Knowledge Management In The Business Realm Commerce Essay


Before we shall discuss about the knowledge management, we should know about the definitions of the knowledge itself. As many nobles had argued about the nature, origin and scope of knowledge from the Greek era until the current academic circles (Hicks et al, 2006), there were two outstanding views in studies of knowledge work in organizations: the epistemology of possession and the epistemology of practice. Newell et al. (2009) had explained the difference between those two views: "In short, the epistemology of possession treats knowledge as something people have whereas the epistemology of practice treats knowledge as something people do."

Although the two epistemologies seem to be quite distinctive to one another, there was still an idea to reconcile them together. That idea pointed out the possibility to see the processes of knowing and forms of knowledge as evenly important and complementary, as cited by Newell et al. (2009) from Cook and Brown (1999): "Organizations are better understood… if knowledge and knowing are seen as mutually enabling (not competing). We hold that knowledge is a tool for knowing, that knowing is an aspect of our interaction with the social and physical world, and the interplay of knowledge and knowing can generate new knowledge and new ways of knowing." Therefore, the two major views of knowledge can support each other and would lead to augmentations in both of them.

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Then, we shall move to discuss about the knowledge management and how it is important to an organization. The definition of knowledge management was debated, defined, and redefined repeatedly, recently; Groff and Jones (2003) referred the knowledge management as "the tools, techniques, and strategies to retain, analyze, organize, improve, and share business expertise", while, von Krogh (1998) defined it as the identification and leverage of the collective knowledge in an organization to help it compete. However, most of the explanations for the knowledge management said about quite the same thing: utilization of knowledge within an organization in order to gain the competitive advantage against the organization's rivals through the better performance from a good management of its intangible asset, which usually refers to the organizational knowledge or intellectual properties.

Knowledge management is really important to an organization as denoted by many educated with slightly the same reasons; for example, knowledge management urged to develop and retain the knowledge, which is the infinite assets as it is not depleted, but tends to be increased instead, after sharing, of the people in organization (Groff and Jones, 2003), knowledge management is a critical factor for an organization's survival via a good management of the employee competencies (Martensson, 2000), knowledge management is subject to an increase in innovativeness and responsiveness as cited from Hackbarth (1998) by Alavi and Leidner (2001), and Gartner Group (1999) stated that "Knowledge management promotes an integrated approach to identifying, capturing, retrieving, sharing, and evaluating an enterprise's information assets." Anyway, Kermally (2002) noticed that some organizations believe that small firms do not need to do anything about managing knowledge since the knowledge-related issues are to be concerned only in big businesses, but he argued that knowledge management is very important for all businesses and does not discriminate as far as the size of company is concerned.

There are two popular concepts of managing knowledge in an organization: knowledge creation and knowledge conversion (between tacit knowledge and explicit knowledge), as it was stated by Groff and Jones (2003) that knowledge conversion is one of the key functions of knowledge management strategy. According to Alavi and Leidner (2001), most organizations believed that much of the knowledge they needed were already existed within the organization, but the trickiest part was to identify and leverage it. Usually, individuals transformed information into knowledge once they understood it and store it within their minds, then the knowledge was transformed again into information when they would like to transfer it to one another, and there were repeatedly transformation between knowledge and information inside an organization (Hicks et al, 2006). In other words, knowledge conversion could bring about knowledge creation and vice versa. Furthermore, Nonaka (1994) added that the knowledge creation, which includes the development of organization's cognitive resources, is more dynamic than organizational learning.

As Nonaka and Takeuchi (1995) stated about the knowledge conversion, they concentrated on the interaction between tacit and explicit knowledge. Hence, the distinction between tacit and explicit knowledge should be known prior to the study of knowledge conversion. According to Newell et al. (2009), an important aspect of tacit knowledge is that we know more than we can say; it is more about skills or know-how that people obtain via their own experience, they also added that tacit knowledge appeared to be utterly hard to be formalized and communicated. In contrast, they described the explicit knowledge as something that can be spelled out or codified, so it is more communicable across the contexts. As Nonaka (1994) explained: "The way to create knowledge in organizations, then, according to the structural perspectives is to identify important tacit knowledge, make it explicit, and convert it back again into the tacit knowledge of others elsewhere in the organization so that it can be applied."

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As illustrated in the Figure 1 below, there are four modes, or processes, of knowledge creation, divided by the types of knowledge at the beginning and the ending of the transformations. Nonaka and Takeuchi (1995) had explained those four distinct modes of knowledge creation as follow: First of all, socialisation (tacit to tacit knowledge), which is the sharing of experiences including mental model and technical skills, the observation, imitation and practice are the tools for an individual to obtain tacit knowledge from one another. Secondly, externalization occurs when articulating tacit knowledge into explicit concepts. The successful of this process depends on the appropriate use of metaphor, analogy, and models to help convert tacit into explicit knowledge effectively. The externalization is defined as the hardest mode of the knowledge conversion in several studies (Chaston et al, 2001; Honig, 2001). Next, combination is a process of converting explicit knowledge into systematic sets of explicit knowledge through media such as documents, meetings, telephone, or computerized communication networks. The combination process also includes the breakdown of concepts, for example, corporate vision into operationalized concepts. Finally, internalization is a step of embodying explicit knowledge which is created and shared in an organization into tacit knowledge of individuals. It is closely related to learning by doing.

Figure 1: The SECI cycle of knowledge creation

Source: Nonaka and Takeuchi (1995)

Then, we shall explore more in-depth about two of the significant components of knowledge creation and conversion, which are knowledge codification and sharing. Cowan and Foray (1997) defined the codification process as 'the process of conversion of knowledge into messages which can be then processed as information'; moreover, an adequate capability of knowledge codification can bring about economies of scale in an organization (Chaston et al, 2000). As Hansen et al (1999) suggested, there are two different knowledge management strategies. Firstly, codification strategy centres on the computer. Knowledge is codified and stored in databases, where it can be accessed by anyone in the organization. This strategy might reduce brainstorming and interaction between people. The second strategy is personalization strategy. In this case, the knowledge is tied to the person who developed it and is shared mainly through direct person-to-person contacts, and if the computer is used to communicate knowledge more than store it, this can be personalization strategy as well (Newell et al, 2009). To summarize, the proper strategy depends on the nature of the business and knowledge.

The rise of Information and Communication Technologies (ICTs) such as e-mail, video conferencing, forum, web server, and etc make knowledge sharing, which could be the core of improvement for organizations, especially in public sector (Rashman et al, 2009), among people within an organization become more efficient (Cross et al, 2001). Zack (1999) stated that a distinction can be made based on their functional characteristics. The first category of ICTs is called integrative technologies which sustain management of stocks and sequential flows of codified knowledge in organization. This kind of technology such as database seems to be suitable for sharing know-what which is knowledge about fact and minimal understanding of things. The second category is interactive technology which represents all applications that support interactions and cooperation among people. Therefore, interactive technologies are appropriate for sharing know-how which refers to skills and competences. Know-how depends on practical experience and it is difficult to codify or explicit. For high degree of tacit knowledge, people have to share context, routines, and experience. The most advanced technology is not enough to improve coordination and face-to-face must take place (Feher, 2006).

However, there were still some problems in knowledge management as stated in a number of studies (Cowan and Foray, 1997; Ivory et al, 2007; Newell et al, 2009; Martensson, 2000): To begin with, it is hard to identify which knowledge is tacit since there was no clear applicable definition to everything, so it was quite hard to determine the trigger of Nonaka's SECI cycle of knowledge creation. Next, they added that the conveyance of knowledge can be difficult as the perception of individuals might be wrong, so it could be very hard to transfer knowledge to the latter tier(s) in organization. In addition, there could be some problems in knowledge codification; for example, the interpretation could be tricky due to distinctive style of experts, there could be some omitted content(s) during the codification, special knowledge and capture skills are required, and knowledge codification could be costly, includes in term of money, time, and human capital. Lastly, there could also be some problems in knowledge sharing, such as the reluctant to share knowledge due to lack of incentive and the risk of losing the organizational importance of individuals, some knowledge might be non-renewable so sharing them was not really beneficial, and there could be difficult to specify a proper media choice in every cases as it could be varied with richness and competencies at the knowledge capture.

Interactions between people in organization

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Interactions between individuals within an organization is crucial to its performance because it is not only help the people in organization and the organization itself to achieve some tasks those cannot be done with just a single person (Buchanan and Huczynski, 2007; McAllister, 1995; Ragins, 1997), but also can enhance the processes of knowledge management within an organization which prior to better operational quality (Alavi and Leidner, 2001; Cross et al, 2001; Newell et al, 2009; Nonaka, 1994). Therefore, appropriate relationship between organization's employees can lead to both better cooperation and organizational performance's development.

To begin with, one of the most important factors of the interactions between people in an organization is the communication between them. The currency of conversations is information as it has been conveyed via the communications' processes; good communication lead to a sharing of ideas and meanings those had constructed messages, options and information, which will be received, considered and discussed until an expected common understanding has been reached, as explained by Cribb and Hartomo (2002). They also added that there are three main ways in communication those support knowledge sharing and creation in organizations:

Publication consists of tangible mediums, such as brochures, handbooks, directories and annual reports, which can improve the flows of explicit knowledge, though they can contain some drawbacks like the requirements of time and employees' interests in order to understand those mediums.

Face-to-face communication, which holds the title of the best and the most effective way to transfer messages and understanding, and it can also lead to an establishment of relationships from this way of communication. The core of this method is that it allowed knowledge to flow from both sides; however, there are still some skills, such as listening skills, negotiation skills and presentation skills, which are needed to be developed as it can enable better knowledge sharing among individuals.

Electronic technologies, which have been developing in an extreme scale in the recent decade, are a potential alternative for the communication since it would bring about the more convenience in communications, despite its requirements of initial investments and organizations' restructures.

However, there is still some disagreement on the topic of communication. According to Buchanan and Huczynski (2007), organizational communication is not neutral as it is constructed from the management's aspect in order to manipulate the attitudes and behaviors of recipients, while, Ichijo and Nonaka (2007) argued that knowledge-based industries underpin the significance of personal contacts and communication by growing role of communities of practice.

Next, groups and teams are very useful devices for the organization as, other than the fact that it helps the organization improve its competencies, it could bring about beneficial relationship between the members of the groups or the teams; however, group and team are not exactly the same thing, though they were used interchangeably for many times (Buchanan and Huczynski, 2007). As noted by Katzenbach and Santamaria(1999), members of a group tend to work on their own, whereas members of a team will work together after the desired goal(s), and a team would give more importance to each member's ideas, while, a group tends to based much on its leader. Moreover, they added that the leadership in a team is transferrable among the members, but it was quite fix to one person in a group. However, team and group also have one thing in common: both of them are formed and will be working toward the desired goal, interest, or task (Johnston and Clark, 2008). As stated by Buchanan and Huczynski (2007), a team is a group which possesses extra (and positive) features, such as co-ordination and cohesion, so a group can be transformed into a team if it manages to acquire those positive features through the learning progress (Johnston and Clark, 2008; Buchanan and Huczynski, 2007).

According to Hampton (1999), groups contain many good values: teamwork, co-operation, a collective that is greater than the sum of its parts, informality, egalitarianism, and even the indispensability of the individual member. Generally, most of the variation in a group's performance could be explained by the task that it was asked to perform (Borrill and West, 2005). Steiner (1972) classified group tasks, based on the type of interdependence that they required between their members, into three main types: 1) additive task, which is a task whose accomplishment depends on the sum of all group members' efforts, 2) Conjunctive task, which its accomplishment depends on the of the least talented member in the group, and 3) disjunctive task, which the performance of the group's most talented member determine its accomplishment. Then, Buchanan and Huczynski (2007) claimed that there are two major kinds of groups: formal group and informal group. They stated that a formal group is the one that has been consciously created to achieve a defined part of an organization's collective purpose; its functions are the assigned tasks which it is officially held responsible. While, they explained that an informal group is a collective of individuals who become when interdependencies is developed by its members and each member can influence the behaviour of one another; moreover, this kind of group contribute to mutual need satisfaction.

Then, we shall move to the team, which was claimed by Johnston and Clark (2008) that many organizations would prefer it over working groups. Team can only succeed or fail as a whole, and the benefits and costs of success or failure are to be shared by the team's members (Buchanan and Huczynski, 2007). Sundstorm et al (1990) divided teams by using four dimensions: 1) degree of technical specialization, whose members are required to be special; possess technical skills from higher education or extensive training (high differentiation), or from the members' experience and problem-solving ability (low differentiation), 2) degree of co-ordination, which is determined by the work's relation and cohesion; high co-ordination means the work is closely related and intertwined among the team's members, while, relatively independent operation refers to low co-operation, 3) work cycles, which can be measured by the number of work cycles and the length of time that the team need to achieve its aims (short and repetitive work cycles or a single, long one), and 4) typical output, which refers to the types of the team's output. According to those four dimensions, there are four types of teams, as Sundstorm et al (1990) added, which are:

Advice, such as committees, review panels and boards, quality control circles, employee involvement groups, or advisory councils. This type of team contains low degrees of both technical specialization and co-ordination with the lifespan equal to one work cycle (no matter it is brief or long), and the outputs are decisions, solutions, suggestions, proposals, or recommendations.

Action, such as sports teams, entertainment groups, expeditions, negotiating teams, surgery teams, or cockpit crews. This type of team possess high degrees of both technical specialization and co-ordination with a brief and repeated work cycles under new conditions, and the outputs are competitive events, expeditions, contracts, lawsuits, concerts, surgical operations, flights, or combat missions.

Project, such as research groups, planning teams, architect teams, engineering teams, development teams, or task forces. This team type contains high degree of technical specialization with either high (for cross-functional teams) or low (for traditional units) degree of co-ordination along with different in work cycles for each project; a team's lifespan is equal to one cycle. The outputs are plans, designs, investigations, presentations, prototypes, reports, or findings.

Production, such as assembly teams, manufacturing cells, mining teams, flight attendant crews, data processing groups, or maintenance crews. This type of team is consist of high degree of both technical specialization and co-ordination with the work cycles those are usually shorter than the team's lifespan (either they are typically repeated or continuous process). The outputs are food, chemicals, components, assemblies, retail sales, customer service, or equipment repairs.

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