By: Mostafa Sayyadi
With a clear understanding of knowledge management success, executives can make more effective managerial decisions.
Knowledge management success has been evaluated from various perspectives—as knowledge management is understood in many different ways, scholars focus on different aspects of it and offer several options of managerial application. These perspectives are discussed below.
Taking a Technological Perspective
In this case, the executive understands how knowledge management as a means of facilitating organizational processes and activities uses information technology to organize existing information. They have found that this type of management embraces IT to convert individual knowledge into valuable resources for their organization. They focus on individuals as the major source of knowledge, and show how followers tie together so that they can affect the sharing, storage, transfer, and application of knowledge within their organizations. These connections, and the related shared knowledge and memory, are seen as central to the effectiveness of knowledge management.
Taking an Economic Perspective
Executives agree with Doyle McCarthy, who sees society as a product of knowledge. Knowledge is a byproduct of culture, and its role in guiding and facilitating people’s action is key to executive decision-making. Four scholars by the names of Bernard Marr, Oliver Gupta, Stephen Pike and Goran Roos define knowledge management as a set of activities and processes aimed at creating value through generating and applying intellectual capital. Executives direct the practices that create value from intangible organizational resources. For them, it is clear that the objective of managing knowledge is to add value to organizations. The focus here is that executives consider the fact that a firm’s knowledge is positively associated with its outcomes.
Taking a Process Perspective
The process perspective focuses on knowledge flows and management for strategic management decision-making. Managing knowledge is not anything new; scholars have considered the various processes involved. One example, in which Hirotaka Takeuchi and Ikujiro Nonaka suggest that knowledge management processes include:
- Socialization (from tacit knowledge to tacit knowledge)
- Externalization (from tacit knowledge to explicit knowledge)
- Combination (from implicit knowledge to explicit knowledge)
- Internalizations (from explicit knowledge to tacit knowledge)
For a good example of this, executives can look at three-step processes of knowledge accumulation, integration, and reconfiguration. Knowledge, in the first stage, is acquired from external environments and created through the organization’s human capital. In the second stage, knowledge is integrated into organizational processes and procedures through sharing. Finally, in the process of knowledge reconfiguration, knowledge is shared with other organizations operating in the business environment to meet new changes and challenges.
Executives are aware that activities related to managing knowledge at the individual level vs. the organizational level are handled at different points on the organizational chart. Therefore, they need to focus on the interactions among the three facets of knowledge (i.e. implicit, explicit and affectual) to minimize the possible limitations of managing all facets or the business units and components on an organizational chart. As per the nature of knowledge management and how it has manifested in the boardrooms of large organizations, scholars have posited several applications and buzzwords. For example, they go beyond the simple application of knowledge management and suggest an application that incorporates three major kinds of knowledge:
- Perceptual knowledge that is on-going and continuously updated (i.e. implicit)
- Conceptual knowledge that is based on upper management decision making and discernment (i.e. explicit)
- Affectual knowledge which shows caring and empathy for followers, customers, and stakeholders (i.e. affectual)
Executives embrace the process perspective because it takes a task-based approach by translating the management of knowledge into various organizational processes. Accordingly, the process perspective develops a firm-specific approach by which organizational knowledge provides a significant contribution to business objectives through the context-dependent way it is managed. Process perspective can also help organizations identify their inefficiencies in each process, and subsequently recover them on an instantaneous basis which enables leaders to prevent further operational risk. Executives know that applying knowledge management using the process perspective is advantageous and good sound strategic implementation.
This article attempts to blend scholarly concepts with real-world application. This article introduces an applicable perspective to evaluate knowledge management success. Also, this article provides evidence that knowledge management is used in corporate infrastructure for strategic decision-making.
About the Author
Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies, and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.
Marr, B, Gupta, O, Roos, G & Pike, S 2003 Intellectual Capital and Knowledge Management Effectiveness. Management Decision, vol. 41, no. 8, pp. 771-781.
McCarthy, ED 1996 Knowledge as Culture: The New Sociology of Knowledge, New York: Routledge.
Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company: how Japanese companies create the dynamics of innovation, New York: Oxford University Press.