Knowledge Management Enablers, Processes, and Organizational Performance: An Integration and Empirical Examination

Transcription

1 Doctoral Thesis,, : Knowledge Management Enablers, Processes, and Organizational Performance: An Integration and Empirical Examination ( Choi, Byounggu) Division of Management Engineering Korea Advanced Institute of Science and Technology 2002

2 ,, : Knowledge Management Enablers, Processes, and Organizational Performance: An Integration and Empirical Examination

3 Knowledge Management Enablers, Processes, and Organizational Performance: An Integration and Empirical Examination Advisor: Professor Heeseok Lee by Byounggu, Choi Division of Management Engineering Korea Advanced Institute of Science and Technology A thesis submitted to the faculty of Korea Advanced Institute of Science and Technology in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Division of Management Engineering. Seoul, Korea Approved by Professor Heeseok Lee Major Advisor

4 ,, : ) ( ) ( ) ( ) ( ( )

5 DMT Byounggu Choi. Knowledge Management Enablers, Processes, and Organizational Performance: An Integration and Empirical Examination.,, :. Division of Management Engineering p. Advisor Prof. Heeseok Lee. Text in English Abstract Knowledge management is an important new business paradigm, and it is no surprise that it has received so much attention from researchers. They have investigated knowledge management strategies and important knowledge management variables such as enablers, processes, and performance. However, most current empirical research has explored their relationships in isolation. In addition, it is still unclear how these strategies are affected by knowledge management processes. To fill this gap, this dissertation focuses on two research objectives; (i) to propose an integrative empirical research model and (ii) to find relationships between knowledge management strategies and knowledge creating processes. For the first objective, this dissertation proposes a research model that interconnects knowledge management variables. To establish credibility between knowledge creation and performance, organizational creativity is incorporated into the model. In addition, the emphasis of this study is on knowledge creation because it is a critical source for fostering competitive advantage. Sampling data from 58 firms is used to test the model. The model includes seven enablers; centralization, formalization, collaboration, trust, learning, skill, and information technology support. The results confirm the impact of trust on knowledge creating processes such as socialization, externalization, i

6 combination, and internalization. In contrast, it is noted that the primary impact of information technology support is on knowledge combination. Simply investing in IT infrastructure does not supplement a competitive advantage; managers should pay more attention than ever to cultural factors in order to sustain capabilities of knowledge creation. It is found that formalization is not only an inhibiting but also an encouraging enabler for innovation. Lastly, organizational creativity is found to be critical for improving performance; neglecting ideas can undermine a business. For the second objective, this dissertation proposes a model to illustrate the relationship between knowledge management strategies and their creating processes. The model shows that the strategies vary depending on different knowledge creating processes. Result of this study is that, in order to manage knowledge effectively, human strategy is more likely to be adopted in the case of the socialization process while system strategy is more likely to be adopted in the case of the combination process. A real-life case is explored to demonstrate the usefulness of the model. This study may be used as a stepping stone for further empirical research on knowledge management and knowledge management strategies. This study can also help develop robust strategies that involve trade-offs between knowledge management enablers. ii

7 TABLE OF CONTENTS Abstract.. i List of Figures.. vii List of Tables.. viii Chapter 1. Introduction Research Background Research Objectives and Questions Research Procedure Significance of the Research Organization of the Dissertation Chapter 2. Literature Review Knowledge and Knowledge Management Definition of Knowledge and Knowledge Management Classification of Knowledge Knowledge Management Process Knowledge Management Enablers Summary Empirical Study of Knowledge Management Previous Empirical Studies Synthesis of Previous Empirical Studies. 30 iii

8 Chapter 3. A Research Model Theoretical Background Systems Thinking Theory Social Capital Theory Input-Process-Output Model Knowledge Chain Model Theoretical Framework Variables Enablers Processes Intermediate Outcomes Organizational Performance Hypothesis Enablers and Processes Processes and Intermediate Outcome Intermediate Outcome and Organizational Performance 59 Chapter 4. Research Methodology Survey Methodology Theory Testing Measurement Development Administration of the Survey Analysis Methodology iv

9 Chapter 5. Survey Results Sample and Data Collection Sample Characteristics Reliability and Validity of Instrument Interrater Reliability and Agreement Analysis Regression Analysis Analysis Results Findings and Implications Chapter 6. A Research Extensions Background Typology of Knowledge Management Strategy Comparison of Knowledge Management Strategies Knowledge Strategies and Knowledge Types Research Framework Sample and Measures Results Sample Characteristics Reliability and Validity of Instrument Interrater Reliability and Agreement Analysis Classification of System and Human Strategy Knowledge Creation Processes and Knowledge Management Strategy Knowledge Management Strategy and Organizational Performance. 131 v

10 6.5 A Case Study Implications Implications for Researchers Implications for Managers Possible Research Chapter 7. Conclusion Summary of the Research Contributions of the Research Limitations of the Research Directions of Future Research Summary in Korean References Appendix A: KM Components and Organizational Performance Appendix A: KM Strategy and Organizational Performance 189 vi

11 LIST OF FIGURES Figure 1-1. Research Procedure Figure 2-1. Research Models for Studying Knowledge Management 26 Figure 3-1. An Integrative Research Framework for Studying Knowledge Management.. 39 Figure 3-2. Knowledge Creation Process Figure 3-3. A Research Model. 49 Figure 4-1. Total Design Method for Mail Survey 72 Figure 5-1. Regression Equations. 93 Figure 5-2. Significant Relationships in Regression Results.. 99 Figure 6-1. Three Perspectives of Knowledge Management Strategies 112 Figure 6-2. Organization Change Model Figure 6-3. A Systems Model of Strategy Formulation-Implementation Figure 6-4. An Extended Research Framework for Knowledge Management. 120 Figure 6-5. Knowledge Creation Processes and System Strategy Figure 6-6. Knowledge Creation Processes and Human Strategy Figure 6-7. Knowledge Creation Processes and KM Strategies Figure 6-8. Knowledge Creation Processes in F Company Figure 6-9. Possible Enhanced Research Framework. 139 vii

12 LIST OF TABLES Table 2-1. Definition of Knowledge and Knowledge Management Table 2-2. Knowledge Classification.. 16 Table 2-3. Summary of Knowledge Management Process. 19 Table 2-4. Summary of Knowledge Management Enablers.. 23 Table 2-5. A Comparison of Previous Studies Table 4-1. Summary of Research Methodology Table 4-2. How Bagozzi s Criteria are Used in This Dissertation Table 4-3. Conceptual Definition and Measurement for KM Components. 67 Table 4-4. Operational Definition and Measurement for KM Components 68 Table 5-1. Respondent Characteristics.. 78 Table 5-2. Description of Instruments for Study Table 5-3. Summary of Reliability and Validity Test for Study Table 5-4. Rotated Factor Matrixes with Varimax Rotation for Study 88 Table 5-5. Statistics for Reliability and Validity Tests. 90 Table 5-6 Results of Interrater Reliability and Agreement.. 92 Table 5-7. Summary of Regression Results Table 5-8. Mediation Analysis Result of Knowledge Creation 105 Table 5-9. Mediation Analysis Result of Organizational Creativity 106 Table 6-1. Features of System and Human Strategies. 111 Table 6-2. Studies on Knowledge Management Strategies Table 6-3. Knowledge Types and Strategies Table 6-4. Operational Definition for Knowledge Management Strategies. 121 Table 6-5. Respondent Characteristics. 123 Table 6-6. Description of Knowledge Management Instrument for Study. 124 viii

13 Table 6-7. Reliability and Validity Test Results for Measures Table 6-8. Results of Interrater Reliability and Agreement Test Results 126 Table 6-9. Analysis of Agglomeration Coefficients 127 Table Result of Cluster Analysis Table ANOVA Test Results for System Strategy and Organizational Performance 129 Table ANOVA Test Results for Human Strategy and Organizational Performance 131 Table Dynamic Strategy and Organizational Performance Table 7-1. Relationship between Organizational Creativity and Financial Performance 147 ix

14 CHAPTER 1. INTRODUCTION This chapter provides an overall understanding of this dissertation. Section 1.1 describes the research background. Section 1.2 discusses the research objectives and questions. The following section explains research procedure. In section 1.4, significance of the research is provided. Finally, this dissertation describes the organization of this dissertation in Section Research Background In recent years, it seems as though businesses that could capture the knowledge embedded in their organization would own the future. Companies that isolate knowledge management risk losing its benefits. It is no surprise that knowledge is overturning the old rules about strategy and competition as the foundation of industrialized economics has shifted from natural resources to intellectual assets. In response, many managers and management thinkers have proclaimed an era of knowledge management. This has compelled researchers to investigate how knowledge is managed. Evidence is provided by a variety of studies on knowledge [Davenport and Prusak, 1998; Earl, 1994; Nonaka, 1994; Swanson, 2000; Tuomi, 2000], knowledge process [Grant, 1996a; Grover and Davenport, 2001; Lee, 1999; Lee and Kim, 2001a; Leonard-Barton, 1995; Malhotra, 2000; Nonaka and Takeuchi, 1995], intellectual capital [Edvinsson, 1997; Han et al., 2000; Roos and Roos, 1997; Sveiby, 1997], and knowledge management architecture [Alavi, 1997; Demarest, 1997; Wiig et al., 1997]. These studies have explored the foundations and disciplines of knowledge management. However, despite their best efforts, most studies continue to downplay how companies can leverage 1

15 knowledge assets into improved performance. It is hard to come to any firm understanding of the impact of knowledge management on business only from perspective of conceptual frameworks. Companies attempting to deploy knowledge management may be confused by the variety of efforts under way that all go under the name of knowledge management [Junnarkar, 1997]. Many companies have tried, with mixed success, to leverage knowledge assets by centralizing knowledge management functions or by investing heavily in information technology [Hansen and Oetinger, 2001]. It is understandable, when confronted with a new business phenomenon, to look to new management techniques for guidance. Caught up in the general fever, many managers may assume that knowledge management can improve their companies. This assumption should be validated by the use of empirical tests. However, it would be more important to distinguish themselves through strategy. The key question is not whether to manage knowledge, but how to manage it. These strategies should be validated by the use of empirical tests. To fill this gap, prior research has investigated which factors are essential for managing knowledge effectively. One challenge is to explore the relationships among these factors. Most current empirical research has examined the relationships of knowledge management enablers, processes or performance in isolation. For example, some research has focused on the relationship between enablers and processes [Appleyard, 1996; Hansen, 1999; Lee and Kim, 2001b; Szulanski, 1996; Zander and Kogut, 1995]; other studies have explored the relationship between enablers and organizational performance [Becerra-Fernandez and Sabherwal, 2001; Bierly and Chakrabarti, 1996; Drew, 1997; Gold et al., 2001; Simonin, 1997]. Researchers and practitioners have not yet explored an integrative model. An integrative perspective of these knowledge variables based on relevant theories is a necessity. It is also noted that very few empirical studies adopt a process- 2

16 oriented perspective of organizational knowledge [Raven and Prasser, 1996]. Knowledge creation or transfer would benefit companies more than simple knowledge contents because knowledge is not primarily about facts but more about context-specific characteristics [Teece, 2000]. For example, Xerox systemizes knowledge creation and transfer processes through strategic communities [Strock and Hill, 2000]. Consequently, another challenge is to leverage a process-oriented perspective. In addition, it is important to investigate the role of knowledge management strategies. Although knowledge enablers can enhance a firm's capability to manage knowledge, it is still unclear how to use these enablers in a strategic fashion. Knowledge management strategies are necessary for facilitating these enablers; they determine how to use knowledge resources and capabilities [Hansen et al. 1999; Zack 1999a]. Three research areas for knowledge management strategies have been identified [Zack, 1999b]. First, which knowledge is unique and valuable? Studies on intellectual capital [Han et al., 2000; Edvinsson & Malone, 1997; Kitts et al., 2001; Sveiby, 1997] or intangible resources [Hall, 1992] attempt to solve this issue. Second, how can these resources and capabilities support a firm's product and market positions? This research question deals with resource-based theory [Collins & Montgomery, 1995; Prahalad & Hamel, 1990] and organizational capability [Grant, 1996b; Teece et al., 1997]. Lastly, the real challenge lies in finding the link between knowledge management strategies and its processes. This dissertation attempts to explore this last issue. The fit between knowledge management processes and knowledge management strategies is a lynchpin in improving organizational performance. It is essential to identify which knowledge processes represent unique and valuable capabilities for effective knowledge management [Holsapple & Singh, 2001; Zack, 1999b]. However, implementing knowledge processes within a 3

17 firm can be very costly and fragile [Soliman & Spooner, 2000]. Therefore, knowledge processes should be guided by appropriate knowledge strategies. Knowledge management strategies that firms take have a significant influence on knowledge management processes [Zack, 1999a]. Previous approaches have some difficulties in clarifying this relationship. Most studies fail to incorporate the dynamic characteristic of knowledge management strategies [Hansen et al., 1999; Jordan & Jones, 1997]. Because the nature of knowledge varies depending upon knowledge processes, locations, or time [Wiig et al., 1997], knowledge management strategies need to correspond to this contingency. Furthermore, despite of a great deal of discussion about knowledge management strategies, relatively little empirical evidence is available. As a result, last challenge is to find the relationship between knowledge management strategy and knowledge management processes. It can help many managers sharpen their abilities to build effective knowledge management initiatives. 1.2 Research Objectives and Questions The primary objective of this dissertation is to delineate an integrative view of knowledge management and provide some guidelines. For this purpose, this dissertation attempts to find relationships among knowledge management components such as knowledge management enablers, knowledge management processes, and organizational performance. It also investigates the relationship between knowledge management strategy and knowledge management processes. Related with this purpose, previous empirical research shows three research challenges. The first challenge is to explore the relationships among these factors. An integrative perspective of these knowledge variables is a necessity. It is also noted that very few empirical studies attempt to 4

18 analyze a process-oriented perspective of knowledge [Raven & Prasser, 1996]. Managing knowledge relies on knowledge management process more than knowledge objects. [Teece, 2000]. Consequently, the second challenge would be to analyze knowledge management from a processoriented perspective. The third challenge is to find relationship between knowledge management strategies and knowledge management processes. Previous studies fail to answer how the strategies can support knowledge management processes. More specifically, this dissertation intends to answer the following questions from the processes-oriented perspective: (1) What are the components of integrated empirical research model on knowledge management? (2) Is there any relationship between knowledge management processes and organizational performance? (3) Is there any relationship between knowledge management enablers and knowledge management processes? (4) How can organizations increase organizational performance by managing knowledge effectively? (5) How knowledge management strategies can support knowledge management processes? 1.3 Research Procedure To describe knowledge management components and identify their interrelationships clearly, 5

19 this dissertation will follow the research procedure as shown in Figure 1-1. It consists of five major parts: (i) development theoretical framework, (ii) development of measure, (iii) survey, (iv) research findings, and (v) research extensions. First, this dissertation proposes a research model on the basis of various models and theories. Literature review can compare and analyze the previous knowledge management studies. System thinking theory, social capital theory, knowledge chain model, socio-technical theory, and inputprocess-output model are introduced to support the proposed research model. Second, research questionnaires will be prepared. The questionnaires will be developed on the basis of the literature as well as comments gathered from the several case studies. Multi-item method is used. Third, survey will be performed to provide the empirical validation of proposed research model. Samples are selected from listed companies in the Korea Stock Exchange. The questionnaire is mailed to 1290 middle managers of the companies. This study adopts a total design method for mail survey. Fourth, this dissertation will propose some implications for managers and researchers. The result of this study may provide meaningful implications to establish effective knowledge management programs and knowledge management strategy. Finally, research is extended to find relationship between knowledge management strategies and knowledge creation processes. New research framework is proposed. Not only empirical study, but also case study will be performed. 6

20 Key Concepts Research Procedure Key Concepts Conceptual relationships among KM components KM strategy study KM enablers study KM creation study Organizational performance study Research Objective Literature Review System thinking theory Knowledge-chain model Social capital theory Input-process-output model Socio-technical theory Theoretical Framework Framework Extension Organizational change model Strategy contingency model Validated measures by previous studies Total design method Measurement Development Measurement Extension Validated measures by previous studies Total design method Field survey (probability sampling) Reliability and validity test Interrater reliability and agreement test Multiple regression analysis Statistical results Survey Research Results Survey & Case Study Extension Results Field survey (probability sampling) Reliability and validity test Interrater reliability and agreement test Clustering analysis Case study Statistical results Implications Research directions in KM Research Findings Implications Research directions in KM Figure 1-1. Research Procedure 1.4 Significance of the Research This dissertation focuses on how knowledge management can support firms competitive advantage. The basic assumptions of this study are that organizational performance will be increased under the appropriate knowledge management enablers, processes, and intermediate 7

21 outcome. An integrative view is need for incorporating the previous empirical research model from knowledge management perspective. In addition, this study attempts to identify how knowledge management strategies can support knowledge creation for effective knowledge management. Therefore, this research is significant to both academics and practitioners. For academics, this study provides an integrative research framework for studying knowledge management and integrative empirical research model. Although many researchers have tried to understand knowledge management components [Appleyard, 1996; Bierly and Chakrabarti, 1996; Drew, 1997; Nonaka et al., 1994; Simonin, 1997; Szulanski, 1996; Zander and Kogut, 1995], they have no integrative view for empirical research form knowledge management perspective. As a result, they do not provide integrative view on relationships among knowledge management enabler, processes, and organizational performance. Therefore, an integrative perspective of these knowledge components is a necessity. It is also noted that the existing empirical research has not considered a process-oriented perspective of knowledge [Raven and Prasser, 1996]. Process perspective is more important than object perspective in knowledge management because knowledge is not primarily about facts but more about context specific characteristics [Teece, 2000]. This study is first attempt to propose integrative view for knowledge management, and thus it can provide meaningful implications for academics. In addition, this dissertation proposes dynamic model which describes relationship between knowledge management strategies and knowledge creation processes. Knowledge management strategies determine how to use knowledge management enablers and processes for managing knowledge effectively. Therefore, managers can sharpen their organizational performance through understanding the relationship between knowledge creation processes and knowledge management 8

22 strategies. For practitioners, this study may provide basic guideline to establish a successful knowledge management. Although many organizations struggle to introduce knowledge management, they do not know what is important to knowledge management and how they can increase their organizational performance. This study provides the relationships among knowledge creation, organizational creativity, and organizational performance. It may also provide the first step as to how firms can adjust knowledge creation processes to sustain their performance. This dissertation enables managers to find which enablers are critical for knowledge creation. Many managers have faced difficulties in employing knowledge management strategies, because it is still unclear about how they can improve corporate performance [Davenport and Prusak, 1998; Hansen et al., 1999]. This dissertation provides the relationship between knowledge management strategies and organizational performance using knowledge creation processes. Therefore, this dissertation can provide deeper understandings and useful guidelines for effective knowledge management strategy. 1.5 Organization of the Dissertation The remainder of the dissertation is organized as follows. The following chapter surveys and summarizes the related studies. It includes the relevant literature of knowledge management, empirical studies on knowledge management, and knowledge management strategies. In chapter 3, this dissertation proposes an empirical research model, and then explores the key variables and their relationships. In chapter 4, research methodologies are explained such as the administration of the 9

23 survey and statistical methods. It also explains the sample and measures. Chapter 5 illustrates the analysis and summarizes analysis results. This chapter also discusses implications. Chapter 6 extends research scope. This chapter investigates the relationship between knowledge management strategies and knowledge creation processes. A real-life case is explored to demonstrate the relationship. Finally, in the last chapter, this dissertation discusses the contributions and limitations of the study and offer suggestions for future study. 10

24 CHAPTER 2. LITERATURE REVIEW This chapter presents a brief review of the literature which is relevant to this dissertation. Section 2.1 describes the basic concepts of knowledge management including its definition and classification. It also provides knowledge management components including knowledge management enablers and processes. Section 2.2 covers the previous empirical research on the relationships among knowledge components. The synthesis of previous studies is presented. 2.1 Knowledge and Knowledge Management Definition of Knowledge and Knowledge Management Since knowledge is a multifaceted concept with multilayered meanings, philosophers and sages have debated the idea of knowledge over the ages [Nonaka, 1994; Radding, 1998]. Many researchers have defined knowledge and knowledge management. Table 2-1 summarizes the definition of knowledge and knowledge management. Arthur Anderson and APQC [1996] defined knowledge as information that has value and the collective experience of the organization. In Arthur Anderson and APQC, knowledge management is a learning process in which people use information to manage. 11

25 Table 2-1. Definition of Knowledge and Knowledge Management Author Knowledge Knowledge Management Anderson & Information that has value and collective A learning process in which people use APQC [1996] experience of the organization information to manage Bock [2001] Delphi [1998] Demarest [1997] Ernst & Young [1998] KPMG [1998] Leonard- Barton [1995] Nonaka & Takeuchi [1995] Pan & Scarbrough [1998] Pentland [1995] Ruggle [1997] Schuppel et al. [1998] Stein & Zwass [1995] Spek and Spijervet [1997] Wiig [1995] Wijnhoven [1998] Individual s beliefs for solving organizational problems The information resident in people's minds The actionable information Thoughts, capabilities and information which can be enhanced and mobilized to value Experience, facts, rules about those subject area that crucial to the business Information that is relevant, actionable, and based at least partially on experience Justified true belief N/A The product of an ongoing set of practices embedded in the social and physical structures of organization Fluid mix of contextual information, values, experience, and rules N/A Collection as concrete experiences The whole set of insight, experience, and rules Facts, concepts, judgments, and procedures Collection of concrete experiences or a set of abstract conceptualizations Management program which manages and diffuses a set of activities of knowledgeresources acquisition, creation, and sharing The practices and technologies which facilitate the creation and share The systematic underpinning, observation, instrumentation, and optimization of the firm's knowledge Development of processes to link knowledge requirement to business strategies as well as to provide access, and representation of knowledge N/A Activities which create a firm capabilities A knowledge conversion activities for knowledge creation Multi-level set of technologies, norms, and practices N/A N/A Question of knowledge production, reproduction, distribution, application N/A Allowing organization to explicitly enable and enhance the productivity and value A set of distinct and well-defined approaches and processes designed to manage knowledge N/A 12

26 Bock [2001] defined knowledge as individual s beliefs for solving organizational problems by synthesizing concepts in epistemology and psychology. Knowledge management was defined as management program which manages and diffuses a set of activities of knowledge-resources acquisition, creation, and sharing in order to improve organizational performance and keep competitive advantages. Delphi [1998] defined knowledge as the information resident in people's minds that are used for making decisions in previously unencountered circumstance. They referred to knowledge management as the practices and technologies which facilitate the efficient creation and exchange of knowledge on an organization-wide level in order to enhance the quality of decision making. Demarest [1997] defined knowledge as the actionable information embodied in the set of work practices, theories-in-action, skills, equipment, processes and heuristic of firm's employee. Also, he suggested that knowledge management is the systematic underpinning, observation, instrumentation, and optimization of the firm's knowledge economies. This definition suggests what knowledge management might be, or more precisely what people who call themselves knowledge management might do. Ernst & Young [1998] defined knowledge as thoughts, capabilities, and information which can be enhanced and mobilized to create value. Also, they referred to knowledge management as development of processes to link knowledge requirements to business strategies, as well as to provide access to, and representation of individual and organizational knowledge. KPMG [1998] defined knowledge as experience, facts, rules, assertions and concepts about those subject areas that are crucial to the business. In KPMG, knowledge management concerned with the whole spectrum of data, information, and knowledge, whether general or specific, explicit or tacit, shared or individual, recorded or not. 13

27 Leonard-Barton [1995] defined knowledge as information that is relevant, actionable, and based at least partially on experience. She considered knowledge management as activities which create a firm capabilities. Nonaka and Takeuchi [1995] defined knowledge as a dynamic human process of identifying personal belief toward the truth. They consider knowledge management as knowledge conversion activity for knowledge creation. Pan and Scarbrough [1998] had no definition of knowledge, but defined knowledge management as multi-level set of technologies, norms and practices. Pentland [1995] defined knowledge as the product of an ongoing set of practices embedded in the social and physical structures of the organizations. Especially, he suggested that knowledge is always embedded in some social collectivity and is subject to the cultural assumptions, practices, and power relations operating within that collectivity. Ruggle [1997] defined that knowledge is a fluid mix of contextual information, values, experiences, and rules. He defined knowledge management as allowing organizations to explicitly enable and enhance the productivity of generation, codification, and transfer activities and to leverage their value for the group as well as for the individual. Schuppel et al [1998] had no specific definition of knowledge, but define knowledge management as questions of knowledge production, reproduction, distribution, application, and logistics depending on who the specific bearer, mediator or multiplier of organizational knowledge is. Stewin and Zwass [1995] referred to knowledge as collections as concrete experiences. Spek and Spijervet [1997] defined knowledge is the whole set of insights, experiences, and procedures which are considered correct and true and which therefore guide the thoughts, behavior, and communication of people. They suggested that knowledge is always applicable in several situations and over a relatively long period of time. They defined knowledge management as the explicit control and management of knowledge within an 14

28 organization aimed at achieving the company's objectives. Wiig [1995] dealt with knowledge in terms of facts, concepts, judgments, and procedures that are kept over time and remembered from situation to situation. Also, he suggested that knowledge management is a set of distinct and well-defined approaches and processes designed to find and manage positive and negative critical knowledge functions in different kinds of operations, identify new products or strategies, argument human resources management, and achieve a number of other, highly targeted objectives. Wijnhoven [1998] defined knowledge as collection of concrete experiences, or a set of abstract conceptualizations Classification of Knowledge The classification of knowledge is foundation on knowledge management processes. Therefore, many researchers classify knowledge for their own knowledge framework. Table 2-2 shows the classification of knowledge. Much research classifies knowledge into tacit and explicit on the basis of Polanyi's [1997] classification [Arthur D Little, 1998; Delphi, 1998; Ernst & Young, 1998; KPMG, 1998; Arthur Anderson and APQC, 1996; Nonaka and Takeuchi, 1995]. Tacit knowledge is personal, contextspecific, and therefore hard to formalize and communicate. Explicit knowledge refers to knowledge which is transmittable in formal and systematic language [Nonaka and Takeuchi, 1995]. 15

29 Table 2-2. Knowledge Classification Author Anderson & APQC [1996] Arthur D. Little [1998] Bock [2001] Delphi [1998] Demarest [1997] Ernst & Young [1998] Jang & Lee [1998] KPMG [1998] Leonard-Barton [1995] Nonaka & Takeuchi [1995] Pan & Scarbrough [1998] Probst [1998] Ruggle [1997] Schuppel et al. [1998] Wiig [1995] Classification Tacit, Explicit Tacit, Explicit Generality and Analyticity Pattern, Theory, Case, Know-how Representativeness Tacit, Implicit, Explicit Tacit, Explicit Scientific, Philosophical, Commercial Tacit, Explicit Task, Domain Tacit, Explicit Scientific, Industry specific, Firm specific Tacit, Explicit Factual, Behavioral Individual, Collective Process, Catalog, Experiential Inner/outer, Actual/future, Explicit/implicit, Experience/rationality Forms Public, Shared expertise, Personal Types Factual, Conceptual, Expectational, Methodological However, some researchers classify knowledge differently. Bock [2001] divided knowledge using generality and analyzability. Generality means the scope of different cases and situations covered by that knowledge. Analyticity refers to the degree to which a person inferences by using the rules of logic to acquire that knowledge. He also classified knowledge into tacit, implicit, and explicit on the basis of knowledge representativenesss. Tacit knowledge is defined as knowledge which cannot be expressed in verbal, symbolic, and written form. Implicit knowledge is knowledge that can be expressed in verbal, symbolic, or written for, but not expressed yet. Explicit knowledge refers to knowledge which exists in symbolic or written form. Demarest [1997] divided knowledge into scientific, philosophical, and commercial knowledge. In this types, he focus on commercial 16

30 knowledge which is an explicitly developed and managed network of imperatives, patterns, rules, and scripts, embodied in some aspect of the firm, and distributed throughout the firm, that creates marketplace performances. Jang and Lee [1998] divided knowledge into task knowledge and domain knowledge. The domain knowledge involved with manual, reports, patents, products, services, advertisement and software and the task knowledge consists of know-how, skill, benchmarking, brainstorming, analysis, meeting, best practice and so on. Leonard-Barton [1995] classified knowledge into scientific, industry-specific, firm-specific knowledge. From scientific to firm-specific knowledge, these knowledge are increasingly less codified and transferable. Pan and Scarbrough [1998] divided knowledge into factual knowledge and behavioral knowledge. Factual knowledge is an accumulation of structured information and is transferable in formalized processes. Behavioral knowledge includes mind structures cocoordinating to social interaction of individuals and organizations. Probst [1998] classified knowledge into individual and collective knowledge. Individual knowledge relies on creativity and on systematic problem solving. Collective knowledge involves the learning dynamics of teams. Ruggle [1997] classified knowledge into process knowledge, catalog knowledge, and experiential knowledge. Schuppel et al [1998] classified knowledge along the four bipolar dimensions. First, the inner and outer knowledge, related to the bearer of the necessary knowledge. Second, the actual and future knowledge, related to content of the relevant knowledge. Third, the explicit and implicit knowledge, related to the aspect of visibility and communicability of knowledge. Fourth, the knowledge created out of experience and rationality, related to the aspect of richness and validity of knowledge. Wiig [1995] distinguished between different forms and types of knowledge. The forms are public, shared expertise, and personal knowledge. The types are factual, 17

31 conceptual, expectational, and methodological knowledge Knowledge Management Processes Knowledge management process is the heart of knowledge management. Therefore, most researchers present phase of knowledge management process. Table 2-3 summarizes the various knowledge management processes. Arthur Anderson and APQC [1996] proposed process to design to capture tacit knowledge and make it explicit for all individuals within organization. This process consists of applying, sharing, creating, identifying, collecting, adapting, and organizing. Arthur D Little [1998] proposed knowledge management processes which are acquisition and creation, saving, disseminating, use. Delphi [1998] proposed four key knowledge management processes. Capturing is related to obtain external knowledge and create knowledge by research or experience. Sharing is make organization to access knowledge in anytime and anyplace. Leveraging is concerned with conversion knowledge into product or service. In feeding process, knowledge is embedded in product to increase value. Demarest [1997] divided knowledge management processes into construction, embodiment, dissemination, and use. Construction refers to the process of discovering or structuring a kind of knowledge. Embodiment refers to the process of choosing a container for knowledge. Dissemination refers to the human processes and technical infrastructure that make embodied knowledge available to the people within firm. Use refers to the ultimate objective of any knowledge management system. 18

32 Table 2-3. Summary of Knowledge Management Process Author Anderson & APQC [1996] Arthur D. Little [1998] Delphi [1998] Demarest [1997] Ernst & Young [1998] Jang & Lee [1998] KPMG [1998] Lee & Kim [2001a] Leonard-Barton [1995] Nevis et al [1995] Nonaka & Takeuchi [1995] Pan & Scarbrough [1998] Pentland [1995] Probst [1998] Ruggle [1997] Schuppel et al. [1998] Stein & Zwass [1995] Szulanski [1996] Spek and Spijervet [1997] Walsh & Ungson [1991] Wiig [1995] Wijnhoven [1998] KM Process Applying, Sharing, Creating, Identifying, Collecting, Adapting, Organizing Acquisition and creation, Saving, Dissemination, Use Capturing, Sharing, Leveraging, Feeding Construction, Embodiment, Dissemination, Use Planning, Acquiring, Applying, Assessing Knowledge acquisition, Schema codification, Knowledge codification, Knowledge retrieval, Knowledge embedding, Problem analysis, Problem solving, Knowledge shaping Creation, Application, Exploitation, Sharing and dissemination, Encapsulation, Sourcing, Learning Accumulation (acquisition and creation), Integration, Reconfiguration Problem solving, Implementing and integrating, Experimenting, Importing Acquisition, Dissemination, Utilization Sharing tacit knowledge, Creating concepts, Justifying concepts, Building a archetype, Cross leveling knowledge Generation, Processing, Storage, Dissemination, Use/reuse Construction, Organization, Distribution Knowledge goal, Identification, Acquisition, Development, Distribution, Preservation, Use, Measurement Generation, Codification, Transfer Use and multiplication, Development and acquisition, Transfer, Institutionalization Acquisition, Retention, Maintenance, Search and retrieval Initiation, Implementation, Ramp-up, Integration Developing, Distributing, Combining, Holding Acquisition, Retention, Retrieval Creation, Manifestation, Use, Transfer Acquisition, Retention, Search, Maintenance, Dissemination Ernst & Young [1998] provided four knowledge management processes which is consisted of planning, acquiring, applying, and assessing. Jang and Lee [1998] proposed knowledge creation organizational memory process. It is consisted of knowledge acquisition, schema codification, knowledge codification, knowledge retrieval, knowledge embedding, problem analysis, problemsolving, and knowledge shaping. Kolb [1984] proposed knowledge development process. It consists 19

33 of experiencing, observation, conceptualization, and experimentation. KPMG [1998] proposed knowledge cycle which represents the seven basic processes of knowledge. Basic processes are involved creation, application, exploitation, sharing and dissemination, encapsulation, sourcing, and learning. Lee and Kim [2001a] suggested that three knowledge management processes; accumulation, integration, and reconfiguration. The accumulation of knowledge can be achieved through the acquisition of knowledge from external sources and internal creation. The major management processes are integrating and reconfiguring them according to the environmental changes. Leonard- Barton [1995] suggested knowledge management processed which are consisted of problem solving, implementing and integrating, experimenting, and importing knowledge. Nevis et al. [1995] proposed three knowledge management processes; acquisition, dissemination, and utilization. Knowledge acquisition means that the development or creation of skills, insights, and relationships. Knowledge dissemination means that the dissemination of what has been learned. Utilization means that the integration of learning so it is broadly available and can be generalized to new situations. Nonaka and Takeuchi [1995] proposed knowledge creation process which is made up of sharing tacit knowledge, creating concepts, justifying concepts, building an archetype, and cross leveling knowledge. Pan and Scarbrough [1998] proposed five phase processes which are consisted of knowledge generation, processing, storage, dissemination, and use/reuse. Pentland [1995] proposed a set of five knowledge management processes based on Holzner and Marx [1979]. Construction is the process through which new material is added or replaced within the collective stock of knowledge. Organization is the process by which bodies of knowledge are related to each other, classified, or 20

34 integrated. Once a new observation or experience has passed the test and been socially ratified as knowledge, it concerned with storing. Distribution is a critical issue in any organization. Application is concerned with possibility of obtaining the kind of performance improvement. Probst [1998] suggested eight building blocks which are composed of knowledge goal, identification, acquisition, development, distribution, preservation, use, and measurement. He present more detail knowledge management processes. Ruggle [1997] proposed generation, codification, and transfer. Knowledge generation includes all activities which bring to light knowledge which is new, whether to the individual, to the group, or to the world. Knowledge codification is the capture and representation of knowledge so that it can be re-used either by an individual or by an organization. Knowledge transfer involves the movement of knowledge form one location to another and its subsequent absorption. Schuppel et al [1998] suggested four knowledge management processes that are composed of use and multiplication, development and acquisition, transfer, institutionalization. Stewin and Zwass [1995] suggested mnemonic functions which are composed of knowledge acquisition, retention, maintenance, search, and retrieval. Szulanski [1996] focused on knowledge transfer process, which is composed of initiation, implementation, ramp-up, and integration. Spek and Spijervet [1997] divided act process into developing, distributing, combining, holding operations. Nevis et al [1995] split knowledge into acquisition, sharing, and utilization. Knowledge acquisition is the development or creation of skills, insights, and relationships. Knowledge sharing is the dissemination of what has been learned. Knowledge utilization is he integration of learning so it is broadly available and can be generalized to new situations. Walsh and Ungson [1991] divided organizational memory process into acquisition, retention, 21

35 and retrieval. Wiig [1995] divided knowledge management processes into creation, manifestation, use, and transfer. Creation and manifestation is related to how it is created and manifested in people's minds as well as in procedures, culture and even technology. Use is concerned with how it is used in making decisions and other knowledge-related work by individuals and businesses. Transfer is related to how we learn and how we otherwise can capture and exchange knowledge. Wijnhoven [1998] proposed organizational memory processes which are made up of acquisition, retention, search, maintenance, and dissemination Knowledge Management Enablers An important component of knowledge management research is to identify enablers of knowledge management. Table 2-4 shows the summary of knowledge management enablers of previous research. Arthur Anderson and APQC [1996] stressed organizational culture, information technology, strategy, knowledge management process, knowledge evaluation and leadership. Arthur D Little [1998] emphasized organizational culture, information technology, strategy, knowledge management process, and knowledge content. Delphi [1998] emphasized organizational culture, information technology, strategy, and knowledge management process. Demarest [1997] divided enablers into culture infrastructure, operational infrastructure, and technical infrastructure. Ernst & Young [1998] emphasized organizational culture, information technology, strategy, knowledge management process, and knowledge content. KPMG [1998] emphasized organizational culture, information technology, strategy, and knowledge management process. 22

36 Table 2-4. Summary of Knowledge Management Enablers Author Anderson & APQC [1996] Arthur D. Little [1998] Delphi [1998] Demarest [1997] Ernst & Young [1998] KPMG [1998] Lee & Kim [2001a] Leonard-Barton [1995] Nevis et al [1995] Nonaka & Takeuchi [1995] Pan & Scarbrough [1998] Pentland [1995] Probst [1998] Szulanski [1996] Spek and Spijervet [1997] Walsh & Ungson [1991] Wiig [1995] Wijnhoven [1998] KM Enablers Organizational culture, IT, Strategy, KM processes, Leadership, Evaluation Organizational culture, IT, Strategy, KM processes, Content Organizational culture, IT, Strategy, KM processes Culture, Operational, Technical Organizational culture, IT, Strategy, KM processes, Knowledge content Organizational culture, IT, Strategy, KM processes Knowledge worker, Content, IT, KM processes Strategic intent, Core capability, Signature skill, Creative abrasion, Continuous, experimentation, information-porous boundaries, Cognitive variety Ten factors (ex. openness, operational, variety, leadership) Organizational intention, Autonomy, Fluctuation and creative chaos, Information redundancy, Requisite variety Culture and strategy, Technology, Organizational learning, Measurement Social interaction Top management support, Organizational structure Knowledge content, Source and recipient, Context Organization and personnel, IT, Management, Culture and motivation Individual, Culture, Transformation, Structure, Ecology, External archives Task/process, People, Structure, Power Individual, Culture, Transformation, Structure, Ecology, External archives, System Lee and Kim [2001a] proposed knowledge, knowledge workers, knowledge management processes, and information technology. Leonard-Barton [1995] suggested strategic intent, core capability, signature skill, creative abrasion, continuous experimentation, information-porous boundaries, and cognitive variety as influencing factors. Nevis et al [1995] proposed ten facilitating enablers which are made up of scanning imperative, performance gap, concern for measurement, experiential mind-set, climate of openness, continuous education, operational variety, multiple advocates, involved leadership, and system perspective. Nonaka and Takeuchi [1995] proposed organizational intention, autonomy, fluctuation and creative chaos, information redundancy, and 23