ONE1 Knowledge and the Organisation

ONE 2 §Traditional value is based on net assets of the company §New philosophy is that value of firm reflects value of knowledge in organisation §Knowledge is information about the interaction between firm and markets §Knowledge is understanding in minds of employees or stored in organisation about all organisational processes

ONE 3 §Knowledge encompasses attitudes and beliefs of employees §Beliefs are influenced by employee interactions §Knowledge will influence actions of employees §Polanyi proposes forms:  Corporate knowledge  Employee knowledge §By sharing knowledge, performance can be enhanced

ONE 4 §Quinn proposes knowledge covers:  “Know What”  “Know How”  “Know Why” (Possible to add “Know When”) §Knowledge is critical for national economies §Drucker posits knowledge is an organisation’s most valuable resource

ONE 5 Learning §By using learning, individuals acquire new knowledge §De Guess believes organisational learning is only real source of competitive advantage §Narver proposes: learning permits identification of new ways of offering superior products/services §Woodruff proposes: learning is route to delivering superior customer value

ONE 6 §Organisational learning has roots in psychology, management science, strategic management, production management, sociology and anthropology §Learning is not sufficient, must be translated into new knowledge that can upgrade core competence §Key competence is ability to respond more effectively to changing market circumstances §“Double Loop” learning permits greater flexibility and adaptive response when compared to “Single Loop” learning

ONE 7 PROBLEM DRAW UPON PAST EXPERIENCE DEVELOP AND IMPLEMENT SOLUTION PROBLEM BRING IN NEW KNOWLEDGE DRAW ON PAST EXPERIENCE IMPLEMENT NEW MORE EFFECTIVE SOLUTION (a) Single Loop Learning(b) Double Loop Learning FIGURE 1:1 ALTERNATIVE LEARNING STYLES

ONE 8 Managing §Information Technology permits more effective acquisition, storage and distribution of knowledge §Nonaka divides knowledge into:  Tacit (in minds of employees)  Explicit (documented and stored) §Zack proposes that explicit knowledge consists of:  Declarative knowledge which is shared understanding  Procedural knowledge of processes  General knowledge  Specific knowledge

ONE 9 §New knowledge must be cleaned and labelled before storage §Today storage is usually in a computer data base §E-commerce systems can automate data acquisition and storage §Stored data must be easily accessible to users in firm

ONE 10 §Integrative knowledge processing is storage of data (e.g. sales records) for later use by others §Interactive knowledge processing is dynamic often involving real time exchange of tacit knowledge (e.g. forums) §Successful knowledge management requires creation of knowledge repositories §Formalised repositories often unsuitable for storage of tacit knowledge sources

ONE 11 §Critical antecedent is willingness of employers to share knowledge §More successful firms place greater emphasis on importance and power of knowledge §Knowledge projects that can demonstrate added value are easiest way of validating effectiveness of philosophy §Knowledge project more likely to succeed if supported by appropriate infrastructure

ONE 12 §Employees must be trained in how to use knowledge §Database systems must permit easy access to knowledge §Culture of organisation must be that of valuing knowledge §Knowledge must be in language form understandable to employees

ONE 13 §Must continually re-motivate knowledge users §Typically there is a need for multiple channels to distribute knowledge §Senior management must be committed to exploitation of knowledge by organisation

ONE 14 Systems §Seven Elements:  Knowledge sources to acquire new knowledge  Product-process knowledge orientation  Effective documentation  Effective dissemination  Focus on learning  Focus on value chain process  Focus on employee development (individual and team-based)

ONE 15 Entrepreneurial Knowledge Management System External Knowledge Sources Focus on Market Aspects of Value Chain Group-based Skills Development Formally Documented Knowledge Double-loop Learning Formulised Dissemination Focus on Product FIGURE 1:2 ENTREPRENEURIAL KNOWLEDGE MANAGEMENT SYSTEM

ONE 16 Platforms and Networks §Permit exchange of knowledge between organisations §E-commerce platforms allow for instant knowledge exchange §Networks formed by supply chain members seeking mutual optimisation of performance

ONE 17 HUB FIRM Customer Intermediary Supplier Intermediary Customer FIGURE 1:3 A HUB KNOWLEDGE NETWORK STRUCTURE

ONE 18 OEM KNOWLEDGE CENTRE Primary Supplier Secondary Supplier FIGURE 1:4 A CASCADE KNOWLEDGE NETWORK

ONE 19 PHASE 1 IDEA GENERATION PHASE 2 IDEA VALIDATION PHASE 3 NETWORK PLANNING PHASE 4 NETWORK LAUNCH Customer Government Support Agency Sector Champion Firm Trade Association Focus Group Meetings More Research Learning Plan Defined Learning Plan and Network Formation Initiated FIGURE 1:5 PROCESS MODEL FOR FORMATION OF A NEW MULTI-FIRM KNOWLEDGE NETWORK