Overview of Knowledge Management in Organizations 1

Overview of Knowledge Management in Organizations

Yu Huang
Graduate Student, Training and Human Resource Development
Key words: Knowledge Management, Organizational Culture, Organizational Structure

Abstract
This paper looked into the knowledge management from the organizational perspective. Author
introduced definition of knowledge management, explicit knowledge and tacit knowledge, and
three attributes of effective knowledge managementmaturity, dynamic and self-growth.
Subsequently, the author explained organizational culture and structure which can best support
successful knowledge management by reviewing literatures and illustrating a knowledge
enterprise model. To manage knowledge effectively, the organization should create a knowledge-
sharing culture whose component is trust and consider it from four targetsinterpersonal,
group, organizational and institutional. Trust should go through the process of knowledge
management, and emphasize trust to people and to knowledge content simultaneously.
Organizational structure should facilitate knowledge sharing and be able to manage tacit
knowledge. Also, it should align with organization strategies, fit the culture and lead to
organization learning by using technology as an enabler.

Introduction to Knowledge Management
As the knowledge-based economy grows exponentially, the knowledge assets become
invaluable to the organizations. Effective use of knowledge has been crucial to the organizations
survival and success in competitive global markets and has a strong potential to problems solving,
decision making, organizational performance enhancements and innovation. Effective use of
knowledge, stated in a more academic way, is Knowledge Management. Knowledge
Management defines a systematic, explicit and deliberated building processes required to
manage knowledge, the purpose of which is to maximize an enterprises knowledge-related
effectiveness and create values (Bixler, &Stankosky, 2005). The process incorporated in KM
includes collecting, organizing, clarifying, disseminating and reusing the information and
knowledge throughout an organization. Dealing with knowledge is the main theme of KM.
Knowledge has two types, explicit and tacit. Explicit knowledge can be articulated in formal
language and transmitted among individuals; tacit knowledge involves more intangible factors
and is personal knowledge embedded in individual experience (Frappaolo, 2002). Both explicit
and tacit knowledge must create returns and solve todays problems within an organization.
Mastery of crucial and up-to-date knowledge for continuous organizational improvement
is primary emphasis of KM. Successful KM has maturity, dynamic and self-growth attributes.
Maturity attribute means KM should be strong enough to handle the turbulence in performance
yet flexible to adapt to changes. Also, KM should align with the organizational policy, strategies,
culture and structure, and provide an environment with well disciplined, value-added and
relevant knowledge to generate and introduce innovation and challenging ideas. Dynamic
attribute means the information and knowledge flow should spread through the organization
without barriers; everyone can approach and contribute to the knowledge assets. Self-growth
Overview of Knowledge Management in Organizations 2
attribute means, on one hand, KM should sense potentially valuable knowledge, capturing and
storing it to increase organizational knowledge assets, and on the other hand it should create new
knowledge based on what an organization already has had.
KM can profit organizations, for instance, leveraging the intellectual capital, utilizing
knowledge assets, sustaining cutting-edge performance. Such as GE, Microsoft and Intel, their
net worth incensement which can be attributed to KM up to 82%, 97% and 85% respectively
(Frappaolo, 2002). In organizational perspective, creating culture and structure that can foster
KM are the key points.

Knowledge Management and Organizational Culture
Organizational culture is a big factor impacting success of KM. KM should be supported
in a knowledge-sharing culture, and trust is its most important component (Ford, 2001, & Figallo,
2002).Dianne Ford (2001) summarized trust into interpersonal, group, organizational and
institutional targets (Figure 1).


Interpersonal trust
The willingness of one person to increase
his/her vulnerability to the actions of another
person [e.g., Zand 1972] (Aulakh, Kotabe &
Sahay, 1996, p. 1007).
Also defined as generalized expectancy that
the verbal statements of others can be relied
upon (Rotter, 1967, p. 651).
Group trust
(Rousseau, et al., 1998)
The willingness of one person to increase
his/her vulnerability to the actions of a group
of people.
Organizational trust
Organizational trust is a feeling of confidence
and support in an employer organizational
trust refers to employee faith in corporate goal
attainment and organizational leaders, and to
the belief that ultimately, organizational action
will prove beneficial for employees (Gilbert
& Li-Ping Tang, 1998, p. 322).
Institutional trust
Institutional trust is a feeling of confidence and
security in institutions (e.g., the law,
organizations), that the laws, policies,
regulations, etc. are to protect the individuals
rights, and will not harm her/him.

Figure 1. Trust Targets (Ford, 2001, p. 31)


Overview of Knowledge Management in Organizations 3
Trust is the channel through which the knowledge can be exchanged smoothly .High
level of trust in organizational culture can facilitate knowledge sharing, particularly tacit
knowledge. Because sharing knowledge is a risky action, people are more inclined to conceal
what they have known if they are uncertain with outcome of sharing. So building trust is the first
step to effective KM. In KM, trust entails trust to people and trust to the knowledge content itself.
Trust to people is a key element promoting collaborative and participative culture in the
organization, which can break down the barriers to the knowledge sharing. Trust to knowledge
content will increase the credibility of knowledge, which can make people use knowledge
without concerns and improve the trust to other people immediately.
Researchers also pointed other components of knowledge-sharing culture, like ownership
of knowledge and liability (Frappaolo, 2002) Ownership of knowledge can be categorized into
organizational trust. As defined in Table 1, it more stresses what the organization can do for the
employees. The organization should support the employees work, provide necessary knowledge
required to accomplish the task, be receptive to criticism, and encourage truth. The knowledge
assets do not only belong to the leaders. It should be shared with everyone in the organization.
All the members have the right to own and retrieve the knowledge assets. Furthermore, the
organization should created an atmosphere which make employees feel the equal access to
knowledge assets and responsible for making contribution. Participative leadership, open
communication and knowledge reward can be the means to increase the organization trust. As far
as liability, it can be categorized into institutional trust. Liability plays an important role in
knowledge security, especially in inter-organizational setting where scope of knowledge
exchange often reaches to a large market (Ford, 2001, &Frappaolo, 2002). The knowledge
sharing between organizations needs more trust to drive the knowledge exchange and also more
protection on security. Trustable laws, policies and regulations are powerful tools to protect
peoples right and to ensure no harmful impact of knowledge sharing action. And most of time,
shared knowledge is not present in a neat and official format, so under control of laws and
policies will make it more convincible and avoid problems (Figallo, 2002).
Interpersonal trust, group trust, organizational trust and institutional trust are
interdependent throughout the KM process and do not necessarily begin with interpersonal trust
(Ford, 2001). Trust is essential to the organizational culture, not only in KM, but in all
managerial function leading to organizations success. Organizations should reward knowledge
contribution and encourage learning. As the key component of knowledge sharing culture, trust
is the ground of knowledge-related action in an organization.

Knowledge Management and Organizational Structure
Another issue regarding effective KM is organizational structure. To better implement
KM, some organizations place the positions entitled with, for instance, chief knowledge officer
(CKO), knowledge engineer, knowledge analyst, knowledge manager, knowledge steward to
administrate knowledge management (KM). And along with the development of information
technology (IT), Knowledge Management System (KMS) has been integrated in organizational
structure to assist in managing knowledge through intranet or internet. Figure 2 shows
organization structure which can support KM.
Overview of Knowledge Management in Organizations 4
Figure 2. Knowledge enterprise mode (Anantatmula, &Stankoshy, 2005, p.174)
From Figure 2:
1. Major issues in organizational structure are interaction and strength on tacit
knowledge.
The organization structure should be networked to provide opportunities for employees to
interact and communicate with others, and support knowledge- related actions. Because it is
intangible and more relevant to personal feelings, managing tacit knowledge is more difficult
than explicit knowledge. Organization structure should be able to handle tacit knowledge, and
change it into explicit knowledge if necessary.
2. Technology is only an enabler.
Because of advanced information technology, knowledge management systems, expert systems,
knowledge base systems and other high-tech products are available for organizations to manage
knowledge. Technology is merely a tool. Human factor is the key to effective and efficient KM.
3. Organizational structure should align with the strategies and fit in a trust and open
culture environment.
Organizational structure should be in line with the organization strategies, goals, mission and
vision, and encourage employee to learn. In the organizational structure, there should be a
connection between individual improvement and organization improvement. System thinking
approaches should be integrated into the structure.
Overview of Knowledge Management in Organizations 5
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4. Organizational structure should result in organization learning.
Organization learning is a broad topic. Here just list some suggestions that may help in
organization learning:
Provide continuous learning opportunities.
Use learning to reach their goals.
Link individual performance with organizational performance.
Foster inquiry and dialogue, making it safe for people to share openly and take risks.
Embrace creative tension as a source of energy and renewal.
Are continuously aware of and interact with their environment. (Kerka,1995)

Conclusion
Knowledge Management is a systematical process which includes collecting, organizing,
clarifying, disseminating and reusing the information and knowledge throughout an organization.
KM deals with explicit knowledge and tacit knowledge and should possess maturity attribute,
dynamic attribute and self-growth attribute. Successful KM needs a trust-based organizational
culture to facilitate knowledge sharing and should be supported by an organization structure
which can result in organization learning and fits in the trust and open cultural environment.

References

Anantatmula, V.S. (2005). Knowledge Management Criteria. In M. Stankoshy. (Ed.).Creating
the Discipline of Knowledge Management: The Latest in University Reserch (pp.171-
188).Amsterdam, Boston: Elsevier Butterworth-Heinemann.
Bixler, C.H. (2005). Developing a Foundation for a successful Knowledge Management System.
In M. Stankoshy. (Ed.).Creating the Discipline of Knowledge Management: The Latest in
University Reserch (pp.51-65).Amsterdam, Boston: Elsevier Butterworth-Heinemann.
Figallo,C. (2002). Building the Knowledge Management Networkbest Practices: Tools and
Techniques for Putting Conversation to Work. New York: J ohn Wiley& Sons, Inc.
Ford, D (2001). Trust and Knowledge Management: The seeds of Success. Retrieved May 4
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2007, From
http://business.queensu.ca/centres/monieson/docs/working/working_01-08.pdf

Frappaolo, C. (2002). Knowledge Management. Oxford: Capstone Publishing Ltd.
Kerka, S. (1995). The learning organization: myths and realities. Retrieved May 4
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Form http://www.cete.org/acve/docgen.asp?tbl=archive&ID=A .