Exploring Strategic vision to knowledge management strategy: an evaluative paradigm

Transcription

1 Managing Knowledge, Technology and Development in the Era of Information Revolution 1 Exploring Strategic vision to knowledge management strategy: an evaluative paradigm Tariq Shareef Younis Applied Science University, Jordan Abstract At present, all organisations are concerned with knowledge as an access to new essence of success and competition. Even those organisations which are regarded as leaders in the market are more concerned with Knowledge Management (KM) to sustain and enhance continuous progress in their achievements. Knowledge is not restricted to production in itself, but it is extended to cover all aspects and practices in everyday work in an organisation. However, this issue is considered as a clear cut between developed and underdeveloped entities and organisations. Therefore, knowledge and how to manage this valuable resource is regarded as a core point for determining corporate strategy in this paper. Strategic analysis to KM as a great value creation to the overall organisation s grand strategies is used as an important framework for theoretical interpretation. Moreover, classical physical management is not sufficient to manage today s organisations, at present, all theories and practices are more knowledge-based models rather than theoretical orders and unattainable desires. So, knowledge is the driver of the new competition, besides it is a strategy for comparative advantage. Knowledge Management Strategy (KMS) is badly needed to support the organisation s grand strategies besides adding value to meanings of different strategic decisions. This work tends to analyse KM theories and basic concepts. It is away to put organisational knowledge into a form that is explicit, accessible and understandable to those who formulate strategies across all organisational hierarchies. The deduction approach is adopted through laying out a number of questions delineating the fundamental axes of research. Content analysis is used for analysing the logic of theories and concepts surrounding KMS. Hypotheses are philosophically stated so that the research objectives clearly surface throughout discussion. Logical and content analysis outcomes used here will lead to construct a theoretical model towards an integrated concept between strategic management theory and KM. Although there are many types of knowledge components, emphasis will concentrate upon tacit knowledge. 1 Introduction Today s organisations have to deal with rapidly changing environments in order to compete with rivals. The shifts from products base strategy to knowledge focused strategy have reasoned the adoption of Knowledge Management Approach (KMA) towards a new meaning of organisational existence. Organisational existence is restricted to the knowledge capture, developing, sharing and utilisation aspects. Of the fortune 500 companies which were operating in 1956, only 29 firms are still operating their Copyright 2007 World Association for Sustainable Development (WASD)

2 2 T.S. Younis businesses today (Lee and Hong, 2002, p.17). As such, Knowledge Management (KM) is considered a new terminology in management thought. The KM as a concept is highly related to the meaning of organisational learning, organisational reengineering, human capital, intellectual assets and information technology. All those terminologies come up with a new generation of management paradigm (Gloet and Berrell, 2003). Accordingly, all organisations are concerned with knowledge as an access to new essence of success and competition. Even those organisations which are regarded as leaders in the market are more concerned with KM to sustain and enhance continuous progress in their achievements. Knowledge is not restricted to production in itself, but it is extended to cover all aspects and practices in everyday work in an organisation. However, this issue is considered as a clear cut between developed and underdeveloped entities and organisations. Therefore, knowledge and how to manage this valuable resource is regarded as a core point for determining corporate strategy in this paper. Content analysis to KM as a great value creation to the overall organisation s grand strategies is used as an important framework for theoretical interpretation. Moreover, classical physical management is not sufficient to manage today s organisations, at present, all theories and practices are more knowledge-based models rather than theoretical orders and unattainable desires. So, knowledge is the driver of the new competition, besides it is a strategy for comparative advantage. Knowledge Management Strategy (KMS) is badly needed to support the organisation s grand strategies besides adding values meanings of different strategic decisions. 2 Research methodology KM research lacks a common conceptual core; it is cross disciplinary, addresses a wide variety of phenomena. This work tends to analyse KM theories and basic concepts. It is to put organisational knowledge into a form that is explicit, accessible and understandable to those who formulate strategies across all organisational hierarchies. The deduction approach is adopted through laying out a number of questions delineating the fundamental axes of research. Content analysis is used for analysing the logic of theories and concepts surrounding (KMS). Hypotheses are philosophically stated so that the research objectives may clearly surface throughout discussion. Logical and content analysis outcomes are used as a methods of reviewing and synthesising previously published materials regarding KM. Consequently, this analysis will lead to construct theoretical model towards an integrated concept between strategic management theory and KM. 3 Research significance and justifications There are a number of drivers and motivations leading to undertake a KM issue in this paper such as: 1 it is a new way to gain the competitive advantage that comes across developing knowledge creation and innovation

3 Strategic vision to KMS: an evaluative paradigm 3 2 developing a new image about organisational practices based upon knowledge practices 3 emphasise importance of the issue of organisational learning and leveraging human capital and intellectual people across the organisation 4 building knowledge organisations and best practices 5 leveraging organisational knowledge to deliver long-term advantage to a business and is based on a business strategy that involves knowledge processes 6 to operate efficiently, it is imperative to possess knowledge on a broad spectrum of issues and concepts that affect business activities around the globe 7 successful management in the new millennium requires developing new methods and approaches to suit the challenges and opportunities of this new era of knowledge revolution 8 justifying the issue of creating new positions in organisations besides reengineering of organisational tasks and roles. 4 Research model and research problem definition There is no doubt that the difficulty of writing on this subject requires a theoretical model to facilitate the process of contribution to the theory of KM. Moreover, theory and the relations of the variables reflecting research orientations towards building a researcher theory and desired paradigm are required (Figure 1). Figure 1 Research model Source: Author (this figure is designed by the author Tariq shareef Younis). The primary justification for entering into this issue lies in the multiplicity of approaches and concepts that are to be classified and identified as logical relations to a minimum level. The theoretical model has been designed on two directions.

4 4 T.S. Younis We argue that in spite of growing literature in KM, there are two orientations; the first one, advanced information management systems or information technology to manage knowledge (tangible), the second, advances in humanistic approach (intangible) as a basis for action. Nevertheless, this model is aiming to contribute through directing its interpretation to ideas and concepts for KM competitive strategy formulation on the basis of logical relationships between variables that could be used for general application across different cultures and organisations regardless of organisation residency. Any organisation whether it exists in the Arab World, Underdeveloped Countries or in Developed Countries, has an access to acquire or possess information technologies, but the problem is in the intangible aspect of KM. The main hypothesis of the research is philosophically formulated as: at a time, organisations do not have the same access to information technology, but the possibility of human resources is the de facto exist. It is therefore possible to be used as a strategic source of producing, developing, sharing and utilising knowledge. Such desires are subject to visionary leadership and knowledge-based entities in an organisation. 5 KM strategy and strategic thinking KM is a term that has come in to common usage in business over the past ten years. It means different things in different contexts to different people. Generally, it refers to exactly what the words describe the management of knowledge in organisations (Zhou and Fink, 2003). More specifically, however, there are different interpretations of what is knowledge and what is being managed. Applied in an IT context, knowledge is more likely to be linked to the concept of` information and management is more likely to be associated with the management of hardware and software facilities, including matters such as communications technology. Applied in a business context, less attention is typically focused on these technical aspects of KM and more emphasis is given to social aspects, such as organisation theory, leadership and other issues on the human side of management. However, KM is clearly to be interpreted in the second, broader sense (Keong et al., 2001, p.268). Strategy, on the other hand, is a vehicle of KM. KM practices refer to a more practical and perceptible level of research. From this dimension, KM can be viewed as an organisational innovation involving important changes in the introduction of the strategy and in traditional management practices. Works that have focused on the process of introduction of KM in the firm have centred on the most relevant areas so that the system can be applied effectively (Marqués and Simón, 2006, p.143). The emergence of the knowledge economy necessitated many organisations to recognise knowledge as a crucial resource to achieve sustainable competitive advantage. This recognition resulted in imparting strategic importance to the KM and triggered the commencement of formal KM programmes in many organisations. In the last few years, several theories have been put forward for practising KM. However, given the abstract nature of the subject area, there is little consensus on the components and ways of KM (Oliver and Kandadi, 2006, p.6). The relationship between KM and strategy could be defined through the fact that the strategic plan directs all activities of the organisation, including knowledge towards achieving the visions and goals. The KM task as new function must be implemented within the framework of the strategic directions of the senior management in the

5 Strategic vision to KMS: an evaluative paradigm 5 organisation. In this respect, KM follows strategy and knowledge is an outcome of strategic apex visions and strategic thought. On the other hand, the explicit knowledge is considered as a supportive base for strategic actions and practices. Whereas tacit knowledge is considered as an outcome of vision mission interaction that support internal knowledge environment with ever new trends toward competitive advantage, however, knowledge generation comes from strategic thinking and innovative actions across all strategic management processes. Strategy in this context is about ideas and the development of novel solutions to create competitive advantages. Creative thinking on the other hand refers to how people approach problems and solutions-their capacity to put existing ideas together in new combinations (Bonn, 2001, p.64). However, strategic thinking defined as a way of solving strategic problems that combines a rational and convergent approach with creative and divergent thought processes. Such process orientation focuses this investigation on how senior managers (strategic apex) in an organizational setting attempt to understand and take strategic action in an environment that is highly complex, ambiguous and competitive. It represents an important antecedent to strategic decision-making and may provide a key to better understand organizational change phenomena and ultimately, organizational performance and survival. It is important to note that strategic thinking is closely associated with acting in an ongoing and intertwined process. Improving strategic thinking (Bonn, 2005, p.336). Building on the above discussion KMS and strategic thinking, this view aims to contribute to our understanding of strategic thinking by proposing a multilevel approach that aims to better integrate the construct strategic thinking with existing theories of KM. 6 Strategic apex, KM and vision Strategic apex plays a great role in managing the process of KM, starting from formulating their vision towards future existence and leading their organisations to excellence compared to their rivals. We believe that the positive leadership characteristics at various levels of management in general and in strategic apex in specific are a vital aspect for developing knowledge avenues in organisations. These attributes include the desires of leaders to practise most knowledge base behaviour such as; empowering subordinates, allocation of resources, openness towards change and experimentation, developing trust, tolerance to mistakes and building long-term perspective of the organisational goals among employees (Oliver and Kandadi, 2006, p.6). Emphasis on such criteria is regarded as a start point to formulate learning strategy and pass it to implementation across the management hierarchy. The main role of middle and front end management in this respect is to translate the meaning of vision as tacit meaning into explicit meaning in the work. Hence, the integration between ongoing flows of knowledge creation will be received by junior managers for daily translation. It is a matter of capturing knowledge at the time created in a dynamic functional nature. The strategist s task is restricted to the process by which he or she can rise above the daily managerial processes and crises to generate knowledge; it is a matter of challenges to existing assumptions and develops new and innovative solutions (Bonn, 2001, p.63).

6 6 T.S. Younis The application of the Strengths, Weaknesses, Opportunities and Threats (SWOT) framework is important to be considered for vision determination. According to (Porter, 1979, p.137), the nature and degree of competition in an industry hinge on five forces: the threat of new entrants, the bargaining power of suppliers, bargaining power of buyers, the threat of substitute products or services and the jockeying among current contestants. Knowledge of these underlying sources of competitive pressure provides the groundwork for a strategic agenda of action. This model focuses on the external side of strategy, helping firms analyse the forces in an industry that give rise to opportunities and threats. Accordingly, firms that use their internal strengths in exploiting environmental opportunities and neutralising environmental threats, while avoiding internal weaknesses, are more likely to gain competitive advantage than other types of firms. This model is used as a frame of reference for gaining tacit knowledge (Halawi et al., 2006, p.385). 7 Competitive advantage and agents-vision Competitive advantage comes from adding value through intangible assets such as knowledge creation not simultaneously created by current or potential competitors. However, organisations depend on people for sustaining their knowledge; they create and embed knowledge in the organisation. Some authors called them intelligent agents or visionary leaders (Carneiro, 2001, p.358). Agents are conceptually defined as entities that are able to understand the sense of a given situation and to act accordingly to some orientation; they are owners of tacit knowledge. Intelligent agents (visionary people) contribute directly in improving the organisation s performance. Acquisition of new knowledge leads to create multiple perspectives to diagnose problems facing future progress and sustaining competitive advantage. The strategic manager s vision provides strategic road map to KM. Vision in this meaning pursues a cyclic and incremental approach for reviewing existing knowledge and provides guidelines for new application and renewing the concept tasks, roles and mission of an organisation. Therefore, it prepares ground for future orientation and development activities for integrated practices in the context of an organisation. Recent studies emphasises the use of Intellectual Capital (IC) as interface to visionary personnel in an organisation. Thus, knowledge driven economy has seen the increasing importance being placed on maximising the organisation s IC. The term IC is often a synonymous term of intellectual assets, intangible assets or knowledge assets, at the same time KM systems are being developed. Integration of IC and KM requires alignment of KM processes with IC assets to meet the organisation s strategic needs. A theoretical conjecture is developed in which there are components of elements to achieve strategic objectives (Zhou and Fink, 2003, p.34). While KM has the purpose of maximising the organisation s knowledge-related effectiveness, four areas can be identified, they are (Zhou and Fink, 2003, pp.35 36): 1 monitoring and facilitation of knowledge-related activities 2 establishing and updating of knowledge infrastructure 3 creation, renewing and organising of knowledge assets 4 utilising knowledge assets effectively.

7 Strategic vision to KMS: an evaluative paradigm 7 These four KM areas have different functions and activities, and therefore, serve different subpurposes. Whereas the goal of IC is to create and leverage intellectual assets and to improve a firm s value creating capabilities from a strategic perspective. IC and KM serve different purposes, while they have similarities. They differ from each other, but they also complement one another. In terms of scopes, IC and KM cover almost all aspects of organisational activities. Both are broad and embrace the whole range of intellectual activities within an organisation; from knowledge creation to leverage. However, to put the above discussion into logical interpretation we find that IC is identifying and structuring the related KM processes that are linked to the desired IC elements, whereas KM is organising and facilitating KM processes to create and maximise the IC targeted. This logic comes as the outcome of strategic vision as a complex whole system towards strategic orientation and comparative advantage. 8 Conclusion At present, all organisations are concerned with knowledge as an access to new essence of success and competition. Even those organisations which are regarded as leaders in the market are more concerned with KM to sustain and enhance continuous progress in their achievements. Knowledge is not restricted to production in itself, but it is extended to cover all aspects and practices in everyday work in an organisation. However, this issue is considered as a clear cut between developed and underdeveloped entities and organisations. Therefore, knowledge and how to manage this valuable resource is regarded as a core point for determining corporate strategy in this paper. Content analysis of KM as a great value creation to the overall organisation s grand strategies is used as an important framework for theoretical interpretation. Moreover, classical physical management is not sufficient to manage today s organisations, at present, all theories and practices are more knowledge-based models rather than theoretical orders and unattainable desires. So, knowledge is the driver of the new competition, besides, it is considered as the strategy used to attain comparative advantage. The above discussion has come up with many ideas which address the frame of reference suitable to build strategic paradigm; emphasises the use of KM as a source of sustainable development to management and organisation. The variables described in this paper are based on the theoretical existence of KM practices at organisations with well-established KM programmes. These can serve as pragmatic guidelines for KM practitioners in developing knowledge culture. Despite the emphasis on the crucial role of organisational strategy in KM, there is a lack of clarity on how to influence and develop knowledge culture in organisations. We referred to the knowledge culture to represent: a way of organisational life that enables and motivates people to create, develop, share, utilise and apply knowledge for the benefit and enduring success of the organisation. Vision and intellectual dimensions are also defined in order to make an integrated outlook to the total interpretation of ideas and meanings. Emphasis has gone to the human capital existence for conveying desires into real practice. In today s

8 8 T.S. Younis knowledge-based global marketplace, human capital has replaced physical capital as the source of competitive advantage. An organisation managing knowledge well has the potential to create significant value, but only if it is linked to its overall strategy. KM is the latest strategy in increasing organisational competitiveness. References Bonn, I. (2001) Developing strategic thinking as a core competency, Management Decision Journal, Vol. 39, No. 1. Bonn, I. (2005) Improving strategic thinking: a multilevel approach, Leadership and Organization Development Journal, Vol. 26, No. 5. Carneiro, A. (2001) The role of intelligent resources in knowledge management, Journal of Knowledge Management, Vol. 5, No. 4. Gloet, M. and Berrell, M. (2003) The dual paradigm nature of knowledge management: implications for achieving quality outcomes in human resource management, Journal of Knowledge Management, Vol. 7, No. 1. Halawi, L.A., McCarthy, R.V. and Aronson, J.E. (2006) Knowledge management and the competitive strategy of the firm, The Learning Organization, Vol. 13, No. 4. Keong, F.O.C., Willett, R.J. and Yap, K.L. (2001) Building a knowledge-based business school, Education and Training Journal, Vol. 43, No. 4. Lee, S.M. and Hong, S. (2002) An enterprise-wide knowledge management system infrastructure, Industrial Management and Data System, Vol. 102, No. 1. Marqués, D.P. and Simón, F.J.G. (2006) The effect of knowledge management practices on firm performance, Journal of Knowledge Management, Vol. 10, No. 3. Oliver, S. and Kondal, R. (2006) How to develop knowledge culture in organizations? A multiple case study of large distributed organizations, Journal of Knowledge Management, Vol. 10, No. 4. Peter, H. and Meister, D.B. (2003) Introduction: fragmentation and integration in knowledge management research, Information Technology and People, Vol. 16, No. 3. Porter, M. (1979) How competitive forces shape strategy, J. Birkinshaw (Ed). Harvard Business Review, March/April, pp Also reprinted in The International Library of Critical Writings in Business and Management Strategic Management, Cheltenham: Edward Elgar Publishing. Zhou, A.Z. and Fink, D. (2003) The intellectual capital web: a systematic linking of intellectual capital and knowledge management, Journal of Intellectual Capital, Vol. 4, No. 1.