Organizational Knowledge Management Model

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Organizational Knowledge Management Model

MARIUS-BOGDAN CHILIBAN

Faculty of Engineering

Lucian Blaga University of Sibiu

Sibiu, 550025, Bld. Victoriei, 10

ROMANIA

bogdan.chiliban@gmail.com

VALENTIN GRECU

Faculty of Engineering, Department of Industrial Engineering and Management

Lucian Blaga University of Sibiu

Sibiu, 550025, Bld. Victoriei, 10

ROMANIA

valentin.grecu@ulbsibiu.ro

CLAUDIU KIFOR

Faculty of Engineering, Department of Industrial Engineering and Management

Lucian Blaga University of Sibiu

Sibiu, 550025, Bld. Victoriei, 10

ROMANIA

claudiu.kifor@ulbsibiu.ro

Abstract: - Knowledge Management is quickly making its way into organizational mainstream. More and more companies recognize that the only way to develop a sustainable competitive advantage is to effectively and efficiently manage their most valuable and illusive resource, Knowledge. This paper presents an Organizational Knowledge Management Model whose goal is to position the knowledge process at the heart of the organization, to show the factors that influence it and to introduce the notion of Knowledge Quantum as a principle driver of organizational performance.

Key-Words: -knowledge management model, knowledge quantum, organizational performance.

1 Introduction

To cope with the complexity of the enterprise, the representation of its essence in the unambiguous form of a model can be of great value. Precise definitions and constraints will help create insight into the complexity of the enterprise and to evade conflicts and inconsistencies between the different domains. This is the reason why models are used. A model is an abstract and unambiguous conception of something (in the real world) that focuses on specific aspects or elements and abstracts from other elements, based on the purpose for which the model is created [32].

A reference model is supposed to be seen as a fundamental starting point for the development of new information systems [54]. From this enterprise specific or project specific information models can evolve.

According to OASIS (Organization for the Advancement of Structured Information Standards) a reference model is an abstract framework for understanding significant relationships among the entities of some environment, and for the

development of consistent standards or

specifications supporting that environment. A reference model is based on a small number of unifying concepts and may be used as a basis for education and explaining standards to a non-specialist. A reference model is not directly tied to any standards, technologies or other concrete implementation details, but it does seek to provide a common semantics that can be used unambiguously across and between different implementations [43].

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2. Knowledge

What exactly is knowledge? The short answer to this question could be "We don't know!". The term has been at the center of a philosophical debate since the time of the ancient Greeks. There is an entire field dedicated to the study of knowledge called Epistemology.

To this day a universally accepted definition has not been synthesized. The difficulty is that the main components of Plato's definition do not have a uniformly accepted meaning in society, "no one knows what a belief is, no one knows what a fact is, and no one knows what sort of agreement between them would make a belief true. Let us begin with belief" [53].

Within the modern field of Knowledge

Management, knowledge has been defined in the following ways: The Open Knowledge Foundation created in 2004 with the goal of making knowledge open and freely available has determined its own Open Knowledge Definition: “The term knowledge is used broadly and it includes all forms of data, content such as music, films or books as well any other type of information.”

The definition is highly lax. It does not distinguish between the notions of data and information and treats both of them as knowledge. The definition also does not present any relationship between the term "knowledge" and the notions of truth, understanding, and wisdom.

Another definition of the term comes from Wilson which defines knowledge as: "involving the mental processes of comprehension, understanding and learning that go on in the mind and only in the mind, however much they involve interaction with the world outside the mind, and interaction with others" [60].

What is clear from his definition is that Wilson considers that knowledge cannot exist outside the human mind and as a direct consequence any attempt to externalize knowledge merely creates information which in turn requires the mind of another to become knowledge.

Galliers and Newell suggest a similar view point. In that knowledge cannot exist outside the human mind. They argue that knowledge or for that matter information cannot be managed by Information Systems, only data [16].

The prevailing view in the field is however that knowledge can be present both in the human mind and also disseminated and stored in an explicated form. A direct consequence of this train of thought is that knowledge can be seen as a valuable commodity that can be traded, moved from one

organization to another, or even in cases of illegal competition stolen.

Polanyi is the first to make, a much debated distinction between two types of knowledge: "tacit" and "explicit" [49]. He famously characterizes tacit knowledge by the following expression: "we know more than we can tell".

Tacit Knowledge is knowledge present in the mind of a person that cannot be fully explicated by the possessor. It is the kind of knowledge that is difficult to transfer to another person by means of writing it down or verbalizing it. It consists of beliefs, ideals, values, schemata and mental models which are deeply ingrained in us and which we often take for granted. While difficult to articulate, this cognitive dimension of tacit knowledge shapes the way we perceive the world.

Polanyi noted that human action is often based on what to the observer seems inexplicable reasoning. Polanyi found an explanation in the deeply, often culturally ingrained, beliefs and understandings which we carry with us but of which we are not consciously aware. At best as observers we may be able to infer at least some aspects of this knowledge from the behavior of the subject [31].

Explicit knowledge is knowledge that has been articulated, codified, and stored in certain media. It can be readily transmitted to others. The most common forms of explicit knowledge are manuals, documents, procedures, and how-to videos. Knowledge also can be audio-visual. Works of art and product design can be seen as other forms of explicit knowledge where human skills, motives and knowledge are externalized.

There is another form of knowledge that is supported by academics in the field of knowledge management. This is the so called implicit knowledge, which Wilson [60] considers as the true replacement of tacit knowledge. Others in the community see implicit knowledge as a grey area existent between explicit and tacit knowledge. In this perspective implicit knowledge is seen as knowledge that can be transformed into an explicit state but has not been thus far.

Even though there is much debate related to the term and a precise definition and universally accepted classification do not exist at the moment one aspect is certain. Knowledge is a present force in our everyday lives which molds society itself. We seem to have no problem as human beings in distinguishing between those who posses knowledge and those who do not and ascertain with a high degree of accuracy the level of knowledge of an individual.

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3. Knowledge Management

3.1. Definitions

Knowledge Management is the process of acquiring knowledge from the organization or another source and turning it into explicit information that the employees can use to transform into their own knowledge allowing them to create and increase organizational knowledge [26].

Knowledge Management is the planning,

organizing, motivating, and controlling of people, processes and systems in the organization to ensure that its knowledge-related assets are improved and effectively employed [29]. Knowledge Management is a process of creating, acquiring, capturing, aggregating, sharing, and using knowledge, wherever it resides, to enhance organizational learning and performance [4, 9]. Knowledge Management is a systemic effort to enable information and knowledge to grow, flow and create value [44].

By synthesizing the presented definitions we can state that knowledge management is a theory and process that postulates the connection between knowledge and organizational performance. It is concerned with managing the steps required to effectively and efficiently utilize knowledge and also with the processes that support it.

Knowledge management is important, in today's highly flexible and increasingly demanding market place in which organizations compete, because it is becoming increasingly clear that the only sustainable competitive advantage that can be achieved is thru the correct utilization of knowledge [1, 18].

The importance of knowledge management in the business field was beautifully emphasized by Lew Platt, ex CEO of Hewlett Packard. He stated "If only HP knew what it knows it would make three times more profit tomorrow". O'Dell and Grayson also state that a commonly occurring problem in today's organizations is the lack of transparency which can lead to an unpleasant situation in which “the organization does not know what it knows” [45].

3.2. Goals

Knowledge Management involves the management of the relationship between tacit-the know-how possessed by individuals-and explicit knowledge-the systemically documented know-how that becomes available to everyone in the organization [52]. The ultimate goal of knowledge management should be

to convert tacit knowledge to explicit knowledge to transform the capacity of individuals within the organization to use information strategically and apply higher-order thinking to an informed decision- making process. Nonaka & Takeguci [41] in a study of successful Japanese companies (Honda, NEC, and Fujitsu) describe four types of knowledge creating processes—socialization, externalization, combination, and internalization—to ultimately inform decision making [11].

Knowledge management has adopted

communication and collaboration solutions to address the unique challenge of articulating, sharing, and leveraging tacit knowledge [39].

Ho [22] suggested that the goal of knowledge management is to deliver the right knowledge to the right members at the right time so that they can take the right actions and improve performance [40, 44]. The fast pace of today’s world requires that attention not just be on the existing organizational knowledge, but also on the development of new knowledge, for organizations to remain competitive

[38]. Drucke [15] noted that knowledge

management is different from general management activities in its focus on the perspective of knowledge and its intent to apply this knowledge in a systematic and organized manner to create additional knowledge.

3.3. Strategies

In order for knowledge management activities to be successfully implemented and to overcome the aforementioned problems organizations must choose a clear strategy. Two distinct strategies seem to emerge from the specialty literature when it comes to knowledge management.

The first one focuses on explicit knowledge within the organization. It emphasizes knowledge codification and storage with the help of information technology [13, 34, 35]. This strategy centers on the reusability of knowledge, by embedding specified sets of rules about every possible scenario that may arise, inside data repositories [8]. This is a people to documents procedure [20] which requires a big investment in information technology. The strategy must be

actively managed and the storage system

continuously updated and revised. This type of strategy has been called: codification strategy [20], push strategy and system strategy [10].

The second one focuses on tacit knowledge within the organization. It emphasizes knowledge sharing and creation thru interpersonal interaction [41]. This strategy is based on highly skilled individuals,

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providing customized solutions to knowledge management iterations, utilizing information technology in a different way and with smaller costs. Its main objective is to develop networks that facilitate person to person contacts [19], for the generation of new tacit knowledge. This type of strategy has been called personalization strategy [19], pull strategy and human strategy [10].

Even though the main strategies are accepted by most of practitioners and scholars, there is a divergence in view points when it comes to the best way to utilize these strategies in various practical situations. Three views have emerged: focused, balanced and dynamic.

The focused view argues that companies should utilize one strategy predominantly while utilizing the other only in a role of support [19]. In this case the personalization strategy is seen as superior to the codification strategy.

The balanced view argues that we should utilize both strategies and try to strike a balance between the two. Jordan & Jones [23] emphasize that

equilibrium between personalization and

codification leads to the development of more innovative knowledge. Bierly and Chakrabarti [6] highlight that organizations that start down this path become more profitable and [61] also suggests that they outperform other organizations.

The dynamic view argues that organizations should align their strategies with the characteristics of knowledge. Bohn [8] explains that knowledge

management strategies should be aligned

considering the extremes of pure expertise and pure procedure. Singh and Zollo [56] suggest that companies should take into consideration specific tasks and use those as guidelines for aligning knowledge.

4. Proposed Knowledge Management

Model

Based on a thorough analysis of the existent models of knowledge management: Knowledge Tower [48], Knowledge Management Process Model [29],SECI Model [41], Knowledge Wheel [62], Practical Knowledge Management Model [50], Integrated Knowledge Management Model for Construction Projects [24] and Knowledge Life Cycle [21], a new model has been elaborated.

The model is comprised of two separate views. The main view presents the organization positioned inside the environment, with knowledge at its core (figure 1).

Information and communication technology plays a key role in knowledge management [1]. It is an essential part of the codification strategy because of its utilization in knowledge storage data bases and also in the personalization strategy for facilitating communication between individuals. The main aspect is establishing the correct amount of ICT [19] required based on industry levels and knowledge strategy so that the investment to return balance is a favorable one.

Culture refers to the collective behavior of people, who are part of the organization, based on the shared values that they hold. These represent a set of mental assumptions that guide interpretation and action in organizations by defining appropriate behavior for various situations [51]. The culture of the organization has a profound effect on knowledge management, especially because of its impact on knowledge sharing. In the case of an organization with a culture of mistrust between members, be it of same level or different, efficient and effective sharing of knowledge will definitely not take place and as a result the whole process will suffer [58]. B. Knowledge Management Activities represent the core of knowledge management. They should be conducted based on Deming's Plan-Do-Check-Act [14] paradigm so that continuous improvement of knowledge takes place. This is a key factor that the model emphasizes.

The Knowledge Management Activities presented in the model are:

Knowledge Generation refers to the process by which an organization achieves new knowledge. This can be done in two distinct ways. Through Knowledge Acquisition which is the process of searching, sourcing and grafting existing knowledge [29]. Searching refers to the utilization of the internet as a source of knowledge. Sourcing is the process by which organizations utilize specialized markets and specialists to provide knowledge. Grafting refers to the introduction inside the organization of people that hold vast amount of knowledge in a target field. The second way to generate knowledge is through creation. This process utilizes the principals underlined by [41] in the SECI Model: Socialization, Externalization, Combination and Internalization to achieve new knowledge in the organization.

Knowledge Refinement is the process that follows Knowledge Generation. Its goal is to achieve long term durability and reusability of knowledge [29]. It is comprised by the various mechanisms that are put in place to prepare knowledge before it is introduced inside the organizations "collective" memory. Some of these are: explicating, encoding, cleaning,

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indexing, standardizing, organizing, distilling, revising etc.

Fig.1. Knowledge Management Model Main View Knowledge Storing represents the knowledge that is

held in the minds of organizational participants, in electronic repositories, that which has been acquired and retained by groups or teams and that which is embedded in the business’s processes, products or services [12]. Knowledge storage must be regarded as a fragile and complex process. This is because tacit knowledge is stored in the minds of individuals, in processes and it may succumb to the passage of time and can be lost. Explicit knowledge that is stored in electronic repositories suffers from knowledge decay and must be actively managed in order to maintain its value.

Knowledge Dissemination represents the process by which knowledge is spread across the hole organization. It can be achieved two fold, by

transfer or sharing. Knowledge transfer is a direct people to people process [19]. A good example are courses and training programs whose main goal is the transfer of knowledge from one individual (teacher) to another (students) [27]. Knowledge sharing utilizes the codification strategy and information technology to externalize a person's knowledge in a medium that can be directly accessed by other interested parties. It is a people to documents procedure [20] and a good example of it are books, papers, videos etc. that do not necessitate direct interaction between the teacher and student [28]. Knowledge dissemination is important because of its connection to knowledge generation. If the members of an organization all attain a similar level of knowledge then, the new knowledge produced

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will be of higher quality and greater value. Knowledge dissemination also prevents the loss of tacit knowledge embedded in human minds.

Knowledge Utilization represents the process by which knowledge is implemented. It does not suffice to create new knowledge if it is not utilized in the organization [50]. If this step is not undertaken that the knowledge management procedure remains strictly a theoretical one and organizations and managers will fail to see the benefits it provides. The utilization of new

knowledge must be actively supported by

management and by the organizational culture put in place.

Knowledge Measurement is the process by which the impact of knowledge on organizational

performance is realized. It is important to assess knowledge so that the knowledge management process can be continuously improved [50]. However, assessing tacit knowledge and its impact on the organization has proven however illusive to this point. This represents the last step of the cycle. C. Knowledge Quantum is the result of the knowledge management process and is at the core of the organization. It represents the amount of knowledge present in the organization. This resource is the key to competitive advantage for the company in the market place.

The second view of the model presents the connection between the various elements (figure 2).

Fig. 2. Knowledge Management Model Second View Each one influences the others and their height is

indicative of the amount of influence they have on a successful knowledge management initiative. The higher each step is the more data and information they contribute to the process as a hole and the end result is a taller Knowledge Quantum which is directly linked to improved organizational performance. Also presented in this view are the

two opposing forces that affect the model thru its entire life cycle. The "positive" force is Knowledge Generation while the "destructive" is Knowledge Decay [21]. Managers must strive to maintain the balance in favor of the "positive" force, otherwise

the organizations Knowledge Quantum will

diminish and so will its overall effectiveness and efficiency on the market.

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Fig. 3. Knowledge Management Model General View The whole Knowledge Management Model is

presented in Fig. 3 thus the correlation between the two views is made clear.

5. Conclusions

Although the successful implementation of knowledge management presents many difficult challenges and requires a considerable amount of resources, the benefits to the organization are considerable.

A company that manages its knowledge correctly achieves increased effectiveness and efficiency in today's highly competitive market place. This can be

attributed to the connection that exists between knowledge and key business processes [17].

Successful knowledge management

implementations lead to:  new products and services;  reduced time to market;

 increased customer satisfaction;

 increased employee satisfaction and motivation;  cost reduction;

 increased market share, etc.

Those are some of the reasons why the following organizations implement knowledge management and emphasize its importance at all possible levels: ITC companies, Apple, Samsung, Google, IBM; automotive companies Toyota, Volkswagen, BMW,

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Audi, Ford; consulting companies Ernst & Young, Andersen Consulting, Bain Company etc.

The importance and benefits of knowledge in general and knowledge management in particular are synthesized by [41]: " In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge"

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