Knowledge Management Chapter 11

Identification of Appropriate Knowledge Management Solutions

 A methodology for identifying appropriate KM solutions, includes the following seven

steps:

1. Assess the contingency factors.

 Requires assessing the organization’s environment in terms of the contingency factors—

characterizing the tasks, the knowledge, the environment, and the organization—and how
they contribute to uncertainty.

 The variety of tasks for which KM is needed should be characterized in terms of task
interdependence and task uncertainty.

 The kind of knowledge those tasks require should be classified as general or specific,
declarative or procedural, and tacit or explicit.

 Environmental uncertainty may arise from changes in the firm’s competition, government
regulations and policies, economic conditions, and so on.

 The organization’s business strategy—low-cost or differentiation— should be identified.

 The organization should be classified as small or large relative to its competitors.

 In some instances, it may be labeled as midsized, in which case the KM processes would
be based on considerations of both small and large organizations.

 In using these contingencies, it is important to use the appropriate unit of analysis, which
could be either the entire organization or a subunit depending on the specific context for
which the KM solution would be developed.

 When deciding on KM processes that are intended to improve KM within a subunit, such
as the accounting department of the organization, the contingency factors should be evaluated
for that subunit.

 On the other hand, when deciding on KM processes that are intended to improve KM for
the entire company, the contingency factors should be evaluated for the entire company.

2. Identify the KM processes based on each contingency factor.

 The appropriate KM processes based on each contingency factor should be

identified.

 There are seven contingency factors, and the effects they have on the KM
processes.

 These are only some of the most important factors that need to be
considered in making this choice.
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 There are several other factors, such as the information intensity of the organization’s
industry, that would also affect the appropriateness of KM processes, but they have been
excluded to simplify the presentation.

3. Prioritize the needed KM processes.

 Once the KM processes appropriate for each contingency factor have been identified, they
need to be considered together in order to identify the needed KM processes.

 In doing so, it is useful to assign a value of 1.0 to situations where a KM process is

appropriate for a contingency variable and 0.0 where it is not appropriate.

 Where a KM process is appropriate for all possible states of a contingency variable, a

value of 0.5 could be assigned.

 As a result, a prioritization of the importance of various KM processes can be developed,

and a Cumulative Priority Score can be computed.

 For example, if KM process A has a composite score of 6.0 based on the seven contingency factors
whereas another one (B) has a composite score of 3.0, greater attention is needed toward KM
process A rather than B.

4. Identify the existing KM processes.

 The KM processes that are currently being used should be identified.

 In doing so, a short survey of some of the employees assessing the extent to which each
KM process is being used may be helpful.

5. Identify the additional needed KM processes.

 Based on the needed KM processes (identified in step 3) and the existing KM processes
(identified in step 4), the additional needed KM processes can be identified.

 This comparison might also find some of the existing KM processes to not be very useful.

 In other words, if a KM process is identified as needed (step 3) but it is not currently being
used (step 4), it should be added.

 Whereas if a KM process is not identified as needed (step 3) but it is currently being used
(step 4), it could potentially be dropped—at least based on knowledge management
considerations.
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6. Assess the KM infrastructure and identify the sequential ordering of KM processes.

 The KM infrastructure indirectly affects the KM processes. Specifically, organization

culture, organization structure, and the physical environment can facilitate or inhibit
knowledge sharing and creation.

 Information technologies can support all KM processes and organizing knowledge can
help enhance the efficiency of knowledge sharing (through common language and
vocabulary) and application processes (by enhancing recognition of individual knowledge
domains).

 Aspects of the KM infrastructure should be considered with the additional KM processes

needed (step 5) to identify the KM processes for which supporting infrastructure,
mechanisms, and technologies currently exist.

 This step is especially important when deciding the sequence in which KM processes
that are nearly equal in importance (step 3) should be developed.

7. Develop additional needed KM systems, mechanisms, and technologies.

 Steps 1 through 6 have helped identify the KM processes and the order in which they
should be developed.

 Now the organization needs to undertake steps to initiate the creation of KM systems,
mechanisms, and technologies that would support those KM processes.

 This might require;

 Creation of teams
 Acquisition of technologies
 Development of systems

 In the long run, these systems, mechanisms, and technologies would also contribute to the
KM infrastructure.

Illustrative Example

 As an illustration, let us consider the fictional Doubtfire Computer Corporation, a

manufacturer of low-end personal computers for home users.

 A small player in this industry, Doubtfire has recently undergone some difficult times due
to new competition for its product line.

 Competitors make frequent changes in technology in an attempt to gain the upper hand
in the marketplace with more state-of-the-art products.

 Having belatedly recognized this, Doubtfire recently hired a new president and a new sales
manager to turn the situation around.
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 The new president called a meeting of the staff to discuss possible strategies for the
financial turnaround of the company.

 The main push of this presentation was that the staff needed to better manage knowledge
so as to creatively identify areas where new technology could improve the company’s
products and operations.

 Based on inputs from the senior management, the president hired a knowledge
management consulting firm, KM-Consult Inc., to help improve its KM strategy.

 A team of consultants from KM-Consult Inc. conducted an in-depth study of Doubtfire,

using interviews with several employees and examination of company documents.

 Based on their investigation, they concluded that Doubtfire is a small organization that
has pursued a low-cost business strategy to operate in an uncertain environment as is
typical of high-tech firms.

 Knowledge management is needed for its tasks, which are highly interdependent and also
highly uncertain due to changing components in the computer industry.

 Doubtfire relies mainly on the tacit, procedural knowledge possessed by its employees
rather than seeking the explication of that knowledge or management of declarative
knowledge.

 The consulting team arrived at the following conclusions:

 Based on Organization Size

o Based on Doubtfire’s small organization size, socialization (for knowledge sharing or

knowledge discovery) and direction processes would be appropriate.

o Combination, internalization, and externalization could be used regardless of

organization size. However, exchange and routines would be inappropriate due to
Doubtfire being a small organization.

 Based on Business Strategy

o Considering Doubtfire’s low-cost business strategy, direction and routines would be

appropriate.

o Socialization (for knowledge sharing), exchange, internalization, and

externalization could be used regardless of strategy.

o However, combination and socialization (for knowledge discovery) would be

inappropriate because they are not suitable for firms pursuing a low-cost strategy.

 Based on the Environment

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o The uncertain environment in which Doubtfire operates—which is characteristic of

firms in the high-tech sector— direction, combination, and socialization (for
knowledge discovery) would be appropriate.

o However, the remaining processes would be inappropriate as they are more suitable
for certain, predictable environments.

 Based on Task Interdependence

o The high task interdependence in Doubtfire suggests that socialization (for

knowledge sharing or knowledge discovery), combination, and exchange would be
appropriate.

o Direction and routines could be used regardless of task interdependence.

o However, externalization and internalization would not be as useful.

 Based on Task Uncertainty

o The high task uncertainty suggests that socialization (for knowledge sharing or
knowledge discovery) and direction would be appropriate.

o However, the remaining processes would be less suitable.

 Based on Nature of Knowledge

o The procedural nature of knowledge indicates that direction and routines would
be useful for managing this knowledge.

o The tacit nature of knowledge suggests that socialization (for knowledge sharing or
knowledge discovery) and externalization would be appropriate.

o Direction and routines could be used regardless of tacit or explicit nature of

knowledge.

 The results of this analysis by KM-Consult Inc was constructed in a table

 The cells in the columns for each contingency factor show the suitability of the KM
process in that row for that contingency variable;

o “Yes” indicates that KM process in that row is appropriate for the contingency
variable in that column, which converts to a score of 1.0

o “No” indicates that KM process in that row is inappropriate for the contingency
variable in that column, which converts to a score of 0.0

o “OK” indicates that KM process in that row can be used for all possible values of the
contingency variable in that column, which converts to a score of 0.5.
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 The last four columns of the table show the computation of the Cumulative Priority
Score for each KM process, based on the number of “Yes,” “OK,” and “No” responses for
the suitability of that KM process for the seven contingency variables.

 Based on this analysis;

o Direction has the highest Cumulative Priority Score (6.0)

o Socialization for knowledge discovery (5.5)

o Socialization for knowledge sharing (5.0)

o Routines are at an intermediate level of priority with a Cumulative Priority Score of 4.0

o Combination, externalization, exchange, and internalization have low Cumulative

Priority Scores (3.0 or less).

 The consideration of the contingency variables led KM-Consult Inc., to conclude that
Doubtfire should focus its KM efforts primarily on direction and socialization (for both
knowledge discovery and knowledge sharing), with attention being given to combination
and routines if the resources so allow.

 However, recognizing the financial difficulties Doubtfire was facing, KM-Consult Inc.,
recommended that Doubtfire should focus its efforts on direction and socialization.

 KM-Consult Inc. had found that the current KM initiative at Doubtfire was making little
use of both socialization and direction. Therefore, KM-Consult Inc., recommended that
Doubtfire should try to enhance the use of direction and socialization for knowledge
management.

 Their report also identified the specific technologies and systems for Doubtfire to pursue.
It recommended the establishment and use of communities of practice to support
socialization and an expertise locator system to support direction.

 It also recommended that Doubtfire should enhance socialization through more frequent
meetings, rituals, brainstorming retreats, and more.

 The consultants argued that this socialization would also enhance mutual trust among
Doubtfire’s employees, thereby increasing their willingness to provide and accept direction.

 KM-Consult Inc. found Doubtfire to be currently making considerable use of

internalization and spending considerable resources on employee training programs.

 In the light of the low cumulative score for internalization, KM-Consult Inc., advised
Doubtfire to consider reducing the budget allocated towards employee training.
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