Part 1 - Literature Review Since the mid 1990s, there has been an increasing trend for companies to take

a more active interest in knowledge management initiatives (Little, S & Ray, T, 2005). As the topic of knowledge management is so diverse, there are many definitions of the concept. In its broadest sense, it has been described as relating to the management of anything classified as knowledge (McAdam & McCreedy, 2000), however a more specific definition is provided by Newell, Robertson et al. They describe it as identifying, extracting and capturing the knowledge assets of the firm so that they can both be fully exploited and fully protected as a source of competitive advantage Two epistemologies have been identified within knowledge management literature (Hislop, D 2009), the objectivist perspective and the practice-based perspective. The objectivist perspective makes the assumption that knowledge is an entity which people possess (Cook, S & Brown, J 1999). This knowledge can exist independently of people in a codifiable form (Hislop, D 2009). Within the objectivist perspective, explicit knowledge is privileged over tacit knowledge as the latter is thought of as highly subjective. In contrast, the practice-based perspective claims that knowledge is embedded in practice and that tacit and explicit knowledge are inseparable (Hislop, D 2009). Blaclker (1995) has suggested that rather than regarding knowledge as something that people have, it is suggested that knowing is better regarded as something they do. In implementing a knowledge management initiative, Business-Soft will face many challenges, from resistance from employees to cultural factors that can act as a

barrier to effective knowledge management. In this report, I intend to present some of these challenges and critically review the literature surrounding them, finishing with my recommendations for Business-Soft. Socio-Cultural Factors in Motivating People to Participate in Knowledge Management We cannot always assume that employees will be willing to participate in knowledge sharing within their organisation. When discussing the share/hoard dilemma, Hislop elucidates that there are potentially negative consequence to sharing knowledge, such as the relinquishing of power, which can lead to information hoarding. Lam and Lambermont-Ford (2010) go into further detail on the possible negative consequences of sharing information and allowing ones knowledge to become a public good. They present the concept of free-riding, whereby it is possible for other employees to benefit without contributing, which can be particularly prevalent if not contributing does not lead to some form of punishment. In the case of the software engineers, as they often work in project teams, there is a possibility that they may hoard their specialist knowledge so as to discourage these so-called free-riders. The concept of the share/hoard dilemma is backed up by Kelleher and Levene (2001), who state that the competitive nature of organisations can encourage knowledge hoarding, as holding unique knowledge is regarded as a provision of power and job security. In the case of Business-Soft, this could be a major issue as the engineers salaries are linked to their experience. An engineer may have what they believe to be unique knowledge of a particular area, which could potentially earn him a higher salary than an engineer without this knowledge. If this is the case, there is little motivation to make this knowledge a common good and in this respect,

they may be in a stronger position in monetary terms if they do not share their knowledge. However, in a slight contrast, Tung-Ching & Chien-Chih (2010) found in their study that providing workers thought their salary to be fair, they would be willing to share their knowledge. This would suggest that as long as the workers believed the pay system to be just, that they would be happy to share their knowledge regardless of where they sat within this scale. When thinking about the impact of pay within Business-Soft, on the surface the system appears fair, however, keeping knowledge unique has more benefit for the software engineers so they have a monetary incentive to do so. An effective enabling context , allowing for a network of interactions, must be characterised by care and trust among the participants if it is going to encourage knowledge sharing and knowledge creation. (Von Krogh et al 2000). In the case of Business-Soft, the knowledge of the engineers is highly tacit as it is specialised, and thus Little & Ray (2005) would argue that trust is even more crucial. They claim that for the creation and sharing of tacit knowledge, there must be a certain level of trust and care among members of the organisation. The concept of trust is one that appears many times in literature on the topic, and thus we must consider it in the case of Business-Soft. Newell, Robertson et al (2000) identify three types of trust; Companion, Competence and Commitment. Companion trust is the strongest as it is built over a period of time and requires a great deal of interaction. As Hislop points out, this cannot develop quickly and thus one could suggest that this may be unlikely to exist within the project teams at Business-Soft, as the teams appear to change when a new project is set. However, you could also argue that as the average length of time for completion of a project can be up to 9 months, this could be enough time to develop

that companion trust which, as the strongest type of trust, could lead to free-flowing knowledge sharing. Competence trust, as suggested by Newell & Swan, is based on our perception of others ability to carry out tasks. As the teams at Business-Soft are put together based on prior experience, this type of trust is more likely to exist, as engineers may feel more comfortable sharing knowledge with others that are deemed to have experience in the field by management. According to Holste & Fields (2010), the best relationships for the creation of trust, are those that involve face-to-face interaction. In terms of Business-Soft, we assume that the project teams do meet face-to-face in most instances which would encourage the development of trust and thus the sharing of knowledge, however, it is when it comes to the larger projects that Business-Soft may run into problems. Some of the work on these large projects is outsourced to India and thus most of the interaction here is done through the use of technology. With the reliance on emails and phone calls and no face-to-face interaction between the engineers in the UK and India, no foundations for the development of trust are provided, and thus knowledge sharing is unlikely to be common. Largerstrom and Andersson (2003) conducted a study within an MNC, where much of the business was done through interaction across borders. They present findings that are relevant to Business-Soft. They concluded that for effective knowledge sharing, social interaction was required between the actors and that IT mechanisms as a means of interaction were subordinate. Although not an MNC, Business-Soft conducts large projects with a company in India, where team members never meet and communicate only through technology.

Leadership, Organisational Culture and Knowledge Management The literature on leadership and knowledge management is concerned with the role that the behaviour and actions of key individuals can have in facilitating knowledge management activities (Hislop, 2009). Much of the literature on this subject supports this claim by Hislop, and a number of studies have been conducted to investigate the link between the style of the team leaders and the effectiveness of knowledge sharing among these teams. Lee et al (2010) claim that management create the opportunities that encourage knowledge sharing among teams. They deem this to be knowledge building behaviour and suggest that managers practice the role of knowledge builder to stimulate knowledge sharing within their teams. Hislop would appear to agree with Lee et al, as he goes on to suggest that effective leadership has a positive correlation with effective knowledge sharing. This seems to be agreed among the vast majority of the literature around this subject, for example, Desouza & Paquette (2011) take a similar stance on this. Similar to Lee et als knowledge builders, Desouza and Paquette use the term Chief Knowledge Officers (CKO) to describe those that encourage knowledge sharing. They define the role of the CKO as fostering and developing mechanisms that enable the exchange of information and knowledge. It is clear then, that many of the authors on this topic conclude that the role of the leader is imperative in encouraging knowledge sharing and exchange. Hislop discusses the concept of transformational and transactional leadership, as developed by Burns (1978). Kuhnert and Lewis (1978) go into further detail on these two types of leadership by suggesting that Burns originally developed two types of political leadership which Bass (1990) then went on to apply to organisational management. According to Bass, transactional leaders consider how to marginally improve and maintain the quality and quantity of performance, how to reduce

resistance and how to implement decisions while transformational leaders attempt and succeed in raising colleagues......awareness about the issues of consequence. Hislop (2009) summarises this neatly in his definition by describing this type of leadership as being concerned with long term vision, values and goals. Some authors on this topic contradict this idea of senior managers being solely responsible for creating the opportunities for knowledge sharing. For example, Nonaka and Krogh (2006) claim that for an organisation to support knowledge flow from the top right the way through to the bottom, leadership should be distributed. They argue that middle management should assume a key role in controlling and directing knowledge. In terms of Business-Soft, we can assume the senior management leadership style is fairly effective in some respects, as turnover is low. Leadership style must be considered in terms of the project teams however, as there is typically one senior engineer leading the team. According to some authors on the topic, the responsibility lies with them to create the opportunities for knowledge sharing and to stimulate the transfer of knowledge between the team, however Guildenberg and Konrath (2006) (In Hislop) argue that organisations should create a community of leaders. This suggests that within the teams at Business-Soft, all members should be encouraged to play a role in creating the right environment for the sharing and transfer of knowledge. One issue that may become apparent at Business-Soft is concerned with the project teams in Edinburgh. Although there are presumably senior engineers present, none of the senior management team are based at the Edinburgh site. Lee et al would see this as a disadvantage to these project teams as they believe management take on the role of knowledge builder and thus the responsibility for creating the opportunities for knowledge sharing.

When discussing the socio-cultural aspects that affect knowledge management initiatives, one that appears recurrently is the issue of organisational culture. Many organisations have come to recognise this over the years, for example, ScienceCo. According to a case study presented by Newell, Robertson et al, the founder of the technology-based consultancy company wanted to create a culture that would promote innovation and creativity. In order to achieve this, he created an environment in which hierarchy, rules and formal procedures were all absent and everyone was able to contribute to decision making. Employees work as part of a team and when conflict does arise, as is inevitable, they feel free to discuss this which each other to resolve it. This case supports Hislop (2009) in his claim that a culture likely to facilitate knowledge sharing is one in which there is a strong sense of collective identity and one where colleagues have a high level of trust and respect for each other. Alavi et al (2006) claim that knowledge management processes are heavily influenced by the social settings in which they are embedded and are subject to various interpretations based upon organizational norms and social interactions among individuals. This highlights the need for culture to be managed effectively when implementing a knowledge management system, however, there is some disagreement among the literature concerning the management of culture in relation to knowledge management. The question posed is whether the culture should be actively changed to create the appropriate knowledge behaviours and values or whether the knowledge management system should fit in with the existing culture in the organisation. (Hislop, 2009) Integration studies of culture, as explained by Martin (1992) suggest that leaders are culture creators and culture transformers who have the ability to create a culture

within their organisation that inspires intense loyalty and commitment. This would suggest that the leaders at Business-Soft may have already achieved the creation of this culture, as we know the workforce is loyal and committed, however they must consider now how the culture of the organisation can be used to create the right knowledge behaviours when the initiative is implemented. Another issue to consider here is the implications of sub-cultures within an organisation. Subcultures are groups whose common characteristic is a set of shared norms and beliefs. They need not form around existing sub-divisons such as departmental or functional groups, not do they need to be consciously formed (Boisnier, A and Chatman, J, 2002) Alavia et al (in Hislop 2009) conducted a study to determine how organisational culture shaped knowledge management. Their findings show that in the business studied, distinctive subcultures existed and affected how knowledge management tools were used. A study by Lok and Crawford (1999) supports this finding by Alavia et al. Lok and Crawford found that the type of subculture affected commitment to the organisation and so we may suggest participation in knowledge sharing would also be affected, as it is understood that trust and commitment are vital to knowledge sharing amongst colleagues. They established that innovative and supportive subcultures had positive associations with commitment which again, working on the theory that commitment is a key driver for knowledge sharing, demonstrates that the type of subculture is important. This then poses the question, should managers intervene to shape values of these subcultures? Delong and Farhey (In Alavi, M et al) would appear to concur that managers should influence these values as they suggest that

firms should seek to reinforce and mould those cultural values most consistent with knowledge sharing behaviours. In a similar stance to Lok and Crawford, they argue that these values are that of trust and collaboration and these are the values that should be encouraged, rather than emphasising individual power and competition. This theory appears to support Lok and Crawfords study as it seems to recognise that there are many types of subcultures that exist and the values that they hold will affect the likelihood of the members sharing their knowledge with others. IT and Knowledge Management A common approach to facilitating knowledge sharing is to implement information and communication technologies (ICTs) under the assumption that the presence of a communication channel will encourage this. (Newell, Robertson et al, 2002). This statement has been supported by Hislop, who suggests that a common assumption is that simply implementing ICTs could allow organisations to effectively manage their knowledge. (Hislop, D, 2009). Amongst the literature on this topic, this assumption has been hugely criticised as being over simplistic and failing to recognise the social and cultural factors involved in knowledge sharing. (Hislop, D, 2002) A respondent in a study by Newell, Bresnen et al, regarding knowledge transfer and ICTs within project teams, said I think you learn so much from looking at the system but there is more to be learnt talking to somebody that has done it. This view appears to agree with the critics of ICTs as channels for knowledge transfer as well as Hislops analysis of the importance of social factors by suggesting that you actually learn more from interacting with someone that has experience in what you are attempting to achieve.

Among the literature, it is suggested that we can view the use of ICTs in knowledge management from both the objectivist perspective and the practice based perspective. Hislop (2010) expands on this by proposing the roles that ICTs can play in knowledge management from both of these perspectives. From an objectivist perspective, ICTs can provide libraries of codified knowledge and from a practice based perspective, ICTs can provide collaboration tools to facilitate communication and the sharing of knowledge. The relationship between knowledge management and ICTs has been described by Hendricks (2001) as the clash of the titans, so it is important to consider the challenges this approach to knowledge management may bring. Newell, Bresnen et al (2006) discuss the limitations of an ICT based approach to knowledge management, particularly in the case of project teams. They claim that not all knowledge can be successfully transferred through ICTs as some knowledge is deeply embedded in practice which makes a social network essential for knowledge transfer. Hislop would appear to agree with this, as he puts forward research to suggest that ICT enabled knowledge management systems have failed in the past because the social and cultural factors have been either neglected or ignored completely. He states that putting ICT based knowledge resources in place is not in itself going to make such knowledge management initiatives successful. Fundamentally, if people cant be persuaded to utilise them then such initiatives are likely to fail. This is a key statement among the literature and many authors on the topic appear to agree with him. For example, Newell, Bresnen et al (2006) suggest three key conditions for ICT based knowledge management systems to be successful, one of which is that people must be knowledgeable enough to realise that there is indeed knowledge that exists beyond the confines of the project that

could be a useful tool... This would suggest that it is not enough to simply put the system in place, people have to be trained to realise that this knowledge exists and can be of help to them.

At Business-Soft, the work of the engineers is formed around project teams, which was the main focus of the study by Newell, Bresnen et al. Business-Soft may find there is an issue with the transfer of knowledge between these teams if an ICTbased system is put into place as clearly, not all knowledge can be transferred in this way. They claim that knowledge deeply embedded in practice is hard to transfer in this manner which would be an issue for Business-Soft as the knowledge of the engineers is highly specialised and thus tacit.

Part 2 Recommendations for Business-Soft In implementing a knowledge management initiative, it is clear that any business will face challenges, some of which have been discussed above. There are many issues that Business-Soft will have to consider and address in order to make this a success. My first recommendation would be to amend the remuneration and compensation packages of the engineers. We have seen the significance of the share/hoard dilemma and the challenge this poses to employees and also that when there is no punishment for not sharing information, employees can free-ride. Currently, the engineers salary is linked to their experience which in my opinion, wouldnt lead to maximum knowledge sharing as at the moment, holding this unique information appears to provide a more desirable salary. I would suggest that this needs to be looked at and new incentives to encourage employees to share their knowledge need to be implemented. The incentives need not be monetary, but if people are not rewarded for their contributions, they are less likely to do it again in the future. Even public recognition as a reward can be effective, so for example, a monthly email announcing the top 3 contributors to the system may be something to consider. Next, I think it is important to consider the value of trust in knowledge sharing and how this can be encouraged. As I have previously mentioned, face-to-face interaction is the best foundation upon which to build a trusting relationship, and unfortunately some of the engineers are based in India in this case, which makes this difficult. If meetings are not a possibility due to time and money restrictions, it may be helpful to install video conferencing software and arrange for the engineers in India and England to have a meeting in this way once a month. This way, they would have a better understanding of their colleagues in other parts of the world and

would feel more comfortable sharing their knowledge, as they would no longer feel like strangers, with whom sharing their knowledge could be harmful. With regard to the level of trust between engineers based in the UK, in order to help them develop the highest level of trust, it could be an option to consider putting them in the same project teams for each new assignment. This way, the members of the team will spend more time working together, will begin to develop a deeper understanding of the functioning of the team and in time, companion trust should ensue. Developing this level of trust takes time, but once it is established, knowledge should flow freely. Another recommendation is concerned with the culture of the business. Although there has been some debate on whether managers should intervene to manage culture, I feel in this case it is necessary. The leaders of the teams must create a culture in which knowledge sharing is encouraged and perceived as a positive action. In order to do this, they may want to consider delegating some authority so that all members of the team are involved in decision making, as this could be one way of encouraging employees to part with their knowledge for the benefit of the team and task at hand. Managers and leaders should seek to encourage the correct values, in order to create the best environment and culture in which knowledge can be shared. For example, they should place less emphasis on individual achievement and competitiveness and more on collaboration and teamwork. By demonstrating that these values are the most important in the organisational setting, they are encouraging employees to behave in this manner. They may consider putting into place a monthly recognition scheme for the best performing project team. On one hand, this could be based on characteristics such as level of interaction between members, overall performance and the team with the most unique ideas. However

on a more individual basis, rewards for those who have been instrumental to the teams success could be considered. Recognising those who made a valuable contribution to the teams performance may encourage others to emulate this behaviour next time, thus resulting in better teamwork. With regards to the use of ICTs in knowledge management initiatives, managers at Business-Soft should be cautious about implementing an ICT based system, as doing this does not encourage knowledge sharing in itself. As we have discussed, managers cannot ignore the social aspects of knowledge sharing and it would be advisable for them to use an ICT system to provide collaboration tools and encourage communication, rather than relying on the ICT as merely a database of knowledge. Business-Soft should be aware that in order for the knowledge management initiative to be a success, they will need to invest further time and money in training the employees to use the system effectively. Without this training, employees may not see the full benefits of the system and thus will be less inclined to use it. If they can be shown how to get the most out of it and how this will be beneficial to them, they are more likely to use it and more importantly, use it in the most effective manner.

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