Knowledge Management In The Intelligent Organization 1

Knowledge Management in the Intelligent Organization Mohammad Shamsuddoha N J Chy. M Sohrab Abstract Every firm wants to get competitive advantages rather than other competitive firm so that he can manage bigger market share than his competitors. Knowledge, Managing capabilities, Core competences, emanating from an Organization and that provide distinctive benefits to customers and company itself. At the same time as these survive in many appearances, the role of individual and Organizational knowledge is increasingly important in the formation of knowledge-based core competences. This paper explores the ideas of knowledge management for an intelligent organization for making reference to a number of sectors and companies, and specifically the garments, agro based, shipping and other types of industry, arguing that the culture, structure and infrastructure of an Organization are integral elements that facilitate and nurture learning. As a consequence, competences are built and developed within the “intelligent” Organization, which in turn, contribute to its competitive success.

Keywords: Knowledge, Intelligent, Organization

Introduction The use of business intelligence and knowledge management is very much indispensable in acquiring, analyzing, and decision making of customers who are most fundamental thing in creating an impact on the corporate business. Global commerce is today characterized by ever increasing competition, rapidly shortening product life-cycles and advances in technologies, all co-existing in a turbulent environment within which “hyper competition” is now the norm (Chakravarthy, 1997) and the rules of chaos and complexity theory apply (Turner, 1996). Creation and sustainability of competitive advantage has never been more of a challenge.

However, flexibility and adaptability, and the ability of both individuals and Organizations to learn from their experiences, are now integral elements of a firm’s business strategy. Arguably, as the pace of change accelerates, the survival and performance of an Organization is governed by the speed at which these Organizations learn to develop knowledge-based competences that are both durable and adaptable. In other words, Organizations must become “intelligent”, continually learning more about the nature of, and the relationship between, their internal and external environments (George H. Stonehouse and Jonathan D. Pemberton, 1999). Knowledge management is such important thing for the sake of getting customer attention by giving quality full product and services to the targeted customer. That is why knowledge and knowledge management is very important thing to work intelligently within the organization.

Objectives The main two objectives of the study are:1. To define Knowledge, Knowledge Management and Intelligent Organization. 2. Set up the total knowledge management theories and models for an Intelligent Organization.

Scope & Methodology The study covers some learning organizations and business organizations to understand the knowledge management and demand from their own views. In the process of analysis of collected information, various tables, graphs and diagrams have been applied in order to make the study worthier, informative, and useful for the purposes. The study was based on fully secondary materials like local and international articles, seminar papers, journal paper, magazines, PhD thesis, etc.

What is knowledge? Knowledge is a shared collection of principles, facts, skills, and rules. More specifically, Organizational knowledge aids decision- making, behavior and actions, and is primarily developed from the knowledge of individuals within the Organization. Firms strive to generate

superior knowledge that, if appropriately managed, results in superior performance. Thus, knowledge is, arguably, the single most important source of core competence (Prahalad and Hamel, 1990). Knowledge may be either explicit or implicit. The former is tangible, being clearly stated and consisting of details which can be recorded and stored. Implicit or tacit knowledge is often unstated, based on individual experience and therefore difficult to record and store (Demarest, 1997). Invariably, both forms of knowledge begin as individual knowledge but, to substantially improve performance, are transformed into Organizational knowledge, an often difficult feat in the case of implicit knowledge. Thus, it is the role of knowledge management to ensure that individual learning becomes Organizational learning.

Fig1: Combination of resources for total knowledge

Men

Material

Money

Machine

Methods

Moment

Multiplicity

Knowledge

Organizational knowledge can take many forms. Demarest also refers to commercial knowledge, defining this as: … an explicitly developed and managed network of imperatives, patterns, rules and scripts embodied in some aspects of the firm, and distributed throughout the firm, that creates market place performance (Demarest, 1997). Sectoral differences aside, managers invariably need to utilize such knowledge to improve Organizational performa nce. Devising a meaningful, prescriptive and all embracing taxonomy of knowledge is not possible, but Organizational knowledge revolving around customers, products, processes, technology, competitors, legal and financial issues must clearly be based on understanding and experience, and form the basis of core competences and value adding activities. Furthermore, knowledge can be specific or generic to varying degrees. Experience has shown that specific knowledge is the

most likely source of competitive advantage and the basis of core competence. For example, in the automotive industry, specific knowledge of design and engineering technology is at the heart of its core competence and has been an enduring source of competitive advantage. Generic knowledge, on the other hand, is necessary to the operation of any business, but is ultimately unlikely to generate a superior performance (George H. Stonehouse and Jonathan D. Pemberton, 1999). Figure 1 shows that 7M is the total combination of knowledge. Knowledge should combine with Men, Machine, Material, Money, Methods, Moment and Multiplicity. These sorts of quality are treated as regulator of knowledge and knowledge has his own creativity to develop intelligence. Without having intelligent no firm able to lead the market.

What is Knowledge Management? There is a rapidly increasing and eclectic body of knowledge relating to knowledge management (Km) in regard to both practitioners and academics as shown by the following sample of definition: “knowledge management is…knowledge creation, which is followed by knowledge interpretation, knowledge dissemination and use and knowledge retention and refinement (De Jarnett, 1996)”. “Knowledge management is the process of critically managing knowledge to meet existing needs, to identify and exploit existing and acquired knowledge assets and to develop new opportunities (Quintas et al. .1997)”. “Knowledge management is the activity which is concerned with strategy and tactics to manage human centered assets (Brooking, 1997)”. These definitions and their contextual origin all relate to large private enterprise studies and include both theory and practice in a fairly seam less and often recursive manner. The spectacular superiority of knowledge management is emblematic of the increasing attention paid by organizations to their internal capabilities. The dominant discourse within the corporate environment is one that emphasizes the need for organizations to leverage their ‘‘knowledge base’’ in order to gain competitive advantage. The global management consulting network has led to the packaging and commoditization of knowledge management programs. Such programs are both image and rhetoric intensive. We would argue that such programs have played an important role in establishing ‘‘knowledge’’ as a master concept of contemporary organizational life. (Chris Carter and Harry Scarbrough, 2001). KM emerging as it has done out of attempts to theories practice, draws upon a wide variety of terms and practical techniques. As such, there are many different veils of knowledge, differing according to context. Similarly, KM practices may

span across a diverse range of managerial activities. For instance, this may include: systems which attempt to measure and account for intellectual capital; efforts to exploit intellectual property rights; and attempts to the capture the results of project-based learning.

What is Intelligent Organization? The intelligent Organization is founded on intelligence and learning. Thus, an intelligent Organization is one that learns and manages knowledge “intelligently”. Intelligence is based on the collection of information, reasoning and quickness of understanding. Broadly speaking, intelligence results in competences that add value to a company’s products and services in the eye of the consumer. From an Organizational perspective, intelligence depends upon ability to acquire information, manipulate, analyze and interpret it, which through reasoning and learning, results in the generation of relevant and timely knowledge. If utilized appropriately, such knowledge assists in building new competences and leveraging existing ones, allowing an Organization to consistently outperform its rivals. An intelligent Organization must ultimately exist in an environment that encourages and supports the development and management of knowledge. For example, it is only by understanding competences, and their relationship to customer needs, that firms can develop competitive advantage. Furthermore, not only must an Organization learn about its internal and external relationships, but such learning must take place quicker than competitors in order to deliver sustainable competitive advantage. The issues of Organizational learning and knowledge management are central to this, and are developed further in the ensuing sections. Figure 2 shows that knowledge (explicit &implicit), organizational learning, organizational knowledge and individual learning is regulated or dominated by core competencies and can control total structural, cultural, infrastructural and communicational things of an organization.

Figure 2: The intelligent Organization: knowledge management and Organizational learning loops

Source: Argyris, C. (1977 & 1992), “Double loop learning in Organizations”, Harvard Business Review

Characteristics of Intelligent Organization The intelligent organization should be created through individual and team empowerment. This process is meaningful through various interfaces like HR, technology, relationship, strategy and financial and marketing management. However, intelligent organization has own characteristics and the basic characteristics of intelligent organization as defined by Gifford and Elizabeth (1997) are: 1. System thinking: It is the act of seeing patterns in the wholeness rather than focusing on individual parts. It is a way of doing away with the mental boundaries, which people will create for themselves. 2. Open access to information: there should be open and free exchange of information and it is to be viewed that nothing will block the information flow. 3. Freedom of speech and press: Organization should have strong speech regarding his commitment and also have a good connection with the press. 4. Multi Layer autonomy: people at each and every level should be empowered enough to use their intelligence towards shared purposes.

5. Self-organizing systems: self-directed transactions between friends and associates, freedom of choice between alternatives ways of doing things should be there. 6. Choice rather than monopoly: in the free enterpris e systems, there has choice between alternative vendors, distribution systems, subcontractors and so forth. Organizations cannot achieve intelligence without strong implication of its characteristics. These above are the Gifford and Elizabeth’s (1997) defined characteristics of an intelligence organization which can keep contribute for the sake of smooth running of firm’s profitability. Figure 3 shows that use of business benefits and employee emancipation, knowledge dissemination, knowledge construction and knowledge embodiment is related with the total knowledge management cycle or model which will control the organization and also proved the organization as intelligent.

Figure 3: Modified version of Demarest’s (1997) Knowledge Management Model

Source: McAdam and MaCreedy, 1999

Knowledge and Core Competence Whenever an intelligent organization thinks about knowledge management, it will have to increase his competencies checklist because core competencies are the only vital things which will different iate the organization to others. Competitive advantage, it is suggested, is based on firm specific core competences (Prahalad and Hamel, 1990) or distinctive capabilities (Kay,

1993). Core competences or distinctive capabilities are combinations of resources and capabilities unique to a specific Organization and generating competitive advantage by creating unique customer value. Knowledge is inextricably linked to core competence. A core competence must be distinctive, complex, difficult to imitate, durable and adaptable to ensure it is a source of sustained superior performance. By its very nature, knowledge, specifically tacit or implicit knowledge, is complex and difficult to imitate. Equally, the type of Organizational learning apparent in an intelligent Organization results in knowledge based competences that are both adaptable and durable. Knowledge plays a unique role in building and conserving core competences. For example, core competences may be based upon knowledge of customers and their needs, knowledge of technology and its innovative and distinctive uses, knowledge of products and processes etc. Furthermore, knowledge of the business environment, of competitors and their behavior, of countries and their cultures, may also assist in building competences that are both distinctive and superior to those of competitors. There are numerous examples of the ways in which knowledge acts as the foundation for competence development and leveraging. Microsoft’s, coke and Kodak’s core competences are based on their knowledge of building and marketing operating systems and software. Particularly Microsoft’s competitive advantage arises as a consequence of their knowledge of computer hardware and networking, and in-depth knowledge of the Organizations producing such products. Thus, Microsoft has leveraged its competences in personal computer operating systems and software and, in the process, developed new associated competences revolving around the acquisition of competitive advantage in computer networking and Internet software. Such competence building and leveraging is essentially knowledge based. However, the development of these systems into subscriber products, allowed owning airlines such as develop new core competences, greatly expanding their business and increasing revenues (Barber, 1998; Pemberton et al., 1999; Stonehouse et al., 1999). Table 1 shows the different strategies of knowledge management which was invented by Chris Carter and Harry Scarbrough. The table is concentrating about Use of IT, Human resources Recruitment and selection, Training and development and Reward systems under the codification and personalization strategy. The strategy can be followed when organization act like an intelligent one.

Table 1 : Knowledge management strategies Codification strategy Use of IT

Personalization strategy

Invest heavily in IT ± connect people with re- Invest moderately in IT ± usable knowledge

facilitate conversations and exchange of tacit knowledge

Human resources Hire new college graduates who are

well Hire

MBAs

who

like

and

can

Recruitment and suited to the reuse of knowledge and the problem-solving selection Training

implementation of solutions

tolerate ambiguity

and Train people in groups and through computer- Train people through one-

development

based distance learning

Reward systems

Reward people for using and contributing to Reward people for directly document databases

to-one mentoring

sharing

knowledge

with

others Source: Chris Carter and Harry Scarbrough, Towards a second generation of KM? The people management challenge, Education + Training, Volume 43. Number 4/5 . 2001. pp. 219

Conclusion After shortening all the secondary information, we need to evaluate current knowledge maturity level and take adaptive steps to bring in the harmonizing between organization capability and creativity. Here the question is, will the firm act as a market challenger or market follower? Because if there has remarkable capability then firm should work as a market challenger. In the other hand, market follower should not acquire capability and capability comes through creativity. Knowledge management system does not replace conventional departments and processes involved in new services, product or strategies because they serve as a attachment to them. Knowledge management creates new things or develops a framework that can help the firm to be act as an intelligent organization. The corporate world is facing tremendous challenges from its competitors that are why firm should have developed its management methodologies to face emerging challenges of the corporate world.

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