Google Translate

Monday, February 11, 2013

Knowledge Management in Organizations - Varied Facets of Knowledge

In the recent past, as work has been shifted from ‘hands to mind’, knowledge and knowledge management have generated a lot of interest among corporate leaders. It is, of course, the advent of information society that brought knowledge and the importance of its management within organizations to the forefront. It doesn’t mean that there was no knowledge earlier and people were not concerned about it. Knowledge has been with us since mankind came into existence. Indeed, it is the accumulation of knowledge over centuries and its application that transformed the agrarian society into an industrial society and ultimately into an information society. The only difference between the past and the present is that today, knowledge has become one of the key factors of production.

Teece, Pisano and Shuen (1997) aver that organizations with superior knowledge can combine traditional assets to bring out new and superior products/services that can provide superior value to customers. Dess and Picken (1999) also believe that it is the superior knowledge rather than the physical resources which can enable companies to compete and do better than their rivals, even when their other resources are not that unique. It is being increasingly felt that the embedded and intangible capability arising from superior knowledge alone gives the organization the capability to exploit the physical resources and systems for withering out global competition and, at the same time, create confidence among its stakeholders about its potential for future value creation (Rob Sharkie, 2004).

John Browne[1], head of British Petroleum, in one of his interviews said: “Knowledge, ideas, and innovative solutions are being defused throughout the world today at a speed that would have been unimaginable ten or twenty years ago. He went on to say “to generate extraordinary value for shareholders, a company has to learn better than its competitors and apply that knowledge throughout its businesses faster and more widely…” He also made an exciting observation: “the wonderful thing about knowledge is that it is relatively inexpensive to replicate if you can capture it”. Against this background, this article attempts to define what knowledge is, what for and how knowledge management is accomplished and the key role of human resources in effective knowledge management.

1.      Knowledge and its Varied Facets
Knowledge, according to the Webster Dictionary, is “the fact or condition of knowing something with familiarity gained through experience or association”. According to Davenport and Prusak, 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 the knower. In organizations, it often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices, and norms.[2]

In the context of knowledge management in organizations, knowledge does not necessarily mean what is there in journals and books, for that is only information. It is only what is read, manipulated, communicated and embedded in the employees’ minds that becomes the organizational knowledge. Knowledge in the context of an organization, is often referred to as intellectual capital, which comprises –

  • Human capital – it is the people’s knowledge, learning, motivation and commitment;
  • Organizational capital – it encompasses the processes, systems, management practices,         brands, IPRs and the very culture of the organization; and
  • External network capital – consists of customer relations, sub-contracts and its very image and reputation in the market.

It is said that knowledge is the result of processed information, experiential learning and shared interpretation, and that knowledge provides the company competency and the competitive edge.  Knowledge is distinct from both data and information and it is essential, as Davenport and Prusak (1998) said, to understand these three terms for “doing knowledge work successfully”. Data are “discrete, objective facts about events”. There is no inherent meaning in data. It is more like raw material of decision-making but by itself cannot say what to do. On the other hand, information is “communication concerning some fact or circumstance”. Peter Drucker said that information is “data endowed with relevance and purpose. It simply adds meaning to data. As against these two, knowledge is information distilled and interpreted and thus acquires a purpose. In other words, when purpose is added to information it becomes knowledge.

Davenport and Prusak (1998) suggest the following components as the contributors to knowledge:
  • Experience – knowledge develops over time as experience provides a perspective from which to understand the new event.
  • Practical utility – it enables one to distinguish what ‘should’ work from what really does. It is something like the difference between what was read from the book and what really happens in the business. 
  • Speed – it enables the knowledge possessor to recognize patterns and offer shortcuts to solution instead of starting from scratch.
  • Complexity – it helps handle complexity with clarity and comfort.
  • Evolution – since the key to knowledge is knowing what one does not know, even the knowledgeable gets refined with further experience.
In the context of knowledge management, it is the employees of the organization who provide the knowledge. They generally possess two distinct kinds of knowledge: Explicit Knowledge and Tacit Knowledge. Tacit knowledge is mostly supposed to exist only in the human minds. It is considered a by-product of interaction of people among themselves and with the environment. It remains in the unconscious and maybe we are not even aware of its existence. To put it otherwise, “we can know more of it than being able to talk about it”. It means employees often know far more than what they realize. Over the years of doing a particular job, employees, as Stewart (1999) observed, develop “huge repertoires of skills, information and ways of working that they have internalized to the point of obviousness”. It is so embedded in the possessor’s mind that they no longer think of it but simply do it.

On the other hand, explicit knowledge is that “which is easily codified and shared asynchronously”. For instance, a computer servicing company can list probable failures that can be anticipated based on past experiences and also record plausible remedies for all such problems and make them available for its servicing workforce as an operating guide for future use. Similarly, a five-star hotel can document the ingredients and process involved in making a Chinese dish and make it available for a new chef to master its making through a few trials. The Know-how’, that results from the conversion of tacit knowledge into explicit knowledge can be transferred to others through a well-structured learning process.

There is yet another dimension to knowledge: missing knowledge. It is that knowledge which employees need but do not have to do their jobs. In the context of knowledge management, it is critical for the organizations to identify that missing knowledge and create a mechanism that enables them to identify active missing knowledge and work towards filling that gap.

[1] “Unleashing the Power of Learning: An Interview with British Petroleum’s John Browne”, Harvard Business Review, September-October 1997.
[2] Davenport, T H and Prusak, L (1998), Working Knowledge: How Organizations Manage What They Know, Boston, MA: Harvard Business School Press.

....To be continued 


Post a Comment

Related Posts Plugin for WordPress, Blogger...

Recent Posts

Recent Posts Widget