Knowledge Management Strategies: Balanced Systems in Public Sector

Introduction

The relation between Knowledge Management and the Balanced Scorecard has been widely embraced by many organisations during the last decades. After several years of development, many organisations such as AT&T, BMW, DuPont, Mellon, and UPS, have shown an excellent performance based on the BSC which allows them to use resources effectively based on the implementation of a strategy (Wu, 2005). Despite some scepticism, it has become a significant force for organisational improvement and change, and is hailed as a critical weapon for competitiveness in the modern competitive market, particularly in developed countries (Yahya, 2009). Public sectors are finding it difficult to cope with the complexity, dynamism and inevitable crises and difficulties of such rapid development. Finding a way for organisations to develop in response to their changing environment culminated in the development of the theory of Knowledge Management. Research on these issues, however, is concentrated mostly in advanced countries (Pedler et al., 1997).

Theoretical adaptations of other topics are common and beneficial to raise the level of theoretical development. Knowledge management and Balance Scorecard are two areas of knowledge of great interest that grows continuously, but still have a lack of research concerning its interrelations, so due to the importance of both topics, the aims of this paper are:

• •

  To present a perspective-based approach to knowledge management and Balance scorecard, which intended to bridge the gap between the disciplines involved in this chapter.

• •

  To show how the Balance scorecard perspectives can be used to derive a definition for KMS Usable for investigations into the application of such systems in organisations.

• •

  To present a framework to analyse the state of strategic KM from different perspectives of BSC.

Knowledge Management

Despite the voluminous literature on KM, there is no readily accepted definition of the concept (Earl, 2001). The term knowledge management (KM) is just as difficult to define as knowledge itself (Bhatt, 2001). Bhatt (2001) defined KM as the processes and procedures that govern the creation, dissemination and utilisation of knowledge by merging organisational structures and people with technology in order to better leverage resources within an organisation. Davenport et al. (1998) have argued that knowledge management is concerned with the exploitation and development of the knowledge assets of an organisation with a view to furthering the organisation’s objectives. The knowledge to be managed includes both explicit, documented knowledge, and tacit, subjective knowledge. They also suggest that management entails all of those processes associated with the identification, sharing and creation of knowledge.

The definition of KM adopted in this paper integrates various approaches to KM. A researcher advocates the holistic approach to KM definition and believes the KM can encompass any or all the following items: IT, business process; human/individual dimension and competitive advantage. These dimensions allow the organisation to develop, transfer, transmit, store and applies knowledge. The following definition was adopted in this chapter: