Unit-4

Building knowledge management

into strategic framework
 Building Knowledge Management into
Strategic framework

• KM strategy is a plan that describes how an organization will manage its

information and knowledge better for the benefit of that organization and its
stakeholders. A good IKM strategy is closely aligned with the organization’s
overall strategy and objectives.
• A good, clear KM strategy can help to:
• Increase awareness and understanding of KM in your organization
• Articulate the business case and identify potential benefits
• Gain senior management commitment
• attract resources for implementation
• Communicate good KM practice
• Give a clear, communicable plan about where you are now, where you want
to go, and how to plan to get there
• Give you a basis against which to measure your progress,
Building Knowledge Management into Strategy: Making
Sense of a New Perspective
• Knowledge management is rapidly becoming one of the next big trends.
• The experiences of knowledge management pioneers in North America
and Europe show that real and significant results are possible. However, as
with older methodologies, good planning and implementation are essential
and success is not guaranteed.
• This paper explores how managers might build knowledge management
into the strategy process in their firms. Much has already been written
about the philosophy and concepts of knowledge and intellectual capital.
• Less attention has been focused on how to combine a knowledge
perspective with established strategy tools, or how to develop unique
knowledge-based sources of sustainable competitive advantage.
• Gary Hamel and C.K. Prahalad have observed that managers typically spend
too little time thinking seriously about strategy and the future. We need to
ensure that in this limited time, the important dimension of knowledge
doesnt get overlooked.
KNOWLEDGE MANAGEMENT FRAMEWORKS
•KM is the planned and continuous management of tools, processes, systems, structures and cultures
to improve the creation, sharing and use of knowledge critical for decision-making and
competitiveness .
• the most important resource that can be leveraged to create and sustain competitiveness in
organizations may be knowledge. KM place emphasis on the knowledge value chain .
•KM is the process of acquiring, storing, sharing, disseminating and applying knowledge both inside and
outside the organization, with the goal of efficiently meeting corporate objectives. The effective use of
KM helps organizations to improve the quality of their decision-making and thus, to reduce costs and
increase efficiency and monitoring capabilities .
• Effective KM has a positive effect on organizational innovation, efficiency and profitability . In an
empirical study, based on 310 Spanish organizations, found that organizations that manage KM
strategically, improve the organizational performance and innovation.
•The research findings indicated that the management of organizations should convince all
stakeholders, including suppliers, about the positive impact of KM and KM strategy on innovation and
organizational performance.
•Organizations with a clear KM strategy can be more innovative, achieve improved financial results,
improve business processes and develop the capabilities of personnel conducted a study to analyze
KM frameworks from research and industry.
Knowledge sharing as core
competency
 introduction
• Dramatic changes in organizations are occurring. A large
proportion of these changes place an emphasis on the
development and use of intellectual assets and the
development of core competencies. Defining and re-
defining organization’s core competencies are the results
of a deliberate management strategy. In order to be
supportive to this business strategy, the practice of
business management, technology management,
knowledge management, and human resources
management will have to undergo significant
transformation. 
 Cont…
• C.K. Prahalad and Gary Hamel (1995) developed the
concept of core competencies in the management field
and introduced it in a 1990 Harvard Business Review
article. They wrote that a core competency is “an area
of specialized expertise that is the result of harmonizing
complex streams of technology and work activity.” They
developed their main idea through a series of articles in
the Harvard Business Review followed by a best-selling
book – Competing for the Future. Their central idea is
that over time companies may develop key areas of
expertise which are distinctive to the company and
critical to the company’s long term growth.
Cont…
• Many organizations attempt to examine the role of core competencies
in the development of business and knowledge strategies viewing
knowledge embedded in core competencies as a strategic asset and
were articulated and verified in the overall strategy of the
organization.
• Many companies have developed or adopted various core competency
development and knowledge management (KM) initiatives to try to
surface and differentiate what they do know from what they need to
know and also identify the location of their knowledge gaps. Processes
and tools that support efforts to capture knowledge are well known
and widely used, such as expertise directories, intranets, communities
of practice, knowledge audits, discussion forums, knowledge maps,
post- project or after-action reviews, lessons learned banks, building
and documenting knowledge-based and expert systems, storytelling,
benchmarking and the like.
 Core competencies as a part of knowledge
• Core competencies are necessary part of a knowledge strategy which itself is part of the
overall strategy, whether embedded or aligned.
• To give a sustainable strategic advantage, core competencies should be valuable, rare,
hard to imitate or substitute, and ideally will confer a dominating ability in their area.
• The theoretical literature on core competencies does not, however, generally relate their
development to concepts of knowledge management operation, nor to strategy
implementation.
• some competencies are more important than others, does it distinguish strategic from
operational core competencies. It may be proved useful to differentiate these since the
only way strategy can be realized is through the competent people performing activities
that achieve strategic goals at the operational level,
• For this to occur, an explicit linkage between strategic goals and operational activity,
between strategic core competencies and their implementation (and reciprocally between
operational competencies and strategic objectives) must be articulated.
• Since contemporary thinking on strategy emphasizes ability to respond to environmental
changes quickly at all levels rather than planning in a controlled environment, an
embedded knowledge strategy will act as the medium through which these levels can be
brought into alignment and allow for emergent strategy to be developed across the
organization.
 example
• A study of Philippine-based organization and the
development and mapping of its long-term corporate core
competency development and knowledge strategy.
• Having identified the need to provide detailed guidance or
framework on identifying an organization’s core
competencies and to directly link or relate these effectively
to knowledge strategy and overall organization’s strategy
• A process of core competency development and strategies
including knowledge development and that the framework
can be a good vehicle to properly manage core competency
strategies in support to the overall organization’s vision.
HR DIMENSION TO KNOWLEDGE
MANAGEMENT
 Seven HR dimensions to KM
 Dimension 1 - Strategic factors and the role of senior
management:
•The fundamental role of senior management is to define
knowledge areas to be explored by the company and to establish
visions for driving innovative projects.
•In this environment, leadership, organization and management of
the workforce are key to any competitive strategy because they
are advantages and assets that are difficult to imitate.
• A company's ability to create effective conversion processes
between individual, collective, tacit and explicit knowledge, that
result in new products and processes, is equally as important as
developing innovative projects by clarifying business strategy and
goal setting;
  Dimension 2 - Cultural and organizational
values:
• Organizational culture and values make all the difference and they cannot
be relegated to the background. Organizational culture can be understood
as the norms and values that help to interpret events and evaluate what is
appropriate and inappropriate.
• These standards and values may also be seen as control systems that are
capable of achieving great effectiveness, since they lead to a high degree of
conformity, while at the same time giving a heightened sense of
independence.
• Organizational culture is essential for strategic development through
expressive elements in its demarcation, such as creative cultural
environments, the workplace, and the freedom of employees in relation to
norms, values and the implementation of new ideas. Senior management
must develop an organizational culture through an environment that is
conducive to sharing;
  Dimension 3 - Organizational structure
• : A strictly bureaucratic organization is becoming increasingly inadequate to
meet the contemporary challenges imposed on businesses. Organic or
post-entrepreneurial types of companies are now breaking the
bureaucratic paradigm and they are more dynamic and more knowledge
intensive.
• The post-entrepreneurial type of structure tends to: center more on
people; emanates authority from expertise or relationships; is geared
towards creativity, searching for both innovation and efficiency; and pays
according to the contribution or the value added by the person or the
team, regardless of their formal position.
• The implementation of this type of organizational structure is in process of
development where companies are more innovative and seek to leverage
creativity, knowledge and the learning capacity of the various hierarchical
levels that exist;
  Dimension 4 - Administration of human resources
•
Human resources must be directly related to the acquisition, generation, dissemination and
storage of external and internal knowledge of the company because they clearly influence the
management of learning, innovation and knowledge through recruitment and selection, training,
career and reward systems. The following three activities contribute to the development and
creation of knowledge:
•- Improving the ability of organizations to attract and retain people with the skills, behaviors and
competencies that they themselves add to their stock and knowledge flows (value). This occurs
when companies adopt rigorous and highly selective processes and seek to increase diversity in
the backgrounds of the staff that are hired;
•- Encouraging behaviors aligned with the requirements of individual and collective processes of
learning, as well as those behaviors that will safeguard the strategic and long-term interests of
the business for strengthening its competencies. In this sense, attention should be paid to career
plans and training that broaden experience as well as contacts and interactions with other
people both inside and outside the company;
•- Adopting remuneration schemes, which are increasingly associated with the acquisition of
individual skills, performance of teams, and the company as a whole, both in the short and the
long term.
Dimension 5 - Information systems:
• The information systems (IS) of an organization directly
influence the generation, storage and dissemination of
knowledge. Every company needs to have good IS for its
employees to have access to all necessary information to
facilitate the performance of its activities. The IS should be
available in a precise way, in the necessary time and space to
facilitate the use of the information. Moreover, Terra (2005)
warns that IS can only be useful if the data, information and
knowledge bases that feed them are reliable, relevant and
updated. The best IS and communication tools still rely
primarily on individual inputs;;
  Dimension 6 - Measurement of results
• Organizational outcomes should be measured in order to obtain the
level of contribution of tangible and intangible assets. From the
measurement of results, the organization can develop valuation
methodologies for the strategic, tactical and operational levels,
assisting in the creation of organizational knowledge.
• The measurement of Intellectual capital should not be confused with
Knowledge Management. Nevertheless, it is possible that as
companies engage in these processes of accounting for intellectual
capital, they will start to question work processes, culture,
communication strategies, the use of IS, and human resource
management policies, leading them to develop practices that are
more geared to learning, stimulating creativity, innovation and the
generation of organizational knowledge.
 Dimension 7 - Learning through the
environment:
•
It is based on the external environment as a way to increase learning. This need is being
increasingly extended beyond the boundaries of companies, i.e. customers, suppliers,
other companies (competitors or not), research institutes, universities, among others.
• The clear importance of the inclusion and absorption of new prospects for
advancement in knowledge cannot be overemphasized. Companies that learn to
encourage their employees to acquire and exploit new prospects facilitate and promote
work in multi-functional, multi-regional and multi-company teams.
•Implicit in each of these dimensions is the recognition that human capital, formed by
the values and norms of individuals and organizations, as well as the competencies,
skills and attitudes of every employee, is the mainspring of knowledge generation and
value creation in organizations.
• This means knowing the need to promote values that are appropriate to innovation
and knowledge sharing; to stimulate motivation; establishing personal contacts; the
analysis of different perspectives; openness to effective communication, and the
development of personal and professional skills.
STRATEGIC APPROACH TO
INDUSTRIAL RELATION
 Strategic Approach to Industrial Relations

• The Industrial Relations or IR shows the relationship

between the management and the workmen within the
industry and the role of a regulatory body to resolve the
industrial disputes.
• IR is perceived differently by a different group of
behavioral practitioners and theorists. Some believed that
IR is related to the Class Conflict while some perceived it in
terms of Mutual Co-operation and still others perceived it
in terms of Competing Interests of various groups. On the
basis of these perceptions, there are four popular
approaches to Industrial Relations. These are:
 Unitary Approach
• The unitary approach is based on the notion that all the members of
the organization Viz. Managers, workers, and other staff have a
common set of objectives, purposes and interests and, therefore,
work in unison towards the accomplishment of shared goals. Here,
the conflict is seen as a temporary divergence which is caused due
to the poor management or the negligence on the part of the
employees to understand and mix with the organizational culture.
• The unitary approach is based on the assumption that the overall
profitability of the firm could be increased if everyone in the
organization has the common interest/purpose and works
unanimously towards its completion thereby establishing the
harmonious relations. Here the strikes are considered as
destructive.
 Pluralistic Approach

• The pluralistic approach is just the opposite of unitary approach which is

based on the assumption that an organization is an alliance of powerful and
divergent sub-groups (management and trade unions), having different
competing interests are mediated by the management. The management and
the trade unions (association of workers) are the powerful sub-groups that
may not agree with certain terms and conditions prevailing in the
organization and to resolve those management tries to mediate the interest
of both the groups.
• During mediation, if the management pays less attention to the needs of the
workers then they form unions in order to protect their interest and influence
the management decision. The unions so formed helps in balancing the
power between the management and employees. Thus, it is based on the
notion that the conflict between the management and the employees is
inevitable and is viewed as instrumental in the innovation and growth.
 Marxist Approach

• The Marxist approach is based on the basic assumption that the conflict is
regarded as the product of a capitalist society. This means that conflict arises not
just because of the rift between the employee and the employer, but also
because of the division in the society between those who owns the means of
production (capitalists) and the ones who have only labor to offer. The ultimate
objective of the capitalists is to increase the productivity by paying possible
minimum wages to the workers due to which the latter feels exploited.
• To overcome such situation workers form unions so as to safeguard their
interests. These trade unions are considered as a weapon to bring about a
revolutionary social change that focuses on improving the overall position of the
workers in the capitalist system and not to overthrow. Unlike the pluralist
approach, the Marxist believes that the state intervention via legislation and
industrial tribunals work in the interest of the management and do not ensure a
balance between the competing groups. Thus, according to this approach, the
pluralist supports the capitalism, and the unitary approach is anathema.
 Human Relations Approach

• The Human relations approach is propounded by Elton Mayo,

who is a humanist and believes in the positive nature of the
employees. According to him, given human initiatives from
management, the employees positively listens and responds
properly to them and hence there is no room left for the
conflict to arise. But however Marxists and Pluralists did not
appreciate too much stress on the positive nature of the
workers.
• Thus, these approaches to industrial relations must be properly
understood by the HR managers as these offer a solid
foundation for much of the role of human resource
management.
OUTSOURCING
 HR IMPLICATIONS
• The implications for human resources policies mean utilizing human capital the
right way can result in employee engagement, job satisfaction, and most
importantly, an impressive bottom line.
• Recruitment and Selection
• Policies regarding recruitment and selection are the framework for making
decisions in the hiring process. Employment specialists who understand
employment law can shape recruitment and selection policies based on
federal, state and local regulations pertaining to fair employment
practices.
• Fundamental to creating a recruitment and selection policy is an
understanding of and appreciation for the laws that underlie fair
employment practices. The recruitment and selection process is where an
employer has the first opportunity to demonstrate its commitment to
equal opportunity employment.
• Recruitment and selection policies are essential to building a productive
workforce -- from attracting qualified applicants to hiring the best talent
possible for the organization's needs. These policies contain elements of
how to source candidates, attract qualified applicantS.
 Training and Development

•The organization and its workforce benefit from training and development policies. Human
resources departments staffed with training experts often have policies that offer training
for skills improvement, professional development and leadership training that complement
the company's succession plan.
•Training and development policies are important for demonstrating company interest in
employees' developmental needs and preparing existing leadership for taking on more
responsible and higher-level positions as part of the succession plan. The company benefits
from providing training that enhances existing workplace skills because its result is higher
productivity
•. Employees benefit from training and development policies because they demonstrate the
company's investment in its employees. Employers that provide training and development
to every level of the workforce often experience greater levels of workplace job satisfaction.
Workplace Safety
• The implications of workplace safety policies cannot be
overstated. Employees are comfortable with company policies
designed to protect their well-being.
• A risk or safety manager develops policies based, in part, on
federal and state regulations governed by agencies like the
United States Occupational Safety and Health Administration.
Safety policies range from guidelines for operating complex
machinery to handling incidents of workplace violence.
• Workplace safety is such a concern for some employers that they
reward employees for injury-free months because it
demonstrates employees adhere to workplace safety rules.
Employees who work for a company that implements strict
guidance for workplace safety believe the company has a vested
interested in its human capital.
 Performance Management

• Company leaders are responsible for providing employees with the necessary tools and
information to help them understand the company’s performance expectations. This means
human resources policies pertaining to performance management are an essential part of
supervisory and management duties. The importance of performance management policies
also extend to employees in that these policies affect their progression within the company
and employee performance contributes to organizational goals. In other words, performance
management policies are key elements in driving organizational success. Performance
management policies also establish a platform for recognizing employee contributions.
Absent effective and consistent policies for performance management, companies can
experience low productivity and job satisfaction, along with high turnover rates.
• Implications
• Developing and implementing human resources policies are essential HR responsibilities. The
importance of human resource policy development cannot be overlooked. Employers who
design policies that serve the interests of the company and its employees are highly regarded
employers.
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HUMAN SIDE OF MERGER AND
ACQUISITION