Introduction
With increased management strategies and mechanisms, facilitated by increased competition among companies, there is a new wave of management to knowledge management. Globalization and competition has resulted in companies looking for intellectual assets management over and above traditional business assets like physical and human resource.
The move has been facilitated by advancement in technology with homemade and commercial tools used to produce and distribute information within and without a business. These tools include internet, intranet, CRMs, and advance intellectual data management tools. Business intelligence tools are also considered as knowledge management tools.
The major difference that can be seen between the traditional factors of production (land, labor and capital) is that the tradition approaches offered a diminishing marginal rate of return; however, with every other knowledge learnt, there is an increasing marginal rate of return (Singh & Soltani, 2010). This paper discusses how a business can use knowledge management in its operation and how knowledge management influences business restructuring and how it might help an organization better leverage its knowledge resources.
Knowledge Management
Knowledge management cannot be given a single definition but it entails a combination of issues and processes. They are intangible assets which are unique to different businesses and can be improved with experience and information interpolation.
The most important factors considered are human assets that a company have. Human beings have different talents and capabilities; however, tapping this asset requires strategic operation and management. Other than utilizing the knowledge and experience that the employees have, there is the need to use available information to grow and develop knowledge and expertise in employees.
Information can be internal and external and how well the information is utilized can result in growth of knowledge, effectiveness, and efficiency in doing business. To effectively utilize information, organizations should move from information hoarding to sharing of information that they are holding for the benefit of others; this is so despite the fact that there are some private information that a company can hold (March & Kim, 1988).
Other than physical, financial, and human resources being available in an organization there is need to integrate an intellectual asset where these resources can be managed and measures developed to ensure a company has a competitive advantage. Knowledge management is a process which involves understanding the current operation, understanding the potentials and weakness of a company then strategies to get relevant business information and knowledge developed.
The following are the objectives of a knowledge management process;
• To develop knowledge based competence for decision making; this will assist a firm to adapt to changing business environment, be able to learn and adjust faster than their competitors. This results in a competitive edge
• It aims at developing a company from a production-based company to knowledge-based company; this means that a company will not only be competing in the lines of quantity, price, and availability as suggested by 4Ps of marketing but will go a step higher to quality improvement and continuity.
• Improving social capital in a firm for better performance of the general company.
The present Knowledge Management Programs
With well organized knowledge management tools, there are numerous advantages that a business is likely to get. The success of a business is dependent on the quality of decisions that managers at different levels make. High quality decision leads to competitive advantage.
One of the most critical decisions that managers should make is one that reduces cost of production. Knowledge management tools assist a company to develop a cost cutting policy by recognizing areas of inefficiency and rectifying them. With a reduced cost of production, then it can sell at a lower price than its competitors.
For example, city of Albuquerque utilized KM to develop mechanisms to cut down their cell phone bill; they managed overtime and identified areas of inefficiency in their operations. The resultant was saving the city $2 million in a period of three years. Toyota in Tokyo, Japan, recognized that it was double paying its shipment in 2000. The amount that it had already double paid was to the tune of $800,000 (Chong, Keng-Boon, Binshan & Pei-Lee, 2010).
When making decisions managers need to be informed and have reliable past, current, and futurist data. With futuristic decisions, a company is likely to satisfy its current and future customers. When making strategy for a company, there are generally three approaches; cost strategy, differential strategy, and flow strategy.
In a cost strategy a company aims at improving its efficiency to a level that it becomes the least cost producer. In a differential strategy the business aim at getting unique products that will attract the greatest number of customers and meet their need. A KM system offers a chance to analyze the trends of customers and thus a business will always be ahead of its consumers and competitors in their products.
This will eventually give the business an upper hand. Flow strategy is all about establishing a certain area that has un-tapped market then entering the market. When there is data a business will always be aware of emerging opportunities in the business world and venture into them after analyzing them using the available data. One of the major hindrances to making the right decision is lack of information.
The initial point in coming up with a good knowledge management strategy is data mining. This is ensuring that data has been captured that will assist in developing the knowledge of staffs and enhancing their improvement.
The following table shows the procedures that are involved in a Knowledge development process;
The process involves an analysis of corporate goals and mission of a given company a move that will assist in developing mechanism for better utilization of intellectual’s information. When information and data have been gotten in an organization, the information is used to improve the operations of a company. Improving these operations may call for restructuring of various processes and even making structural adjustments to accommodate better learnt methods of doing work.
Lesson learnt
In developing a good KM system there are different issues that emerge and hinder an organization from full enjoyment of its benefits. These issues can be broadly divided into two categories; people & organizational issues, and technological issues.
People and Organization issues
An organization requires physical and human resources for its operations. How well an organization blends its human resources determine its success. The human resource department is given the mandate of ensuring that adequate employees are available at all times.
It has the mandate of planning, deploying, employing, training, and dismissal of employees. When the department is undertaking this duty, it looks into quantitative and qualitative aspects. Qualitative means the right number of employees and qualitative means employees with right skills. However, to tap the talents and intellectual asset of people there are factors that have to be considered, they are;
Resistance to change
People are not willing to move from their comfort zone to look for better ways of doing things yet they are willing to adopt the new systems. Although everybody is a thinker in his own capacity there are people who are willing to develop and look for better ways of doing things. This is a culture that should be cultivated in an organization as it will ensure that knowledge has been sought and utilized in an organization.
Organizational culture
Organizational culture is unwritten or unseen control that exists in a company; it can be for the benefit of a company or the loss of the company. When a culture that does not support and nurture innovation and creativity is adopted in a company, then developing a pool of knowledge will not be possible; knowledge management and development involves an entire company to come up with improvements in their own area utilizing the talents and experiences that they have. To facilitate an organizational culture that adopts change and is willing to create and be innovative the management should have motivational measures targeting these effects. For example, adopting an expectancy theory of motivation would assist a company in initiating a spirit of creativity and motivation in an organization.
Lack of trust in the system
Disseminating information using the informational technology and communication tools is a fast method however the method can result in information going to the wrong people. To develop a good knowledge sharing tools and mechanisms there is need to create trusted sites and information control mechanism so as sharing of information can be facilitated without any risk.
Employee retaining
Information is developed over time; there is explicit knowledge and tacit knowledge. Explicit knowledge can be documented and reviewed in the future for better decision. There are documented better ways of doing things and processes that has been attained from previous experiences. This information can be available even when an employee has left an organization. What needs to be tapped and retained through retaining employees is tacit knowledge; this is knowledge mostly in term of experience, professionalism, and talent development which an organization has managed to develop. To have an effective knowledge management system these people need to be maintained and these assets utilized accordingly. The experience may be lost due to retirement, change of jobs, and natural factors (like death and sickness). To maintain this, there is need to have a good staff retention mechanism and employee who had appropriate skill but got to retirement age should be contracted as consultants to the firm (Key & Tompson, 2009).
Motivational issues
For creativity and innovation staffs must be motivated to think and come up with ways that can improve the current situation in a business. The role of motivation and tapping of potential should not be left to the human resource department but line managers should have the capability of recognizing a certain idea/talent and growing it to the benefit of the organization.
Pressure of work
The kind of pressure and working environment that an organization gives to its employees will influence their move towards a KM direction.
If the environment is of a dictatorship kind where the management has the final word without considering the views and observation of other employees then there is a high likelihood that the process and solution development in terms of knowledge will be hampered. Structuring an organization to have a smooth flow of information and giving credit where it is worth is of great essence in developing a good KM frame work (Jensen, & Webster, 2009).
Technology and Process issues
Information communication and Technology tools
There is a high tendency that management will be more skewed to offer attention to analysis and information that information technology tools have. However, this is not the focus of a knowledge management program. Computers and other information and technology tools are there to facilitate and assist development of knowledge management but should not be the sources of information necessary. People are the driving force and should be given the first priority.
Restricted access
Information is a valuable asset whose access should be restricted. However, there are times that a restriction could work for the disadvantage of an organization. In most cases management are given the right to access sensitive information but since they are not the user the idea of disseminating the information can lead to other issues.
Too much theory
Theory should be used to give a direction that the organization should follow but does not dictate the path to be followed. Different organizations have different need which requires different approaches. Focusing so much on theory can be dangerous to the implementation of a good KM system (Lingling, Jun, Yong, & Xiaohui, 2009).
Matching Ahead
There are three simple stages in developing a good KM strategy. They include focusing on technical knowledge of an organization; this is looking in terms of the need and the level that the available intellectual assets are utilized. After understanding the level of utility a decision to increase effectiveness is made.
The second stage is developing and sharing of information. This is the stage that ways are devised that is of benefit to an organization. The last stage is the stage where from the gathered information, knowledge, and experience new developments of doing things are made. It is also the stage that oversees and monitors the entire process. To effectively match ahead the following things should be put in place:-
Formulate a knowledge leadership committee
The committee should be composed of people from all departments who are willing to embrace change. Most preferably it should be composed of opinion leaders who are able to influence a department or a certain group of people that they lead. The support of top management can be felt through their participation and involvement in these organizations.
Develop a framework that place KM in the business context
These are frameworks which will ensure that there is an appropriate method of data creation, data analysis, knowledge development, knowledge dissemination, knowledge security, and ensure that there is an adequate checks and balances system to evaluate a system in different times (Gunasekaran & Ngai, 2007).
Aligning value-adding knowledge process with the strategic goals
The new move is seen as a change in an organization and thus it should go in line with the expectations of the organization. A move aimed at ensuring that organizational goals are attained as knowledge developed is crucial. In this, there is need for adequate monitoring and coaching of staffs for them not to be focused on knowledge development at the expense of the organization. A clear understanding in employees should be ensured.
A likely scenario that has happened in the past is after the process has been put in place then employees feel that their organization is moving to a state where it requires highly educated people. They start going back to school in large number or seeking for other “less demanding” jobs.
Motivate and enhance knowledge sharing and learning convergence
The success of a change system is dependent on how employees are motivated and are willing to adopt change. Modern systems of motivation are moving from the traditional roles played by human resources to a more involvement of other people like line managers and colleagues. Other than having money as the only motivator, creating a good working environment will go a notch higher in ensuring that there is good adopting of knowledge (Wang, Hult, Ketchen & Ahmed, 2009).
Rebuilding and Reinforcement of enablers
There are three major enablers in a knowledge management system; they are people (employees), technology, and processes. They should be addressed separately to ensure that they are aligned to the end result in developing an effective knowledge system.
• Human resources
They are the ones who are responsible for developing the knowledge required in an organization. To facilitate their involvement, they should be involved in the system development from the initial stage. The move and decision to have the system may have come from the management but should not be forced on people. There is a lot of anxiety created when a new system is being put in place. This involves employees wondering what will happen to their jobs if the system is implemented. Such anxieties should be dealt with accordingly.
Top management involvement and participation is important in ensuring that the process is a success. If the system is supported by top management, employees are likely to adopt it. This will also create a one voice in management, employees, and directors.
Encouraging safe information sharing among employees; this involves having a well defined way through which a development or creativity can be communicated in an organization. One of the hindrances that kill the spirit of creativity and innovation is hijacking of ideas. This is a move which should be stopped by devising mechanisms that ensures that in case of an innovation and creativity, credit is given to the right person (Perrott, 2008).
• Process
To have good knowledge development and utilization there is need to align all organizational system to this effect. For example, if the focus is on getting response from customers a system that facilitates customers to give their observation and views is important.
To align the system to this effect there should be the involvement of people on the ground (people who are undertaking various functions in an organization), supervisors, process head, departmental heads, and even casuals. They are all part of the system and should be considered always.
• Technology
Appropriate and up to date information technology tools should be used in the entire organization. Hardware and software tools should be developed which are appropriate for the attainment of set goals and objectives. Intranet and internet services should not only be implemented but monitored to ensure that they do not lead to avenues that an organization will lose its knowledge information. It should be a mechanism to facilitate sharing and dissemination of information (Johnson,
2008).
Implementation Phase
Implementation can be in three stages; it is going to follow the normal process of knowledge management but different level has different functions they are;
• focusing on technical knowledge of an organization (1-4 months)
Activities
Formulate a knowledge leadership committee
Develop a framework that place KM in the business context
• developing and sharing of information (4-8 months)
Activities
Analyzing internal processes for better strategy development
Prepare the organizational infrastructure and people for the new process
• Monitoring and control (8-16 months)
Aligning value-adding knowledge process with the strategic goals
Motivate and enhance knowledge sharing and learning convergence
Rebuilding and Reinforcement of enablers (Kumar & Thondikulam, 2006).
Conclusion
Knowledge management is a new management tool which has taken center stage in many organizations. It aims at developing information and knowledge to empower employees and organizational process for better ways of doing business. It aims at high efficiency and effectiveness in an organization.
It’s a process that entails involving all employees to come up with creative ways of conducting business in the changing business environment. When implementing the plan, systems for collection, analyzing, disseminating, and evaluating information should be put in place.
Effectiveness in KM process is influenced by employees and organizational factors, technology, and processes. Before starting a KM implementation process, management should communicate and explain to their employees on what are the goals they want met failure to which the process can get repression from employees. An organization with a well managed knowledge has better ways of doing business and adopts to change effectively.
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