1. KNOWLEDGE MANAGEMENT
Knowledge and its perceived value
Knowledge is increasingly viewed as a critical organisational resource which provides competitive advantage, and as Gourlay (2006) demonstrates, it has a particular importance for multinational companies (MNCs). As the speed of change gets faster organisations increasingly need innovations, new ideas and new ways of doing things to keep ahead of the competition, and they constantly need to know what their competitors and customers are doing. Increasing organisational knowledge is seen to underpin this. In addition knowledge-based organisations, such as consultancies and finance companies, are growing. The growth of knowledge work and the increasing number of knowledge workers has been well reported. Examples of knowledge workers are research and development staff, legal, IT, accounting and other professionals. But, although the prevalence of knowledge work still accounts for only a minority of workers in the UK (Nolan 2001), it would be a mistake to see knowledge as relevant just to such a narrow range of staff (see, for example, Evans 2003). We take the view in this chapter that knowledge is important for everyone in the organisation.
There are many different perspectives in the literature on what constitutes knowledge, and for an academic debate about the nature of knowledge see Tsoukas and Vladimirou (2001). At a simple level we can say that data are raw facts, that analysis and contextualisation of raw data so that they become something meaningful produce information, and that knowledge is more than information in that it has been reflected on and processed to the extent that it can be applied and is with the person who needs to apply it. Explicit knowledge, sometimes referred to as operational knowledge, or the ‘know what’ type of knowledge, can be codified and stored for others to access. Examples here might be competitors’ price changes, new competitor products, customer buying patterns and changes in employment legislation.
However, most knowledge is more complex than this, it is something which resides in a person’s head and we are often unaware of what we know until we come to use it. This is usually referred to as tacit knowledge, or the ‘know how’ type of knowledge. This is made up of our accumulated experiences about how things are done, how problems can be solved, what works, what doesn’t and in what contexts and under what conditions. An example of this might be a fireman who during a fire would be able to work out when a backdraught would be likely to occur and could then make sure the immediate area is clear of people. Working this out involves a series of decision processes about the current conditions of the fire and comparing this with previous experiences when backdraughts have occurred. This is usually done intuitively. For anyone else to use this knowledge it needs to be made explicit, which is recognised by many as difficult, and by some as unachievable. Knowledge management initiatives may cover either or both types of knowledge.
Knowledge in itself is not enough as it has to be accessed, applied appropriately and used to enhance the organisation’s ability to achieve its objectives. Thus for knowledge to be of value it needs to be turned into action. Given this, it is not surprising that attention has been focused on how to generate knowledge, how to share knowledge and how to reuse it – in other words knowledge management.
2. MANAGING KNOWLEDGE
Knowledge management has been variously defined and the term is ambiguous. In this chapter we will use a definition suggested by Scarbrough and Swan (2001):
defined broadly and inclusively to cover a loosely connected set of ideas, tools and practices centring on the communication and exploitation of knowledge in organisations. (p. 3)
Our understanding of what knowledge is will have implications for the way we try to manage it. Early approaches to knowledge management focused on IT systems as a means of codifying an individual’s knowledge, storing it and making it available to others in the organisation. This somewhat simplistic approach was based on the concept that knowledge is an abstract objective truth which can be easily recorded and manipulated, separately from the person who created the knowledge. The resultant activity led to a proliferation of organisational databases, search programmes, yellow pages type directories, intranets and extranets. An example of an extranet is provided by Hunter et al. (2002) in the context of a legal firm which offered professional knowledge in this format to valued clients as part of the service that they paid for. While this may be useful for the explicit knowledge referred to above, and is the focus of much research work in the area, it has very limited value.
The alternative perspective is that knowledge is personal and socially constructed. In other words, knowledge is an ongoing interpretation of the external world, as suggested by Blackler (2000):
knowledge to be . . . pragmatic, partial, tentative and always open to revision – it is no more, and no less, than a collective interpretation. (p. 61)
This perspective suggests that codifying knowledge and using IT systems to store and share it is inadequate. Instead attention needs to be focused on ‘communities of interest’ – in other words the way in which individuals with a common interest network to share knowledge and spark off new ideas. A second focus is on the way that knowledge becomes embedded into systems, processes and culture within the organisation. This perspective requires that individuals need to be willing to share their knowledge, and since knowledge is power, there can be no assumptions that individuals will comply. To this end encouraging and perhaps facilitating various types of networking would be more appropriate. Trust in the organisation is critical here as sharing knowledge may involve admitting to failures and what has been learned from them and giving bad news. Project write-ups and reports may also be used in trying to make tacit knowledge explicit, especially when individuals holding the knowledge may leave the organisation. An example of this is a Department Head in a university who was aware that a valued member of staff teaching a very specialist area was about to retire and instigated a project to document their teaching content and methods so that their particular knowledge would not be lost to the university.
Kermally identifies a range of knowledge management initiatives, based on Nonaka and Takeuchi’s (1995) model of how organisational knowledge can be created. Kermally suggests that to develop knowledge through socialisation activities such as brainstorming, informal meetings, conversations, coaching, mentoring, interacting with customers,
on-the-job training and observation may be helpful; to develop knowledge through externalisation, databases, exchange of best practices, building models, after-action reviews and master classes would also be helpful; for a combined approach, conferences, publications and electronic libraries are suggested; and for knowledge internalisation, feedback from customers, facilitation skills and development counselling would be helpful.
The barriers to knowledge management have been variously identified as the culture of the organisation, the risk of admitting to failure, lack of incentive to change, resistance to ideas and learning from other contexts, internal competition and individual reward practices. Factors identified as encouraging knowledge management are an organisation which engenders trust and openness, a knowledge-centric culture, defined roles and responsibilities in knowledge management, support through the performance management system (such as targets about sharing knowledge and team/organisational rewards), building on informal practices which already exist.
It has been suggested that organisations need to make all their knowledge management activities explicit in order to justify the investment made and demonstrate the organisation’s commitment to knowledge. Strategies for making knowledge management explicit are the subject of Case 12.2 at www.pearsoned.co.uk/torrington.
2.1. Roles in knowledge management
Evans (2003) notes that there is still much confusion about the responsibility for and accountabilities in knowledge management, and Lank (2002) suggests three new organisational roles intended to promote knowledge management:
- The knowledge architects. Lank suggests that these are senior, strategic roles such as Chief Knowledge Officer and involve, among other things, working out which knowledge is critical and how it will be shared, how technology could be used, how people will be trained, how they will be rewarded for collaborative working.
- The knowledge facilitators. These are the people who run processes to help knowledge flow, for example company journalists who write up customer case studies and project reviews; librarians who develop indexes for storage and retrieval of information; information service providers who provide an internal consultancy service to find and deliver information to staff – including external and internal information; webmasters who develop the company intranet; and learning facilitators who can facilitate post-event reviews to elicit lessons learned.
- The knowledge aware. These include all employees, who have a responsibility to share their own expertise and knowledge, who will participate in post-event reviews, and who act to reinforce the value of collaboration.
There are two critical roles missing here – the line manager and the HR specialist. MacNeil (2003) makes a convincing case for the importance of the line manager in knowledge management which she suggests has been overlooked to date. She identifies the line manager’s contribution as creating a positive learning climate, encouraging open exchange, reinforcing that making mistakes is acceptable and that it is helpful to share errors. She does, however, note that there are questions about the extent to which line managers have the skills to facilitate knowledge management.
Given a broader understanding of knowledge as outlined above, then knowledge management is inevitably bound up with human resource management in overcoming barriers and in proactively supporting knowledge management. HR professionals may, for example, utilise facilitation skills in supporting knowledge management, or they align human resource activities with knowledge management needs.
2.2. Knowledge management and human resource management
MacNeil (2003) goes on to suggest that there has been a lack of research on the links between HRM and knowledge management, yet Lengnick-Hall and Lengnick-Hall (2003) suggest that knowledge facilitator is a key HR role. They suggest that HR has a key role in:
developing the motivation, competencies, value orientation, and knowledge of the firm’s strategic intent to use knowledge to enhance organisational capabilities. (p. 90)
In more detail they recommend that HR managers need to design organisational structures and processes that promote knowledge diffusion, contribute to designing user-friendly systems for accessing knowledge and training people in their use, develop a knowledge-centric culture, provide mechanisms for people to share knowledge – for example allowing teams to work together long enough to develop knowledge together and then move people around the organisation to cross-fertilise.
Scarbrough and Carter (2000) asked their sample of researchers in the knowledge management area what implications their work had for HRM, and found that:
- 27 per cent claimed there were implications for recruitment and selection policy;
- 63 per cent claimed there were implications for training and development in the workplace;
- 27 per cent claimed there were implications for rewards and appraisal;
- 77 per cent claimed there were implications for organisational and cultural change policy and practice.
At a strategic level Scarbrough and Carter identify five different perspectives in the work on knowledge management and draw out the implications that each has for HRM:
- Best practice perspective. Encouraging employees to share knowledge and cooperate with knowledge management initiatives. If commitment is required in order that individuals are prepared to share their knowledge and remain with the organisation then ‘best practice’ HRM will be important to generate that commitment. (See Chapter 2 for a reminder of this approach.)
- Knowledge work perspective. Managing knowledge work and knowledge workers. Such workers may have distinctive needs in terms of motivation, job challenge, autonomy, careers and so on. These will need to be addressed by HR policies. For further depth on this issue see Beaumont and Hunter (2002).
- Congruence perspective. Increasing performance by aligning HRM and knowledge management practices. For a reminder of this see the fit model of HR strategy in Chapter 2.
- Human and social capital perspective. This involves the development of human and social resources in the organsisation. This both underpins the success of knowledge management initiatives and mobilises longer-term capabilities. This perspective is based on the resource-based view of the firm that we explored in Chapter 2.
- Learning perspective. This perspective incorporates two different approaches. First is the notion of communities of learning, discussed above, which draws attention to the way tacit knowledge is developed and shared in practitioner groups. Second, there is organisational learning which focuses on how learning can be embedded in organisational routines and processes to improve organisational performance.
Source: Torrington Derek, Hall Laura, Taylor Stephen (2008), Human Resource Management, Ft Pr; 7th edition.