Knowledge Management: is this the next step in the evolution of management theory?

To some, the management process may seem straightforward.  But things are more complicated than they appear at first glance.  Mintzberg offers this observation especially his list of executive preoccupations in his classic book, The Nature of Managerial Work, 1973, that the manager’s day is unrelenting in intensity and pace.  In today’s dynamic environment, organizations are adopting new forms and practices to meet the ever-changing challenges of new knowledge, technology, people, change and globalization.  In another word, it is crucial to a manager’s success in mastering daily challenges.  Skills are therefore necessary for a manager to master the challenging nature of managerial work.  Those who want to succeed in the 21st century workplace must reach for the heights of personal competency and accomplished.  Certainly, knowledge is the key success.  Drucker says that knowledge is the principle resource of a competitive society. (1)

Knowledge Management

What is Knowledge Management?  Knowledge management is the explicit and systematic management of vital knowledge and its associated processes of creating, gathering, organizing, diffusion, use and exploitation. It requires turning personal knowledge into corporate knowledge than can be widely shared throughout an organization and appropriately applied.  The interest in knowledge as an important lever in business is not new.  In the 1970s and 1980s there were great expectations that knowledge based computer systems could harness knowledge to solve many business problems.  The significance of knowledge in management has become a strategic and integrating force in organizations.  Yet, there is no general approach to managing knowledge.  One notion deals with management of explicit knowledge using technical approaches such as computer knowledge, use of internet, e-mail … etc.  A second notion focuses on management of ‘intellectual capital” in the forms of structural capital and human capital in people.  Another notion for managing knowledge has a broader focus to include all relevant knowledge-related aspects which affect the enterprise’s viability and success. (2)  Quite simply, knowledge management is a process through which organizations develop, organize and share knowledge to achieve competitive advantage. (3) 

Intellectual Capital is a related concept, based on the view that the real market value of a commercial enterprise consists not only of its physical and financial assets (its 'book value') but also its intangible assets created through intellectual activities, ranging from acquiring new knowledge (learning) and inventions to creating valuable relationships. Intellectual assets thus include things such as patents, copyright and other forms of intellectual property, which are often estimated to be worth many times the book value. Leif Edvinsson, Director of Intellectual Capital at Skandia, the Swedish insurance company, defines intellectual capital as "the possession of knowledge, applied experience, organisational technology, customer relationships, and professional skills that provides Skandia AFS with a competitive edge in the market".

Currently, knowledge management is a buzz-phrase that it starting to occur more frequently in many publications and conversations.  It is a phrase that has been around for years.  In the years leading up to 2002, knowledge management has been going through phases of maturity (Sveiby, 2001).

The Evolution of Knowledge Management
Much of the current literature in knowledge management is based on the writings of two philosophers Gilbert Ryle and Michael Polanyi.  The most dominant concepts within the current knowledge management literature are the notions of ‘tacit’ and ‘explicit’ knowledge (Nonaka, 1994).  The underlying philosophy of these constructs can be traced back to Gilbert Ryle (1900-1976) and Michael Polanyi.  A recent survey by the Journal of Knowledge Management revealed that 92% of the responding executives indicated that they worked in knowledge intensive organizations (Chase, 1997).

A more important distinction - which is fundamental to the concept of knowledge management - is that between 'explicit' and 'tacit' knowledge, explained by Ikujiro Nonaka,  "Explicit knowledge is formal and systematic. For this reason it can be easily communicated and shared, in product specifications or a scientific formula or a computer program. Tacit knowledge is highly personal. It is hard to formalise and therefore difficult, if not impossible, to communicate."  Tacit or implicit knowledge (also referred to as 'experimental' knowledge) is thus both unrecorded and unarticulated.

Ryle’s most important contribution is demonstrating the difference between ‘knowing how’ and ‘knowing that’.  Knowing how cannot be defined in terms of knowing that (Jashapara 2003).  For instance, a chef does not recite his recipes to himself (knowing that) before he can cook according to them (knowing how).  M. Polanyi in his book “The Tacit Dimension” develops the notion of tacit knowledge from a number of experiments involving hypothetical shock treatments reminiscent of the stimulus-response model of behavior (Skinner, 1938).  His starting point of human knowledge is “the fact that we can know more than we can tell”.  On the other hand, J. Browne, Chief Executive Office of British Petroleum says that a company must learn better than its competitors and apply that knowledge throughout its business faster and more widely than they do. (4) 

A problem that many organizations face is that knowledge management is in danger of being perceived as so seamlessly entwined with technology that its true critical success factors will be lost in the pleasing hum of servers, software and pipes.  As organizations label their document management, database or groupware products "knowledge management solutions," managers can be excused for mistaking the software for the solution (Hildebrand, 1999).   It is therefore important for managers to appreciate the philosophy behind knowledge management to ensure they do not circum to the software trap.

Conclusion

Organizations are rapidly changing; the nature of work itself is changing; the global economy is driven by innovation and technology.  In the 21st century workplace, everyone must respond and adapt to a rapidly changing society with constantly shifting demands and opportunities.  Given the emphasis on constant change in our modern societies, whether of a business, political, economic, environmental, technological or social nature, there is every indication that knowledge needs to be up-dated continuously.  If knowledge, skills and learning abilities are not renewed, the capacity of individuals and by extension, of communities or nations to adapt to a new environment will be considerably reduced, if not cut off entirely.  Knowledge management is a survival issue, and is certainly the next step in the evolution of management theory.  The future challenge in this area is to develop tools to enable tacit knowledge to be made explicit in an easy and effortless manner.  One approach may be the development of multimedia technologies such as digital video that capture and store an individual’s ‘know how’ for storage, indexing and future retrieval via a search engine.  No doubt, the importance for persons to continue learning throughout their active working life, and even beyond, will increasingly move to the top of individual, national and international agendas in the future.

To conclude, the knowledge and skills of management are just like a bag of golf clubs.  When the situation demands, it is necessary to take the appropriate clubs whether a custom fitted golf club, a putter or a wedge and put to work.  New knowledge and skills can occasionally be added to the managerial bag of management when, and if required.

Bibliography

1. Drucker, P.  1997. “Looking Ahead: Implications of the Present,” Harvard Business Review, September – October pp 18-32.
2. Wing, K. M.  1997.  “Knowledge Management: An Introduction and Perspective”, Journal of Knowledge Management Volume 1, No. 1 September.
3. Davenport, T. H. and Prusak, L. 1997.  “Working Knowledge: How Organizations Manage What They Know”, Cambridge, M.A.
4. Information from Scott Turn, “What Do You Know?”  The Wall Street Journal, June 21, 1999, pp. R10.

Reference

1. Chase, R. 1997.  “The Knowledge-based Organizations: An International Survey.”  Journal of Knowledge Management, Vol 1, No. 1 September.
2. Davenport, T. H. and Prusak, L. 1997.  “Working Knowledge: How Organizations Manage What They Know”, Cambridge, M.A.
3. Drucker, P.  1988.  'The Coming of the New Organization”, Harvard Business Review, pp. 45-53 January-February 1988.
4. Fayol, H. 1949.  “General and Industrial Management”, Pitman.
5.  Hildebrand, C.  1999.  Does Knowledge Management=Information Technology?  CIO Enterprise Magazine, Sept 15, 1999.
6. Jashapara, A.  2003.  Knowledge Management: An Integrated Approach, Harlow Essex: Prentice Hall.
7. Mintzberg, H, 1973, “The Nature of Managerial Work,” New York, Harper & Row.
8. Nonaka, I. 1991. “The Knowledge-Creating Company”, Harvard Business Review, pp.96-104, November-December.
9. Polanyi, M.  1967.  “The Tacit Dimension”, Doubleday, New York.
10. Ryle, G.  1949.  “The Concept of Mind”, Hutcheson, London.
11. Sveiby, K-E.  2001.  “What is Knowledge Management?”