Temtim Assefa (PhD), Addis Ababa University 1

Foundation of Knowledge Management

The term Knowledge management started to be used

in 1980s
However activities were practiced before that by
Librarians, philosophers, teachers, and writers
Some form of narrative repository has been in existence
for
a long time,
People used a variety of ways of sharing knowledge to
eliminate costly redundancies, and avoid making at least
the same mistakes again.
For example, knowledge sharing often took the form of
town meetings, workshops, seminars, and mentoring
sessions.
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 Foundation…
The primary “technology” used to transfer knowledge
consisted of the people themselves.
Migration of different peoples across continents
also promote knowledge sharing
Drucker (early 1960s) was the first to coin the term
knowledge worker
Senge (1990) focused on the “learning organization” as
one that can learn from past experiences stored in
corporate memory systems.
Nonaka and Takeuchi (1995) studied how knowledge is
produced, used, and diffused within organizations and
how such knowledge contributed to the diffusion of
innovation

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Foundation……
Main contributors
1. Management theorists who have contributed significantly
to the evolution of KM include Peter Drucker, Peter Senge,
Ikujiro Nonaka, Hirotaka Takeuchi, and Thomas Stewart.
2. Development of modern technology offer another
perspective on the history of KM
 industrialization beginning in 1800,
 transportation technologies in 1850,
 communications in 1900,
 computerization in the 1950s,
 virtualization in the early 1980s, and
 the early efforts at personalization and profiling
technologies in 2000

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Knowledge management
knowledge management may be defined as doing
what is needed to get the most out of knowledge
resources.
This definition implies that
knowledge resources might be those resources that
are relevant to the decisions, goals, and strategies
of an individual or an organization.
It also refers not only to the knowledge
currently possessed
by the individual or the organization
but also to the knowledge that can
potentially be obtained from other
individuals or organizations.

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KM …
KM also includes a variety of activities which include
 (a) discover new knowledge,
 (b) capture existing knowledge,
 (c) share knowledge with others, or
 (d) apply knowledge.
Knowledge management can be defined as performing
the activities involved in discovering, capturing,
sharing, and applying knowledge so as to enhance, in
a cost-effective fashion, the impact of knowledge on
the unit’s goal achievement.

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Knowledge management and Business
Intelligence (BI)
BI focuses on providing decision makers with
valuable information and knowledge by utilizing a
variety of sources of data and structured and
unstructured information via the discovery of the
relationships
1. KM starts with information and knowledge as
inputs, but BI begins with data and information
as inputs
2. KM directly results in the discovery of new
knowledge, codification, sharing and
application of knowledge but

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KM and BI …
BI directly results in information (such as through
dashboards) and newly created knowledge or
insights by revealing(Make visible) previously
unknown patterns within data and information.
3. KM involves using both social aspects as well as
information technology, and is sometimes viewed
as being more social than technical.
But BI is primarily technical in nature, and does
not incorporate social mechanisms such as
meetings and brainstorming retreats.

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KM Foundations and Solutions
Knowledge management depends on two broad aspects:
 KM solutions and KM foundations,
KM solutions refer to the ways in which specific aspects
of KM (discovery, capture, sharing, and application of
knowledge) can be accomplished.
 KM solutions include KM processes and KM systems.
KM foundations are the broad organizational
aspects
that support KM solutions in the short- and long-term.
 They include KM infrastructure, KM mechanisms, and KM
technologies.
Thus, KM solutions depend on KM foundations (See
Fig. below)
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An Overview of KM Solutions

KM Processes

KM Systems

KM Mechanisms and Technologies

KM Infrastructure

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KM solutions …
KM infrastructure, which is at the
organizational level, supports mechanisms and
technologies
KM mechanisms and technologies are used in
KM systems, with each KM system utilizing a
combination of multiple mechanisms and
multiple technologies.
KM systems enable KM processes, with a KM
system focusing on one specific KM process
Therefore, KM processes and KM systems
are specific solutions for KM needs
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Knowledge Management
Infrastructure
KM mechanisms and technologies rely on the
KM infrastructure, which reflects the long-term
foundation for knowledge management.
KM infrastructure includes five major
components: organization culture, organization
structure, information technology infrastructure,
common knowledge, and physical environment

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Organization Culture
 Organization culture reflects the norms and beliefs that guide the
behavior of the organization’s members.
 It is an important enabler of knowledge management in
organizations.
 Indeed, a survey of KM practices in U.S. companies (Dyer and
McDonough 2001) indicated that the four most important challenges
in knowledge management are nontechnical in nature and include, in
order of importance:
1. The organization’s employees have no time for knowledge
management;
2. the current organization culture does not encourage knowledge
sharing;
3. inadequate understanding of knowledge management and its
benefits to the company; and
4. inability to measure the financial benefits from knowledge
management.

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Organization culture …
Attributes of an enabling organizational culture include
 understanding the value of KM practices,
 management support for KM at all levels,
 incentives that reward knowledge sharing, and
 encouragement of interaction for the creation and sharing
of
knowledge (Armbrecht et al. 2001).
Culture that inhibit knowledge sharing
 stress individual performance and
 hoarding of information within units encourage limited
employee interaction, and
 lack of an involved top management
 Fear of being labeled as ignorant if posting questions to
the portal
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Organization Structure
Knowledge management also depends to a
considerable extent on the organization structure.
Several aspects of organization structure are
relevant.
First, the hierarchical structure of the
organization affects the people with whom each
individual frequently interacts, and to or from
whom to transfer knowledge.
Traditional reporting relationships influence the flow
of data and information as well as the nature of
groups who make decisions together, and
consequently affect the sharing and creation of
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Organization structure …
Decentralized or flat organization structures
eliminate organizational layers, thereby placing more
responsibility with each individual and increasing
the size of groups reporting to each individual.
Knowledge sharing is likely to occur in
more decentralized organizations.
Matrix structures also facilitates greater
knowledge sharing primarily by cutting across
traditional departmental boundaries.

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Organization structure …
Organization structures can facilitate knowledge
management through communities of practice.
A community of practice is an organic and self-
organized group of individuals who are dispersed
geographically or organizationally but communicate
regularly to discuss issues of mutual interest (Lave
and Wenger 1991).
For example, a tech-club at DaimlerChrysler included a
group of engineers who didn’t work in the same unit but
met regularly, on their own initiative, to discuss
problems related to their area of expertise.

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Information
Technology
Infrastructure
 Knowledge management is also facilitated by the organization’s
information technology (IT) infrastructure.
 The organization’s overall information technology infrastructure
also facilitates knowledge management.
 There are some technologies such as data mining specifically
developed for KM
 The information technology infrastructure includes data
processing, storage, and communication
technologies and systems.
 It comprises the entire spectrum of the organization’s
information systems, including transaction processing systems
and management information systems, databases (DB) and
data warehouses, and enterprise resource planning systems
(ERP).

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IT …
One possible way of systematically viewing the IT
infrastructure is to consider the capabilities it provides
in four important aspects: reach, depth, richness, and
aggregation
Reach pertains to access and connection and the efficiency
of such access.
Reach reflects the number and geographical locations
of the nodes that can be efficiently accessed.
Keen (1991) also uses the term reach to refer to the
locations an IT platform is capable of linking, with
the ideal being able to connect to “anyone, anywhere.”
Internet is attributed to its reach and the fact that
most people can access it quite inexpensively.

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IT …
Depth focuses on the detail and amount of
information that can be effectively communicated over
a medium.
It refers to aspects of bandwidth and customization
Communicating deep and detailed
information requires high bandwidth.
Customization refers to the availability of deep
and detailed information about customers so that it
enables to generate different information from the
same data
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IT …
Communication channels can be arranged along a
continuum representing their “relative richness” (Carlson
and Zmud 1999).
The richness of a medium is based on its ability to:
 (a) provide multiple cues (e.g., body language, facial
expression, tone of voice) simultaneously;
 (b) provide quick feedback;
 (c) personalize messages; and
 (d) use natural language to convey subtleties (Daft and Lengel
1986).
IT has traditionally been viewed as a lean communication
medium but latest technologies have the ability to
support rich communication.

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IT …
Aggregation refers to summarization of large
volumes of information drawn from multiple sources.
For instance, data mining and data warehousing
together enable the synthesis of diverse
information from multiple sources, potentially to
produce new insights.
Enterprise resource planning systems (ERPs)
also present a natural platform for aggregating
knowledge across different parts of an organization.

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Common Knowledge
Common knowledge refers to the organization’s
cumulative experiences and the organizing principles
that support communication and coordination
(Zander and Kogut 1995).
Common knowledge provides unity to
the organization.
It includes: a common language and
vocabulary, recognition of individual
knowledge domains, common cognitive
schema, shared norms, and specialized
knowledge that are common across individuals
sharing knowledge
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Common knowledge
Common knowledge enhances integration of
individual expert’s knowledge with the knowledge of
others.
Common knowledge supports knowledge transfer
within the organization but impedes the transfer
of knowledge outside the organization (Argote and
Ingram 2000).
For example a system engineer in the Bank is
different from system engineer in the
Telecommunication industry.

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Physical Environment
The physical environment is another important
foundation upon which knowledge management rests.
Key aspects of the physical environment include the
design of buildings and the separation between
them; the location, size, and type of offices; the type,
number, and nature of meeting rooms; and so on.
Physical environment can foster KM by providing
opportunities for employees to meet and share
ideas.
Coffee rooms, cafeterias, water coolers, and
hallways do provide venues where employees learn
from and share insights with each other
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Knowledge management
mechanisms
Knowledge management mechanisms are
organizational or structural means used to
promote knowledge management.
For examples of KM mechanisms include learning by
doing, on-the-job training, learning by observation, and
face-to-face meetings.
More long-term KM mechanisms include the hiring of a
Chief Knowledge Officer, cooperative projects across
departments, organizational structure, organizational
policies, standards, initiation process for new employees,
and employee rotation across departments.

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Case of BP Amoco Chemical Company
 BP Amoco Chemical Company has benefitted from retrospect meetings
at the conclusion of projects. Each retrospect meeting is facilitated by
someone outside that project team and focuses on the following
questions:
 What was the goal of the project?
 What did we accomplish?
 What were the major successes? Why?
 How can we repeat the successes?
 What were the significant disappointments? Why?
 How can we avoid them in the future?

 What kind of knoweldge is shared through the above knowledge

management mechanisms?

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KM Technologies
KM Technologies are information technologies
that can be used to facilitate knowledge
management.
KM technologies are intrinsically not different
from information technologies, but they focus on
knowledge management rather than
information processing.
KM technologies also support KM systems and
benefit from the KM infrastructure

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KM Technologies …
Technologies that support KM include artificial
intelligence (AI) technologies including those used for
knowledge acquisition and case-based reasoning systems,
Communication technologies like electronic discussion
groups, videoconferencing, Web 2.0 technologies, such as
wikis and blogs
Knowledge repository technologies like databases,
computer-based simulations, ERPs,, MISs, expertise locator
systems, and information repositories
Knowledge based system like expert systems, case-
based reasoning systems, decision support systems,
Recommender systems, etc
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KM processes
Knowledge management is defined as performing the
activities involved in discovering, capturing, sharing,
and applying knowledge so as to enhance, in a cost-
effective fashion, the impact of knowledge on the
unit’s goal achievement.
KM relies on four main kinds of KM processes (see
Fig. below)

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Knowledge Management Processes
Discovery
• Combination
• Socialization Sharing Application
• Socialization • Direction
• Exchange • Routines
Capture
• Externalization
• Internalization

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Knowledge Discovery Systems
Knowledge discovery systems support the process of
developing new tacit or explicit knowledge from
data and information or from the synthesis of prior
knowledge
Supports two KM sub-processes
combination, enabling the discovery of new
explicit knowledge
socialization, enabling the discovery of new tacit
knowledge

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Discovery … Combination
 Combination refers to integration of multiple bodies of
explicit knowledge (and/or data and/or information) to
create new, more complex sets of explicit knowledge (Nonaka
1994).
 Through communication, integration, and systemization of
multiple streams of explicit knowledge, new explicit knowledge
is created—either incrementally or radically (Nahapiet and
Ghoshal 1998).
 Existing explicit knowledge, data, and information are
reconfigured, recategorized and recontextualized to produce
new explicit knowledge.
 Example: writing a proposal, applying data mining, etc

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…. Socialization
Socialization is the synthesis of tacit knowledge
across individuals, usually through joint
activities rather than written or verbal
instructions.
For example, by transferring ideas and images,
apprenticeships help newcomers to see how
others think.
Davenport and Prusak (1998) described how
conversations at the watercooler helped knowledge
sharing among groups at IBM.
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Knowledge Capture
It is the process of retrieving either explicit or
tacit knowledge that resides within people,
artifacts, or organizational entities.
Knowledge being captured might reside outside
the organizational boundaries including
consultants, competitors, customers, suppliers,
and prior employers of the organization’s new
employees.

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Knowledge capture …
Knowledge might sometimes reside within an
individual’s mind without that individual being able to
recognize it and share it with others.
Similarly, knowledge might reside in an explicit
form in a manual but few people might be aware of
it.
It is important to obtain the tacit knowledge from
individuals’ minds as well as the explicit
knowledge from the manual to share with others.
It is benefitted from two KM subprocesses—
externalization and internalization
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… Externalization
 Externalization involves converting tacit knowledge into
explicit forms such as words, concepts, visuals, or figurative
language (e.g., metaphors, analogies, and narratives; Nonaka and
Takeuchi 1995).
 It helps translate individuals’ tacit knowledge into explicit forms
that
can be more easily understood by the rest of their group.
 Externalization may be accomplished through the use of metaphor—
that is, understanding and experiencing one kind of thing in terms
of another.
 An example of externalization is writing lessons learned in the
project
by a consultant team about the client organization
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… Internalization
 Internalization is the conversion of explicit knowledge into
tacit knowledge.
 It represents the traditional notion of learning.

 The explicit knowledge may be embodied in action and practice

so that the individual acquiring the knowledge can re-experience
what others have gone through.
 An example of internalization is a new software consultant
reading a book on innovative software development and
learning from it.
 This learning helps the consultant to capture the knowledge
contained in the book

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Knowledge Sharing
Knowledge sharing is the process through which explicit
or
tacit knowledge is communicated to other individuals
It may take place across individuals, groups, departments
or organizations
It involves externalization of personal knowledge and
internalization of explicit knowledge
It also uses communication channels
The quality of communication channels has an effect on
effectiveness of the knowledge sharing process
Three important clarifications are in order.
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Knowledge sharing …
 First, knowledge sharing means effective transfer, so that the
recipient of knowledge can understand it well enough to act on it
(Jensen and Meckling 1996).
 Second, what is shared is knowledge rather than recommendations
based on the knowledge;
 The former involves the recipient acquiring the shared knowledge as
well as being able to take action based on it,
 whereas the latter simply involves utilization of knowledge without the
recipient internalizing the shared knowledge.
 Third, knowledge sharing may take place across individuals as well
as across groups, departments, or organizations (Alavi and
Leidner 2001).

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Knowledge sharing …
For knowledge sharing, exchange or
socialization processes are used.
Socialization, as mentioned above, facilitates
the sharing of tacit knowledge
Exchange focuses on the sharing of
explicit knowledge.
It is used to communicate or transfer
explicit knowledge among individuals,
groups, and organizations (Grant 1996).
An example of exchange is a product design manual
being transferred by one employee to another
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Knowledge Application
Creation of new value from knowledge by
solving problems or creating new products and
services
This involves solving problems in a novel way,
creating new products and services, etc
Examples include workflow automation so that
new employees can quickly learn existing
knowledge
Development of different intelligent agents
It has two main components
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Direction
Direction involves the transfer of instructions or
decisions and not the transfer of the knowledge required
to make those decisions
This preserves the advantages of specialization and
avoids the difficulties inherent in the transfer of tacit
knowledge.
 Example of direction is when a production worker calls
an expert to ask her how to solve a particular problem
with a machine and then proceeds to solve the problem
based on the instructions given by the expert.
Similarly a student asking his fellow classmate for the
answer to a question gets a direction
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… Routines
 Routines involve the utilization of knowledge embedded in
procedures, rules, and norms that guide future behavior.
 Routines economize on communication more than directions as
they are embedded in procedures or technologies.
 However, they take time to develop, relying on “constant repetition”
(Grant 1996).
 Routines could be automated through the use of IT, such as in
systems that provide help desk agents, field engineers and automated
answers from a knowledge base (Sabherwal and Sabherwal, 2007).
 Routine is created to avoid reinvention by storing best practices
in procedure manual and software tools

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KM Technologies
Technologies that support KM include artificial
intelligence (AI) technologies encompassing those
used for knowledge acquisition and case-based
reasoning systems, electronic discussion groups,
computer-based simulations, databases, decision
support systems, enterprise resource planning
systems, expert systems, management information
systems, expertise locator systems, videoconferencing,
and information repositories encompassing best
practices databases and lessons learned systems

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Knowledge Management Systems
KM systems utilize a variety of KM mechanisms
and technologies to support the KM processes
Knowledge Management Discovery Systems
Knowledge Management Capture Systems
Knowledge Management Sharing Systems
Knowledge Application Systems

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Knowledge Sharing Systems
Knowledge sharing systems support the
process through which explicit or implicit
knowledge is communicated to other
individuals
Discussion groups or chat groups facilitate
knowledge sharing by enabling individuals to explain
their knowledge to the rest of the group

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Knowledge Application Systems
Knowledge application systems support the
process through which some individuals utilize
knowledge possessed by other individuals without
actually acquiring, or learning, that knowledge
Mechanisms and technologies support
knowledge application systems by facilitating
routines and direction.

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KM Technologies for Routine and directions
Technologies supporting direction include experts’
knowledge embedded in expert systems and
decision support systems, as well as troubleshooting
systems based on the use of technologies like case-
based reasoning
Technologies that facilitate routines are expert
systems, enterprise resource planning systems,
and traditional management information systems

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Mechanisms for Direction and Routines
Mechanisms facilitating direction include traditional
hierarchical relationships in organizations, help desks,
and support centers
Mechanisms supporting routines include
organizational policies, work practices, and standards

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 Overview of KM Solutions
Knowledge Knowledge Knowledge Knowledge
Discovery Capture Sharing
Application
KM Processes

Combination Socialization Internalization Externalization Exchange Direction Routines

Knowledge Knowledge Knowledge Knowledge

KM Systems Discovery Capture Sharing
Systems Systems Systems Application
Systems

KM Mechanisms Analogies and metaphors Decision support systems KM Technologies

Brainstorming retreats Web-based discussion
On-the-job training groups Repositories of best
Face-to-face meetings practices Artificial intelligence
Apprenticeships systems Case-based
Employee rotation reasoning
Learning by observation Groupware
…. Web
pages
…

Organization Organization IT Common Physical

KM Infrastructure Culture Structure Infrastructure
Knowledge Environment 56
KM Processes, Mechanisms, and Technologies

57
Limitation in KM implementation
Enterprise invested in KM-relevant technology
Intranets
Groupware
Data warehouses
Data mining
Enterprises forgot the non-technical work
Aligning knowledge to business goals
Mapping knowledge content
Creating networks of knowledge users
Changing culture and defining KM role

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