# From Tacit Knowledge to Knowledge Management: Leveraging Invisible Assets

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## From Tacit Knowledge to Knowledge Management: Leveraging Invisible Assets

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Attempts to understand knowledge phenomenon in organization can be traced throughout management history. Taylor (1911), in his ‘scientific management’, attempted to formalize workers’ experience and tacit skills into objective and scientific knowledge without insight that a worker’s judgement was a source of new knowledge. However, it was Barnard (1938) who shed light on the importance of ‘behavioural knowledge’ in the management processes. Drucker (1993), coining the term ‘knowledge worker’, later argued that in the ‘knowledge society’ the basic economic resource is no longer capital, natural resources or labour, but is and will be knowledge.......

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1. Knowledge and Process Management Volume 8 Number 3 pp 137–154 (2001) DOI: 10.1002 / kpm.120 & Research Article From Tacit Knowledge to Knowledge Management: Leveraging Invisible Assets Nada K. Kakabadse*, Alexander Kouzmin and Andrew Kakabadse Cranﬁeld School of Management, UK Within competitive advantage considerations, knowledge has emerged as one of the more strategic, although invisible, assets for organizations. This is notwithstanding a wider and speciﬁcally economistic and cognitive discounting of knowledge as a factor of production — largely ignoring the socially constructed and socially mediated nature of knowledge. Intellectual capabilities and knowledge/information transformations now have a central place within globalizing information economies. Constructing, transforming and commodifying knowledge and information require new organizational understandings and newer cognitive capabilities of strategic management praxis. Part of this cognitive awareness is a deliberate organizational designing for the role of symbolic analysts. As well, there is an emerging need for the Chief Knowledge Ofﬁcer function going well beyond the Chief Information Ofﬁcer requirements posited by an information technology-driven restructuring of routine processes, as compared with innovation creation capacities associated with critically non-routine functions within organizations discovered by Cranﬁeld research. The paper considers neglected institutional and organizational dimensions to knowledge creation and knowledge conversion — it reviews the renewed importance of internal recruitment and socialization within institutions and details knowledge codiﬁcation and application functions within knowledge-creating organizations. Knowledge management, as praxis, inevitably raises concerns about cognitive failure in leadership theory and praxis. Copyright # 2001 John Wiley & Sons, Ltd. Nada K. Kakabadse is currently a Senior Research Fellow at the INTRODUCTION Cranﬁeld School of Management. Her research interest focuses on information technology and organizational dynamics; diversity management; performance improvement in private Organizations continuously practice creative and public sector organizations and excellence in politics of destruction by destroying old ways in order to decision making. create new ways. In the last decade, knowledge Alexander Kouzmin currently holds the Chair in Organiza- tional Behaviour at the Cranﬁeld School of Management. His has emerged as one of the most important and research interests include organizational design; technological valuable organizational assets. The term ‘know- change; project management; comparative management; admini- ledge worker’, coined by Peter Drucker (1959), strative reform; and crisis management. gained acceptance and became associated with the Andrew Kakabadse is Professor of Management Development and Deputy Director of the Cranﬁeld School of Management. users of information systems and information He is also European Vice Chancellor for the International technology (IS/IT) (Drucker, 1993). The ability to Academy of Management. His current areas of interest focus on use intellectual capability and create new solutions improving the performance of top executives and top executive teams, excellence in consultancy practice and the politics of for human needs now takes central place in the decision making. global info-economy. Human knowledge and *Correspondence to: Cranﬁeld School of Management, Cran- capabilities have always been at the core of ﬁeld, Bedford, MK43 OAL, UK. E-mail: N.Korac-kakabadse@ value-creation, but this truism has become more cranﬁeld.ac.uk visible in the info-age where the ‘intellective Copyright # 2001 John Wiley & Sons, Ltd.
2. RESEARCH ARTICLE Knowledge and Process Management component of work is increasingly important has been predominant in Western philosophy (Zuboff, 1988). For years, organizations paid lip (Nonaka and Takeuchi, 1995). service to the management of knowledge, being Attempts to understand knowledge phenom- concerned with more tangible and physical assets. enon in organization can be traced throughout The knowledge component of the value-chain had management history. Taylor (1911), in his ‘scien- been obscured by the tendency to think of work as tiﬁc management’, attempted to formalize work- fundamentally a physical activity (Zuboff, 1988). ers’ experience and tacit skills into objective and However, the potential advantages that intellectual scientiﬁc knowledge without insight that a work- capital brings in the form of greater earnings er’s judgement was a source of new knowledge. through licensing technology has revised this However, it was Barnard (1938) who shed light on trend. Intellectual assets exist in various forms the importance of ‘behavioural knowledge’ in the and their explotiation is only restricted by the management processes. Drucker (1993), coining capacity of humans to do so. The capacity to the term ‘knowledge worker’, later argued that in manage the human intellect and convert it into the ‘knowledge society’ the basic economic resource useful products and services is fast becoming the is no longer capital, natural resources or labour, but critical executive skill in the contemporary organ- is and will be knowledge. Drucker (1993) further ization (Davis, 1998). The pursuit of knowledge for suggested that one of most important challenges for competitive advantage has become increasingly organizations is to build systematic practices for central to organizational strategies. There has been managing self-transformation. Knowledge received an intense interest in intellectual capital, creativity, explicit acknowledgement in economic affairs by innovation and the learning organization. Yet, the neo-classical economist Alfred Marshall (1965: research shows that few organizations have real- 115) who argued that capital consists, in a greater ized beneﬁts from knowledge management initia- part, of knowledge and organization and that tives (Murray and Myers, 1997; Brue, Grimshaw knowledge is the most powerful engine of produc- and Myers, 2000). The reason for this is two-fold; tion. Theories of learning (Bateson, 1973; Argyris there are various conceptualizations of knowledge and Schon, 1978; Senge, 1990), among others, also and, thus, confusion as to what constitutes know- tried to understand knowledge and processes of ledge management and there is no coherent learning in organizations. framework for implementing the management of Notwithstanding, the meaning and value of knowledge in an organization. knowledge can be understood only in the ‘know- In order to effectively manage knowledge one ledge context’ within which that knowledge is has to understand the meaning and signiﬁcance of known (Meacham, 1983). The knowledge context knowledge, understand one’s own ability and is determined jointly by one’s perception of the limitations of knowledge and its potential mean- extent of all knowledge that can be known and by ing for organizational endeavours. Knowledge one’s perception of the proportion of what one about knowledge, or meta-cognition, requires does know to all that can be known. Thus, two individuals to recall, analyze and use knowledge persons can hold the same objective amount of (Habermas, 1972). The challenge for management knowledge, yet one might feel that she/he knows is to use the vast knowledge potential of organiza- a substantial proportion of all that can be known, tions to create value. whilst the other might feel that she/he knows relatively little (Meacham, 1983). In the vein of Greek philosophers’ dualistic UNDERSTANDING THE MEANING OF deﬁnition of knowledge as a mythos and logos, KNOWLEDGE Schank and Abelson (1977) propose two classes of knowledge, ‘general’ and ‘speciﬁc’. General Plato (1953) ﬁrst deﬁned concept of knowledge as knowledge includes information about, and inter- ‘justiﬁed true belief’ in his Meno, Phaedo and pretation of, human intention, disposition and Theaetetus. Plato’s (1953) concept was debated relationships organized in term of ‘goals’ (satis- from Aristotle (1928), a student of Plato, through- faction, enjoyment, achievement, preservation, out continental rationalism (Descartes, 1911), British crisis, instrumental) and ‘themes’ (role themes, empiricism (Locke, 1987), German philoso- interpersonal themes and life themes) (Schank and phers (Kant, 1965; Marx, 1976; Hegel, 1977) to Abelson, 1977: 4). Thought and thinker, knower twentieth-century philosophers (Dewey, 1929; and known, is one single, indivisible unit (Olson, Husserl, 1931; Sartre, 1956; Wittgenstein, 1958; 1977; Labouvie-Vief, 1989). Thus, knowledge is Heidegger, 1962; Merlau-Ponty, 1962; James, 1966). intensely personal. As such, mythos refers to that Although imperfect in terms of logic, this deﬁnition part of ‘knowledge’ that is arguable and can be 138 N. K. Kakabadse et al.
3. Knowledge and Process Management RESEARCH ARTICLE demonstrated and identiﬁed with precision and knowledge plays an important role in leadership agreement (Olson, 1977; Labouvie-Vief, 1989). effectiveness and effective design and implemen- Speciﬁc knowledge is seen as a ‘script’; a tation of IS/IT systems This knowledge is based representation of the expected sequential ﬂow of on the cultural norms and beliefs that are contex- events in a particular situation (cooking, applying tually imbedded. for a job). Cognitive psychologists deﬁne speciﬁc Polanyi (1958, 1966) and, later, others (Bateson, knowledge as expert knowledge under the 1973; Gelwick, 1977; Teece, 1981; Nonaka, 1990; assumption that the analysis of protocols (written Naisbitt, 1994; Von Hippel, 1994; Nonaka and or verbal) allows access to the content and Takeuchi, 1995) made distinctions between tacit structure of knowledge in a domain (Ericsson and and explicit knowledge. Polanyi (1966) deﬁnes Simon, 1984; Anderson, 1987). Thus, speciﬁc tacit knowledge as personal, context-speciﬁc and, knowledge can be equated with logos that deﬁnes thus, not easily visible and expressible — nor easy ‘knowledge’ that is derived from more conceptual to formalize and communicate to others. Indivi- aspects of knowledge or of the state of the world. duals may know more than they are able to Logos derives from gathering, reading and coming articulate (Polanyi, 1966). Tacit knowledge is to connote counting, reckoning, explanation, rules based on the subjective insights, intuitions and or principles and, ﬁnally, reason. Logos implies hunches and is deeply rooted in an individual’s that knowledge can be rendered purely mech- actions and experience and ideals, values and anical, computable and deductively certain. emotions (Polanyi, 1966). People acquire tacit Although mythos and logos represent two realms knowledge by actively creating and organizing that constitute knowledge, they are also comple- their own experience by what Polanyi (1966) calls mentary and interactive poles of knowledge. ‘indwelling’ and Kakabadse (1991) calls ‘reﬂection’ Schank and Abelson (1977) postulate that and, as such, knowledge-creating activity is under- experts in a particular domain can be differ- pinned by the ‘commitment’ (Polanyi, 1958) and entiated from novices in the domain — both at ‘willingness’ to reﬂect (Kakabadse, 1991). In order quantitative and qualitative (ﬂexible use and to be shared, tacit knowledge needs to be con- organization) levels; where quantitative aspects of verted into words, numbers or pictures that can be particular meta-knowledge and strategies (use of understood by others (Polanyi, 1966). intuition) appear to best distinguish top experts in Polanyi (1966) has illustrated how the know- domains in which many people are able to ledge involved in riding a bicycle has not been specialize or acquire knowledge through formal made explicit, involves an embodied skill and education. Expert knowledge is considered to be cannot easily be articulated. Polanyi (1958: 20) based on ‘factual knowledge’ and ‘procedural argues that a ‘sharp distinction between tacit and knowledge’. explicit knowledge does not exist and that ‘‘tacit Factual knowledge implies having long-term thought’’ forms an indispensable part of all know- memory, an extensive data base about life — an ledge’. Even if knowledge has been articulated into analogue to a multiple cross-referenced encyclo- words or mathematical formulas, this explicit paedia (Brown, 1982; Kahneman et al., 1984). knowledge must rely on being tacitly understood Procedural knowledge, on the other hand, is and applied. Therefore, ‘all knowledge is either represented as a repertoire of mental procedures tacit or rooted in tacit knowledge’ (Polanyi, 1966: or heuristics used to select, order and manipulate 7). Tacit knowledge is deeply embedded personal information in the database or encyclopedia and is beliefs, attitudes, values and experiences that give used for purposes of decision making and action tacit knowledge its meaning (Popper, 1972). As planning (Brown, 1982; Kahneman et al., 1984). such it is at best difﬁcult and at worst impossible Factual knowledge can be equated to Ancient to articulate as it is highly situated in the context Greeks’ ‘epist’m’ (scientiﬁc knowledge) — theo- and to abstract it from its context of application is retical or the Western reductionist and cerebral to lose much of its intrinsic meaning and value. It mode of enquiry of knowing that is based on is this tacitness precisely that makes tacit know- cognition. Procedural knowledge can be equated ledge difﬁcult to imitate or import from organiza- to technical (craft-knowledge) — the Eastern tion to organization and therefore makes it an mode of enquiry or knowing that combines important organizational resource for securing the use of all senses: hands, eyes, feelings as well competitive advantage (Grant, 1996). as cognition. The secret of technology is in The term tacit knowledge has been used to refer being intensely personal and that it can be learned to knowledge that has not been formalized or only in a network of relationships: the parent– made explicit (Zander and Zander, 1993), as well child, master–apprentice, gury–shisha. This tacit as to knowledge that cannot be formalized From Tacit Knowledge to Knowledge Management 139
4. RESEARCH ARTICLE Knowledge and Process Management (Popper, 1972; Nonaka and Takeuchi, 1995; complementary ‘types’ of knowledge or know- Howells, 1996; Hansen, Nohria and Tierney, ledge — constitutive interests concerned with 1999). Hence two sub-categories of tacit know- social consensus and understanding, emancipatory ledge emerge; knowledge that has not yet been interests concerned with self-critical reﬂection and formalized (Zander and Zander, 1993) and know- autonomy. Holliday and Chandler (1986) also ledge that cannot be formalized (Grant and deﬁne three categories of knowledge: a general Gregory, 1997). Knowledge that has not yet been competence (a dimension that overlaps with local formalized implies that it can be formalized at intelligence or technical ability); an experience- some point in time. For example Zander and based pragmatic knowledge; and reﬂective or Zander (1993) argue that tacit know-how is evaluative meta-analytical skills and abilities. The articulable under certain circumstances: when the Western philosophical tradition has fundamentally pace of performance is low and variations are shaped the disciplines of social science, which has tolerable, when a standardized, controlled context shaped current thinking about knowledge and for the performance is assured and when the innovation (Nonaka and Takeuchi, 1995). performance as a whole can be simpliﬁed to basic interactions. Hence, the impetus for creating environments for knowledge management. INFORMATION AS KNOWLEDGE Nonaka and Takeuchi (1995: 8) expand Polanyi’s (1966) tacit knowledge in a practical direction, The concepts of knowledge and information tend segmenting it into two dimensions, technical and to be used interchangeably through the literature cognitive. Technical dimensions encompass craft and praxis. For example, the management of and skills captured in concrete ‘know-how’ — information captured on corporate databases is exempliﬁed by the master craftsman who is often often considered as an example of corporate unable to articulate what he or she knows. ‘Know- knowledge and knowledge management. Inform- how’ cannot always be codiﬁed since it often ation and data management are important pillars has important tacit dimensions (Polanyi, 1966). of knowledge management. However, knowledge The cognitive dimension of tacit knowledge en- management encompasses broader issues and, in compasses ‘mental models’ (Johnson-Laird, 1983) particular, creation of processes and behaviours such as schemata, paradigms, perspectives, beliefs, that allow people to transform information into images of reality and vision of the future, which the organization and create and share know- shape the individual’s perception of the world. ledge. Thus, knowledge management needs to en- Tacit knowledge is created in a speciﬁc practical compass people, process, technology and culture. context and real time, ‘here and now’, and, thus, Moreover, corporate databases and connectivity has an ‘analog’ quality (Bateson, 1973). Tacit know- do not guarantee the sharing of information over ledge is equivalent to cognitive psychology’s deﬁni- time. In some instances, databases and connecti- tion of ‘procedural’ knowledge in the ACT model vity result in too much information, or information (Anderson, 1983; Single and Anderson, 1989). overload, posing a threat to aspects of knowledge Explicit knowledge or ‘codiﬁed’ knowledge, quality such as relevance (Sharda, Frankwick and refers to knowledge that is transmittable in some Turetken, 1999). systemic language — such as words, numbers, In the era of widespread economic and ethno- diagrams or models (Polany, 1966). As such, it is logical change, understanding the changing nature easily transmitted orally and in written or electro- of work is important to understanding organizing nic form. It can also easily be manipulated and and reorganizing (Barley, 1996). The adoption stored in various databases and repositories. of new IT also conveys a powerful cultural Explicit knowledge is imbedded in the past load, having the capacity to involve all organiza- events or objects and is oriented towards a tional actors in its use — being inserted into context-free theory (Polany, 1966). It is sequentially organizational life in both material and discursive created and captured by ‘there and then’ and, ways (Webster and Robins, 1986; Hill, 1988; thus, possesses a ‘digital’ activity (Bateson, 1973). Muetzelfeldt, 1988; Korac-Boisvert, 1992). Mater- People acquire explicit knowledge by actively ially, IT provides the potential for a wide range searching for it through education, repositories of data collection, storage and processing. IT and work context. Explicit knowledge is equivalent provides information on demand, builds banks of to cognitive psychology’s deﬁnition of ‘declara- shared knowledge and enables real-time, struc- tive’ knowledge in the ACT model (Anderson, tured learning events to transcend boundaries of 1983; Single and Anderson, 1989). time and space, becoming a tool for building Habermas’ (1972) framework recognizes three solutions (McAteer, 1994: 68). The theoretical link 140 N. K. Kakabadse et al.
5. Knowledge and Process Management RESEARCH ARTICLE between information gathering and decision is and speciﬁc heuristics and inference procedures framed in Western societies within an Apollonian involved in the situation being modeled (Sowa, context where the value of intelligent and rational 1984). choice is paramount (Nijsmans, 1992). The belief $Knowledge consists of truths and beliefs, per- that more information leads to better decision spectives and concepts, judgments and expecta- making implies that having information in an tions, methodologies and ‘know-how’ (Wiig, organization is a good in itself (Nijsmans, 1992). 1993). Meyer and Rowan (1977: 340) argue that the$ Knowledge is the whole set of insights, experi- symbolic meaning of information represents ences and procedures which are considered mythical and ceremonial symbolism, often in- correct and true and which, therefore, guide dependent of its immediate efﬁciency criteria or the thoughts, behaviours and communication of internal logic. Thus, the link between decision and people (Van der Spek and Spijkervet, 1997). information appears to be weak or ‘loosely $Knowledge is reasoning about information to coupled’ (March, 1962, Allison, 1971; Brunsson, actively guide task execution, problem-solving 1985; Weick, 1995). and decision making in order to perform, learn The process of information gathering in organi- and teach (Beckman, 1997). zations can be seen as ‘representation of basic$ Organizational knowledge is processed informa- social value, the ability to account intelligibly for tion embedded in routines and processes which rational decision-making process’ (Nijsmans, 1992: enable action. It is also knowledge captured by 139). However, an individual’s ability to attend the organization’s systems, processes, products, selectively to information, disregarding unimpor- rules and culture (Myers, 1996). tant stimuli in favour of those which pre-existing $Organizational knowledge is the collective sum stores of knowledge indicate are relevant, is as of human-centred assets, intellectual property important (Rumelhart and Nomran, 1990). How- assets, infrastructure assets and market assets ever, this ability that advances individual capacity (Brooking, 1996). to remember, reason, solve problems and act is loaded with a potential Achilles’ Heel — allowing Attempts to deﬁne knowledge reﬂect the multi- predetermined experiences to exclude contra- faceted nature of knowledge itself. Moreover, dictory, novel and unfamiliar pieces of informa- knowledge management has been deﬁned in a tion entering one’s analysis of the world (Weick, variety of ways that vary in scope and focus. In 1995), lowering one’s capacity to classify informa- terms of scope, the term has been used broadly to tion in knowledge structures and, even, ade- refer to the capacity or process within an organiza- quately updating knowledge content. Walsh’s tion to maintain or improve organizational perfor- (1995) comprehensive literature review, for exam- mance based on experience and knowledge (Pan ple, demonstrates the lack of constancy in the and Scarbrough, 1999). In terms of focus, deﬁni- understanding of knowledge structures, with some tions emphasize, variously, organizational pro- seventy alternatives for the meaning of knowledge cesses and routines (Pan and Scarbrough, 1999); structure. performance improvement outcomes (Bassi, 1997); processes for networking and collaboration; prac- tices for harnessing and distributing expertise (Marshall, 1997); speciﬁc tools; and methodologies, KNOWLEDGE DEFINITIONS such as data-mining and storage systems (Cole- Gomolski, 1997). However, research and practice The discourse on knowledge has produced a rich in knowledge management has been dominated by and diverse set of meanings. Beckman (1998) has a focus on using information technology (IT) to compiled a number of useful deﬁnitions of know- store, separate and transfer knowledge within and ledge and organizational knowledge: across organizations based on premises of a$ Knowledge is organized information applicable cognitive model of knowledge management. The to problem solving (Woolf, 1990). assumption is that if knowledge is transferred via $Knowledge is information that has been organ- technology, it can be used for innovation without ized and analyzed to make it understandable needlessly re-inventing what has already been and applicable to problem solving or decision done elsewhere. This technocratic view of know- making (Turban, 1992). ledge assumed in the cognitive model has been$ Knowledge encompasses the implicit and expli- challenged by network and community models. cit restrictions placed upon objects (entities), Table 1 provides a summary of dominant models operation and relationships along with general of knowledge management and their characteristics. From Tacit Knowledge to Knowledge Management 141
6. RESEARCH ARTICLE Knowledge and Process Management Table 1 Models of knowledge management Cognitive model of KM Network model of KM Community model of KM Treatment of Knowledge is objectively Knowledge is external to Knowledge is constructed knowledge deﬁned and codiﬁed as the adopter in explicit and socially and based on concepts and facts implicit forms experience Dominant Memory Network Community metaphor Focus Knowledge capture and Knowledge acquisition Knowledge creation and storage application Primary aim Codiﬁcation and capture Competitive advantage Promoting knowledge sharing explicit knowledge and information Critical lever Technology Boundary spanning Commitment and trust Primary Standardization and Awareness of external Application of new knowledge outcomes re-cycling of knowledge development Adapted from Swan and Newell (2000). THE ROLE OF SYMBOLIC ANALYSTS IN deal he or she can get and need not consider what MAKING SENSE OF INFORMATION AND is in the best interest of the customer. Thus, KNOWLEDGE increasingly, customers, will value mediums which provide both rich and reachable access as During the 1980s, the cost of IT’s material he or she will need information that is complete, components (hardware) continued to decline truthful, clear and contextual (establish context of (Kauffman and Weill, 1990), resulting in IT information origin) (Ngwenyama and Lee, 1997). permeating every facet of organization and, con- This validation of information pertaining to the currently, becoming available for individual use. completeness, truthfulness, clarity and contextua- In the 1990s and beyond, IT further intensiﬁed its lity, and the sheer breadth of choices of media and dominant role by the ever-increasing societal databases available to customers, will require dependence on IT systems that have segmented services of an intermediator — ‘symbolic analysts’ the labour market into three generic groups: (Reich, 1993). ‘routine production servers’; ‘in-person servers’ Symbolic analysts access, analyze and syn- and ‘symbolic analysts’ (Reich, 1993). The pro- thesize information that adds to the value chain liferation of IT has further re-deﬁned traditional or produces ‘symbolic goods’ (with the focus on routine production work into sequences of re- intellectual ﬁelds) (Bourdieu, 1971; 1979) and petitive tasks, to the extent that even the super- conditions the supply and demand for symbolic visors of such tasks are easily replaced. There is goods (the process of competition and monopoli- currently no shortage of such labour and it can zation). For example, some organizations have an usually be found more cheaply in a new market incentive to create or simply make available (Reich, 1993). Routine production margins are databases on interest rates, risk ratings and service controlled, proﬁts are usually predictable and quality histories. New opportunities emerge for workers have a high degree of exposure to global third parties that neither produce a product nor competitive forces. deliver a primary service — intermediators (Evans Information, in many ways, deﬁnes pair-wise and Wurster, 1997). relations, such as the buyer–seller relationship, Navigators or agent brands have been around where, traditionally, much of the trader’s margin for long time. For example, restaurant guides depended on the asymmetry of information inﬂuence readers towards a particular establish- (Evans and Wurster, 1997). For example, in trade, ment. The Platform For Internet Content Selection caveat emptor applies and the buyer of goods or (PICS) is a programming standard that allows net services must look out for his or her own interests. browsers to interpret third-party rating labels on Thus, a merchant is permitted to negotiate the best Web sites. PICS enables users to rate anything and 142 N. K. Kakabadse et al.
7. Knowledge and Process Management RESEARCH ARTICLE it makes those ratings ubiquitous, searchable, challenge for information providers is to integrate portable and costless (Evans and Wurster, 1997). information in a way that helps users be more The dramatic proliferation of networked matrices effective in ﬁnding what they need. This may increase the need for such navigators and other involve adopting standards for metatags, develop- facilitating agents; those that guarantee a product’s ing an internal content classiﬁcation system, performance or assumed risk (Evans and Wurster, deploying layered search architectures and adapt- 1997). The ﬁrst need to consider is the means for ing other knowledge infrastructure components. transmitting and circulating the feedback effect Balancing creativity and innovation with the amongst actors; focusing on symbolic enclaves need for levels of standardization and control (academics, other professionals in symbolic pro- requires time spent building support and develop- duction) and their relationship with the increasing ing corporate plans, guidelines and strategies. number of actors employed in the role of cultural Business units can be responsible for developing intermediaries. These intermediaries administer the content of the information but corporate IT units the new global media-distribution chains (via need to be responsible for security policies, encryp- satellite), rapidly circulating information between tion, infrastructure and network performance formerly sealed-off areas of culture (Bourdieu, issues. With increasing information ﬂow, there is a 1971; Touraine, 1985) through conduits of intensi- need for corporate information librarians to be ﬁed competition (Crane, 1987). involved in selecting and implementing company- There is also a need to give consideration to wide crawler and search engines, indexing, catalo- competition, changing balances of power and guing major content sites and areas of knowledge interdependencies between the specialists of ‘sym- and overseeing the process for authenticating Web bolic’ production and intermediaries and their sites and GroupWare databases. The value of library interplay with other actors (Elias, 1987) — espe- expertise in information retrieval and in cataloguing cially the conditions of growth in the former’s and indexing is increasingly more important in the power potential as producers in the information- IT context (Web, Internet, GroupWare). Increas- age, along with a further segregation between ingly, librarians are seen as a strategic asset. As a high-skill and very low-skill demands. The process result, librarians are likely to be asked to partici- of intensiﬁed competition on an inter-societal level pate in cross-functional teams where their exper- is shifting the balance of power from isolated tise would not have previously been sought. areas. With the emergence of ‘globalization’ issues (Robertson, 1990), the struggle between the estab- lished and the outsider/newcomer is intensiﬁed INSTITUTIONAL KNOWLEDGE (Elias and Scotson, 1965; Bourdieu, 1979). Outsider CONVERSION groups are often faced with a monopoly situation in which knowledge, in the form of a stable The development in strategic management of the symbolic hierarchy and canon, is transmitted to resource-based view of the ﬁrm (Teece, Pisano and initiates through a patronage and sponsorship Shuen, 1997) has been extended to a knowledge- system operated by a stable establishment; out- based theory of the ﬁrm (Spender, 1996), adopting sider groups often may have to adopt usurpatory more recently the concept of invisible assets tactics (Marphy, 1989). (Itami, 1987) with explicit attention to core Because of the speed with which the new competencies of an organization (Hamel and technologies such as GroupWare and Web swept Prahalad, 1990) and capabilities-based competition through organizations, many Web sites, for exam- (Stalk, Evans and Shulman, 1992). This ever- ple, were developed ‘on the ﬂy’ and, thus, without increasing search for greater performance improve- the effectiveness that a more methodical approach ment also gives impetus to greater creation, would have brought. Similarly, GroupWare (Lotus sharing, application and acquisition of knowledge. Notes) databases are cluttered with data of dubious From the process perspective of organizational quality. Although this ad-hoc and decentralized innovation, innovation is perceived as a complex approach created opportunities for innovation, it design and decision process involving the creation, also generated particular problems. Opportunities sharing/diffusion, application/implementation and created by the free form and decentralized devel- utilization/acquisition of new ideas by people who, opment of corporate Web sites, for example, over time, engage in transactions with others in an produced a wealth of creative solutions to Web institutionalized context (Van de Ven, 1986). From problems and large and diverse Internet facilities. a process perspective, innovation is perceived as a However, drawbacks are the proliferation of set of recursive and overlapping episodes which duplicative and unmaintained information. The move from initial awareness of new ideas to From Tacit Knowledge to Knowledge Management 143
8. RESEARCH ARTICLE Knowledge and Process Management application and acquisition. Hence, there are opportunities for communication and experimenta- four distinct stages of knowledge institutional- tion (Senge, 1990; Davenport and Prusak, 1997). ization; namely knowledge creation, knowledge sharing, knowledge application and knowledge Knowledge application: a codiﬁcation process acquisition. Many scholars link, theoretically and/or empiri- cally, organizational performance to co-alignment Knowledge creation: an internalization process between the organizational context and informa- tion technology and argue that technology utiliza- Many contemporary organizations have estab- tion is inﬂuenced by organizational context lished higher levels of information sharing which (Nolan, 1979; Venkatraman and Camillus, 1984; constitutes the bedrock of a knowledge culture. Tushman and Anderson, 1986; Anderson and The emphasis on knowledge-creation and aides Tushman, 1990; Venkatraman, 1990; Davenport, both allows and forces an interpretation of the 1993; Currie, 1995). Both vertical technology trans- nature of value-creation. The emphasis of knowl- fers (the transformation of ideas into products) edge-leadership overthrows many conventional and horizontal technology transfers (the applica- notions of value. New knowledge emerges as the tion of an idea into different domains) are long, result of the interplay between individual effort expensive and difﬁcult processes and require and social interaction. The exact conception of an technological, physical and intellectual infra- idea that leads to an innovation, almost by structures (Korac-Kakabadse and Kouzmin, 1999). deﬁnition, is not conﬁned to place and time but, One out of seven analyzed organizations that rather, can occur at any time (Usher, 1954). The had knowledge management initiatives in place creation of organizational knowledge, or intellec- had been more successful in knowledge sharing tual capital, is driven by the interplay of human than other organizations — the differing factors capital (employee knowledge and skills) needed to being culture supportive of knowledge sharing meet product or customers’ needs, structural and context and knowledge-structure manage- capital (organizational capability to respond to ment. In other organizations, where the culture of market demands) and customer capital (the sharing was evolving, there were no structured strength of a customer base). The availability for processes in updating knowledge context and ‘tinkering’ or ‘slack’ time for learning, thinking structuring the knowledge base, resulting in a and reﬂecting may be one of the best vehicles for knowledge repository of little use in ﬁnding more knowledge creation. information. Considering that knowledge needs to be codiﬁed, classiﬁed and retrieved in a similar manner to information in the library, Information Knowledge sharing: a socialization process Librarians or Knowledge Structure Managers and Sharing implicit knowledge between actors is Knowledge Content Managers may be required in considered to be a socialization process — exter- addition to knowledge management in creating nalization or knowledge transfer as the individual knowledge-sharing organizations. or group of individuals share knowledge or ‘know-how’ with each other or within the group. Knowledge management and acquisition The act of knowledge sharing requires gesinnung or disposition-of-will; that is, the ‘underlying Knowledge provides the basis on which both common ground’ of all the acts-of-will of a improvements and innovation take place in organi- person capable of free choice (Kant, 1960). Organ- zations. An organizational environment that is rich izational climate needs to be one of learning in in opportunities for creation of relationships results order to motivate individuals and groups to share in the re-evaluation of existing knowledge and the knowledge (Senge, 1990; Davenport and Prusak, creation of new knowledge (Scharge, 1997). Man- 1997). For example, motivationally misleading situa- aging corporate knowledge requires the develop- tions can lead individuals to act in a way that is ment of comprehensive frameworks for managing contrary to his or her intended plans and can stem every phase of the knowledge process and a way of from existential conﬂict of the will, such as between measuring these intellectual assets. A ﬁrst step is to and among motives and values (Kant, 1960). Choice visualize intellectual capital at the interchange from to share knowledge requires willingness to act or an human capital, organizational capital and customer act-of-will (Kakabadse, 1991). Creation and testing capital. The zeal to acquire knowledge has brought of knowledge is a social activity and, as such, about the creation of new roles in organizations — requires environments that provide extensive Knowledge Managers and Knowledge Engineers, 144 N. K. Kakabadse et al.
9. Knowledge and Process Management RESEARCH ARTICLE whose work is to ensure effective management of Investing in employees’ learning, in whom inquiry knowledge workers. is coupled with action, results in new ideas With the rapid pace of change and the complexity replacing old and does lead to behaviour changes. of problems facing many organizations, there is a Home-grown talent strategy is not just training but need for people who can see new perspectives and training that is tied to business results. It is can go beyond the current boundaries — whether development where action learning occurs and of knowledge, available technology, social norms where systemic learning from job experience occurs. or, even, beliefs. The growing uncertainties and By recruiting, organizations can recreate/buy shortening time scales in the global information highly qualiﬁed talent. The process involves staff- economy are challenging organizations — economi- ing and selection from the entry level to the cally, organizationally, socially, managerially and executive levels. A recruiting strategy works technologically. when talent is available and accessible, but the Accounting for intellectual capital requires man- risk can also be great. The organization may not agers to learn how to operate and evaluate a ﬁnd external talent that is better or more qualiﬁed business when knowledge is its chief resource and than internal talent. Furthermore, if the organ- result. In the emerging information economy, ‘soft’ izational culture is not conducive for knowledge assets (knowledge, ‘know-how’, programming) transfer, newly recruited talent may not be effect- can be a better credit risk than ‘hard’ assets ively utilized or it may exit. (ofﬁce space, equipment) as the value of tangible Effectively using consultants or outsourcing assets can depreciate and, even, vanish overnight. partners may share knowledge, create new know- For example, IT equipment depreciates at approx- ledge and design work in ways that both parties imate 33% annually. Knowledge is the genome of a can beneﬁt. Knowledge must transfer into the corporation. Organizational learning depends on organization by adapting consultant or partner the business ability to generate new ideas and its tools so that employees can replicate and redeploy adeptness at generalizing ideas through horizontal them. The danger is becoming too dependent on and vertical knowledge transfer (Korac-Kakabadse an external consultant and not adopting the new and Korac-Kakabadse, 1999). ‘Generic concepts’ knowledge (Korac-Kakabadse, Korac-Kakabadse provide a collection of software applications, and Kouzmin, 1998). manuals and other structured ‘know-how’ which Organizations can invest in developing alliances can easily be customized to take account of local and partnerships with outside partners who bring laws and regulations and support many lines of in ideas, frameworks and tools to make the ﬁnancial products. organization stronger. Partnership is developmen- Knowledge can be generated within organiza- tal and takes a long time to establish. It can be tion through R and D or it can be accessed from argued that management’s linguistic message and outside the organization. If an organization gets the image that it conjures are both problematic. most of it knowledge from external sources, it is Perhaps the adoption of the term ‘proctorment’ expected, over time, that this knowledge should (proctoring, proctorship) or some other non- be transferred internally by way of training gender terminology that connotes management or informally through on-the-job development/ activities may overcome some of the contextual specialization and it should, subsequently, be problematic. ‘Proctor’ has historically been applied embedded in the organization. However if, with to junior and senior appointed persons charged time, an organization still depends on external with a variety of functions. It can be argued that sources for this same knowledge then it has a ‘proctorment’ may adequately replace manage- knowledge management problem. Organizations ment terminology without the burden of stereo- with a high turnover of knowledgeable employees typing (Korac-Kakabadse and Kouzmin, 1997). are very likely to have problems with managing knowledge. There are various strategies for gene- rating knowledge: home-grown talent; recruiting; KNOWLEDGE MANAGEMENT PRAXIS and consultancy/alliances. Home-grown talent requires investment in the Notwithstanding that the term ‘knowledge man- current work. As employees must ﬁnd new ways agement’ implies formalized knowledge transfer, to think about and do work, many organizations its essential function is developing speciﬁc strate- invest heavily in helping them learn new skills. gies to encourage knowledge exchange (Davenport Some learning can occur in formal training and Prusak, 1998:89). A Cranﬁeld survey (TCISKS, programmes and centres — much more occurs in 1998) carried out in 100 large and medium-size structured on-the-job experience and development. European companies in the UK, Germany, France, From Tacit Knowledge to Knowledge Management 145
10. RESEARCH ARTICLE Knowledge and Process Management Ireland, Benelux and Scandinavia shows that which are ﬂexible and responsive to change. The business leaders deﬁne knowledge management Cranﬁeld, Microsoft and Partners Survey of UK as the collection of processes that govern the knowledge management practices shows that creation, dissemination and utilization of knowl- management practices that scored highest in edge to fulﬁl organizational objectives’ (Murray importance by UK managers also scored the and Myers, 1997:29). This means that organizations lowest in performance ratings; namely getting need to capture knowledge they have, share it and people to collaborate; capturing and transferring use it to some commercial beneﬁt. The socializa- knowledge; approving customer/supplier rela- tion or transfer of knowledge is particularly critical tionships; process efﬁciency; matching skills, for an organization whose primarily role is the people and tasks; and facilitating access to experts creation of knowledge or transfer the knowledge (Microsoft, 2000). The Cranﬁeld and Partners — such as R and D organizations. Employees’ Survey shows that there is a gap between the attitudes to sharing knowledge are central to importance of knowledge management aims and creating, socializing/sharing it and using know- the achievement of those aims in UK organizations ledge for competitive advantage. Knowledge (Brue et al., 2000) (see Figure 1). socialization is part of organizational life and Although there are no proven solutions for takes place whether or not organizations manage knowledge management (KM), 87% of European the process at all — people do talk formally and respondents believed that formal systems would informally (Davenport and Prusak, 1998). How- help knowledge management, especially managing ever, at the same time, people do also provide knowledge about customers, markets, products, major constraints to knowledge socialization for services and corporate performance (Murray and the fear of losing expertise, inﬂuence or control. Myers, 1997). Many organizations are looking for The Cranﬁeld survey shows that 89% of respond- the solution in the arena of IT, as IT can assist ents perceive knowledge as the key to business integration, span cross-functional boundaries power and, as such, often are unwilling to share it and facilitate existing and emergent networks at (Murray and Myers, 1997). Sharing knowledge the organizational and global scale. On-line within focal groups is a primary and most information systems (IS), document management, common form of knowledge socialization. How- GroupWare (Lotus Notes), Intranets, Extranets and ever, sharing knowledge between key groups and Internet are key technologies being used in know- making some of it available within the organiza- ledge management. Notwithstanding that IS/IT is tion and, perhaps, outside, among partners, sup- a useful tool for capturing, tracking and shar- pliers and customers, requires major rethinking ing information, it is also necessary to have and new vision strategies. Sharing within organ- culture-of-sharing ‘best practice’ and ‘know-how’. ization is often difﬁcult if there is no sharing Knowledge socialization is not a single function or culture and the result is ‘islands of knowledge’, process but one that pervades the whole organ- fragmented and separated into functional ‘silos’. A ization. Knowledge is created and shared at all sharing culture requires, also, effective structures levels and in all processes and functions and, as Getting people to collaborate Capturing and transferring knowledge across projects Achieved Benefits Delivering products/services faster Improving customer/supplier relationships Importance Incorporating the insights, experiences and judgements of individuals into good practice Improving quality and speed of decision making Increasing process efficiency Increasing speed of communications (internal/external) Creating commitment to knowledge sharing Matching people, skills and tasks 1 2 3 4 5 6 7 Figure 1 Top ten KM aims — importance and achieved beneﬁts ranking (adapted from Brue et al. 2000). 146 N. K. Kakabadse et al.
11. Knowledge and Process Management RESEARCH ARTICLE such, requires a learning culture that rewards information management in the performance of knowledge creation and sharing. The Cranﬁeld their business are unlikely to leapfrog into KM survey suggests that 85% of respondents believe (Murray, 1999). The Cranﬁeld study shows that that their organization encourages their staff to organizations which have achieved success in KM share and bring forward new ideas, whilst 29% had visionary leadership necessary for KM. The explicitly reward (only 6% on a regular basis) most progressive Chief Knowledge Ofﬁcers (Murray and Myers, 1997). (CKOs) all had wide experience in business and The advent of information technology such as were respected within their organization for their Intranets, Extranets, Internet and intelligent agents leadership qualities. has contributed signiﬁcantly to the increased The future research agenda needs to address the interest in knowledge management. As organiza- general lack of understanding which connects the tions are beginning to connect themselves in a way role of the employee and use of information/ that they had not done in the past, groups, knowledge, its critical links to the optimization of departments and teams now have ability to share the available technology within the ﬁrm and the information in a way that they did not have in the consequent achievement of competitive advantage. past. Although many existing approaches focus on Such a research agenda would need to ask: organizational issues, they consider knowledge as a $What effect can data/information customiza- resource which can be managed much like capital or tion have on the effective use and management labour. With the advent of Web-based technologies of information and knowledge within an organ- and specialized systems such as knowledge man- ization? agement systems (DOCS Fulcrum System, Know-$ What activities, using both human and tech- ledge X Analyst, Livelink V, GrapeVine, Business nical interventions, will enable individuals to Knowledge Navigator) or learning environments, a be able to receive customized information of variety of information technologies exist to support the quality and quantity they require to be able organizational processes of generating, institutio- to perform at their optimum level? nalizing, retrieving and disseminating knowledge. $What are the critical issues directly affected by Information is shifting the vector of economic the use of information technology and know- forces that deﬁne competitive advantage (Evans, ledge management within the organization? 1999). Increasingly, in the search for competi-$ What are the issues relating to the relationships tive advantage, scholars are identifying a shift between the functions responsible for informa- away from managing the information and tech- tion and knowledge management? (HR, IT, nology itself towards managing the use of it: the Knowledge Management, Marketing, Internal human interface (Choo, 1998, 1999; Murray, 1999; Communications). Orlikowski, 1999). Davenport and Marchand (1999) $What impact do these activities have on the similarly identify that facilitating access to a ﬁrm’s competitive advantage of an organization? repository of knowledge through improved inform-$ What are requisite organizational structures ation management is an important part of KM. They and roles identiﬁed to manage these relation- also highlight that companies have paid far less ships and those with the employees within the attention to how effectively employees apply and organization? use their knowledge and the increasing recognition that KM is as much about managing people than it is about managing information and IT. The Cranﬁeld study (TCISKS, 1998) shows that because the topic of knowledge management is BARRIERS THAT KNOWLEDGE relatively new there are still a few outstanding MANAGEMENT NEEDS TO MANAGE examples to show where business is demonstrably delivering signiﬁcant beneﬁts from KM activities. Considering that there are differences in deﬁning Whilst many organizations are still deciding on the the nature of knowledge, a variety of measures best forms of metrics and measurements, some and models for valuing knowledge and know- have already implemented KM, but often in the ledge management initiatives and the endless secondary feeder process such as account manage- variety of organizational structures, cultures ment or internal networking. KM also requires and formative contexts, as well as numerous investment and infrastructure. Organizations with motivations and the problematic nature of tacit inconsistant infrastructures and those who have knowledge, it is no surprise that there are a variety been relaxed about data and information manage- of barriers to managing the knowledge. The ment and those who never discuss the role of Cranﬁeld survey has identiﬁed four major broad From Tacit Knowledge to Knowledge Management 147
12. RESEARCH ARTICLE Knowledge and Process Management categories of knowledge barriers across Europe, was inscribed with a stylus in wet clay and then namely, people; management; structure; and baked. However, the heating process and the lack knowledge (TCISKS, 1998): of portability limited an author’s ability to share knowledge. The papyrus was the new technology People: in 2800 BC. Papyrus made capturing knowledge $Inertia to change easier and allowed for the building of great$ Too busy, no time to learn libraries, such as those at Sumer, Akkad, Ebla $No discipline to act and Alexandia. Parchment become available in 200$ Motivation BC and paper in 100 AD. Being vulnerable media, $Constant staff turnover due to ﬁre and moisture, there was need for$ Transferring knowledge to new people making copies, often by the monks — the ﬁrst $Teaching older employees new ideas knowledge professionals. In 400 BC, the Greek philosophers Plato, Socrates and Aristotle (1928, Management: 1984) laid down the foundations of understanding the nature of knowledge and its application$ The fear of giving up power (Skyrme, 1996). $The difﬁculties of passing on power Socrates invited debate, through dialogue, to$ Challenging traditional company style challenge traditional thinking whilst Aristotle $Imposed constraints (1928, 1984) encouraged storytelling. These me-$ Lack of understanding about formal approaches thods are being rediscovered in contemporary management (Skyrme, 1996). The signiﬁcant Structure: advancement in technology, the innovation of the $Inﬂexible company structures printing press in the 15th century, made storage$ Fragmented organizations and distribution of knowledge cheap and widely $Functional ‘silos’ accessible. With the advent of IT, computerized$ Failure to invest in systems databases were the ﬁrst tools for storing knowl- edge in the form of data and networks provided a means of sharing it. The ﬁrst really useful IT Knowledge: knowledge management tool was GroupWare, $Extracting knowledge exempliﬁed by Lotus Notes, which allowed multi-$ Categorizing knowledge ple users to share information and help in the $Rewarding knowledge creation of ‘corporate memory’. The invention of$ Understanding knowledge management corporate Intranets have provided a means of $Sharing between key knowledge groups building GroupWare from a collection of less$ Making knowledge widely available expensive software using Internet standards. Fundamentally, the basic requirement for KM The process approach to KM is one of the has not changed dramatically — what has changed principal emerging patterns in KM across Europe is the wasted volumes of data, the speed and ease (TCISKS, 1998). It involves identifying knowledge- of content changes and the transformation of the dependent processes and enhancing them through workplace. Even the cultural barriers to learning KM. It has the merit of tying readily into business and sharing have been fundamentally the same for beneﬁts and also allows the possibly of more some time. formal mechanisms, metrics and measurements Although KM means different things to different (TCISKS, 1998). people, in contemporary organizations it implies a Knowledge management, as a combination of mix of people, process and ethnology to share disciplines and technologies, aims to manage information and to gain competitive advantage. knowledge. The disciplines have evolved from Human resources (HR) experts see KM as part several areas, including business process re- of recasting the corporation as the ‘learning engineering and human resource management. organization’. The consultant sees it as exploitation The ethnologies sprung from two main sources — of ‘intellectual capital’ or the foundation for the universal communications medium of the ‘knowledge-centric’ organizations. Currently, US Internet and established software technologies companies are technically focused around KM and such as information retrieval, document manage- European companies think it is about people ment and workﬂow processing. (Dempsey, 1999). The explicit knowledge held in The ﬁrst attempts at KM started with the intellectual property portfolios, databases and, cuneiform language of about 3000 BC. Knowledge increasingly, corporate Intranets need to be 148 N. K. Kakabadse et al.