What is Knowledge Management

What is Knowledge Management?  Chapter I What is Knowledge Management? Murray Jennex, San Diego State University, USA Abstract This chapter defines knowledge and knowledge management (KM) and establishes its roots. KM is not a brand new topic; organizational learning and organizational memory are related topics that have been fields of research for many years. This chapter relates these concepts to a relational model that shows that the three topics are related and influence organizational effectiveness. Additionally, this chapter explains that KM has become a research area due to a confluence of trends that have made KM necessary and technically useful. Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.  Jennex Introduction Knowledge management (KM) is a hot topic in many business communities. Although, the term Knowledge Management might suggest a rather simple definition, there are plenty of opinions on what exactly it is and how it should be used, if used at all. However, because of the ever-increasing pace of business development, the task of effective and competitive management of organizations becomes essential, and KM, if understood and implemented properly, may be a useful tool for business transformation as well as the key to competitive advantage. In this first chapter I would like to introduce the basic definitions and concepts of KM. I thought this would be an easy chapter to write, as it seemed that we all knew what we were talking about when discussing KM. However, I became aware of the need to establish a definition of KM through the publication of an expert opinion in the Business Intelligence Journal. The editors asked three experts (this author included) about integrating KM and data warehouses. When the issue was released, I was surprised that the three experts all had different opinions on what KM was (Corral, Griffin, & Jennex, 2005). One expert described the purpose of KM as disseminating knowledge quickly and KM systems as essentially document management systems. The other expert considered KM as the process of handling unstructured knowledge. The final view (mine) combined technical and organizational initiatives to manage structured and unstructured knowledge in order to help the organization improve its effectiveness through improved retention and reuse of knowledge. Three experts expressed different definitions of KM and illustrated the need to define KM so that there is a common ground for discussion. The first step, though, is to define what is meant by the term knowledge, since this is the central theme in KM. Knowledge Davenport and Prusak (1998) view knowledge as an evolving mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. They found that in organizations, knowledge often becomes embedded in documents or repositories and in organizational routines, processes, practices, and norms. They also say that in order for knowledge to have value, it must include the human additions of context, experience, and interpretation. Nonaka (1994) expands this view by stating that knowledge is about meaning in the sense that it is context-specific. This implies that users of knowledge must understand and have experience with the context, or surrounding conditions and influences, in which the knowledge is generated and used in order for it to have meaning to them. This also implies that in order for a knowledge repository to be useful, it also must store the context in which the knowledge was generated. That knowledge is context-specific and argues against the idea that knowledge can be applied universally; however, it does not argue against the concept of organizational knowledge. This chapter considers organizational knowledge to be an integral component of what organizational members remember and use, meaning that knowledge is actionable. Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. What is Knowledge Management?  Various knowledge taxonomies exist. Alavi and Leidner (2001) and Jennex and Croasdell (2005) found that the most commonly used taxonomy is Polyani’s (1964, 1967) and Nonaka’s (1994) dimensions of tacit and explicit knowledge. This book uses this taxonomy for knowledge. Tacit knowledge is that which is understood within a knower’s mind. It consists of cognitive and technical components. Cognitive components are the mental models used by the knower that cannot be expressed directly by data or knowledge representations and also is known as unstructured knowledge. Technical components are concrete concepts that can be expressed readily and also is known as structured knowledge. Explicit knowledge also consists of these technical components that can be expressed directly by knowledge representations. Knowledge transfer in an organization occurs when members of an organization pass tacit and explicit knowledge to each other. Information technology (IT) assists knowledge transfer by providing knowledge repositories and methods for capturing and retrieving knowledge. The extent of the dimension of the knowledge being captured limits the effectiveness of IT in assisting KM. IT works best with knowledge that is primarily in the explicit dimension. Knowledge that is primarily in the tacit dimension requires that more context be captured with the knowledge in which context is the information used to explain what the knowledge means and how it is used. Nonaka and Takeuchi (1995) propose four modes of knowledge transfer and creation (known as the SECI model): • Socialization is the process of sharing experiences and thereby creating tacit knowledge such as mental models and technical skills. Tacit knowledge can be obtained without using language through observation, imitation, and practice. • Externalization is the process of articulating tacit knowledge in the form of explicit concepts, taking the shapes of metaphors, analogies, concepts, hypotheses, or models. • Combination is the process of systemizing concepts into a knowledge system by combining different bodies of explicit knowledge. Explicit knowledge is transferred through media such as documents, meetings, and e-mail and/or phone conversations. Categorization of this knowledge can lead to the generation of new knowledge. • Internalization is the process of converting explicit knowledge into tacit knowledge and is closely related to learning by doing. These four modes or processes show that the transfer of knowledge is dependent upon the transfer of a common understanding from the knower to the user of the knowledge. Common understanding consists of the context (the story behind the knowledge, the conditions and situations that make the knowledge understandable) and the experience (those activities that produce mental models of how the knowledge should be used) expressed in a culturally understood framework. Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.  Jennex Knowledge Management Jennex (2005) defined KM as the practice of selectively applying knowledge from previous experiences of decision making to current and future decision-making activities with the express purpose of improving the organization’s effectiveness. Also, Jennex (2005) viewed a KM system as that system created to facilitate the capture, storage, retrieval, and reuse of knowledge. This perception of KM and KM systems is that they holistically combine organizational and technical solutions to achieve the goals of knowledge retention and reuse in order ultimately to improve organizational and individual decision making. This is a Churchman (1979) view of KM that allows KM systems to take whatever form necessary to accomplish these goals. For some organizations, this may mean that the KM system essentially is a document management system. However, as a community, we don’t want KM perceived essentially as a document management technology. Also, in some organizations, KM may be used only to manage unstructured knowledge. This may meet those organizations’ needs, but again, the KM community is not comfortable accepting that KM handles only unstructured knowledge. Another key definition of KM includes Holsapple and Joshi (2004), who consider KM as an entity’s systematic and deliberate efforts to expand, cultivate, and apply available knowledge in ways that add value to the entity in the sense of positive results in accomplishing its objectives or fulfilling its purpose. The entity’s scope may be individual, organizational, transorganizational, national, and so forth. Finally, Alavi and Leidner (2001) in their seminal work concluded that KM involves distinct but interdependent processes of knowledge creation, knowledge storage and retrieval, knowledge transfer, and knowledge application. It is important to note that none of these definitions of KM ise purely technical in nature. They all include information system (IS) support, but they also include organizational considerations, and all include an impact on organizational productivity and effectiveness. This is important, because many experts consider KM to be a form of IS. However, while the IS component is important, in order for KM to be effective as a change or transformation tool, it must include more; it requires management support and an organizational culture. A better understanding of KM is obtained by incorporating the concepts of organizational memory (OM) and organizational learning (OL). Jennex and Olfman (2002) found that the three areas are related and have an impact on organizational effectiveness. Organizational effectiveness is how well the organization does those activities critical to producing what the organization sells. OL is the process the organization uses to learn how to do these activities better. OL results when users utilize knowledge. That OL may not always have a positive effect is examined by the monitoring of organizational effectiveness. Effectiveness can improve, get worse, or remain the same. How effectiveness changes influences the feedback provided to the organization using the knowledge. KM and OM are the processes used to identify and capture critical knowledge. Knowledge workers and their organizations “do” KM; they identify key knowledge artifacts for retention and establish processes for capturing it. OM is what IT support organizations do; they provide the infrastructure and support for storing, searching, and retrieving knowledge artifacts. Figure 1 illustrates these relationships, and the following sections expand on these concepts. Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. What is Knowledge Management?  Figure 1. The KM/OM/OL Model (Jennex & Olfman, 2002). Impact to Organizational Effectiveness EEEffectiveness Management Org Learning Access and Use Memory to perform actions that affect Organizational Performance Knowledge Users Evaluate Events for Use of Applicable Memory to perform actions that affect Organizational Performance Monitor Organizational Effectiveness and AdjustKnowledge Requirements as needed Knowledge Engineers KM OM System Designers/IT Drives Users to put Information and Knowledge into their OMS Identify and Acquire Knowledge for future use Store, Retrieve, and Search Memory Base Organizational Learning Organizational learning (OL) has been defined as a quantifiable improvement in activities, increased available knowledge for decision making, or sustainable competitive advantage (Cavaleri, 1994; Dodgson, 1993; Easterby-Smith, 1997; Miller, 1996). Malhotra (1996) defines Organizational Learning as the process of detection and correction of errors. In this view, organizations learn through individuals acting as agents for them. Individual learning activities are seen as being facilitated or inhibited by an ecological system of factors that may be called an organizational learning system. Learning in this perspective is based on Kolb’s (1984) model of experiential learning in which individuals learn by doing. Huber, Davenport, and King (1998) believe that an organization learns if, through its processing of information, its potential behaviors are changed. Huysman, Fischer, and Heng (1994) as well as Walsh and Ungson (1991) believe organizational learning has OM as a component. In this view, OL is the process by which experience is used to modify current and future actions. Huber (1991) considers four constructs as integrally linked to OL: knowledge acquisition, information distribution, information interpretation, and organizational memory. In this case, OM is the repository of knowledge and information acquired by the organization. Organizational learning uses OM as its knowledge base. A different perspective on OL from Sandoe et al. (1998) is that organizations do not learn; rather, only individuals learn. During work, people gain experience, observe, and reflect in making sense of what they are doing. As they analyze these experiences into general abstractions, their perceptions on how work should be done changes. As these individuals influence their co-workers, the “organization” learns, and the process gradually is changed. Learning in this perspective also is based on Kolb’s (1984) model of experiential learning. Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.  Jennex Organizational Memory Huber, Davenport, and King (1998) summarize organizational memory (OM) as the set of repositories of information and knowledge that the organization has acquired and retains. Stein and Zwass (1995) define OM as the means by which knowledge from the past is brought to bear on present activities, resulting in higher or lower levels of organizational effectiveness. Walsh and Ungson (1991) define OM as stored information from an organization’s history that can be brought to bear on present decisions. OM can be viewed as abstract or concrete. It is comprised of unstructured concepts and information that exist in the organization’s culture and the minds of its members, and can be partially represented by concrete/physical memory aids such as databases. It also is comprised of structured concepts and information that can be represented exactly by computerized records and files. Sandoe and Olfman (1992) and Morrison (1997) describe these two forms of OM as having two functions: representation and interpretation. Representation presents just the facts (or knowledge or expertise) for a given context or situation. Interpretation promotes adaptation and learning by providing frames of reference, procedures, guidelines, or a means by which to synthesize past information for application to new situations. Comparing to the definition of knowledge, it is obvious that knowledge and OM are related through experience and learning. We consider knowledge to be a subset of OM and the processes of KM a subset of OM processes. Knowledge Management Summary IT summary knowledge is something that is actionable; that is, it is something that users can retrieve and apply to organizational activities. KM is the process used to make knowledge actionable to members of the organization. It involves capturing, storing, retrieving, and using knowledge. KM involves the creation of a KM system. The KM system includes an environment that promotes organizational learning. In this respect, KM can be an organizational change or transformation tool, as it can help management to create a learning organizational culture. Also, KM is a tool for improving organizational effectiveness, as it promotes knowledge reuse to improve decision making. Incorporating the concepts of OM, OL, and the previous discussion, this chapter proposes this working definition of KM: KM is the practice of selectively applying knowledge from previous experiences of decision making to current and future decision-making activities with the express purpose of improving the organization’s effectiveness. This definition, while perhaps not perfect, does represent the idea that when organizations implement KM, they are doing so with the expectation that organizational effectiveness will be improved and that organizational members will do this by acting on and using knowledge. The remaining chapters in this book may use differently worded definitions of KM, but all agree with this discussion and the spirit of this working definition. Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. What is Knowledge Management?  This chapter concludes with a discussion on why KM has become an important organizational endeavor. Why Knowledge Management? This book is written with the assumption that KM is something that modern organizations need to do. It is expected that readers will read with the assumption that they need to implement KM in their organizations or that KM is something important to research. However, KM is a relatively new discipline (as discussed in the next couple of chapters), and it is worthwhile to conclude this chapter with a short discussion on why KM has become this important of an endeavor. Jennex (2006) summarizes a workshop discussion at the 2006 Hawaii International Conference on System Sciences (HICSS) on the origins of KM and why KM came into prominence in the late 1990s. The following paragraphs summarize Jennex (2006). Many consider the popularization of the term by Davenport and Prusak (1998), with the publication of “Working Knowledge,” as the beginning of KM. However, there was a confluence of trends in the mid-1990s that actually caused KM to become an important topic. The first trend was the fallout from the business process reengineering (BPR) fad of the early 1990s. This business process led many organizations to restructure their businesses by changing processes and reducing staff. These staff reductions led to many organizations discovering that they had lost key knowledge and were no longer as nimble and innovative as they needed to be. This loss of knowledge provided a driver for identifying and managing knowledge that was internal to the organization. The second trend was technology. The mid to late 1990s saw accelerated advancement in the capability of the personal computer. Processing speed and memory grew rapidly (and continues to grow); also, the Internet became a practical reality, providing connectivity to many organizations and individuals. Additionally, the Year 2000 (Y2K) date problem was a driver for many organizations to replace older computers with current models as well as a driver to integrate and modernize organizational infrastructures. It was this trend that enabled KM to develop by providing organizations with technological capabilities for organizing, storing, searching, retrieving, and manipulating large amounts of structured and unstructured knowledge. The third trend was the explosion in content, information, and knowledge caused by the rapid growth of the Internet and corporate intranets, data warehouses, and databases. This explosion in the amount of data, information, and knowledge and its easy availability to decision makers of all ranks led to a loss of information and knowledge control by managers. This loss of control served as a driver to managerial awareness that there was a problem that needed to be solved. The fourth trend was organizational issues of maintaining business value and reducing risk of litigation and overall liability by managing human and intellectual capital better. A shift in many American businesses to a service-based economy led to an increasing focus on an organization’s skills and capabilities as well as sustaining these capabilities by retainCopyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.  Jennex ing high-value employees. This served as a driver to managerial awareness that employee knowledge was a valuable organizational asset. The confluence of these trends led to the behaviors observed by Davenport and Prusak (1998) and to the emergence of knowledge management as a necessary discipline. Why do we care? One of the major concerns is the sustainability of KM. We don’t want to waste our time and energy on a fad; we want to make sure that what we are doing is sustainable. Some of this concern is self-serving; we want to ensure that our peers recognize the importance of our research so that our research will be accepted and published and we can obtain promotion and tenure. Also, we want to ensure that we have a steady supply of students wanting to study our discipline and that these students have careers waiting for them in industry. Finally, we want to make a difference; we want to enable organizations to continue to prosper and better utilize their resources, as ultimately, this leads to a better society. References Alavi, M., & Leidner, D. E. (2001). Review: Knowledge management and knowledge management systems: Conceptual foundations and research issues. MIS Quarterly, 25(1), 107-136. Burstein, F., & Linger, H. (2003). Supporting post-fordist work practices: A knowledge management framework for dynamic intelligent decision support. Journal of IT&P Special Issue on KM, 16(3), 289-305. Cavaleri, S. (1994). 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