Learning Unit 2:

Knowledge Management Foundations, Economics, Mechanisms and

Technologies.
1) Develop a Knowledge Management infrastructure and Architecture:
KM mechanisms and technologies rely on the KM infrastructure; this reflects the long
term foundation of for knowledge management.
KM Infrastructure in an Organisation includes 5 major components:
1. Organisational Culture: Reflects norms and beliefs that guide the behaviour of
the organisations members’ behaviour. Is an important enabler of KM in an
organisation?
 The 4 most important challenges to KM in an organisation are:
 The Organisations employees have no time for KM.
 Current Organisational culture does not encourage knowledge sharing.
 Inadequate understanding of KM and its benefits.
 Inability to measure financial benefits to KM.

2. Organisational Structure: KM is also determined by the organisational

structure.
Firstly, Hierarchy of the organisation: affects who an employee is likely to
interact with on a regular basis.

Secondly, Communities of practice: Communities of Practice provides access

to a larger group of individuals than possible within traditional departmental
boundaries.

Thirdly, Specialised Structures and Roles: The organisation could…

(1). Appoint one person in charge of KM for the organisation (Chief
Knowledge Officer).
(2). Set up a separate Knowledge department headed up by the Chief
Knowledge Officer.
(3). Use the two traditional KM management departments. R&D who focus of
new innovative knowledge and the Corporate Library who focus on past,
historical Knowledge.

3. Information Technology Infrastructure: Certain technologies and systems are

developed specifically for KM, the organisations overall IT system that is set
up for the running of the business needs to facilitate KM.
The Information Technology infrastructure comprises of the organisations
entire spectrum of the organisations information systems, including
transaction processing systems and management information systems. It
consists of Databases (DB), Data Warehouses and enterprise resource
planning systems.
IT system must include 4 important aspects:
  Reach: Pertains to the number of geographical locations of the nodes
that can be efficiently accessed.
 Depth: The detail and amount of information that can be effectively
communicated over a medium.
 Richness: Of a medium is based on its ability to provide multiple cues
(Body language, facial expression, tone of voice etc.); Provide quick
feedback; Personalise messages and use natural language.
 Aggregation: Looks at the volume of information from various sources
processed in a specific space of time. (IT has contributed to the speed
of processing large amounts of information in a short period of time).

4. Common Knowledge: The Organisations cumulative experiences in

comprehending a category of knowledge and activities and the organising
principles that support communication and coordination. Common Knowledge
provides unity to the organisation through commonality. Eg, common
language and vocabulary.

5. Physical Environment: Design of buildings, separation between them, size,

location and types of offices etc. Physical Environment can improve
knowledge management by providing opportunities for employees to meet
and share ideas. Cafeterias, water coolers and coffee rooms can provide
avenues for employees to learn from and share insight with one another.

LO 2- Discuss the importance of managing knowledge management

foundations in an organisation

 KM infrastructure mechanisms and technologies are the underlying

foundations for any organisations KM solutions
 KM infrastructure is of fundamental importance with long term implications
and needs to be managed carefully with close involvement from top
executives
 All components of KM infrastructure affect not only KM but also all other
aspects of the organisational operations
 A strong relationship between the leaders of the KM function and top
executives is important
LO 3- Explain knowledge management processes using suitable examples

KM relies on 4 main processes

1. Knowledge discovery
 The development of new tacit or explicit knowledge from data and information
or from the synthesis of prior knowledge.
 Combination:
 New explicit knowledge is discovered through combination
 Through communication integration and systemisation of multiple
streams of explicit knowledge, new explicit knowledge is created
 E.g. When creating a new proposal to a client, explicit data, information
and knowledge embedded in prior proposals may be combined into a
new proposal
 Socialisation:
 In the case of tacit knowledge, the integration of multiple streams for
the creation of new knowledge occurs through the mechanism of
socialisation
 Socialization is the synthesis of tacit knowledge across individuals,
usually through joint activities rather than written or verbal instructions
 E.g. By transferring ideas and images, apprenticeships help
newcomers to see how others think

2. Knowledge Capture
 Tacit or explicit knowledge exists within people, artefacts and organisational
entities
 Knowledge capture is the process of retrieving either explicit or tacit
knowledge that resides within people, artefacts or organisational entities
 Externalisation:
 Involves converting tacit knowledge into explicit forms such as words,
concepts, visuals or figurative language
 It helps translate tacit knowledge into explicit forms that can be more
easily understood by the rest of the group
 E.g. a consultant team writing a document that describes the lessons
the team has learnt about the client organisation, client executives and
approaches that work in such an assignment this catches the tacit
knowledge acquired by the team members
 Internalisation:
 Is the conversion of explicit knowledge into tacit knowledge
 It represents the traditional notion of learning
 E.g. a new software consultant reading a book on innovative software
development and learning from it. This helps the consultant and his
organisation capture the knowledge contained in the book
 3. Knowledge sharing
 Is the process through which explicit or tacit knowledge is communicated to
other individuals
 Knowledge sharing means effective transfer (Recipient of knowledge
understands it well enough to act on it)
 What is shared is knowledge rather than recommendations
 May take place across individuals, groups, departments or organisations
 Socialization:
 Facilitates sharing of tacit knowledge
 E.g. when you used to share knowledge a face to face meeting could
involve a question and answer session between a sender and a
recipient of knowledge- whereas when used to create knowledge, a
face to face meeting could take the form of a debate or a joint problem
solving
 Exchange:
 Focuses on the sharing of explicit knowledge
 Used to communicate or transfer explicit knowledge among individuals,
groups or organisations
 E.g. A product design manual being transferred by one employee to
another who can then use the explicit knowledge contained in the
manual

4. Knowledge Application
 the process through which knowledge is utilised within the organisation to
make decisions and perform tasks
 When applying knowledge one does not need to comprehend it all. All that is
needed is that somehow the knowledge be used to guide decisions and
actions
 Direction:
 The process through which the individual possessing the knowledge
directs the action of another individual without transferring to that
individual the underlying knowledge
 E.g. direction is the process used when a production worker calls an
expert to solve a particular problem with a machine and then proceeds
to solve the problem based on the instructions given by the expert
 Routines:
 Involve the utilization of knowledge embedded in procedures rules and
norms that guide future behaviour
 E.g. routines could be automated through the use of IT, such as in
systems that provide help desk agent, fuelled engineers, and customer
end users with specific and automated answers from a knowledge
base

LO 4- Explain how knowledge management solutions can improve

organisational decision making
Managing KM solutions
Organisations should use a combination of the four types of KM processes and
systems. Different KM processes may be most appropriate in the light of the
organisations business strategy
 Knowledge application enables efficiency. Too much emphasis on knowledge
application could reduce knowledge creation.
 Knowledge capture enables knowledge to be converted from tacit form to
explicit and from explicit to tacit, thereby, facilitates knowledge sharing.
However, it might lead to reduced attention to knowledge creation
 Knowledge sharing enables efficiency by reducing redundancy. However, too
much knowledge sharing could lead to knowledge leaking from the
organisation and becoming available to competitors
 Knowledge discovery enables innovation. However, too much emphasis on
knowledge discovery could lead to reduced efficiency
LO 7- Develop a KM strategy to support business strategy
 Alignment between business strategy and KM helps enhance organisational
performance
 Greater alignment between business strategy and KM efforts indicates that
these efforts are targeted on areas that are critical to the firm’s success
 For knowledge to become a source of competitive advantage, firms need to
match their learning and knowledge strategy with their business strategy
 When a firms learning and knowledge strategy matches its business strategy,
the impact of knowledge and learning is positive
 If the match is not achieved, knowledge and learning may have no impact or a
negative impact on performance

LO 8- Discuss the value and impact of people, processes and products in

organisational knowledge and information practices
 KM can impact the organisations performance at several levels: people,
processes, products and overall organisational performance
 KM processes can impact the organisation at these four levels in two main
ways.

Impact on people
 Km can facilitate employee learning
 KM causes employees to become more flexible and enhances job satisfaction
Impact on employee learning
 KM can help enhance the employees learning and exposure to the latest
knowledge in their fields
  Can be accomplished in a variety of ways including externalisation,
internalisation, socialisation and communities of practice
 Externalisation and internalisation work together in helping individuals learn
 Socialisation helps individuals acquire knowledge through joint activities such
as meetings
Impact on employee adaptability
 The KM process encourages employees to continually learn from each other,
the employees are likely to possess the information and knowledge needed to
adapt when organisational circumstances require
 When employees are aware of ongoing and potential future changes they are
less likely to be caught by surprise
 Awareness of new ideas and involvement in free flowing discussions prepares
employees to respond to change and makes them more likely to accept
change
 Therefore KM is likely to create greater adaptability among employees
Impact on employee job satisfaction
 The two benefits of KM that relate to employees are:
 A) they are able to learn better than employees that are in firms that
are lacking in KM
 B) They are better prepared for change
 These impacts cause the employees to feel better because of the knowledge
acquisition and skill enhancement

Impact on Processes
 KM also enables improvements in organisational processes such as
marketing, manufacturing, accounting, engineering, public relations, and so
forth.
 These impacts can be seen along three dimensions:
 Effectiveness
 Efficiency
 Innovation

Impact on process effectiveness

 KM can enable organisations to become more effective by helping them to
select and perform the most appropriate processes
 Effective KM enables the organisations members to collect information
needed to monitor external events
 This results in fewer surprises for the leaders of the organisation and
consequently reduces the need to modify plans and settle for less effective
approaches
  In contrast, poor KM can result in a mistake by the organisation because they
risk repeating past mistakes or not foreseeing otherwise obvious options
 Organisations lacking KM find it difficult to maintain process effectiveness
when faced with turnover of experienced new employees

Impact on process efficiency

 Managing knowledge effectively can also enable organizations to be more
productive and efficient
 Three fundamental dilemmas that need to be solved with regards to
knowledge sharing by devising methods to:
 1) motivate members to participate and openly share valuable
knowledge
 2) prevent free riders- who are individuals who learn from others
without helping others learn
 3) reduce the costs associated with finding and accessing different
types of valuable knowledge
 Refer to examples on page 81

Impact on process innovation

 Organisations can increasingly rely on knowledge shared across individuals to
produce innovative solutions to problems as well as to develop more
innovative organisational processes
 KM has been found to enable riskier brain storming and thus enhance
process innovation
 Through process improvements, KM also contributes to the organisations
dynamic capabilities
 Which includes organisational processes such as strategic decision making
and product development processes that create value for organiusations in
dynamic environments

Impact on products
 KM impacts the organisations products. These impacts can be seen in two
respects

Value- added products

 KM processes help organisations offer new or improved products that provide
significant additional value as compared to earlier products
  Value added products also benefit from KM due to KM’s affect on
organisational process of innovation
 Refer to examples page 83

Knowledge- based products

 KM has major impact on products that are knowledge based
 Knowledge based products can play an important role in traditional
manufacturing firms
 Refer to examples on page 83

Organisational performance
 KM effects the overall performance of the organisation
 KM enhances employee learning from each other and external sources, and
helps to facilitate innovation, effectiveness and efficiency of organisational
processes
 KM contributes new knowledge based products or improves products that
provide significant additional value
 It takes time for KM efforts to produce organisational benefits
Direct impact on organisational performance
 Direct impact of KM on organisational performance occurs when knowledge is
used to create innovative products that generate revenue and profit or when
KM strategy is aligned with business strategy
 Has direct impact on revenue
 Measuring direct impact is straightforward, can be measured ITO
improvements in return on investment
Indirect impacts on organisational performance
 Indirect impacts of KM on organisational performance comes from activities
not directly linked to the organisations revenues
 KM can be used to demonstrate intellectual leadership in an industry which
might enhance customer loyalty
 Indirect impact cannot be easily measured as it cannot be associated with
transactions