performance.
4.
Providing a very detail process of knowledge creation, diffusion,
transfer and application for corporate KM implement.
5.
Constructing an integrated KM model for SMEs to introduce, implement and
measure KM performance.
Recommendations
1.To successfully create and
implement a knowledge management strategy, the study suggested that certain
critical elements must be included. The elements of particular importance are
the following: The "so what?" question, Support from top management,
Communication, Creativity, Culture and people, Sharing knowledge, Incentives,
Time, Evaluation.
2.Further
researchers can study tend to how to fill the gap of KM chain from creation,
distribution, transfer and application by the interaction between technologies,
techniques, and people (Bhatt, 2001). Besides over cultural barriers, the more
important things are how to eliminate the fetish of IT (Information Technology)
and to integrate people, knowledge and technology further. Then the KM system
just can be a complete and effective knowledge management and can help
corporation to reach sustained management.
3.Because
knowledge is largely tacit and individually owned, it is difficult to have
charge of and control over the course of knowledge. The literature review
suggests that the major contribution from KM concern the effort to transpose
tacit knowledge into explicit information, which will lead to greater
possibilities to manage and control knowledge effectively. One major issue that
has hardly been dealt with and, therefore, in need of further inquiry concerns
how this process of translating tacit into explicit knowledge works.
4.Further
researches can use KCM and KVC to link suppliers, customers, partners and
employees to form a knowledge networking as a holistic solution for leveraging
corporate knowledge
5.Further
researchers can due to integrated KM model of the study to construct a bigger
model to integrate corporate internal and external resources and business
process and strategy with suppliers, customers, partners and employees for
further increasing KM synergy for SMEs.
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