Abstract
Despite the more than 25 years since Nonaka wrote the Knowledge Creating Company in the Harvard Business Review (1991) there are still many barriers to implementation of knowledge management (KM) strategies. These include a lack of time and financial resources allocated to sharing knowledge, a lack of organizational understanding of the philosophy and the benefits of KM, a lack of skills in KM and difficulties in effectively establishing a return on investment (RIO) in KM. However both case studies and survey data show that greatest acknowledged obstacle to the implementation of a KM strategy is the management culture of the organization (Alavi & Leidner, 1999; DeTienne, Dyer, Hoopes, & Harris, 2004; H. Lee & Choi, 2003; McAdam & Reid, 2001; Murray, 1998; Ruzzier, Sohal, Katna, & Zyngier, 2008) These obstacles reveal a problem in the implementation of an organizational KM strategy. The problem lies not in the implementation of a given strategy per se, but in the lack of governance of that strategy.
Key Terms in this Chapter
Return on Investment (ROI): Is commonly used as an accounting term to indicate how well an organization has used its investment in resources. In a knowledge management context, ROI describes the return on both the human and financial capital invested in that strategy. Some measures may include sustainable growth, calculable efficiencies in product development cycles; improved decision-making; better ability initiate and integrate new employees; lower rates of staff turnover reflecting improved employee morale; better ability to retain customers reflecting trust in employees’ expertise
Authority: An established power to enforce moral or legal decisions. Organizational authority is accountable for its actions. Authority is a right to demand and instruct subordinates. Authority may also be delegated or be derived from delegated control. The organization may mandate power to a role or position a group or individual in authority, or power may be assigned or sanctioned by consensus.
Governance: A process that is a framework of authority to ensure delivery of anticipated or predicted benefits of a service or process. The operationalization of the particular organizational strategy and is therefore executed in an authorized and regulated manner. Governance act to manage risk, evaluate and review strategic goal and objectives and exercise fiscal accountability to ensure the return on investment of those strategies.
Evaluation: The assessment of the effectiveness of service delivery and the identification of obstacles or barriers to service delivery. Some means of evaluation include understanding the perceptions of improvement in the organization in the manner in which it formalizes knowledge processes, knowledge structures and underlying systems. These in turn will affect operations, products or services delivered. Another means of evaluation of the effectiveness of a KM strategy is through establishing increased awareness and participation in that strategy. The Balance Scorecard (Kaplan & Norton, 1996) is a technique that considers these human issues.
Measurement: Is substantially a quantitative tool. It may rely on direct comparison of performance before and subsequent to the initiation and establishment of a KM strategy. The organization may choose to measure of its performance in market competitiveness and acceptance, it may look at the contribution of the KM strategy to financial benefits and viability. It can also measure contributions to and the growth in the volume of explicit knowledge content stored and used by staff. Some knowledge managers may regard the increase in the resources attached to the project as a measure of the acceptance and hence the understanding of the value of KM to their organization.
Risk Management: A tactic to minimize the susceptibility of the KM strategy to risk and subsequent failure or ineffectiveness. Risk must be analyzed to assess the potential exposure to the chance of human or infrastructural barriers. Example of these risks may include: (1) management culture in the organization that hinders KM, (2) the philosophy of KM is not understood in the organization and (3) conflicts of organizational priorities (4) the development of criterion for knowledge collection is clouded. Risk may also threaten operational or to financial elements of the strategy. Examples of risks to processes may include: (a) an understanding of the knowledge types and artefacts associated with specific business functions (b) current informal organic knowledge transfer strategies and systems (c) risks associated with system development (d) managing the changes and their implementation and additionally managing the expectations if staff and of executive management.