Chapter 1 The Knowledge Context

Introduction Technological and social change have reshaped our world and the way we work We have shifted from an industrial economy (focusing on commercial products) to a knowledge economy (focusing on services and expertise) This has affected most workplaces and most workers Technological change relates to the ways in which computers are fundamental work tools and also play a major role in most people’s lives. The ease with which people use technology has enabled the creation of many new systems and innovations. Increasingly, people anticipate access to advanced systems and processes at both work and home. (Page 3) The industrial economy encouraged people to conform and follow standard practices. People were seen as sources of production, and their work settings reflected this philosophy. The knowledge economy values the creativity and innovation of individuals as an asset. The expertise held by individuals is a significant contribution to the services which are provided to the community of users. The knowledge economy places more value on the differences between individuals.

External Influences on Organizations (1/2) Globalization Access to more customers from far-flung areas Greater awareness of international practice Increased competition Increased pressure to be innovative and responsive Shareholder expectations Pressure to achieve economies of scale There are many external influences on organisations. Many of these are national or international in nature. The impact of globalisation on organisations has been significant. Globalisation has been greatly assisted by the ongoing moves to reduce regulation of markets. This has both advantages and disadvantages. On the positive side, it has enabled greater access to more customers, speedy service provision and the capacity to see what competitors are doing. On the negative side, it can also generate higher customer expectations, and increase the competition from other firms. The customer knowledge of the practices of other firms may also lead to greater pressure on firms to keep up with competitors. The expectation that firms will continuously demonstrate innovation and responsiveness can be challenging, as learning and experimentation will become more important, at the same time that shareholders expect economies of scale and leaner work settings.

External Influences on Organizations (2/2) Technological change Competition for high performing staff Forward planning and analysis Review of emerging trends Learning from competitors Organizations are dynamic, vulnerable and volatile…. Technological change is a major influence on organisations. Most businesses recognise the importance of creating effective technological systems for use by individual workers and to build more robust and effective systems. Employees expect to have equipment, software and associated support to undertake their roles. They also use technology as part of their work activities (including email, the Internet, access to information, and integrated system management). The presence of effective technological systems and support has transformed how business operates and how people work. (Page 4) Another influence on businesses relates to the increasing competition for high performing staff. People with significant talents and capabilities will be noticed and pursued by competitors. As work conditions grow less stable, the potential loss of valued employees increases. (Page 4) Organisations try to gather and review information from many sources to predict where the organisation needs to move towards. Sources of information can include those held within the organisation, and those which are external to a business. The prediction of directions and areas of potential growth helps to maintain a strategic focus for the organisation, and to determine where resources should be allocated. (Pages 4 – 5) Thus, the external influences on organisations are very major sources of direction and challenge. They are increasingly monitored, as their impact grows larger.

The Changing Nature of Organizations (1/3) The workplace has changed: Series of career paths Workforce composition Evolving roles and responsibilities Teamwork: complex and dynamic interactions Strong focus on relationship building At the same time, organisational workplaces have changed. (Page 6-8) Most employees anticipate a range of career avenues, or at the least, a number of jobs with different employers. Within organisations we see a number of emerging trends which are altering how people work and how they perceive their contribution to the workplace. These include: Workforce composition and different types of employment practice, such as Core workers who are employed long-term Contract or short-term employees who may be valued, but less pertinent over a longer period. People experience evolving work and responsibilities which they must embrace. Few people hold the same roles for many years. Instead, employees are asked to refresh and redevelop their capabilities to meet the demands of new organisational activities or expectations. Teams play a very important part in the modern organisation. It is likely that most people work together on some projects or contribute to the work of others as regular aspects of their work. Teams build a strong sense of collective identity, culture, sense of purpose and valuing of each individual member. An integral element of team membership is the recognition that there is high interdependency: the work of each individual affects others’ work. Relationship building is seen as part of the basic role of any employee. This is partly attributable to their inter-relatedness with others, but also demonstrates the changing expectations of stakeholders as to what an organisation does. The need to develop strong connections with other underpins the modern workplace. At the same time, people generally expect to be self-managing: working as autonomous but effective individuals.

The Changing Nature of Organizations (2/3) Communication Leadership Many people fill leadership roles Good leadership is expected in most workplaces Decision making More people participate in decision-making Many sources of information guide decisions Communication has also changed in organisations. Most employees see email as a normal routine, and indeed, may spend inordinate amounts of time attempting to manage the many messages they see. In terms of face to face interaction, employees are expected to demonstrate a range of effective communication skills, including: active listening feedback skills negotiation skills and presentation skills. Leadership also plays a very critical role in successful workplaces. There are many leaders in the modern workplace – operating across the various levels. Some may be team leaders, others in official management roles, and some will play a part in the overall leadership of the organisation. Employees expect good leadership and it is increasingly critical as workplace complexity increases. Leaders should: Provide direction and guidance Establish and maintain a positive work environment Create and maintain effective people practices Encourage high performance and high standards Decision making has also evolved into a more contributory focus. More people contribute to decisions as they build expert knowledge in specialist areas. They can contribute through direct interaction with decision makers (through meetings and ideas generation activities) or through the contribution of information and data held within the organisation. Organisations draw on many source of information to guide their decisions – technology has assisted with this process, as it is easier to store and access various forms of data. Most organisations aim to avoid repeating prior mistakes by learning from past experience. This anticipates people sharing and collaborating to learn from those mistakes.

The Changing Nature of Organizations (3/3) Change management Ongoing process improvement Worker motivation Self-managing employees anticipate challenging and fulfilling work Desire positive and constructive workplaces Infrastructure Systems and services which support the organization Because organisations change so rapidly, it is important to build good mechanisms to manage change. In many workplaces, there is recognition that change management must be undertaken as a regular, iterative process. Ongoing process improvement and review of pressures is undertaken – particularly with respect to the ways competitors are changing. Any change process involves staff in the evolution, as they need to both accept and adapt to the new processes. (See Page 11) Worker motivation needs to be high. The emphasis on creativity and self-management requires people who are keen to contribute and actively working toward higher performance. Employees anticipate challenging and fulfilling work. If this is allowed, they build much greater commitment to the organisation. Part of the motivational influence relates to how people are treated. If they feel valued and the workplace is a positive and constructive environment, they will be more likely to stay. Unhappy, demotivated people are dangerous to an organisation as they can undermine other colleagues and reduce productivity. (See Page 11 – 12) Infrastructure has become a stronger component of the workplace, reflecting the capacity to link different systems and processes together. Infrastructure relates to the range of systems and services which support the core business of the organisation. Some major examples of infrastructure include the technological systems, human resources services and information services. These serve to bind the various employees together by providing common support processes. (see page 12)

Types of Organizations Organizations differ according to: Their purpose and long-term goals Who funds and directs their activities The stakeholders Types of organizations include: Private Public Not-for-profit The nature of the organisation changes how people work and the outcomes they expect. The purpose and long-term goals are strongly based around the outcomes which are anticipated. These, in turn, are driven by who funds and directs the activities. Each organisation will have a specific purpose and desired outcomes which should be reflected in all activities. The stakeholders play a large part in determining the focus of the business. Stakeholders can include members of the firm, customers, shareholders and national groups. This can best be seen by exploring three common types of organisations.

Private Enterprises Focus on profit Likely to have shareholders, or may be privately owned Anticipate ongoing growth and development, but with a healthy short-term return Chief Executive Officer (CEO) is the public face of the firm Private firms focus on profit – they are intended to return income to those who have invested in the business. The investors are likely to be shareholders, or the company may be privately owned. In either case, there is a very strong desire to ensure the business is profitable to those stakeholders, who anticipate ongoing growth and development, but with a healthy short-term return. The Chief Executive Officer, CEO, is the public face of the firm. This person plays a major role in determining the direction and focus of the company, and is responsible for building its reputation and standing in the community. If the business fails, the CEO is normally the person who carries responsibility, even though many people may have contributed to that outcome. Conversely, very successful private firms are recognised as having good leadership from their CEOs, who may gain major remuneration packages as a consequence.

Public Enterprises Sponsored and funded by government Linked to ministerial portfolios Provide service or govern the community Increasing efforts to collaborate and work together Public enterprises (page 13) are sponsored and funded by the government. They are normally based on ministerial portfolios which reflect the functions of government as laid out in the Australian Constitution, or they may reflect the government’s own view of how their portfolios work. There is often major change to the structure when governments change. Employees are bound to support the business of government, and this can result in changes in organisational practice when the ruling group changes. In general, public enterprises provide services to the community in the areas determined by their governing bodies, or the Minister. In some cases, they assist with the governance of the groups by developing policies, systems and related processes which are implemented. In most cases, demand on these services is greatly increasing, but funds are not. This has placed increasing pressure on these organisations to operate in more intelligent ways by sharing practices, systems and ideas. The Australian Government Information Office (KM Viewpoint 1.3) is a good example of how collaboration and working together can result in effective work practices.

Not-for-profit agencies Provide specialized support for community members Funding may be derived from different sources including government, sponsors and members of the community Frequently have higher demand than capacity to deliver Strong staff loyalty and commitment Not-for-profit agencies (page 14 – 15) fill the gap in the community, by supporting the needs of community members who require specialist assistance. Many relate to those with special illnesses or emotional needs. They are often established to address a community need. Funding is frequently collected from many different sources, sometimes from government, sponsors, and members of the community. As with public enterprises, not-for-profits experience high demand for their services. In many cases, they rely on volunteers who are not paid to provide many of these services. They also rely on strong staff loyalty and commitment, as their salaries are often modest.

What is Knowledge? (1/2) Knowledge is the process of translating information and past experience into a meaningful set of relationships which can be applied by an individual Knowledge is an organizational asset: it should be identified, managed and valued to the same degree as other assets (Page 18) Knowledge is the process of translating information and past experience into a meaningful set of relationships which can be applied by the individual. This implies that the individual is a reflective employee who weighs and assesses new experiences and makes judgements as to what can be learnt. Employees who are highly motivated and responsible for their own actions will be likely to build strong knowledge sets. Knowledge is an organisational asset: it should be identified, managed and valued to the same degree as other assets. But it is often ignored and undervalued. We need to recognise that the shift to a knowledge economy has generated a significant reliance on knowledge as a corporate resource. Frequently, organisations don’t even know what knowledge assets they hold, or which they should be nurturing. The successful organisation aims to identify, cultivate, manage and publicly value the knowledge its staff generate.

What is Knowledge?(2/2) Explicit knowledge can be documented, categorized, transmitted, demonstrated… It can be accessed by other people even if the knowledge source is absent Tacit knowledge draws on the accumulated experience and learning of an individual. It is hard to reproduce or share with others Explicit knowledge (page 19) can be documented, categorised, transmitted, demonstrated… It can be accessed by other people even if the knowledge source is absent. Declarative knowledge relates to principles and facts that can be explained to others. Procedural knowledge enables the sharing and demonstration of processes. In an organisation, explicit knowledge should be recognised and recorded so that it may be accessed by others at point of need. Tacit knowledge draws on the accumulated experience and learning of an individual. It is hard to reproduce or share with others. Individuals hold that knowledge, and often find it hard to either explain or demonstrate. Instead, they become the source of guidance for others, and may need to be nurtured and recognised for their contribution. A major risk to organisations is the lack of awareness as to what tacit knowledge is held within the community.

Sources of Organizational Knowledge Individual Knowledge Experience Advice Learning Corporate Knowledge Errors This slide reflects Figure 1.2. Organisational Knowledge (page 20) reflects the composite sources of knowledge held within the organisational community. It draws on data housed within the various organisational systems; explicit knowledge which has been captured and documented; tacit knowledge held by individuals. Individual knowledge reflects the particular knowledge that people acquire as they work, reflect and interact with others. While many aspects of that knowledge may be unique, it will also have some commonalities with others. For example, this might include a knowledge of systems and processes which operate across the organisation, and which many people access, or it might be a specialist knowledge which is less widely practised. Corporate knowledge is the accreted knowledge of individuals as they learn from each other, share good practice or document what they know. It reflects the degree to which communication and collaboration operates. At a basic level, corporate knowledge is also reflected in the systems which are developed and used regularly. Both corporate and individual knowledge are accrued through a number of avenues. As people gain experience, listen to advice, learn and make errors, they acquire new insights which are built into their existing knowledge. External source of guidance, including those found in libraries, are also drawn into this knowledge set. Historical information, particularly that from knowledgeable parties can also prove useful. This can be seen in the operation of committees, an important form of corporate knowledge. In this instance, a decision may be explored from many angles, drawing on the knowledge of individuals, and the learning evident from other sources. These many sources of guidance are weighed, judged and debated until a higher level of corporate knowledge is acquired. This knowledge is then shared back to individual members of the community. Organisational knowledge is the term used to describe all of these processes. It reflects the very dynamic and integrated amalgamation of various sources so that when strategic processes must be determined, they can access the best guidance possible. Where the sources lack the rich feed-in from experience, advice etc, the quality of organisational knowledge becomes lessened. External Sources History

Strategic Knowledge Strategic Knowledge helps to take the organization toward its desired future goals Closely linked to the organizational focus May be different in each organization Page 21 explores this concept. Strategic knowledge is a higher level of organisational knowledge, in that it seeks to use that knowledge toward the determined goals and priorities of the organisation. Thus, the focus on the learning / reflecting / analysing is directed toward what is best for the organisation, and aims to corral resources toward this outcome. This can be very important, as people often find it hard to keep focused on what is essential. A strong articulation on what is strategic can assist people with cultivating more advanced expertise in those areas, and in disseminating that knowledge to other corporate stakeholders. Strategic knowledge can shift as priorities evolve. It is most important that organisations are aware of the trends and maintain each individuals’ awareness of any changes. The leadership, change management and communication processes are particularly critical during any evolving phase. It should also be noted that strategic knowledge is very particular to the organisation. Each enterprise will determine the fit which is most appropriate – and this is partly driven by stakeholders, but also based on the sources of guidance which are accessible. The more open the channels of learning (from experience, errors etc), the richer and more informed the strategic knowledge.

Knowledge Management The management of knowledge to enable its definition, identification, capture, organization and dissemination across the organizational community Knowledge management is dependent on effective leadership and a collaborative culture Knowledge management (page 22 – 23) relates to the various strategies which guide the activities that draw together the different sources of organisational knowledge into a cohesive and logical organisational process. This form of management aims to build on the strategic assets which are found within the knowledge community, and to guide their usage so that more effective learning and knowledge is then generated and shared. The key concepts associated with knowledge management relate to collaboration and social community. These constructs are strongly supported though leadership and the development of a collaborative culture. The ways in which knowledge is perceived, valued and rewarded also play a large role in determining how successfully knowledge management will be enacted.

Knowledge Organizations The Learning Organization Encourages learning, growth and development of individuals and the community The Developmental Organization Undertakes regular review, adaptation and re-orientation to maintain strategic focus Asset-based corporate development Recognition and capitalizing on knowledge assets of value to the organization Page 22 – 23. Different forms of organisations rely on knowledge management, with some demonstrating a greater valuing of the knowledge which is to be found and employed within their walls. Three types of organisations are worth highlighting. The learning organisation, as conceptualised by Senge, has become a major framing device for many firms. These organisations encourage learning growth and development across the many individuals and as standard work practice. These environments encourage reflection and the sharing of new understanding. They also regard errors as sources of learning, not as failures. The focus on learning, evaluating and remodelling from those processes makes learning organisations particularly powerful knowledge intensive communities. Developmental organisations are those which monitor their capacity and accuracy in supporting the strategic priorities identified for the organisation. They are also focused on learning and growing, but from the perspective of maintaining a strategic edge which assists competitiveness and relevance. Asset Based corporate development recognises that the knowledge held by individuals and as corporate knowledge is a critical asset to the organisation. This encourages ongoing strengthening, valuing and capturing of knowledge so that it is retained and applied in a range of contexts. An effective knowledge organisation may use all three orientations when building their knowledge management strategy, as each provides a different, but very legitimate, perspective on how knowledge should be both employed to maintain organisational sustainability.

Concluding Points Knowledge is an essential asset Organizational knowledge draws on the collective knowledge held by both individuals and within corporate sources A strategic focus helps to preserve the knowledge which is necessary for long-term viability Knowledge management is the method of reaching these outcomes This first session has aimed to provide some contextual grounding as to why knowledge is important, and how it supports organisations. It has aimed to emphasise the integral role knowledge plays in our work communities, and the way people rely on each other and the corporate knowledge sources which are available. The awareness of organisational knowledge is often under-valued until it is lost, but it needs to be more significantly valued and profiled. Most importantly, the link between organisational knowledge and strategic positioning of the business needs to be more fully recognised. As we move more into a knowledge economy, we will become more reliant on what is known and the sharing of that expertise across our various members. Knowledge management assists with these processes by linking knowledge, corporate assets, strategic management and the organisational priorities into a composite strategy.

Today’s focus questions: How is our working world changing? What is knowledge and how does it impact on organizational practice? What is knowledge management? Why does knowledge management vary across different organizations? Lecture Reference: Debowski, Chapter 1 These questions might be posed for reflection, or for discussion. They seek to encourage full absorption of the main points of content. How is our working world changing? There are different expectations of employees, particularly in terms of how they interact, use and share knowledge, build their skills and collaborate with others. Teams are very common, and technological skills are essential. Workers are expected to be flexible, particularly in their responses to change processes. Some employees spend much of their time working from a virtual presence, not face to face. Flexibility is perhaps the keyword most aptly used to describe the workplace now. The external pressures on businesses have also affected how we work. We operate in a global community, with more competition, greater awareness of how others do similar work, and more stakeholder expectations. What is knowledge and how does it impact on organisational practice? Knowledge is the product of learning, reflection, investigation and experience. It guides employees toward more effective ways of working, and assists with good judgements and decision-making. While knowledge may be held by a single individual, it can generate greater value by being shared with others. This is where organisational practice is strengthened and really translates into strategic knowledge management. What is knowledge management? Knowledge management describes the various processes which are employed to draw people’s knowledge into the public work domain, and to encourage usage of that knowledge in a number of ways. It aims to identify and capture the assets which are required to ensure long-term continuity of good business practice. Why does knowledge management vary across organisations? Because it is organisation specific… It draws on the five tiers of organisational process (values, priorities, systems, policies, activities and capabilities) and also reflects the type of organisational context. The external context also drives certain emphases, depending on the level of competition and the globalised / localised context in which the business operates.