Knowledge Management

An investment in knowledge pays the best return

Benjamin Franklin

The Rise of KM
Knowledge is intangible,

dynamic, and difficult to measure, but without it no organisation can survive Shift from natural resources to intellectual assets Enabled by technological innovations

What is KM?
Tools, techniques, methods, behaviour and values that increase effectiveness of organisations.

A source of competitive advantage - Google A primary objective of KM research and practice is to

facilitate effective and efficient knowledge-sharing among organizational members.

KM evaluates how good organisations is at learning

before and after trainings and knowledge-sharing activities

Evaluates How people are connected in organisation or

community

The effective KM depends on a proper KM strategy of the

company

Codification Strategy
Codification strategy Economics of Reuse initial costs of investment and continuous re-use Dependant on the demands of the clientele Person-to-document Develop an electronic system (database, search engine) High investments in IT HR Practices Hire new colleagues, Train and Reward them

Three forms of Codification:

Numbers and codes Words and text People and objects

Example: Ernst & Young, World Bank

Pros and Cons of Codification strategy

Pros: Easier dissemination of knowledge fast access to information across geographical, social, and organizational boundaries. Facilitation of flows of organizational knowledge Potentially, transfer tacit knowledge into explicit

Cons:

o Impossible to recover investment costs if the underlying knowledge changes or becomes obsolete o Considerable cost of creating and maintaining repositories
o Knowledge leakage: Involuntary transfer of organisational knowledge to competitors

Personalization Strategy
Personalization strategy Expert Economies - Charge higher price, solve unique problems Person-to-person Role of IT - facilitate knowledge flows; link geographically dispersed units HR - in depth interviews, mentoring, rewards for directly sharing information

Pros and Cons of Personalization Strategy

Pros: Low investment in IT Knowledge generating features creative chaos e.g Industrial Clusters: Silicone Valley, BMSI. innovative forms of response and coordination Overcome the barriers of tacitness and context Reduced chance of leaks imitation guard - Johannessen et.al (2001), externally safe - Hall and Adriani (2003)

 Cons:

Perishable - staff turnover results in loss of critical knowledge and core skills; memory Reluctance to share tacit knowledge Difficulty recruiting new staff High integration costs Culture specific - Toyota JIT Variable costs - Time and resource consuming/uneconomical May inhibit growth e.g. Bain vs Anderson C

e.g. D. Mehri, Notes from Toyota-land

The Difficulties of Choosing an Appropriate KM Strategy

companies that use knowledge effectively pursues one strategy predominantly ?
Fuji-Xerox has chosen a hybridzation strategy that mixes human-based and ITbased knowledge-sharing techniques. Fuji-Xerox produced the mission statement: Build an Environment for the Creation and Effective Utilization of Knowledge. Fuji-Xerox practiced the Sashimi System- production process lending itself towards the Overlapping approach rather than Sequential (1990s). Eventual move to Zen-in Design(design by everyone) Boeings KM strategy illustrates both a codification and personalization focus

Hydle et. al: personalization is commonly used when projects are conducted at a local level, while a mix of codification and personalization are used when the projects are transnational in nature.
Greiner et.al - codification strategy is more suitable for firms, whose advantage is process efficiency, and personalization is suitable for firms, whose advantage is innovation.

Conclusion
Edwards et al. (2004) 83 per cent of respondents disagree with the statement that an organisation cannot use both collaboration (network) and codification KM strategies together. Personalisation and codification approaches need to be integrated so that the benefits of both tacit and explicit knowledge can be gained. Accordingly, an organisation should seek an integrated approach to knowledge management that ensures the interaction of the strategies: a symbiosis strategy. KM as a tool for sharing know-how information and increase efficiency To be more effective firms should focus on one strategy and use another in a supporting role The documents (codified information) cannot convey all richness and logic of some tacit knowledge and requires personalisation Maximising Knowledge Reuse Efficiency (KRE) - Awareness, Interest, Evaluation, Trial, Adoption Model (AIE

firm should invest to facilitate reuse in order to maximize utility even though this also adds to firm cost internally explicit, but externally tacit