3. ● What is knowledge Management?
● How can knowledge improve processes
and activities in the organisation?
● What is the difference between information
management and KM?
Knowledge Management
4. Discovering Knowledge
➢ Knowledge is emerging discipline
➢ Knowledge considered the key asset to drive
organisational survival and success
➢ Has roots in various disciplines – IT, HR,
strategy and cultural change
5. Tree of KM
ACTIVITY:
Dialogue, tacit knowledge, explicit knowledge,
discussion
CONTENT:
Strategic management, KM tools, KM systems,
organisational learning, change management,
learning organisation, culture, intellectual
capital,
ROOTS
Management science, psychology, strategy,
sociology, economics, anthropology, computer
6. Explicit Knowledge
➢ Can be formalised & represented thus articulated
in formal languages
➢ This is the type of knowledge KM equates to
INFORMATION
➢ As information, it can be easily stored, retrieved,
shared & disseminated within organizations
➢ Examples are knowledge found in commercial
publications, emails, internet, organization
databases etc.
7. Tacit Knowledge
➢ Can be described as experience that is embedded
in an individual such as perspective & inferential
knowledge = “knowing how”
➢ It includes insights, hunches, intuition& skills that
are highly personal & difficult to formalise – and as
a result is hard to communicate & share with others
➢ It can only be “learned” by close association over
an extended period of time
➢ Forms the basis of intellectual capital of an
organization & needs to be expressed & managed
8. Knowledge Management
➢ For KM to be effective, it is essential that both
explicit & tacit knowledge are present in the
organization’s infrastructure
➢ This infrastructure may include
➢ Bench-marking
➢ Training
➢ Sophisticated Information Technology
➢ Variations depending on the complexity of the
organization and its goals & objectives
9.
10. ➢ ‘‘Knowledge management draws from
existing resources that your organization
may already have in place – good
information systems management,
organization change management, and
human resources management
practices.’
--- Davenport and Prusak 1998
➢ Focus on IMS and HRM
Definition 1
11. ➢ ‘‘the explicit and systematic management
of vital knowledge, and its associated
processes of creating, gathering
organizing, diffusion, use and
exploitation, in pursuit of organisational
objectives.’
– Skyrme 1999
➢ Focus on HR
Definition 2
12. ➢ ‘…improving the ways in which firms
facing highly turbulent environments
can mobilise their knowledge base (or
leverage their knowledge “assets”) in
order to ensure continuous innovation.
-- Newell et al 2002
➢ Focus is on strategy
Definition 3
13. Need for integration of various
disciplines
● Need to adopt an integrated
interdisciplinary and strategic
perspective
● Strategic activities of KM - objective is to
increase intellectual capital and enhance
organization performance
14. Dimensions of KM
● Knowledge
management
Systems &
technology
Organisation
culture
Strategy
Organisational
learning
15. Dimensions of KM
● Knowledge
management
Systems &
technology
Organisation
culture
Strategy
Organisational
learning
Knowledge sharing
Exploration
exploitation
Change management
implementation
Intellectual capital
Organisational performance
18. KNOWLEDGE ECONOMY
• Driven by knowledge intangibles rather than
natural resources, capital or low skilled
labour
• Economic performance based on
knowledge, technology and learning
• Mobilising knowledge to add value to goods
and services
19. • Knowledge added to products and services
in West and built in low wage economies
• India & China developing highly educated
labour force
• Recent survey showed 80% of new
corporate R&D sites and personnel of top
firms are in India and China
KNOWLEDGE ECONOMY
20. WHAT’S ALL THE KM FUSS?
• KM started around the mid-1990s
• Knowledge seen as the most important
source of competitive advantage
• Came from consultant beginnings
• Some strongly into IT, some strongly into HR
and some into strategy
• Academic roots in organisational learning,
information systems, strategy and finance
21. Ask Yourself
• Which aspect of knowledge management
are you good at?
• How would you go about managing
knowledge in an organisation given your own
bias or leaning?
22. Class Discussion
• Do you think information systems can
provide the solution to most organisational
problems? If not, why not?
24. DATA
• Are known facts or things used as a basis of
inference or reckoning
• We acquire data from the “external” world
through our senses & and make sense of
these signals through our experience
• By itself, data has no “useful” purpose e.g.
you are a student must be put into a
“context” i.e. you are a student studying for a
Bachelor in Commerce in Raffles College
25. INFORMATION
• Can be considered “systematically
organized data”
• “Systematic” implies the ability to predict or
make inferences e.g. 3, 5, 7, 9 = the next
number should be “11”
• To “inform” = the data must be organized in
some classification system e.g. a library
(Dewey Decimal Classification system)
• Are data endowed with a “meaning,
relevance or purpose”
26. KNOWLEDGE
• Can be considered “actionable” information
allows us to make better decisions &
provide effective input into a conversation or
creativity of the organization.
• In Knowledge Management (“KM”)
knowledge exists along a continuum
between “tacit” (know-how) and “explicit”
(know-what)
27. WISDOM
• The ability to act critically & practically in a
given situation
• It is based on ethical judgment related to an
individual’s belief system
– Children have more need of models than of
critics (French)
– You can’t see the whole sky through a bamboo
tube (Japanese)
– There is plenty of sound in an empty barrel
(Russian)
28. TRUTH
• This is even harder to understand or
sometimes we “refuse to understand”
• Is there an “absolute” truth or are there
“multiple truths”?
29. DATA, INFORMATION & KNOWLEDGE
Figure 1.4 Data, information, knowledge and purposeful action
31. REFLECTIONS
• Think about your social or school life – do
you encounter “difficulties” when someone
gives you information or knowledge
“verbally”?
• What are the likely problems with passing
down information 2nd, 3rd or 4th hand?
32. WHY DO WE NEED KM?
• “Knowledge has become the key resource, for a
nation’s military strength as well as for its economic
strength… is fundamentally different from the
traditional key resources of the economist – land,
labor, and even capital…we need systematic work
on the quality of knowledge and the productivity of
knowledge… the performance capacity, if not the
survival, of any organization in the knowledge
society will come increasingly to depend on those
two factors”
[Drucker,1994]
33. WHY DO WE NEED KM? *
• Knowledge management (KM) may simply be
defined as doing what is needed to get the most
out of knowledge resources.
• In general, KM focuses on organizing and making
available important knowledge, wherever and
whenever it is needed.
• KM is also related to the concept of intellectual
capital.
34. WHY DO WE NEED KM?
1. Increasing Domain Complexity:
• Intricacy of internal and external processes, increased competition,
and the rapid advancement of technology all contribute to
increasing domain complexity.
2. Accelerating Market Volatility:
• The pace of change, or volatility, within each market domain has
increased rapidly in the past decade.
3. Intensified Speed of Responsiveness:
• The time required to take action based upon subtle changes within
and across domains is decreasing.
4. Diminishing Individual Experience:
• High employee turnover rates have resulted in individuals with
decision-making authority having less tenure within their
organizations than ever before.
35. WHY DO WE NEED KM?
• Knowledge management mechanisms are
organizational or structural means used to
promote knowledge management.
• The use of leading-edge information technologies
(e.g., Web-based conferencing) to support KM
mechanisms enables dramatic improvement in
KM.
• knowledge management systems (KMS): the
synergy between latest technologies and
social/structural mechanisms
37. Structure of Organizational
Knowledge
● Organizational routines are the processes in the rules, regulations and procedures
● These maintain the central features of the organization’s and guide (theory in use)
● Detecting and error correcting processes within a framework – a system of rules (e.g. SOP)
38. INTELLECTUAL CAPITAL
• Understand the impact knowledge
management has on organizations and
organizational performance at several
levels
– People
– Processes
– Products
– Overall performance
4P’s
42. IMPACT TO PROCESSES?
• KM enables improvements in organizational processes
such as:
– marketing,
– manufacturing,
– accounting,
– engineering, and
– public relations
• These impacts can be seen along three major dimensions
– Effectiveness
– Efficiency
– Degree of innovation of the processes
43. IMPACT ON PROCESSES?
• Effectiveness:
– performing the most suitable processes and making the
best possible decisions
• Efficiency:
– performing the processes quickly and in a low-cost
fashion.
• Innovation:
– performing the processes in a creative and novel
fashion, that improves effectiveness and efficiency —
or at least marketability.
44. Knowledge
Process Efficiency
Productivity improvement
Cost savings
Knowledge
Management
Process Innovation
Improved brainstorming
Better exploitation of new ideas
Process Effectiveness
Fewer mistakes
Adaptation to changed circumstances
How KM Impacts Organizational
Processes?
45. Impact on Products
• Impact on products can be
– Value added products
– Knowledge based products
Knowledge
Value-added Products
Knowledge-based products
Knowledge
Management
46. Impact on
Knowledge-Based Products
• KM can have a significant impact on product that
are knowledge based like those in consulting or
software development etc.
• Knowledge based products can sometimes play
a significant role in traditional manufacturing
firms
Matsushita’s development of automatic Bread-Making machine.
Matsushita sought a master baker, observed the master baker’s
techniques, and then incorporated them into the machine’s
functionality.
47. IMPACT ON ORGANIZATION PERFORMANCE
• DIRECT:
– Knowledge is used to create innovative products will
generate revenue and profit
• INDIRECT:
– Knowledge is used to demonstrate intellectual
leadership in the industry, which in turn, might enhance
customer loyalty
– Knowledge is used to gain advantageous negotiating
position with respect to competitors or partner
organizations
48. RESOURCE-BASED VIEW (RBV)
• Resources create competitive advantage
• Competitive resources are valuable, rare,
inimitable (not easily replicated) and not
substitutable
• Competitive resources include top mgt skills,
culture, information systems and HRM
49. CRITICISMS OF RBV
• How do you know which resources contribute
to competitive advantage in dynamically
changing contexts and environments?
• How do you gain these resources?
• How can firms compete if they deny the
importance of market conditions?
50. KNOWLEDGE BASED VIEW
(KBV)
• Knowledge is the key resource for competitive
advantage
• Knowledge held in information systems as well
as in people’s heads and communities
• Knowledge sharing is important
• Primary task to integrate knowledge between
people, product and services
52. KNOWLEDGE STRATEGY
Codification
• Heavily based on technology & use large
databases to codify & store knowledge
• Basic idea – “scale in knowledge reuse”
• Valuable knowledge such as industry information,
market segmentation, presentations, programming
documents etc. are stored in a knowledge
repository that others in the same organization can
use for future projects
• A strategy based focused on efficiency, cost
savings & cost leadership
53. KNOWLEDGE STRATEGY
Personalization
• Focus more on people – developing people
through brain-storming exercises & face-to-face
communications to gain a deeper understanding of
the problems
• Innovation & differentiation concerns are more
important
55. What is a SME? EU
➢ Small and medium-
sized enterprises (SMEs) are non-
subsidiary, independent firms which
employ fewer than a given number of
employees. This number varies across
countries. The most frequent upper limit
designating an SME is 250 employees,
as in the European Union.
56. What is a SME? OECD
➢ Small and medium-sized enterprises (SMEs)
are non-subsidiary, independent firms which
employ fewer than a given number of
employees. This number varies across
countries. The most frequent upper limit
designating an SME is 250 employees, as in
the European Union. However, some countries
set the limit at 200 employees, while the United
States considers SMEs to include firms with
fewer than 500 employees
57. What is a SME? Singapore
With effect from 1 April 2011, the
definition of SMEs is businesses with
annual sales turnover of not more
than $100 million or employing no
more than 200 staff.
58. What is a SME? USA
In the United States, the Small Business
Administration sets small business criteria
based on industry, ownership structure,
revenue and number of employees (which in
some circumstances may be as high as 1500,
although the cap is typically 500). Both the US
and the EU generally use the same threshold
of fewer than 10 employees for small
offices (SOHO).
59. What is a SME?
➢ Small and medium-sized enterprises
(SMEs) represent 99% of all
businesses in the EU. The definition of
an SME is important for access to
finance and EU support programmes
targeted specifically at these
enterprises.
60. What is an SME?
60
The main factors determining whether an enterprise is an SME
are:
•staff headcount
•either turnover or balance sheet total
Company category Employees Turnover Balance sheet total
Medium-sized < 250 ≤ €50 million ≤ €43 million
Small < 50 ≤ €10 million ≤ €10 million
Micro < 10 ≤ €2 million ≤ €2 million
61. Why Emphasize Knowledge
Management for SMEs?
➢As in the EU, SME’s comprise the bulk of all
business structures
➢ SMEs do not manage knowledge the same
way as larger organizations
➢ The way the managed Knowledge is not
what is commonly thought of as “scaled down
versions” – they have understandable resource
constraints & therefore have to be creative in
working around these limitations
62. Why Emphasize Knowledge
Management for SMEs?
➢The potential loss of key personnel leads to
the fear that the organization could lose their
competitive edge, which is dependent on the
knowledge acquired & developed by these
employees
➢ This is particularly crucial for SMEs, which
traditionally rely heavily on particular
individuals & lack the recruiting capacity of
larger organizations.
63. Why Emphasize Knowledge
Management for SMEs?
➢Realistically, this was the main reason
behind the development & growth of KM
concepts, models & systems
➢ Companies discovered that there is a need
for systems that enable the retention &
exploration of knowledge developed in the
organization over time by these key personnel
➢ They need to develop & establish methods
which allows sharing of this knowledge
64. Knowledge Management Barriers
➢Long term investments are always lower
priority than short term investments –
investment of management efforts!
➢Difficulties in obtaining a “believable” return
on investment
65. The Value of Knowledge Management
➢Both large & small organizations require
efficient KM in order to maximise their
competiveness & survival chances in the
modern information society
➢ Large organizations have readily adopted
KM principles & its inherent business value
➢SMEs cannot afford this investment & have
difficulties establishing a credible business
value to KM
66. The Value of Knowledge Management
➢ A CEO of a SME remarked
“Actually the most important part of this
business is getting the business & living the
business and all the other stuff is there to keep it
going”
67. The Value of Knowledge Management
➢ Is there a HOPE for SMEs?
68. The Value of Knowledge Management
➢ In order to implement an “appropriate” KM
strategy in SMEs, cultural, behavioural &
organizational issues need to be tackled before
even considering technical issues’
