Knowledge management as strategic need

1. STRATEGIC
IMPORTANCE OF
KNOWLEDGE
MANAGEMENT
PRACTICES
BP0191339

2. KNOWLEDGE MANAGEMENT
• Knowledge management (KM) includes a firm’s ability to manage, utilize, and retain
corporate knowledge
• Good KM provides information for future use
• KM leads to competitive advantages if the firm’s historical information is readily
available to a variety of users (Hewitt, 2016)
• Peter Drucker said that today knowledge has power because it controls access to
opportunity and advancement. Twenty-first centuries is undoubtedly the century of
knowledge.
• KM is strategically important for any firm

3. (Damrau, Herman)

4. KNOWLEDGE MANAGEMENT AS A STRATEGIC
NEED I
• Baby boomer retirements will soon outpace available replacements
• Globalization growth
• Challenges organisations’ “lacking knowledge and information about alternatives to the
global allocation of tasks” (Vidakovic, 2013, p. 369)
• Unpredictable and complex competitive environment
• The global trend has caused that the company’ value is largely associated with the
"intangible" assets (80 %)
• Challenge to retain tacit knowledge with employees turnover
• Up to 80% of an organisation’s useful knowledge is tacit (Olstein, 2005)
• Knowledge management brings competitive advantage

5. KNOWLEDGE MANAGEMENT AS A STRATEGIC
NEED II
• KM
 Helps drive strategy
 Solves problems quickly
 Diffuses best practices
 Improves knowledge embedded in products and services
 Cross-fertilizes ideas and increases opportunities for innovation
 Enables organizations to better stay ahead of the competition
 Builds organizational memory

6. EXAMPLES OF KNOWLEDGE MANAGEMENT
PRACTICES
• Organisational diversity
• Enables the forming of heterogeneous groups to assist in sharing tacit knowledge
• Northrop Grumman
• Utilizes communities of practice to combine employees from different departments to
share new ideas and expertise
• Toyota uses ‘oobeyas’ (big open rooms)
• General Electric
• Uses action learning teams to group employees from a variety of functional departments
(e.g., manufacturing, marketing, and sales)

7. KNOWLEDGE MANAGEMENT THEORY
• Social learning theory
• Prescribes for HRM to consider that people learn differently due to having unique
attitudes, values, and experiences; and that people’s feelings, thoughts, and social
environment influence their ability to learn (Hewitt, 2016; Vidakovic, 2013).
• It becomes essential for HRM to assume a transformational leadership style to
champion organisational learning and emphasize the positive results for employee
efficacy gains and organisational stability and growth (George & Jones, 2012).
• HRM fulfills a vital role in ensuring the optimal method of knowledge sharing
occurs, and everyone is motivated to learn.

8. LEVERAGING KM TO SUPPORT ORGANISATIONAL
OBJECTIVES
• Organizational Learning
• Builds employee confidence and improves group efficacy, thus motivating team members
to meet organisational goals
• Occurs when employees continuously learn in groups or teams to achieve a sense of
mastery for meeting organisational goals. Many organisations have expanded its team
training to a continuous format, such as Intercontinental Hotel Group’s leadership and
management training changed from a two-week event to continual learning throughout the
year (Davila & Kursmark, 2005)
• Relies on concepts of knowledge management which consists of various methods
individuals can apply to attain new knowledge based on the type and source of knowledge
(Smith & McKeen, 2003)

9. ORGANIZATION LEARNING CONTD.
• Training
• Training may be in the form of exploitative or explorative.
• Exploitative learning is based on the organisation’s programmed processes and standards,
which are mature and understood thus enabling trainees to learn vicariously to exploit the
existing information.
• Vicarious learning is about rules and norms and occurs as new employees observe
experienced employees to learn unique tips, what to say, how to respond, and other proven
desired and accepted performance methods (Wei, Yi, & Guo, 2014).
• With group learning, training for institutionalized role orientation teaches common
responses for the group. For example, hotel chain Ritz-Carlton has institutionalized training
to provide employees confidence in their ability to tailor rules to meet customers’ unique
requests (Hemp, 2002).

10. ORGANIZATION LEARNING CONTD.
• Mentorship
• Mentoring shares one’s wisdom and know-how attained from experience and through
time to those less seasoned (Hemp, 2002).
• Wisdom and know-how often come from trials and tribulations, hence difficult to
document
• Mentorship offers a useful approach to mitigate knowledge gaps.

11. SUMMARY
• KM is a critical need for organisations in the 21st century for gaining and
maintaining competitive advantages.
• Organisations’ brain-drain stemming from the aging and retiring workforce
highlights the risk of losing critical corporate know-how if information is not
formally documented and made accessible (Buhler, 2007; Kessler, 2014).
• When done well, tacit organisational information carries significant benefits, but
the loss of tacit knowledge causes organisations to lose competitive advantages
and fall into industry mediocrity (Chatterjee, 2014).

12. REFERENCES I
• Bass, B. M., & Stogdill, R. M., 1990. Bass & Stogdill’s handbook of leadership: Theory, research, and managerial
applications (3rd ed.). New York, NY: Free Press.
• Buhler, P. M., 2007. Managing in the new millennium: Developing the talent within. Supervision, 68(5), 18-20.
• Buhler, P. M., 2009. Managing in the new millennium: Bench strength: A business imperative. Supervision, 70(1), 19-
21.
• Chatterjee, S., 2014. Managing Constraints and Removing Obstacles to Knowledge Management. IUP Journal of
Knowledge Management, 12(4), 24-38.
• Davila, L., & Kursmark, L., 2005. How to choose the right person for the right job every time. New York, NY: McGraw-
Hill.
• Ferrell, O. C., Fraedrich, J., & Ferrell, L., 2013. Business ethics: Ethical decision making and cases (9th ed.). Mason, OH:
Cengage Learning.
• George, J. M., & Jones, G. R., 2012. Understanding and managing organisational behavior (6th ed.). Upper Saddle
River, NJ: Pearson Prentice Hall.

13. REFERENCES II
• Hewitt, A., 2016, January. People Trends 2016: What HR will be thinking about in the new year. Available at
www.aon.com/unitedkingdom/attachments/trp/People_Trends_White_Paper_2016.pdf
• Kessler, G., 2014, July. Do 10,000 baby boomers retire every day?. The Washington Post.
• Smith, H. A., & McKeen, J. D., 2003. Knowledge transfer: Can KM make it happen?. Queen’s Centre for Knowledge-Based
Enterprises, WP-03(05), 20. Available at
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.89.3108&rep=rep1&type=pdf
• Venkitachalam, K., & Willmott, H., 2015. Factors shaping organisational dynamics in strategic knowledge management.
Knowledge Management Research & Practice, 13(3), 344-359.
• Vidakovic, T., 2013. Human resources management in the global environment. Proceedings of the Faculty of Economics in East
Sarajevo, 7, 361-370.
• Warner, F., 2002. In a word, Toyota drives for innovation. Fast Company, (61), 36. Available at
www.fastcompany.com/45195/word-toyota-drives-innovation
• Wei, Z., Yi, Y., & Guo, H., 2014. Organisational learning ambidexterity, strategic flexibility, and new product development.
Journal of Product Innovation Management, 31(4), 832-847. doi:10.1111/jpim.12126