# 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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## Nội dung Text: From Tacit Knowledge to Knowledge Management: Leveraging Invisible Assets

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.
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
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.