Knowledge Acquisition and Loss

Knowledge Acquisition and Loss

DOI: 10.4018/978-1-4666-8318-1.ch009


Metaphorically, the energy conservation law that is applied to all physical systems can be transferred to organizations as the dynamic equilibrium of organizational knowledge. The balance equation for organizational knowledge includes knowledge creation, knowledge acquisition, and knowledge loss. Knowledge acquisition means to bring in organization fluxes of knowledge from the external environment, while knowledge loss means to have fluxes of knowledge crossing the interface toward the external environment. The purpose of this chapter is to present the main issues that are related to knowledge acquisition and knowledge loss for organizations. Knowledge loss became a hot issue in the last decade when the wave of baby boomers reached the retirement age. In the United States and in Europe, ageing of workforce, as well as the downsizing strategies during economic crises, generated many problems due to knowledge loss, which leads to a decreasing capacity for business competition.
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Organizations are open systems with respect to knowledge. There are fluxes of knowledge that enter the internal environment of an organization, and fluxes of knowledge that exit through its interface with the external environment. Also, knowledge can be created inside the organization and transferred from one part to another part of it. Since knowledge is a strategic resource for realizing a competitive advantage, it is important to have a dynamic equilibrium of organizational knowledge (Bratianu, Agapie & Orzea, 2011a; Bratianu & Orzea, 2011). That means that knowledge acquisition and knowledge creation should be comparable with knowledge loss. If knowledge acquisition and knowledge creation components have a greater contribution to the knowledge balance than the knowledge loss component, then the organizational knowledge is increasing and the competitive advantage is strengthen. If the knowledge loss has a larger contribution than the knowledge acquisition and knowledge creation components, then the competitive advantage may be lost. The knowledge dynamic equilibrium is vital for any organization in a strategic perspective. In a metaphorical way, this equilibrium plays the same role like energy balance for a physical system, with the difference that knowledge can be created while energy cannot.

Knowledge acquisition at the organizational level depends on the size of organization and on its mission. For knowledge-intensive organizations the input of new knowledge is a necessity. Usually, large companies are able to create new knowledge and then to use it in creating new products and services which means value for society. By comparison with them, small and medium seize enterprises don’t have enough resources to create new knowledge and thus they have to acquire it by using different methods. These small companies cannot develop the same strategies like the big ones; they must design strategies that fit their needs and mission. At the individual level, knowledge acquisition refers to learning and knowledge capturing.

The level of organizational knowledge depends not only on knowledge creation and knowledge acquisition, but also on knowledge loss. An organization is losing knowledge with people who retire or just leave it from different reasons. Since baby boomers generated a huge wave of ageing population, many companies in United States and in Europe faced in the last decade the situation of losing critical knowledge. Also, due to economic crises and downsizing strategies many companies lost many people together with their expertise. When a company sends into unemployment thousands of people, the organizational knowledge suffers dangerous shocks (DeLong, 2004; Goldberg, 2000; Wallace, 2001):

An outright panic attack comes when an organization realizes that it does not have a plan for capturing the valuable knowledge about to be lost. Like the frog languishing happily, management will languish happily until it realizes that it is getting into ‘very hot water’ because of a loss of expertise. (Hoffman & Hanes, 2003, p. 1)

The purpose of this chapter is to present the main issues related to knowledge acquisition in organizations, especially in SMEs, coupled with the issue of knowledge waste and knowledge loss. To keep a dynamic equilibrium of the organizational knowledge it is important to find ways of increasing knowledge retention from people who leave the company from different reasons, and to decrease the loss of knowledge.

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