CMI - Knowledge Management

CMI

Executive Summary

To leverage global competitiveness, organisations need radical changes. Management change is brought about by global market which evolves constantly. Most changes come in the form of technological advancements, management styles and infrastructure. Management change theories concentrate on both hard and soft approaches whereby hard approaches look into the infrastructure while soft approaches focus the human element.

Knowledge management (KM) is a form of organisational change. KM has been defined as the transfer of knowledge from one to another. The current technological advancements have helped organisations to carry out KM successfully. However, change managers have to be aware that this advancement is only an infrastructural improvement which needs to work hand in hand with the human element. Organisational, country and individual culture can be the deciding factor in the success on KM.

When managed efficiently, organisational change can result in success. This is apparent at Malaysian Palm Oil Board (MPOB) which successfully transformed its organisation from an ordinary public library to a regional hub for research and development in the palm oil industry. Furthermore, MPOB’s transformation has been accredited with awards locally and internationally. Organisational change can also fail as seen in Taylor’s Business School’s (TBS) attempt to transform its educational institution into one of knowledge-based business school. This failure is recognised as due to the inefficient implementation of change strategy. The stance taken by TBS to implement the change did not take into consideration the soft elements of management change.

In conclusion, though change is important to organisations as oxygen is to life, the implementation stage is crucial where a balance between hard and soft elements of change is needed. It is essential for global change leaders to understand the many phases of organisational transformation in order to enjoy its fruits of success.

TABLE OF CONTENTS

Introduction

It is widely recognized that the only thing that is certain about the future is change. Change is inevitable and can be brought about by internal or external factors. If organizations do not anticipate or plan strategically for change and change is not managed, it will have to accommodate changes exerted by external preserve. Radical changes are referred to as revolutionary and represent the entire organisation, showing a decisive break from the past. Organisations change to remain competitive, meet future challenges and achieve market dominance. Globalisation, technological advancement and volatility of consumer demands and shorter product life cycles have precipitated continuing radical environmental shifts and demand a more strategic perspective of change from those who manage and lead organisations.

1.1 Change management theory

Levin’s Force Field Analysis (1951) suggests a three-step change programme of unfreezing the driving and restraining forces, moving to redress the imbalance and re-freezing to internalise the new equilibrium. This theory is used to identify the driving force of the change to reinforce it. Meanwhile restraining forces are reduced by communicating the benefits of change (Walsh, Lok & Jones 2006, p. 214).

Johnson & Scholes’s theory suggest organisations study their external environment closely to create the right mix of innovative and creative resources to manage change. Beer, Eisenstat & Spector (1990) describes co-ordinating, commitment and competencies as three inter-related factors required for corporate revitalisation. It is vital to co-ordinate the change, evoke commitment from organisation and employees and create opportunities to acquire new competencies amongst employees (Walsh, Lok & Jones 2006, p. 227).

Meanwhile, Beer & Nohria (2000)’s theory E and O account for the different assumptions leaders make in understanding how and why change should be made. Theory E is the hard approach for short term improvement that is driven from the top. While Theory O is a soft approach change based on organisational capacity, looking into long term benefits by fostering employees’ behavioural change which is needed to sustain the change rather than driving it themselves (Walsh, Lok & Jones 2006, p. 210).

1.2 Knowledge Management

Knowledge management (KM) is a contemporary change that can play an important ...

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1.2 Knowledge Management

Knowledge management (KM) is a contemporary change that can play an important role as a source of competitive advantage (Chong, Wong & Lin 2006). Information and communication technology (ICT) is a tool for effective total quality management (TQM) which is an organisation-wide effort to improve quality through changes in structure, practices and systems, and most importantly, attitudes. Developments in ICT and TQM are necessary for effective KM (Siong 2006). The International Organisation for Standardisation certification (ISO) is one of the most recognised certification for quality management and quality assurance related to TQM. When a company holds ISO accreditation, it is telling its customers, prospects and suppliers worldwide that it has a logical and documented management system (Coleman & Douglas 2003). Good quality systems improve efficiency and open up global market opportunities.

Wiig (2002) states that it is important to have a comprehensive KM within and in public administration increase the citizens’ quality life. The creation and transfer of knowledge in and out of an organization has become a critical factor in an organisation’s success and competitiveness (Major & Cordey-Hayes 2002).

Higher education institutions are in the knowledge business, and they are increasingly barged with marketplace pressures such as competition just like other businesses (Quek 2005). In the context of education providers, providing the education local or international by academics is sharing knowledge with students and colleagues, as such knowledge management is more related to the social aspects of managing the knowledge such as the organisational structure and people-management in the organisation. Yahya and Goh (2002) suggest organisations identify value, create and evolve knowledge assets to remain competitive in the current knowledge-based society. In support, Wong (2005) asserts that activities and practices are KM’s success factors that need to be recognised, developed and nurtured to remain competitive.

Businesses rarely succeed with sustainable transformation initiatives unless they are led from the top. Organisations are increasingly coming to terms with the fact that there is a direct link between the success of change programs and leadership capabilities.

2. Change management writers

Baba (2003), wrote on the successful change brought about by The Malaysian Palm Oil Board (MPOB) library to be a recognised regional resource centre. The Malaysian Palm Oil Board (MPOB) is a government agency, set to promote and develop Malaysian oil palm industry. It plays an active role in developing new technologies for the oil palm industry.

Yap (2004) wrote on the attempt to change Taylor’s Business School into a Knowledge Management Business School. This attempt was in line with the Malaysian government’s call to embrace knowledge economy (KE) and to meet new demands. Taylor College Sdn. Bhd., recognised as one of the pioneers in providing private higher education in Malaysia re-engineered its business school to become one of the first ‘creative’ Knowledge Management Business Schools in the country.

2.1 Change management at MPOB

The organizational transformation at Malaysian Palm Oil Board (MPOB) took place in its library which was changed radically from being a small specialized library into a leading regional information center. One of the first steps in its transformation was its move to its own building called Palm Oil Information Centre which houses not only the library but also an impressive gallery exhibiting palm oil related matters.

To further enhance its services, the MPOB library made its database available on-line for subscription in 2003. The resilience and resourcefulness of its manager with dynamic and supportive organizational leadership highlights the importance of the palm oil industry in the Malaysian economy. Leadership is just one of the ingredients in this organizational transformation. The library implemented MS ISO 9000 and TQM standards as the next route to organizational excellence. These resulted in MPOB being awarded the Prime Minister’s annual quality award. This is a testament that TQM had helped to position the library as center of excellence in their distinctive areas of competence.

Since 2001, MPOB benchmarked itself with other national libraries and world class organizations in areas of competency development programme for its library and library personnel. In response to the challenges in the technological and knowledge economy era, the library established a national digital library network with strategic partnership while digitizing its extensive local resources. The implementation of these strategies by MPOB provides an insight into the vision and challenges facing the transformation process. While there are obviously major differences between organizational make-up and background of MPOB library and Southeast Asian libraries, there are some common threads that was drawn and used effectively. It can be discerned that the drivers of change in MPOB include cultural and organizational imperatives such as:

rapid development of technology;
concern for quality and excellence;
growing national consciousness;
concern for preservation of heritage;
development of learning infrastructures; and
E-literate society.

MPOB’s successfully change is due to its seriousness and efficiency in implementing change. The leaders managed to recognize the need for innovation, creativity and adaptability to successfully manage the change without employees’ resistance. This could be attributed to the strong support it received from the government which embraced knowledge economy. This supports Wiig’s (2002) assertiveness that it is important to have comprehensive KM within and in support of public administration. This change helps the society to increase its quality of life. As an organization set for social benefits, public sector management is not easy to change due to employee resistance and quite often lack of finance for a radical change (Wiig 2002). However, MPOB is a testament showing a collaborative response to change and KM leadership is necessary to face global challenges and organizational growth.

2.2 Knowledge Management to TBS

Taylor’s Business School (TBS) is an active global player offering business degree from Australian universities as Mazzarol, Soutar and Sim (2003) have identified new wave of globalization in the international education industry. Kumar and Idris (2006) state that globalization of education has greatly expanded opportunities for students acquiring knowledge outside their country of origin. Educators play an influential role in developing new patterns of behaviors for individuals hence it is vital for higher education institutions to acknowledge KM to effectively transfer knowledge (Said et al. 2003). The requirements of the KE have, however, made the need more important. The philosophy at TBS is to produce graduates who are equipped with industry skills to meet KE demands.

The management of TBS felt that, to successfully deliver education and training in KM, the management methods of the school itself needed to reflect the principles of KM. As such, TBS started to change the structural and process as follows:

information technology support;
an emphasis on continual re-skill and a creative approach to teaching;
a flat management structure and appropriate strategic performance management systems
physical structure of the school

Without the advances in ICT made in recent years, strategic goals would not be infeasible (Sohail, Daud & Rajadurai 2006) as it underpins KE (Siong 2006). Employees are therefore selected to be trained to be fluent with the advancements in information technology. The system utilises multi-media software while usage and demand is monitored regularly to ensure adequacy of resources. Employees, organisational projects and activities in KE tend to be multi-disciplinary, compared to the traditional disciplines, demanding a variety of skills ranging from IT through social and creative arts. This was reflected in the broad cross-section of specialists employees employed. Specialists from all of these disciplines, including management, marketing, statistics and sociology and English are represented in the TBS teaching teams and management structure, providing its students with access to a wide range of differing perspectives demanded in KE. Besides this, physical changes such as creative names for staff, tutorial rooms were set to be trendy and attract student attention. In fact, a special room called “war room” was constructed to vent employees’ and students’ frustration and resolve disputes and differences without social embarrassment.

The flat management structure of TBS as shown in Figure 1 was created to empower the Chief knowledge Officer to develop and implement K-strategy effectively (Dalkir 2005, p. 173). This is to facilitate communication. This helps to remove an often significant obstacle to social harmony and efficient management needed in an organisation. In order to ensure customer and student satisfaction, “Knowledge Capital Strategist” or the librarian and “Chief Technology Specialist” or head of ICT were given the responsibility to determine the appropriate strategies towards building an online library to support physical archives and technologically advanced computer laboratory respectively.

The “Academic Strategist” was responsible for the policies toward curriculum development, which has significant implications both for demand and supply of subject matter. TBS utilizes a number of key performance indicators (KPIs) such as student satisfaction surveys, entry curriculum evaluations, and students’ completion and pass ratios to evaluate it K-organisation. A misalignment of strategy with the objectives of the organisation or with key performance indicators is known to increase the probability of failure of the K-organisation (Yahya & Goh 2002).

However, in 2003, TBS made a sudden move to change its management style. The K-organisation failed due to its strong organization culture. The implementation of the change was too sudden for the academics that are the backbone of the educational institution. The approach taken by the then CEO to change the management style was unacceptable to the orthodox academics and a few employees from the old school. KM requires the willingness of a group to work with others and share knowledge to their mutual benefit. This shows that KM will not occur in an organisation unless its employees and work group display a high level of cooperative behavior (Goh 2002). The KM implementers failed to foresee the resistance caused by the strong organizational culture embedded in TBS employees. Syed-Ikhsan and Rowland (2004) assert that changing employees’ behaviour has been identified as the most difficult issue in managing change.

A new CEO, with a new outlook and management style took over TBS with new profitable goals. The new leaders realized that the knowledge of their members is one form of capital, which can be accelerated through continuous learning efforts and supported by systems to capture and share learning within the institution (Kumar & Idris 2006; Pek & Kwee 2004). Taylor’s College on the whole, set a 10year vision to be an international higher education provider which educates the youth of the world to take their productive place as leaders in the global community.

3. Conclusions

MPOB’s successful implementation of KM via its ICT, TQM and ISO tools is due its focused leadership. It can be discerned that the drivers of change in MPOB include cultural and organisational imperatives. It recognised the driving force and the resistance using Levin’s theory to unfreeze change and refreeze the organisation. The need to move into a sophisticated premise, digitise and understand the employees’ culture was recognised using Johnson & Scholes’s theory. Using Beer & Nohria’s theory O, it used a soft approach by introducing new technologies slowly. The leaders understood the employees’ capabilities and implemented changes with the right mix of innovation and co-ordination.

TBS, on the other hand, implemented KM using Beer & Nohria’s theory; changes were made quickly using structural changes, expecting employees to understand. The new leaders failed to understand the organisational culture where many employees have been working for more than ten years, transferring their knowledge. They were unable to understand the need for change in designations and names of facilities in the pretext of KM, when the programme delivered come designed in Australia. The education industry in Malaysia is very competitive hence it stipulates the need for quality institutional and professional services in order to sustain a competitive advantage (Kumar & Idris 2006). However, the use of “knowledge” for designations and facilities does not necessarily translate into quality.

4. Recommendations

KM will significantly help industries to compete locally and globally (Chong, Chong & Heng 2006). However, knowledge transfer requires the willingness of individuals to work with others and share knowledge for mutual benefit (Syed-Ikhsan & Rowland 2004). As such, organisation should consider having a strategy on how knowledge could be maintained and shared amongst employees and communities of practice without any culture barriers.

Organizations can act intelligently when managing change to secure their viabilities and overall success by fostering a better understanding of the importance of the change towards enhancing organizational performance. Globalization has affected the viability of production-driven strategies in substantial ways. Organisation and country culture play a significant role in implementing change, requiring leaders to understand them before introducing the change. Hence, successful change programme management requires the integration of quality leadership and strategy.

(2432 words excluding Executive Summary and References)

List of References

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