Chapter 4 – Flow

• Data, Information, Knowledge

• Organizational Knowledge
• Tacit Knowledge
• Knowledge Creation
• Knowledge Transfer
• Knowledge Utilization
• Information Needs, Seeking and Use in
Knowledge Creation
 Chapter2-Knowledge Economy: An Overview

Basic Features of Knowledge Economy

• Key driver of the economy will be innovation rather
than production efficiency
• Economy will be based on production ,distribution
and use of knowledge
• Increase in number of high skilled knowledge workers
• A range of knowledge based products appear in the
form of knowledge goods, digitalised processes
,digitised physical goods ,knowledge and knowledge
enhanced physical goods and services
• An appropriate government policy supporting the
scientific and technological development
 Forms of Knowledge
• Codified and Tacit Knowledge
• Know-what
• Know-Why
• Know-How and
• Know-Who
 Know-what ,Know-Why , Know-How and
Know-Who
Know-What is the knowledge about facts and this is the
knowledge that experts have to posses .
Know-Why deals with scientific knowledge of laws and
principles .This type of knowledge is the basis of
technological developments .
Know-How is related to skill i.e, the ability to do something
.This type of knowledge is typically developed and kept in
individual firms .
Know-Who indicates the information about who knows what
and who knows how to do what. This type of knowledge is
of particular interest in modern economy since it has a need
for different types of skills and knowledge that are dispersed
in society
 Characteristics of Knowledge
• 1) Knowledge remains with the seller even when the
buyer has acquired it.
• 2) Knowledge is not destroyed in consumption and
more units of same knowledge add no additional value
to one that posses this knowledge .
• 3)Knowledge has a spill over effect –learning a task
can enhance learning of a new task .
• 4)The value of knowledge is not known until it is
purchased .
• 5)Knowledge embedded in emerging types of products
or services that learn or adapt with in use undergoes a
change each time the product or service is used
 Knowledge ASSETS
• 1)Discovery : The most important components
of discovery are investments in R&D.
• 2)Organisational Capital: It incorporates items
such as brands , information and
communications technology ,software or
customer acquisition costs .
• 3)Human Capital: It is the number of human
resources and is widely regarded as one of the
most important components of corporate
success
 Chapter3-Simulation modelling :The link
between change management approaches

• This chapter investigates five management

innovation and change programs including
TQM,JIT,BPR,Process innovation and
Knowledge management
 Total Quality management
• TQM was first developed by U.S writers such as
Crosby (1979),Deming (1982)and Juran(1986)in
the post war period .TQM is sometimes referred
to in the literature as an example of Japanese
management methods and techniques .TQM is a
comprehensive approach to improving
competiveness ,effectiveness and flexibility
through planning ,organising and understanding
all the activities and tasks undertaken by people
with in an organisation .The core of TQM is about
improving customer and supplier relationship
 JIT

• Just –in-Time in general relates to methods

aimed at reducing inventory levels
 Business Process Re-Engineering (BPR)

• BPR emerged in the late 1980s and early

1990s as a new approach to managing
innovation and change. A more cynical
interpretation is that BPR was a euphemism
for ‘Big Personnel Reductions’ as it called for
the ambitious restructuring of organisations
through downsizing and de layering of
managerial hierarchies and functions .
 Process Innovation
• It is an ambitious management change
program designed to fuse information
technology and human resource management
for the purpose of improving business
performance. As with BPR ,process innovation
focuses upon company wide innovation
change and is not intended to be a managerial
quick fix to resolve short term financially
based operational problems
 Simulation Modelling
• According to Pidd(1989) simulation modelling
can be defined as the follows “The basic
principles are simple enough .The analysts
build a model of system of interest ,writes a
computer program which embodies the model
and uses a computer to initiate the systems
behaviour whne subject to variety of
operating policies . Business process modelling
tools are continuously being released on the
software market
 Characteristics of Simulation Modelling

• 1)A simulation model can be easily modified to

follow changes in the real system and as such can
be used as a decision support tool for continuous
process improvement .
• 2)The flow of information within and between
business process can be modelled as the flow of
temporary entities between processing stations
• 3)Simulation model can capture the behavior of
both human and technical resources in the system
 KM Deployment Architecture
• People ,Content , Technology and Process to be
addressed
• People Architecture
• Defines the roles and responsibilities of various
aspects of KM implementation.
• Seven member central Km group
 Has 2 subgroups –one to oversee KM research
and content management
 other to see the architecture development and
maintenance
• Brand Manager for internal publicity and Promotion
• Content Architecture
• Specifies how knowledge assets are organized for
ease of retrieval .
• 18 Distinct contents are identified which includes –
white papers, case studies ,FAQs and website
reviews
• Technology Architecture
• A central KM portal – the Knowledge Shop – has
been developed, and provides access to knowledge
assets as defined by the content architecture.
• The recommended means of navigation is via the
knowledge hierarchy – a visual depiction of the
hierarchy facilitates this 
• Knowledge Shop also integrates existing
knowledge-sharing applications – BoK, Process
Assets, People-Knowledge Map, and so on – in
their present or soon-to-be-upgraded forms.
• Process Architecture
• Includes process that are internal to the KM group
and those used to develop and facilitate KM
• Eg: Content management consists of process like
editing , publishing ,certification and maintenance
• Publicity , Branding ,Reporting and Benefits
measurement
 Benefits of KM at INFOSYS
• Survey of 600 respondents
• 99% said KM is essential for the company
• More than 80% believe that quality of work
and productivity has improved
• 73% said they have saved one person-day by
using the existing KM architecture
• 75% when needed they were easily able to tap
the top level knwoledege
Framework for designing Organizational
Memory
Identify Critical
Knowledge

Capture ,share
Design Links to Set up Policies and grow the
external
Knowledge
,Culture and critical
Incentives knowledge

Design ,storage
,access and
Retrieval Systems
 Identifying Critical Knowledge
• Knowledge about the customers
• Knowledge about the competitors
• Knowledge about the business partners
• Knowledge about the company’s product and
services
• Knowledge about the company’s internal
resources
 Culture and Incentives
• Having a working environment which
encourages ideas to flow smoothly
• working environment that supports initiative
and innovation
• Create a culture of trust and learning
• Create a culture that empowers employees
• Introducing a reward system for sharing
knowledge
 CAPTURING, sharing AND growing
knowledge
• Electronic Knowledge Repositories
• Corporate Yellow pages
• Community based discussion
• Reflective and structured dialogue among
employees
• Supporting collaborative work between teams
 Designing access and Retrieval systems
Process Type of Knowledge Technology

Find Knowledge Tacit and explicit Search engines and

browsers
Acquire new Knowledge Tacit and explicit collaborative decision
making tools e.g. Lotus
notes
Package and assemble Explicit Information refinery tools
Knowledge

Reuse and apply Explicit Customer support and

Knowledge project record databases

Transfer of real time Tacit and explicit Video conferences and

contextual Knowledge groupware recording

Create Socio-technical Tacit and explicit Discussions databases,

networks electronic forums
Facilitating Access to external knowledge

• Many breakthroughs have been serendipitious

, influenced by freedom of intellectual pursuit
and ready access to people and knowledge
bases with a variety of backgrounds
• Help from external environment like joint
venture partners ,consultants ,academicians
etc
Ch .4 Intellectual Capital by Peter Heisig, Jens
Vorbeck and Johannes Niebhur
 Editors have simplified story of emergence of
Intellectual Capital with the publication of Skandia’s
1994 report on Intellectual Capital.

 Moving ahead further editors have presented the

relevance of Intellectual Capital in the knowledge
economy in the form of something more than only the
book value that increases the worth of any firm.

 The measurement and management of such intangible

aspects are also clearly mentioned.
The concept of balance score card to indicate the intangible asset has been describes
with pictorial representation.

Financial
Financial

Balanced
Balanced
Customer Internal
InternalProcess
Process
Customer Scorecard
Scorecard

Innovation
Innovation&&Learning
Learning
 The Components of intellectual capital
according to Sullivan
Intellectual
IntellectualAssets
Human
HumanCapital
Capital Documents,
Assets
Documents,Drawings
Drawings
Programs,Data
Programs, Data
Inventions,
Inventions,processes
Experience
Experience processes

Know-How
Know-How
Intellectual
Intellectualproperty
property
Skills
Skills Patents
Patents, ,
Copyrights,
Copyrights,
Trademarks,
Trademarks,Trade
Trade
Creativity
Creativity Secrets,
Secrets,Semi
Semi
Conductor
ConductorMasks
Masks
Editors have not left unclear the idea of Intellectual
Capital by simply letting the subjective aspects
rather they have presented the methods of
measuring intellectual capital in order to help
companies practically implementing the concept.

Methods include Tobin’s Q, Calculated intangible

value (CIV), Measurement with non financial
indicators and finally the measurement by Sveiby.
 SKANDIA NAVIGATOR I

BUSINESS CONCEPT SUCCESS FACTORS INDICATORS FOCUS

Financial
Financial

Customer
Customer

Process
Process

Renewal & Development

Renewal & Development
SKANDIA NAVIGATOR II

Profits
Profits Yesterday

Customer
Customer
Agent
Agent Staff Products
Products
Today
IC

Growthand
Growth andDevelopment
Development Tomorrow
 SKANDIA NAVIGATOR III

Booked Gross Premium Number of Products offered

Earned Gross Premium
Number of Products in stock
Premium per Employee
Number of investment
Companies
Average Number of funds
Contribution Number of Ecological Funds
Profits
Profits
Cancellation Rate
Number of Key
Accounts

Customer
Customer
Agent
Agent Staff Products
Products

Market Share
Full time Staff
Number of women
Growthand
Growth andDevelopment
Development Market position
Number of service staff Fresh Employments
Training costs per Employee
Personnel Turnover in %
 Chapter 9 Application of Marketing Knowledge

• This chapter highlights the following aspects:

1.How KMS is useful in Marketing
2.Marketing Principles based on Knowledge of Customers
3.Market Research and Analysis
4.Using knowledge to Price Products over their Life Cycle
• The author describes about the Market Mix,Customer
Focus,the factors to be considered while discovering
market knowledge like focus of core
competencies,market research information,development
of products and services,Market share,quality of products
etc.
• It also focuses on Market strategy and how knowledge of
customers can be helpful in selecting marketing strategy.
Chapter 10Application of Manufacturing Knowledge

• This chapter is based on Manufacturing

Operations,TQM,Supply Chain,KMS in
Manufacturing,Analysis of Vendors,Buyer,Knowledge
Discovery to develop an overall purchasinng supply
chain and Knowledge to discover and track Quality
Problems.
• The author descibes the broad view of manufacturing
operations,the focus on TQM,the factors useful in
discovering manufacturing knowledge like
redesigning,life cycles of products,concept of JIT,WIP flow
of manufacturing operations and the manufacturing
processes of competitors,production planning.
 Chapter 11 Application of Financial Knowledge
• The Main focus of tis chapter is:
1.Using KMS in Accounting and Finance
2.Important factors in discovering Financial knowledge
3.Cost accounting Approaches
4.Using knowledge to determine appropriate Costing Methods
5.Using knowledge to manage Investments and maximise ROI

• The author has taken key concepts of financial management

like ROI,Capital turnover,Return on sales,Inventory
turnover,ratios used for calculation assets,liquidity etc.
• The financial principles based on knowledge of company’s
overall operations.
• Softwares useful in discovering financial knowledge.
• How to get the maximim benefits using knowledge based
methods.
 Chapter 12 Application of Human Resource Knowledge

• Features:
1.Role of Knowledge Officer
2.Human resource principles based on Knowledge of
Oragnisational Personnel
3.Software useful in discovering HR Knowledge
4.Wage and salary analysis to resolve Company’s HR Issues
5.Utilising knowledge to resolve Work force.

• The author focuses use of knowledge in HR section of

organisation.The role of CKO in gaining knowledge from
employees and utilising for company’s prosperity,Use of HRMS to
discover Human resource knowledge.
• The author has given a thrust on how knowledge is helpful in
resolving the issues on wage and salary by using analysis of pay
differentials between males and females.
 Chapter 5 Discovering Knowledge-Data Storage

• This chapter includes the following:

• 1.Open system architecture
• 2.Databases-Relational,Object oriented and Multidimensional.
• 3.Data Marts,Data warehousing
• 4.Knowledge Mining or Knowledge Discovery
• Current Data Mining methods
• The author has given an insight of databases,their types and how
they are being managed.
• Data Marts can provide a starting point for decision makers to
discover knowledge that they can use throughout an organisation.
• Data Warehouses help the organisation to become more
competitive,helps company personnel to identify hidden business
opportunities,improves productivity and customer responsiveness
to company promotions.
• The companies using data warehouse as strategic weapon are: Wal
Mart, MCI,MasterCard,Bank of America,R&V Insurance in Germany.
• Data Mining has also been described as knowledge
held within a company’s database by revealing
patterns and trends that can suggest improved
performance in terms of greater customer
satisfaction,higher quality products,savings and
profits.
• Data Mining methods like Neural networks,CART,K-
nearest neighbour,Discriminant analysis and Logistic
Regression with their advantages and limitations has
also been discussed and the current data mining
methods which are employed are being highlighted.
Role of ICT
Collaborative Technologies
Knowledge Infrastructure
The Internet- 3 Level of usuage
Meeting Technologies
Virtualization– Balancing Act
 Five Roles of Collaborative Technology
• A knowledge Connector
• Improved communication
• Access to information Repositories
• A vehicke for active knowledge exchange
• Alternative to conventional meetings.
Summary
• Discussed collaborative technologies such as groupwares and
intranet
• Knowledge technologies directly affect the way that people
work, either individually or with others.
• Achieving success requires attention to organizational and
human factors.
• Opportunities afforded by knowledge technologies are limited
only by human ingenuity.
Ch- 7Toolkit for the Knowledge-based enterprise
A knowledge initiative framework
KM success framework
KM success framework
KM Assessment
Knowledge sharing
Theory meets Practice
Better Collaboration
Knowledge leadership
 Summary
Creating and discovering Sharing and learning Organizing and
managing
Creativity techniques Communities of practice Expertise profiling

Data mining Learning networks Knowledge mapping

Text mining Sharing best practice Information

audits/inventory

Environment scanning After action reviews IRM(information

Resource management)

Knowledge elicitation Structured dialogue Classifying

Business simulation Share fairs Intranets/groupware

Content analysis Cross functional teams Measuring intellectual

Decision diaries capital
 CHAPTER-7 POWER,CONFLICT AND KNOWLEDGE
PROCESS
Power is a scarce resource whose use allows people to shape the
behavior of others.

Properties of knowledge that can make it a powerful resource

 Scarcity: limited Specialist or experienced people possess

 Satisfy wants :knowledge which satisfy individual wants
through its possession
 No alternatives: when there is no alternative

COMMENT : This chapter is silent about conflict

 CHAPTER-8
INFORMATION AND COMMUNICATION TECHNOLOGIES (ICT) AND
KNOWLEDGE MANAGEMENT
 ICT are technologies which facilitate managing and sharing of
knowledge .This term covers verities of diversity of
heterogeneous technologies including computer,
telephone ,e-mail, database ,data mining system , search
engines, internet ,videoconferencing etc.

 Analysis :

 The extent to which ICT can provide information richness

 The extent to which trust can be developed

MEDIUM COMMUNICATION CHARACTRISTICS

Face to face Information rich (facial expression,voice,visible gesture.

Synchronous communication ,quick feed back)
Relevant for sharing of tacit knowledge
Spontaneous response
Provides trust enabling conditions
Expensive if people separated geographically

Video conferencing Information rich (virtually real time ,synchronous medium)

Expensive to set up

Telephone Intermediate information richness (only tone of voice is active)

Cost variable
Spontaneous interaction irrespective of geographical situation
Can facilitate trust

E-mail Suitable to share high codified knowledge

Relatively low information richness
Relatively less costly
Permanent record of interaction so more authentic

*Increasing order of information Richness bottom up

ICT and TRUST

 Different writers having different view points .One school of thought

suggests it is not possible to develop and maintain trust in social relations
mediated by ICT ,they argue face to face contact is vital.

HOW TO DESIGN ICT –BASED KNOWLEDGE MANAGEMENT SYASTEM

 Find what kind of knowledge – sharing processes does the existing

organizational culture encourage or discourage ?
 How do existing power relations affect knowledge processes ?
 Once these questions have been answered it should be possible to design
and implement ICT-based KM-system.

Conclusion :whatever the role of ICT have in KM processes their design and
implementation requires to be sensitive to the socio-cultural context into
which they are being implemented.
 CHAPTER-4
WHY SHOULD I SHARE MY KNOWLEDGE ?WHAT MOTIVATES PEOPLE TO
SHARE KNOWLEDGE
 This chapter introduces the socio-cultural issues that are
fundamental to understanding both the attitudes of workers to
knowledge management initiatives and the dynamics of
knowledge management process .
Key socio-cultural factors
 Nature of employment
relationship
 Conflictual nature of intra-
organizational relations
 Inter-personal trust
 Role of personal identity
 Role of personality
CONSTRAINTS TO SHARE THE KNOWLEDGE

 THE PERSONAL AND EMBODIED NATURE OF KNOWLEDGE

 Knowledge is a recourse locked in the human mind .Hence the sharing and
transmitting of such knowledge occurs through interaction and communication
between people .The tacit knowledge employee possess can be exploited on a voluntary
basis .

 Again the socially and contextually embedded nature of knowledge suggests there are
limits to the extent to which knowledge can be explicit ,no matter how willing the
workers may be to make there knowledge explicit ,they will never be able to make
explicit all the assumptions and values on which it is based .

 THE NATURE OF EMPLOYEMENT RELATIONSHIP

 The willingness of workers to use their knowledge for achievement of organizational

goal should not be taken granted.
 The cause of unwillingness to share the knowledge is due to the recent changes in the
nature of the employment.i.e. due to the rise of contractual nature of job , less job
security and less internal promotion facility .

 INTRA-ORGANIZATINAL RELATIONS

 The inter group conflict is the main barrier of knowledge sharing.

FACTORS AFFECTING WILLINGNESS TO SHARE THE KNOWLEDGE

 Inter group /personal conflict :The importance of knowledge as a

significant power resource amplifies potential for conflict .

 Equity and fairness: The willing ness to share the knowledge can be
related the extent to which organizational decision making processes
are fair ,with fair ness being related to how much people are
involved in decision making ,the clarity of communication why this
decision are made . When all these factors are in place there must be
willingness to share the knowledge .

 Interpersonal trust : Trust is based on reciprocity or mutual

benefit .The lack of trust creates uncertainty .so all parties may not
participate .And due to opportunistic behaviors ,some one may loose
out form knowledge sharing and getting nothing in return .

 Level of organizational commitment :The sense of emotional

attachment to the organization they work for may lead to share the
knowledge
COMMENT
 This chapter is silent what level of equity do workers expect
from organizations they work in ?For example ,with regard to
decisions making ,What type of decisions and what level of
involvement do workers regard as fair ?

 No clear-cut answer to the question ,why I should share my

knowledge?

 In relation to knowledge management initiatives ,the interests

of workers and their employers must be compatible.

 The motivation to share the knowledge is well explained and

the chapter illustrates wide range of specific factors which can
influence people’s willingness to share knowledge.

 Finally the attention is given to the character of socio-cultural

context and a lack of sensitivity to it is likely to jeopardize the
success of any knowledge management initiative .
 CHAPTER-11
INNOVATION DYNAMICS AND KM PROCESSES
 Organizational Innovation is concerned with designing and
implementing changes to an organizations products, services
and processes.

 The demand of change comes into the picture due to the

rapid change in market , change in technology , as well as the
process of globalization .
LEARNING AND KNOWLEDGE MANAGEMENT
 Learning (individual ,group or organization ), is about
improving and developing knowledge by changing ideas
,values , and the way of understanding the things.
 Leaning involves acquisition and application of new
practices retaining existing knowledge.
MODEL OF INNOVATION

IDEA
CONCEPTUALIZATION

APPRAISAL OF NEEDS

DESIGN /BUY

IMPLEMENTATION

INSTITUTIONALIZATION –
ROUTINIZATION
 THE EMBODIEDNESS
OF POWER IN THE
EMPLOYEMENT

LERANING

INTRA-ORGANIZATIONAL THE INTER-RELATEDNESS

CONFLICT OF POWER AND
KNOWLEDE
CHARATERISTICS OF LEARNING PROCESS
PROSESS NAME LEVEL PROCESS DESCRIPTION
Intuition Individual Cognitive process involving
preconscious recognition of
patterns. Intuition is highly
subjective and rooted in
individual experience

Attending Individual Action-based individual process

of actively searching for and
absorbing new ideas

Interpretation Individual Explaining personal insights

through words or action
PROSESS NAME LEVEL PROCESS DESCRIPTION
Experimenting Individual Attempting to implement and
utilize new learning through
actual practices of change

Integration Group Developing shared

understanding and practices
which can occur through both
dialogue and coordinated action

Institutionalization Organization The process of ensuring that

organizes action occurs through
embedded insights in
organizational systems and
process.
COMMENT
 It is impossible to define where learning ends and knowledge process starts.
 Factors affecting learning in organizations
Factor Level

The emotional character of learning Individual

Competency traps and the difficulty of giving Individual/group/organization

up established values and practices

The politics and power involved in Individual/group/organization

implementing learning and challenging norms

The inter-relatedness of learning , knowledge Supra-organizational

and power

The embeddedness of power in the Supra-organizational

employment relationship
 Knowing And Learning In Organizations

The WHO Smallpox Eradication Program

(1967-77) showed how cycles of sensemaking,
knowledge creation, and decision making
supported by a matrix of information
management practices enabled the
organization to innovate and adapt effectively.
This chapter discusses how the knowing
organization model relates to other models of
organizational learning. The chapter also
summarizes the practical implications of the
model, drawing examples from new cases and
cases presented earlier in the book.
The Knowing Cube
Innovation Dynamics and Knowledge
Processes
 The central focus of this chapter is on Nonaka
and his collaborators, whose work on
knowledge creation is arguably the most well
known. The chapter provides a critical
evaluation of his work and highlights a
number of ways in which it has been criticized.

 Provides an overview on how the literature on

organizational innovation has evolved since
the 1980s
Typical components in stage model of
innovation
Idea
conception

Appraisal
of needs

Design/
buy
Impleme
ntation
Institution
alization
 Key characteristics in contemporary
conceptualization of Innovation process

Interactive

Utilization of Diverse bodies

internal and of knowledge
external typically
networks necessary
SECI MODEL OF KNOWLEDGE CREATION
 LIMITATIONS OF NONAKA’S KNOWLEDGE
CREATION THEORY
The empirical evidence supporting the
theory is unconvincing
The model has conceptual problems
Its universal applicability is limited as it is
only relevant to companies utilizing
Japanese business practices.
This part describes two basic frames of reference to analyze the nature
of knowledge : EPISTEMOLOGIES

AUTHER OBJECTIVIST PRACICE-BASED

PERSPECTIVE PERSPECTIVE

Werr knowledge as theory Knowledge as practice

Empson Knowledge as an Asset Knowledge as a process

Cook & Brown Epistemology of Epistemology of practice

possession

McAdam Knowledge as truth Knowledge as socially

made
Knowledge Requirement Framework (KRF) Architecture
KRF ARCHITECTURE
KNOWLEDGE AUDIT
K-AUDIT TEAM
OUTCOME OF K-AUDIT
7 LAYERED KM SYSTEM ARCHITECTURE
APPLICATION 1 OF KM SYSTEM
APPLICATION 2 OF KM SYSTEM
Create new terms and Identify related
concepts knowledge
Build models, Work in cross-
functional teams
prototypes
New products, tools
Lessons learned

Embed new knowledge into

Walking around inside and
action, practice
outside the organization
Mentoring, apprenticeships
Discover new uses
Discover new ways of working