Mgt403/2 Knowledge Management in Theory and Practice Second Edition Kimiz Dalkir foreword by Jay Liebowitz Knowledge Management in Theory and Pra

Mgt403/2 Knowledge Management

in Theory and Practice

Second Edition

Kimiz Dalkir
foreword by Jay Liebowitz

Knowledge Management in Theory and Practice

Knowledge Management in Theory and Practice

Second Edition

Kimiz Dalkir

foreword by Jay Liebowitz

The MIT Press

Cambridge, Massachusetts

London, England

© 2011 Massachusetts Institute of Technology

All rights reserved. No part of this book may be reproduced in any form by any electronic or

mechanical means (including photocopying, recording, or information storage and retrieval)

without permission in writing from the publisher.

For information about special quantity discounts, please e-mail special_sales@mitpress.mit.edu

This book was set in Stone Sans and Stone by Toppan Best-set Premedia Limited. Printed and

bound in the United States of America.

Library of Congress Cataloging-in-Publication Data

Dalkir, Kimiz.

Knowledge management in theory and practice / Kimiz Dalkir ; foreword by Jay Liebowitz.

— 2nd ed.

p. cm.

Includes bibliographical references and index.

ISBN 978-0-262-01508-0 (hardcover : alk. paper)

1. Knowledge management. I. Title.

HD30.2.D354 2011

658.4’038 — dc22

2010026273

10 9 8 7 6 5 4 3 2 1

Contents

Foreword: Can Knowledge Management Survive? xiii
Jay Liebowitz

1 Introduction to Knowledge Management 1
Learning Objectives 1
Introduction 2
What Is Knowledge Management? 5
Multidisciplinary Nature of KM 8
The Two Major Types of Knowledge: Tacit and Explicit 9
Concept Analysis Technique 11
History of Knowledge Management 15
From Physical Assets to Knowledge Assets 19
Organizational Perspectives on Knowledge Management 21
Library and Information Science (LIS) Perspectives on KM 22
Why Is KM Important Today? 22
KM for Individuals, Communities, and Organizations 25
Key Points 26
Discussion Points 27
References 27
2 The Knowledge Management Cycle 31
Learning Objectives 31
Introduction 32
Major Approaches to the KM Cycle 33
The Meyer and Zack KM Cycle 33
The Bukowitz and Williams KM Cycle 38
The McElroy KM Cycle 42
The Wiig KM Cycle 45
An Integrated KM Cycle 51
Strategic Implications of the KM Cycle 54

vi Contents

Practical Considerations for Managing Knowledge 57
Key Points 57
Discussion Points 57
References 58
3 Knowledge Management Models 59
Learning Objectives 59
Introduction 59
Major Theoretical KM Models 62
The Von Krogh and Roos Model of Organizational Epistemology 62
The Nonaka and Takeuchi Knowledge Spiral Model 64
The Choo Sense-Making KM Model 73
The Wiig Model for Building and Using Knowledge 76
The Boisot I-Space KM Model 82
Complex Adaptive System Models of KM 85
The European Foundation for Quality Management (EFQM) KM Model 89
The inukshuk KM Model 90
Strategic Implications of KM Models 92
Practical Implications of KM Models 92
Key Points 93
Discussion Points 93
References 95
4 Knowledge Capture and Codifi cation 97
Learning Objectives 97
Introduction 98
Tacit Knowledge Capture 101
Tacit Knowledge Capture at the Individual and Group Levels 102
Tacit Knowledge Capture at the Organizational Level 118
Explicit Knowledge Codifi cation 121
Cognitive Maps 121
Decision Trees 123
Knowledge Taxonomies 124
The Relationships among Knowledge Management, Competitive Intelligence, Business Intelligence,

and Strategic Intelligence 131
Strategic Implications of Knowledge Capture and Codifi cation 133
Practical Implications of Knowledge Capture and Codifi cation 134
Key Points 135
Discussion Points 135
References 136

Contents vii

5 Knowledge Sharing and Communities of Practice 141
Learning Objectives 141
Introduction 142
The Social Nature of Knowledge 147
Sociograms and Social Network Analysis 149
Community Yellow Pages 152
Knowledge-Sharing Communities 154
Types of Communities 158
Roles and Responsibilities in CoPs 160
Knowledge Sharing in Virtual CoPs 163
Obstacles to Knowledge Sharing 168
The Undernet 169
Organizational Learning and Social Capital 170
Measuring the Value of Social Capital 171
Strategic Implications of Knowledge Sharing 173
Practical Implications of Knowledge Sharing 175
Key Points 175
Discussion Points 176
References 177
6 Knowledge Application 183
Learning Objectives 183
Introduction 184
Knowledge Application at the Individual Level 187
Characteristics of Individual Knowledge Workers 187
Bloom ’ s Taxonomy of Learning Objectives 191
Task Analysis and Modeling 200
Knowledge Application at the Group and Organizational Levels 207
Knowledge Reuse 211
Knowledge Repositories 213
E-Learning and Knowledge Management Application 214
Strategic Implications of Knowledge Application 216
Practical Implications of Knowledge Application 217
Key Points 218
Discussion Points 218
Note 219
References 219

viii Contents

7 The Role of Organizational Culture 223
Learning Objectives 223
Introduction 224
Different Types of Cultures 227
Organizational Culture Analysis 229
Culture at the Foundation of KM 232
The Effects of Culture on Individuals 235
Organizational Maturity Models 238
KM Maturity Models 239
CoP Maturity Models 244
Transformation to a Knowledge-Sharing Culture 246
Impact of a Merger on Culture 256
Impact of Virtualization on Culture 258
Strategic Implications of Organizational Culture 258
Practical Implications of Organizational Culture 259
Key Points 262
Discussion Points 262
References 263
8 Knowledge Management Tools 267
Learning Objectives 267
Introduction 268
Knowledge Capture and Creation Tools 270
Content Creation Tools 270
Data Mining and Knowledge Discovery 271
Blogs 274
Mashups 275
Content Management Tools 276
Folksonomies and Social Tagging/Bookmarking 277
Personal Knowledge Management (PKM) 279
Knowledge Sharing and Dissemination Tools 280
Groupware and Collaboration Tools 281
Wikis 285
Social Networking, Web 2.0, and KM 2.0 288
Networking Technologies 292
Knowledge Acquisition and Application Tools 297
Intelligent Filtering Tools 298
Adaptive Technologies 302
Strategic Implications of KM Tools and Techniques 303
Practical Implications of KM Tools and Techniques 304

Contents ix

Key Points 304
Discussion Points 305
References 306
9 Knowledge Management Strategy 311
Learning Objectives 311
Introduction 311
Developing a Knowledge Management Strategy 316
Knowledge Audit 318
Gap Analysis 322
The KM Strategy Road Map 325
Balancing Innovation and Organizational Structure 328
Types of Knowledge Assets Produced 333
Key Points 336
Discussion Points 337
References 338
10 The Value of Knowledge Management 339
Learning Objectives 339
Introduction 339
KM Return on Investment (ROI) and Metrics 343
The Benchmarking Method 345
The Balanced Scorecard Method 351
The House of Quality Method 354
The Results-Based Assessment Framework 356
Measuring the Success of Communities of Practice 359
Key Points 360
Discussion Points 362
References 362
Additional Resources 364
11 Organizational Learning and Organizational Memory 365
Learning Objectives 365
Introduction 365
How Do Organizations Learn and Remember? 368
Frameworks to Assess Organizational Learning and Organizational Memory 369
The Management of Organizational Memory 370
Organizational Learning 377
The Lessons Learned Process 378
Organizational Learning and Organizational Memory Models 379

x Contents

A Three-Tiered Approach to Knowledge Continuity 385
Key Points 390
Discussion Points 391
References 392
12 The KM Team 397
Learning Objectives 397
Introduction 398
Major Categories of KM Roles 402
Senior Management Roles 403
KM Roles and Responsibilities within Organizations 410
The KM Profession 412
The Ethics of KM 413
Key Points 419
Discussion Points 420
Note 421
References 421
13 Future Challenges for KM 423
Learning Objectives 423
Introduction 424
Political Issues Regarding Internet Search Engines 425
The Politics of Organizational Context and Culture 427
Shift to Knowledge-Based Assets 429
Intellectual Property Issues 433
How to Provide Incentives for Knowledge Sharing 435
Future Challenges for KM 440
KM Research 442
A Postmodern KM 446
Concluding Thought 447
Key Points 448
Discussion Points 449
References 450
14 KM Resources 453
The Classics 453
KM for Specifi c Disciplines 454
International KM 455
KM Journals 455
Key Conferences 456

Contents xi

Key Web Sites 457
KM Glossaries 457
KM Case Studies and Examples 458
KM Case Studies 458
KM Examples 459
KM Wikis 459
KM Blogs 459
Visual Resources 460
YouTube 460
Other Visual Resources 460
Some Useful Tools 460
Other Visual Mapping Tools 460
Note 460

Glossary 461
Index 477

Foreword: Can Knowledge Management Survive?

The title of this foreword, “ Can Knowledge Management Survive? ” is perhaps rather

strange for this second edition of this leading textbook on knowledge management

(KM). However, as the KM fi eld has taught us to be “ refl ective practitioners, ” this

question is worth pondering.

Knowledge management has been around for twenty years or more, in terms of its

growth as a discipline. Even though the roots of knowledge management go back far

beyond that, is knowledge management generally accepted within organizations, and

is KM a lasting fi eld or discipline?

To answer the fi rst question, we can review some anecdotal evidence that suggests

KM is more widely accepted within certain industries than others. Over the years,

the pharmaceutical, energy, aerospace, manufacturing, and legal industries have

perhaps been some of the leaders in KM organizational adoption. In looking toward

the future, the public health and health care fi elds are certainly well positioned to

leverage knowledge throughout the world. And as the graying workforce ensues and

the baby boomers retire, knowledge retention will continue to play a key role in

many sectors, such as in government, nuclear energy, education, and others. So, KM

has permeated many organizations and has the propensity to propagate to others.

However, there are still many organizations that equate KM to be IT (information

technology), and do not fully grasp the concept of building and nurturing a knowl-

edge sharing culture for promoting innovation. Many organizations do not have KM

seamlessly woven within their fabric, and many organizations do not recognize or

reward their employees for knowledge sharing activities. It is getting harder to fi nd

the title of a “ chief knowledge offi cer ” or a “ knowledge management director ” in

organizations, suggesting two possibilities. The fi rst is that KM is indeed embedded

within the organization ’ s culture so there is no need to single it out. The second

proposition is that KM has lost its appeal and importance, so there is no need to

have a CKO or equivalent position, especially in these diffi cult economic times.

xiv Foreword

Probably, both propositions are true, depending perhaps on the type and nature of

the organization.

So, returning to the fi rst question about KM being widely accepted within today ’ s

organizations, the jury is still out. It may be simply an awareness issue in order to

show the value-added benefi ts of KM initiatives. Or it may be that KM was the “ man-

agement fad of the day ” and we are ready to move on. I believe that KM can have

tremendous value to organizations by stimulating creativity and innovation, building

the institutional memory of the fi rm, enabling agility and adaptability, promoting a

sense of community and belonging, improving organizational internal and external

effectiveness, and contributing toward succession planning and workforce develop-

ment. KM should be one of the key pillars underpinning a human capital strategy for

the organization. As with anything else, some organizations are leaders and some are

laggards. Those who recognize the importance of KM to the organization ’ s overarching

vision, mission, and strategy should hopefully be in the winning side of the equation

in the years ahead.

Let us now address the second question posed, “ is KM a lasting fi eld? ” In other

words, does KM have endurance to stand on its own in the forthcoming years? This

relates back to whether KM is more an art than a science. KM is certainly both, and

as the KM fi eld has developed over the years, an active KM community of both prac-

titioners and researchers has emerged. There are already well over ten international

journals specifi cally devoted to knowledge management. Worldwide KM conferences

abound, and individuals can take university coursework in knowledge management,

as well as being certifi ed in knowledge management by KM-related professional societ-

ies and other organizations. There are funded research projects in knowledge manage-

ment worldwide, both from basic and applied perspectives. In addition, there are

many KM-related communities of practice established worldwide. So certainly there

is an active group of practitioners and researchers who are trying to put more rigor

behind KM to accentuate the “ science ” over the “ art ” in order to give the KM fi eld

lasting legs.

On the other hand, there is the “ art ” side of KM. Like many fi elds that draw from

a multidisciplinary approach, especially from the social sciences, there is art along

with the science. Whether KM contributes to “ return on vision ” versus “ return on

investment ” indicates some of the diffi culty in quantifying KM returns. There certainly

is a “ touchy-feely ” side to KM, but there is a sound methodological perspective to KM,

too.

Here again, the jury is still out on whether the KM fi eld will last. So what needs to

be done? This is where textbooks such as Knowledge Management in Theory and Practice

Can Knowledge Management Survive? xv

play an important role. This textbook, in its second edition, marries the theory and

practice of knowledge management; namely, it provides the underlying methodolo-

gies for knowledge management design, development, and implementation, as well

as applying these methodologies and techniques in various cases and vignettes sprin-

kled throughout the book. It addresses my fi rst question of having knowledge manage-

ment being more widely accepted in organizations by discussing how KM has been

utilized in various industry sectors and organizational settings. The book also empha-

sizes the “ science ” behind the “ art ” in order to address my second question regarding

providing more rigor behind KM so that the fi eld will endure in the years ahead.

Professor Dalkir, a leading KM researcher, educator, and practitioner, uses her

insights and experience to highlight the important areas of knowledge management

in her book. People, culture, process, and technology are key components of knowl-

edge management, and the book provides valuable lessons learned in each area. This

book is well-suited as a reference text for KM practitioners, as well as a textbook for

KM-related courses.

This book, and others, is needed to continue to take the mystique out of KM and

provide the tangible value-added benefi ts that CEOs and organizations demand. Pro-

fessor Dalkir should be commended on this new edition, which will hopefully propel

others to be believers in the power of knowledge management. As this happens, the

answers to my two KM questions will be quite obvious! Enjoy!

Jay Liebowitz, D.Sc.

Professor, Carey Business School

Johns Hopkins University

1 Introduction to Knowledge Management

A light bulb in the socket is worth two in the pocket.

— Bill Wolf (1950 – 2001)

This chapter provides an introduction to the study of knowledge management (KM).

A brief history of knowledge management concepts is outlined, noting that much of

KM existed before the actual term came into popular use. The lack of consensus over

what constitutes a good defi nition of KM is addressed and the concept analysis tech-

nique is described as a means of clarifying the conceptual confusion that still persists

over what KM is or is not. The multidisciplinary roots of KM are enumerated together

with their contributions to the discipline. The two major forms of knowledge, tacit

and explicit, are compared and contrasted. The importance of KM today for individu-

als, for communities of practice, and for organizations are described together

with the emerging KM roles and responsibilities needed to ensure successful KM

implementations.

Learning Objectives

1. Use a framework and a clear language for knowledge management concepts.

2. Defi ne key knowledge management concepts such as intellectual capital, organiza-

tional learning and memory, knowledge taxonomy, and communities of practice

using concept analysis.

3. Provide an overview of the history of knowledge management and identify key

milestones.

4. Describe the key roles and responsibilities required for knowledge management

applications.

2 Chapter 1

Introduction

The ability to manage knowledge is crucial in today ’ s knowledge economy. The cre-

ation and diffusion of knowledge have become increasingly important factors in

competitiveness. More and more, knowledge is being thought of as a valuable com-

modity that is embedded in products (especially high-technology products) and

embedded in the tacit knowledge of highly mobile employees. While knowledge is

increasingly being viewed as a commodity or intellectual asset, there are some para-

doxical characteristics of knowledge that are radically different from other valuable

commodities. These knowledge characteristics include the following:

• Using knowledge does not consume it.

• Transferring knowledge does not result in losing it.

• Knowledge is abundant, but the ability to use it is scarce.

• Much of an organization ’ s valuable knowledge walks out the door at the end of the

day.

The advent of the Internet, the World Wide Web, has made unlimited sources of

knowledge available to us all. Pundits are heralding the dawn of the Knowledge Age

supplanting the Industrial Era. Forty-fi ve years ago, nearly half of all workers in

industrialized countries were making or helping to make things . By the year 2000,

only 20 percent of workers were devoted to industrial work — the rest was knowledge

work ( Drucker 1994 ; Barth 2000 ). Davenport (2005, p. 5) says about knowledge

workers that “ at a minimum, they comprise a quarter of the U.S. workforce, and at

a maximum about half. ” Labor-intensive manufacturing with a large pool of relatively

cheap, relatively homogenous labor and hierarchical management has given way to

knowledge-based organizations. There are fewer people who need to do more work.

Organizational hierarchies are being put aside as knowledge work calls for more col-

laboration. A fi rm only gains sustainable advances from what it collectively knows,

how effi ciently it uses what it knows, and how quickly it acquires and uses new

knowledge ( Davenport and Prusak 1998 ). An organization in the Knowledge Age is

one that learns, remembers, and acts based on the best available information, knowl-

edge, and know-how.

All of these developments have created a strong need for a deliberate and systematic

approach to cultivating and sharing a company ’ s knowledge base — one populated

with valid and valuable lessons learned and best practices. In other words, in order to

be successful in today ’ s challenging organizational environment, companies need to

learn from their past errors and not reinvent the wheel. Organizational knowledge is

Introduction to Knowledge Management 3

not intended to replace individual knowledge but to complement it by making it

stronger, more coherent, and more broadly applied. Knowledge management repre-

sents a deliberate and systematic approach to ensure the full utilization of the

organization ’ s knowledge base, coupled with the potential of individual skills, com-

petencies, thoughts, innovations, and ideas to create a more effi cient and effective

organization.

Increasingly, companies will differentiate themselves on the basis of what they know. A relevant

variation on Sidney Winter’s defi nition of a business fi rm as an organization that knows how to do

things would defi ne a business fi rm that thrives over the next decade as an organization that knows

how to do new things well and quickly . ( Davenport and Prusak 1998 , 13)

Knowledge management was initially defi ned as the process of applying a system-

atic approach to the capture, structuring, management, and dissemination of knowl-

edge throughout an organization to work faster, reuse best practices, and reduce costly

rework from project to project (Nonaka and Takeuchi, 1995; Pasternack and Viscio

1998; Pfeffer and Sutton, 1999; Ruggles and Holtshouse, 1999). KM is often character-

ized by a pack rat approach to content: “ save it, it may prove useful some time in the

future. ” Many documents tend to be warehoused, sophisticated search engines are

then used to try to retrieve some of this content, and fairly large-scale and costly KM

systems are built. Knowledge management solutions have proven to be most successful

in the capture, storage, and subsequent dissemination of knowledge that has been

rendered explicit — particularly lessons learned and best practices.

The focus of intellectual capital management (ICM), on the other hand, is on those

pieces of knowledge that are of business value to the organization — referred to as intel-

lectual capital or assets. Stewart (1997) defi nes intellectual capital as “ organized knowl-

edge that can be used to produce wealth. ” While some of these assets are more visible

(e.g., patents, intellectual property), the majority consists of know-how, know-why,

experience, and expertise that tends to reside within the head of one or a few employ-

ees ( Klein 1998 ; Stewart 1997 ). ICM is characterized less by content — because content

is fi ltered and judged, and only the best ideas re inventoried (the top ten for example).

ICM content tends to be more representative of the real thinking of individuals (con-

textual information, opinions, stories) because of its focus on actionable knowledge

and know-how. The outcome is less costly endeavors and a focus on learning (at the

individual, community, and organizational levels) rather than on the building of

systems.

A good defi nition of knowledge management would incorporate both the capturing

and storing of knowledge perspective, together with the valuing of intellectual assets.

For example:

4 Chapter 1

Knowledge management is the deliberate and systematic coordination of an organization ’ s

people, technology, processes, and organizational structure in order to add value through reuse

and innovation. This is achieved through the promotion of creating, sharing, and applying

knowledge as well as through the feeding of valuable lessons learned and best practices into

corporate memory in order to foster continued organizational learning.

When asked, most executives will state that their greatest asset is the knowledge

held by their employees. “ When employees walk out the door, they take valuable

organizational knowledge with them ” ( Lesser and Prusak 2001 , 1). Managers also

invariably add that they have no idea how to manage this knowledge! Using the intel-

lectual capital or asset approach, it is essential to identify knowledge that is of value

and is also at risk of being lost to the organization through retirement, turnover, and

competition.. As Lesser and Prusak (2001, 1) note: “ The most knowledgeable employ-

ees often leave fi rst. ” In addition, the selective or value-based knowledge management

approach should be a three-tiered one, that is, it should also be applied to three orga-

nizational levels: the individual, the group or community, and the organization itself.

The best way to retain valuable knowledge is to identify intellectual assets and then

ensure legacy materials are produced and subsequently stored in such a way as to make

their future retrieval and reuse as easy as possible ( Stewart 2000 ). These tangible by-

products need to fl ow from individual to individual, between members of a commu-

nity of practice and, of course, back to the organization itself, in the form of lessons

learned, best practices, and corporate memory.

Many knowledge management efforts have been largely concerned with capturing,

codifying, and sharing the knowledge held by people in organizations. Although there

is still a lack of consensus over what constitutes a good defi nition of KM (see next

section), there is widespread agreement as to the goals of an organization that under-

takes KM. Nickols (2000) summarizes this as follows: “ the basic aim of knowledge

management is to leverage knowledge to the organization ’ s advantage. ” Some of

management ’ s motives are obvious: the loss of skilled people through turnover, pres-

sure to avoid reinventing the wheel, pressure for organization-wide innovations in

processes as well as products, managing risk, and the accelerating rate with which new

knowledge is being created. Some typical knowledge management objectives would

be to:

• Facilitate a smooth transition from those retiring to their successors who are recruited

to fi ll their positions

• Minimize loss of corporate memory due to attrition and retirement

• Identify critical resources and critical areas of knowledge so that the corporation

knows what it knows and does well — and why

Introduction to Knowledge Management 5

• Build up a toolkit of methods that can be used with individuals, with groups, and

with the organization to stem the potential loss of intellectual capital

What Is Knowledge Management?

An informal survey conducted by the author identifi ed over a hundred published

defi nitions of knowledge management and of these, at least seventy-two could be

considered to be very good! Carla O ’ Dell has gathered over sixty defi nitions and has

developed a preliminary classifi cation scheme for the defi nitions on her KM blog (see

http://blog.simslearningconnections.com/?p=279) and what this indicates is that KM

is a multidisciplinary fi eld of study that covers a lot of ground. This should not be

surprising as applying knowledge to work is integral to most business activities.

However, the fi eld of KM does suffer from the “ Three Blind Men and an Elephant ”

syndrome. In fact, there are likely more than three distinct perspectives on KM, and

each leads to a different extrapolation and a different defi nition.

Here are a few sample defi nitions of knowledge management from the business

perspective:

Strategies and processes designed to identify, capture, structure, value, leverage, and share an

organization’s intellectual assets to enhance its performance and competitiveness. It is based on

two critical activities: (1) capture and documentation of individual explicit and tacit knowledge,

and (2) its dissemination within the organization. ( The Business Dictionary , http://www.business-

dictionary.com/defi nition/knowledge-management.html)

Knowledge management is a collaborative and integrated approach to the creation, capture,

organization, access, and use of an enterprise ’ s intellectual assets. ( Grey 1996)

Knowledge management is the process by which we manage human centered assets . . . the

function of knowledge management is to guard and grow knowledge owned by individuals, and

where possible, transfer the asset into a form where it can be more readily shared by other

employees in the company. ( Brooking 1999 , 154)

Further defi nitions come from the intellectual or knowledge asset perspective:

Knowledge management consists of “ leveraging intellectual assets to enhance organizational

performance. ” ( Stankosky 2008 )

Knowledge management develops systems and processes to acquire and share intellectual assets.

It increases the generation of useful, actionable, and meaningful information, and seeks to

increase both individual and team learning. In addition, it can maximize the value of an orga-

nization ’ s …

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