Introduction
Knowledge Management has become important in organizations today. However, there has been less attention given to the benefits accruing from it. Moreover, organizations have to spend money in acquiring and improving their knowledge infrastructure, both for hardware and software, while putting less effort into measuring the results. Literature found on the value of Knowledge Management system outlines some of the benefits as follows:
- Time benefit—saving of time in solving a problem due to the contribution of the Knowledge Management system
- Man-hour benefit—saving of person-hours in solving a problem due to the contribution of the Knowledge Management system
- Cost-benefit—a saving of cost in solving a problem due to the contribution of the Knowledge Management system
Before I explore the benefits in detail, I have to look at what is knowledge management and related terms.
Knowledge management is the implicit, explicit and systematic organization of important and shareable information within and with the external environment of an organization. It involves organizing information, finding and investigating, selecting necessary information, filtering and presenting to groups, individuals or to entities with the aim of improving understanding of specific areas of business interest. Therefore, knowledge management involves the process of converting personal knowledge, whether acquired in the learning process or obtained at any quarters, into knowledge for others through the organization of information in the firm. Knowledge management focuses on two objectives that are enabling knowledge sharing within the organization and using knowledge to run communities and institutions. Some knowledge management activities that have been implemented by business organizations have helped them to focus on acquiring, storing, and utilizing knowledge for such things as problem-solving, dynamic learning, strategic planning and decision making ( Graduate School of Business, the University of Texas at Austin,2000 and Blue Ridge Academic Health Group. 2000).
Knowledge sharing among employees is an asset that gives the company sustainable competitive advantage, corporate value and economic growth (Sandra Vera-Mum˜, Joanna and Chee 2006), although the sharing of knowledge may be limited within organizations (Szulanski 2000, 1994; Nonaka and Takeuchi 1995;Von Hipper ,1994).
What is Knowledge?
From a dictionary, knowledge is the awareness and understanding of facts, truths, or information gained through reasoning in the form of experience or learning. Therefore, Knowledge can be an appreciation of interconnected details that, in isolation, are of lesser value and Researchers use diverse expressions to define knowledge (argued Sandra Vera-Mun˜, Joanna and Chee 2006). (Nonaka) (1994) Commented that knowledge consists of justified true belief, Starbuck (1992) defined knowledge as stock of expertise and Elliott and O’Dell (1999) as information in action.
Sharing Knowledge
Knowledge is divided into explicit and tacit, Polanyi (1966).
Knowledge is ”know-what,” which can be captured, codified, categorized, and stored and is transmittable (, Stenmark 2000). Tacit knowledge is the ”know-how,” knowledge which is a result of the habitual practices and mental models of individuals ( Polanyi 1997; Nonaka and Takeuchi 1995). Ambrosini and Bowman (2001) summed up that tacit knowledge can not be easily be articulated because it is subconsciously understood and applied, and it resides in people’s minds as intuitions, insights, beliefs, or values. Bonner (2000) and Lee (2000) added that Knowledge in most organizations is embedded and synthesized in people’s minds. This adapted chart shows how a good knowledge system should be: for sharing purposes.
Measuring the value and importance of knowledge in accounting is a classic example.
Sandra Vera-Mun˜, Joanna and Chee (2006), in their article enhancing knowledge sharing in Public Accounting firms they argue that “Explicit knowledge can be shared through verbal or written communication and, thus, passed on to other members of the organization, who in turn must convert it into tacit knowledge before they can use it. On the other hand, tacit knowledge is typically shared through socialization, such as highly interactive conversations, apprenticeship (e.g., observation), storytelling, analogies, and shared experiences and activities ( Stenmark 2000, 10; Zack 1999b, 46; Nonaka and Takeuchi 1995; Nonaka 1994, 1991). Thus, tacit knowledge is effectively shared by allowing the recipient maximum possible opportunities to work alongside the source of the knowledge.” End of the quote. From quotes and discussion, we learn that knowledge sharing, whether explicit or tacit, is vital in the organization, and it requires efforts from both the individuals and enabling environment of the organization.
This adapted diagram shows how a good accounting firm knowledge should in order to allow knowledge sharing.
Factors Affecting Knowledge Sharing and Integration
All organizations make efforts to gather, sort, transform, record, and share the collective knowledge of their employees. However, knowledge in the minds of their staff members will share through consultation, which is an informal and formal interaction. Other knowledge is shared using information technology.
Information Technology
Information technology assists in collecting, codifying and distributing. However, the issue of knowledge sharing is an organizational issue because its success depends ultimately on people, their practices, and their expertise (Salisbury 2003, and Douglas 2002).
Formal and Informal Interactions among employees
Knowledge sharing in organizations is mostly through personal interactions among colleagues, formally or informally. Their sharing of knowledge involves interactions in-office meetings and outside people. This inputs new procedures of work and any other emerging issue relating to work. While firms’ informal groups include associations of employees from some section of the world, get together teams with the aim of assisting each other at times of difficulty. Their interactions are on social terms that are in the process of handling their informal meeting professional knowledge may be passed. This occurs without the other person realizing thus no negotiation of terms and without knowledge of whether or when the other will reciprocate’’ (Molm 2000).
Factors affecting knowledge sharing in formal and informal interactions for firms include.
Organizational Culture includes practices, unspoken norms, beliefs and shared values. This can be summarized as those things that determine the patterns and qualities of interactions between employees at different hierarchical levels (Sadler 1988, 118). Brown and Starkey (1994) argued that the culture of an organization is an important factor affecting attitudes toward communication and communication processes and systems. Many practitioners share this former view as vice-president of strategic planning and knowledge management at the American Institute of Certified Public Accountants (AICPA), John Hudson, equipped that the obstacle to knowledge sharing is not technology but a business culture that rewards keeping what you know close to your vest. Meaning that whatever you know should be kept away from your peers so that you can have a competitive advantage over others in terms of salary and advantages. This means that individuals’ employees are encouraged not to share what they know. (Stimpson 1999, 38–39). Accounting firms should be encouraged to have culture encourage knowledge sharing and eliminate cultures of rewarding employees that does not embrace teamwork. If an employee is good but does not share knowledge, fire him. Thus, cultures and practices that encourage openness and teamwork are a source of successive knowledge sharing in accounting firms. Thus, if partners demonstrate accessibility and openness to discussing sensitive topics, then auditors at lower ranks are less likely to experience evaluation apprehension, in turn increasing their willingness to proactively seek and share knowledge (Sandra Vera-Mun˜, Joanna and Chee 2006).
The criteria used in solving and decision making in the organization also affects sharing of information. All business engagements, explanations, decisions and expectations should be seen to be fair to all. Individuals involved in decision-Making, issue of opinions, their assumptions and ideas being recognized by asking for their opinions and allowing them to refute the merits of one another’s assumptions and ideas. Decisions made should have an explanation to help individuals understand the reasons and thus create faith in management intentions. Sandra Vera-Mun˜, Joanna, and Chee (2006) argued, “Expectation clarity means making explicit the rules of the game”. Studies have linked processes, attitudes, and behaviour. In the research carried out, it has been found out that “executives in their sample were frustrated by the uncooperative behaviour of the senior managers of their local subsidiaries. In particular, the senior local managers often failed to share knowledge and ideas with the top executives. Managers who believed the company’s processes were fair displayed a high level of trust and commitment, which, in turn, engendered active cooperation. Conversely, when managers felt that a fair process was absent, they hoarded knowledge and ideas and dragged their feet in making decisions and executing them. Procedural justice research suggests that to achieve a fair process, the specifics of the new rules and policies matter less than that they are clearly understood. Further, people care as much about the fairness of the process through which an outcome is produced as they do about the outcome itself. In general, a fair process builds trust and commitment, and they, in turn, produce voluntary cooperation. Voluntary cooperation drives performance, thus leading people to go beyond the call of duty by sharing their knowledge and applying their creativity” Sandra Vera-Mun˜, Joanna and Chee (2006).
Role Conflict and Role Ambiguity
Jackson and Schuler (1985) argued that Role conflict and role ambiguity could be sources of work-related stress, and this may affect service delivery to the clients. This occurs when there is no proper definition. Most accountants and auditors expectations are derived from generally accepted accounting principles and other regulations. Sandra Vera-Mun˜, Joanna and Chee (2006) argue that boundaries on the scope of no audit services established by Sarbanes-Oxley may not be completely transparent to some controllers and corporate managers— particularly those of small companies—they may still view auditors as business advisers and, thus, continue to ask for their advice on non-audit-related issues that may compromise auditor independence.” This act changed the role of auditors, and thus role conflict may occur. Another issue of conflict is communication and authority, adaptability, and workflow coordination (Sandra Vera-Mun˜, Joanna and Chee 2006). The writers have written, “For example, proper time allocation is a persistent issue that frequently results in a conflict of expectations between a client and the auditor’s supervisor. This is because an auditor is typically assigned to multiple client engagements, thus requiring careful and thoughtful coordination and management of engagement schedules. Often, unanticipated delays in completing audit assignments are unavoidable due to demands and circumstances beyond an auditor’s control, such as missed deadlines in receiving client information, unresponsiveness of client personnel, and the need for more research to address complex technical issues. A significant delay with a particular client engagement may cause auditors to miss important deadlines with other client engagements. Timely and accurate sharing of engagement progress reports among the auditors, clients, and audit supervisors are an integral component for aligning expectations between and among them” summarizing the role conflict in the formal and informal groups.
While role ambiguity is when in the job specification and description, there is no clarity on job requirements. This is typical in accounting firms like Johnson and associates, auditors are assigned to multiple engagements and work for multiple supervisors with differing or sometimes conflicting management styles and directives Sandra Vera-Mun˜, Joanna and Chee (2006) argues. In this case, conflict affects employees’ abilities to share knowledge with other members of the audit team, and this may cost the firm in terms of performance and service delivery.
Supervision and Feedback
There should be proper supervision and proper feedback on any issue raised. This will enable sharing of information easier and acceptable. Sandra Vera-Mun˜, Joanna and Chee (2006) have argued, “Supervision typically connotes downward communication in the form of advice about task-related matters, such as task instructions, objectives, constructive assessments of preliminary plans and the results of past decisions and provision of feedback. Auditing standards have long required supervision of audit team members”. This is contained in AICPA 1996, AU Section 311, which states that supervision should vary with the nature of the assignment (‘‘the complexity of the subject matter and the qualifications of persons performing the task’’).
The accounting example has used above illustrate the factors affecting knowledge sharing, its benefits and its value. I will add an example of firms in the business of processing. I will no touch issues like factors since they are similar across the divide. The effective Knowledge management system has direct consequences on cost, schedule, safety, and reliability plants for processing. Therefore, in the processing firms, the benefits of integrating and sharing knowledge include (adapted from IoMosaic Corporation, 2003):
- Ensure plant information is available to all users whenever required.
- Ensure plant information is accurate, i.e. kept current with plant changes.
- Decrease the cost of managing, locating, and distributing information.
- Ensure compliance with engineering standards and regulations.
- Enforce standardization and adherence to best practices for critical functions such as Incident Reporting.
- Leverage knowledge in other plant systems for wider benefit.
- Eliminate/reduce errors inherent in paper-based systems, procedures, and work processes.
- Accelerate and streamline plant projects.
- Gain business intelligence/decision support due to knowledge stored and analyzed in the system.
In order to understand the value and importance of KM, one needs to know the factors that affect integration and sharing. Effective KM systems have high benefits with fewer errors, have less redundancy, be quick problem solving, assist better decision making, increase worker independence and improve work delivery. When designing KM, the following factors should be considered:
- Productivity and efficiency.
- Knowledge sharing, skill development and training.
- Competitive advantage, including market visibility as a high-tech firm.
- Ability to direct work to skilled specialists
- Consistency of work product across offices or practice areas
- Faster delivery times
- Quality control.
- Reduced frustration searching for documents
- Client collaboration
References
1.Ambrosini, V., and C. Bowman. 2001. Tacit knowledge: Some suggestions for operationalization.Journal of Management Studies 38: 811–829.
2.Bonner, D. 2000. Knowledge: From theory to practice to golden opportunity. American Society for Training & Development: 12–13.
3. Douglas, P. 2002. Information technology is out—Knowledge sharing is in. The Journal of Corporate Accounting & Finance: 73–77.
4.Graduate School of Business, University of Texas at Austin. KM Answers to Frequently Asked Questions about Knowledge Management. [online].
5. ioMosaic Corporation (2000)
6.Nonaka, I. 1991. The knowledge-creating company. Harvard Business Review 69: 96–104.
7.Polanyi, M. 1966. The Tacit Dimension. London, U.K.: Routledge and Kegan Paul.
8.Salisbury, M. 2003. Putting theory into practice to build knowledge management systems. Journal of Knowledge Management 7: 128–141.
9.Sandra C. Vera-Mun˜ oz, Joanna L. Ho, and Chee W. Chow, (2006). Enhancing Knowledge Sharing in Public Accounting Firms Accounting Horizons Vol. 20, No. 2 pp. 133–155
10.Stenmark, D. 2000. Leveraging tacit organizational knowledge. Journal of Management Information Systems: 9–24.
11.Szulanski, G. 2000. The process of knowledge transfer: A diachronic analysis of stickiness. Organizational Behavior and Human Decision Processes 82: 9–27.
12.Stimpson, J. 1999. In the know. Practical Accountant 32: 34–39.
13.Evaluating Benefits of KM. Web.