ABSTRACT:
With the increase in service-oriented industries in the current economy, organisations need to be aware of the knowledge that is
within the company and utilise it efficiently to
create services and products that would be attractive to the buying market. This
paper discusses how organisations identify knowledge
required within the company and encourage their staff to become more
knowledgeable. The research for this paper took place within four different
companies from four different industries in the
Keywords: Knowledge
management, Knowledgeable employees, Knowledge
Acquisition, Case study
1. Introduction
In the current era of globalisation, it has been indicated that we are now living in a knowledge economy where among the most important assets that organisations must have to survive are information and knowledge. According to Drucker (1993), “the traditional ‘factors of production’ – land, labour and capital – have not disappeared, but they have become secondary. They can be obtained, and obtained easily, provided there is knowledge. And knowledge in this new sense means knowledge as a utility, knowledge as the means to obtain social and economic results…knowledge is now being applied to knowledge” (p. 42). Therefore, companies have to strive hard in order to gain a competitive advantage in today’s rapidly changing market to maintain the demands of their clientele in the future. Furthermore, organisations need to build and continually replenish their capabilities or else they will be naturally weeded out in the economic evolutionary process (Harrison and Leitch, 2000). This is due to the fact that organisations that are constantly learning and evolving with the changes in the environment have proven to be the ones that have succeeded through turbulent times. In order to achieve this level of longevity, companies have to make sure they are utilising the knowledge capacity of their respective organisations.
Currently, besides offering tangible products, firms are also harnessing knowledge as their primary source of growth, offering services that utilises knowledge as their main commodity. According to Jacques (2000), the effect of knowledge on capital is replacing the effect of capital on production as the focal point of analysis. With the onset of people’s new life-styles where convenience is the main-stay of working life, companies that can offer requested services are gaining a strong foothold in the economic ladder. Thus, gradually, economies are shifting from the manufacturing sector to the service-oriented sector making innovation a crucial aspect of company strategies. Furthermore, management styles need to change in order to recognise the growing trends to manage knowledge workers differently from normal traditional management practices. This emphasis on managing knowledge, or knowledge management (KM), could help to maximise the potential of the knowledge workers of the organisation in order to increase their productivity and output of skills and intellectual capability.
In general, KM is about managing the knowledge of employees within an organisation as efficiently and effectively as possible. McAdam and Reid (2000) mention that the transfer, capture and dissemination of knowledge and organisational knowledge itself are considered as key elements of knowledge and KM. Industries realise that knowledge workers do not just manipulate knowledge; they acquire, modify and create knowledge that would be beneficial to the organisation. In order to maintain a competitive edge where they can continue to cater to the ever-changing needs of their clientele, companies are beginning to recognise the need to identify their knowledge workers’ ability, knowledge and skills. This is due to the fact that the current economical challenge is being able to transform individual capital i.e. knowledge, into structural capital which is knowledge that is absorbed into the organisation (Zárraga-Oberty and De Saá-Pérez, 2006). This transformation of individual knowledge into organisational knowledge gives rise to a new management strategy within organisations which looks at identifying the knowledge required within the company to accomplish tasks and encouraging their employees to become more knowledgeable.
2. Literature Review
In discussing the need to identify knowledge necessary for the survival of an organisation, it is necessary to define what knowledge is. Blackler (1993) suggests that there are a variety of definitions of knowledge varying from socially constructed, often tacit material, to knowledge acquired through participation within communities of practice. The Oxford Dictionary (2001) defined knowledge as a person’s range of information or the sum of what is known. The individual’s knowledge as well as the collective knowledge of the organisation as a whole is relevant for the efficient and effective acquisition and utilisation of knowledge of a company. In addition, Hope and Hope (1997) add that knowledge consist of people’s skills, competencies, ideas, and intuitions along with the full utilisation of information and data. However, Sbarcea (2001) explains knowledge as a free-moving entity that has an active social life that is always in a constant state of flux whereby knowledge flows between and across organisational boundaries. In its simplest version, knowledge can be seen as a continuum from individual-based to corporate-wide knowledge. An interesting thing to note is that knowledge is a non-consumable resource. It is possible to use knowledge without using it up which allows organisations to acquire, create, store and maintain, and export knowledge as a commodity.
Due to the changes in the economy from industrial to the service oriented economy, the concept of ‘commodity’ has also changed. Stiglitz (1999) mentions that the market for knowledge and information varied from other commodities in a number of ways. It is perhaps an indication of these facts that it is often said that technological evolution has brought us to the age of a “knowledge society”, “knowledge economy” or “post-industrial society”. Organisational knowledge needs to be sufficiently well integrated to allow the organisation to react rapidly to changes in the market-place. This is due to the fact that knowledge is undoubtedly an important asset in the industry, although it is difficult to value in monetary terms (Brown and Woodland, 1999).
Brailsford (2001) comments that the more knowledge is shared around the organisation, the more valuable it becomes. Furthermore, an organisation that is constantly developing new knowledge and focusing towards achieving the shared organisational goals and values would be a more formidable competitor than an organisation where the employees are focusing on their own career development (Brown and Woodland, 1999). Knowledge comes as a person uses information and combines it with their personal experiences. Much of an individual’s knowledge has its own value, and it is that which makes each employee unique and valuable to organisations and society as a whole (Syed-Ikhsan and Rowland, 2004). However, in order to share knowledge, the employee should possess the knowledge or at least know where to obtain the required knowledge making it important for organisation to manage its knowledge (Hicks et. al., 2007).
In managing knowledge, there is a need to distinguish the definition of knowledge work. Nonaka and Takeuchi (1995) classify knowledge into two forms i.e. tacit knowledge and explicit knowledge. According to them, explicit knowledge is something formal and systematic, that can be expressed in words and numbers which can be viewed and shared in written or tangible form. Tacit knowledge, on the other hand, is defined as something intangible that is difficult to visualise or express (Nonaka and Takeuchi, 1995). It is highly personal and hard to formalise, making it difficult to communicate or to share with others. However, according to Hope and Hope (1997), the tacitness of knowledge can be assessed by measuring its level of codification, which is the degree to which the knowledge is expressed in writing at the time of its transfer. Knowledge that is characterised by a low degree of codification can be referred to as tacit knowledge.
One thing that has to be remembered is that knowledge work is complex. This complexity may be related to the depth of knowledge involved or to the level of interdependence between work components that would make it difficult to predict how change in one area will affect other areas. Therefore, running an organisation today requires the employees to expect the unexpected and increasingly it is these employees who utilise their knowledge to control the marketplace (Du Toit, 2003). In order to manage the knowledge available in the organisation, firms have to be aware of the type or kind of knowledge that is required by the company. Different companies need different types of knowledge and it is important that the employers are aware of the kind of knowledge their employees are capable of producing. However, finding, organising and managing knowledge so that it can be meaningfully used to enrich the corporate environment has become problematic due to the tacitness of the nature of existing or required knowledge. Despite the challenges that an organisation may face in managing their knowledge, it can be seen that it is important for organisations to be able to identify the knowledge that is necessary and available within the company (Hicks et al., 2007). Moreover, companies also need to encourage their employees to become more knowledgeable in the workplace in order to remain more competitive in the job market. Therefore, effective KM is needed to differentiate and utilise the most of the knowledge available to the organisation.
3. Research Methodology
In researching the organisational practices of knowledge identification and encouragement of employees to become more knowledgeable, the subjects chosen for the research were four companies from four different industries in the United Kingdom (UK). These four industries include the architecture industry, the telecommunications industry, the oil and gas industry and the pharmaceutical industry which are renamed for anonymity Build Co., Phone Co., Oil Co., and Pill Co. respectively. The reason for the chosen industries was to look at industries that use different levels of explicit and tacit knowledge and compare them with each other regarding their management of knowledge within their organisations. Build Co. would use more tacit knowledge in their creative element of designing buildings. Pill Co. and Oil Co. would use more explicit knowledge as they would be utilising more technological knowledge that followed certain theoretical frameworks. In the case of Tel Co., it would be a combination of both tacit and explicit knowledge when they create new technological breakthroughs in telecommunications. These companies were also chosen as they were among the leading companies in their respective fields and when contacted, were found to be in the midst of either designing or implementing KM strategies in the workplace.
The data for this paper was gathered through a series of Semi-Structured Interviews with various members of management within the four companies. The respondents include Line Managers, Project Managers, Office Managers and the Managing Directors. The questions asked during the interviews include the importance of knowledge within the organisation, how the organisations identified necessary knowledge as well as methods in which management encourage their staff to become more knowledgeable. The research was conducted as a multiple case-study analysis and a comparative study was made between the four companies. The results of this research are provided in the following section.
4. Results
With the onset of globalisation, organisations within the
Interestingly, the organisations involved in the
research identify knowledge needed within the company through the experience of
the management, talking to the employees, surveys and through job descriptions.
The organisations believe that with efficient
identification of knowledge, it could help them be aware of the knowledge owned
by their employees and they will be able to utilise
it to create new products or services that might be in demand by the customers.
This notion is supported by Brown and
At the current moment, the pharmaceutical industry is quite buoyant (Fenn, 2002) as the sales of prescription and over-the-counter medicines are gradually increasing. However, there is increasing competition from other organisations within the EU, as well as in the rest of the world, for the development of medicines and other bio-medical products. Therefore, Pill Co. is trying to identify and utilise knowledge that is needed especially in the field of R&D in order to remain competitive.
The importance of being able to identify the required knowledge, existing knowledge that is already available within the organisation, and utilise this knowledge efficiently is particularly important for Build Co. This is due to the fact that the industry has changed in recent years from one that offered professional architectural advice to one that is more of a generic business. Architectural companies now offer a variety of services from consultancy to project management rather than just designing buildings for clients as was traditionally done. Initially, the Royal Institute of British Architects (RIBA) did not allow any architectural firms from providing services beyond architectural advice and design. This caused a fierce competition with other construction organisations that provide the same services and other construction management services without the necessary affiliation or accreditation from RIBA (Conway and Roenisch, 1994). Therefore, Build Co. is constantly pressured in providing services and products to their clients that would allow them to remain competitive within the construction market.
Tel Co. is also facing similar problems as Build Co. in that increased competition due to deregulation and improvements in the telecommunications industry has created intense competition for telecommunication services (Dodd, 2002). Due to deregulation, smaller telecommunication firms are being set up and this has increased competition for the share of the telecommunications market. Therefore, Tel Co. is trying to identify the knowledge that they need through detailed job descriptions and external surveys with clients in order to be able to meet the demands of their customers.
In the case of the oil and gas industry, authorities are pressuring the oil companies into finding new ways to keep the cost levels down due to the current hike in oil prices. Even though the production of natural gas and the production of petrochemicals from crude oil are increasing, the overall situation of the oil crises is affecting the cost-effectiveness of the oil companies. Therefore, to remain competitive within the oil and gas market, Oil Co. is utilising job analysis and job description programmes within the organisation in order to identify knowledge that is available for creating new services and products for the customers.
Although there are a wide variety of technologies available to assist the organisation in the identification of knowledge, the managers of the organisations realise what particular knowledge is required during a specific project or by an employee within the company, based on their own past personal experiences of having done the job or managed the project. Furthermore, the participants of the research feel that by discussing the nature of the job position with the respective employee, they could discover gaps in the necessary knowledge as well as encourage their employees to gain further knowledge. The companies also believe that their organisations could remain competitive among other companies within the industry through acquiring more knowledge. Therefore we can see that rather than investing in sophisticated software in order to try and identify the knowledge necessary within the company, organisations are benefiting further through personal networking, basic communication practices and discussions with their employees.
In addition, some of the organisations (Tel Co. and Oil Co.) are asking their own clients through surveys to discover possible gaps in knowledge so that it could be rectified. The organisations recognise that by being aware of the knowledge that their companies already have, as well as gaining more knowledge, they could cater to the needs of their clients more efficiently by offering a variety of products and services.
An interesting point of this study is regarding how employees become more knowledgeable. Although the organisations do try and motive their employees to gain more knowledge, they do it in an informal manner by talking to their employees or while discussing the process of career development with their employees. Some organisations encourage their managers to implement a system of ‘Management By Walking Around’ where managers walk around their own departments and talk to their staff. Managers who follow this practice can observe the working attitudes and skills level of their staff, discuss necessary improvement or provide encouragement to employees to attend more training and learn new things.
Furthermore, it is noticed that middle management from the organisations seem to agree that doing meaningful work is motivating enough for gaining knowledge. Interestingly, although all the companies encourage their employees to acquire more knowledge, higher management would generally make a statement or casually brief their employees whereas middle to lower management would actually discuss the matter with their employees on a more personal basis. This is probably due to the fact that line managers would know the employees on a more personal level and therefore, would be able to give advice on their career development as well as set them challenging jobs as a means for gaining more knowledge.
The companies also use Human Resource (HR) support systems to help their employees gain more knowledge. Training is provided to those who need it and it is also offered as a means of increasing the knowledge of the employees. Through training, the organisations believe that their employees would gain the latest knowledge available in the market, making the staff more adaptable to the changing environment of their respective industries. The employees also view training as a step in their career progression and therefore are encouraged to remain in the company when they know that the company would give them time off, as well as pay for some of the training, as long as it is beneficial to the organisation in the long-run.
Moreover, since the employees’ salary is linked to job performance and experience, the knowledge they gain through the training process could help them obtain higher salaries. Furthermore, a reward system that appreciates and shows recognition of the efforts of the employees either in fair monetary or non-monetary terms helps to motivate the employees to remain loyal and contribute to the KM process within the organisation. Therefore, the staff of the companies are indirectly being encouraged by the organisation to increase the knowledge within the companies through these support systems.
However, the companies cannot simply acquire new knowledge or expertise at a whim. They must identify and combine knowledge appropriate for the project as this will allow for correct diagnosis and problem solving manoeuvres that might confront them during a project (Fincham et. al., 1994). Therefore, all the organisations in this study conduct reviews on a regular basis to see how long their projects take as well as what knowledge they can extract from each project completed. Build Co. tries to identify new knowledge by determining any weaknesses after each project through group discussions and would attempt to discover where they can reduce the time, costs and energy of the project process in order to benefit the client through this lessons-learned activity. The rest of the organisations involved in the research also organise group discussions to try and capture any new knowledge after each project. This is part of their best-practice programmes where they would find the best way to complete their projects but the discussions are not carried out as formalised or detailed as in Build Co. A summary of the results of this research is indicated in Table 1.
Table
1: Identification of Knowledge
Pill Co. Build Tel Co. Oil Co. § Identifies necessary knowledge and
encourages employees to gain knowledge by talking to them. §
Encourages
employees to spend time in other departments to gain knowledge. §
Have
basic job descriptions for all positions. §
Reviews
product process to shorten length of production time. §
Employees
sent for beneficial training. §
Salary
inline with market rates and benchmarked with similar positions. §
Performance
related bonuses given. § Identifies necessary knowledge and
encourages employees to gain knowledge by talking to them. §
Encourages
employees through career development discussions. §
No
job analysis, and job description only for admin
staff. §
Reviews
product process to shorten length of production time. §
Salary
based on market rate, RIBA, performance appraisals, tenure and
experience. §
Bonuses
and high profile jobs given as rewards. § Identifies necessary knowledge and
encourages employees to gain knowledge by talking to them. §
Encourages
employees to publish and give presentations to gain knowledge. §
Discusses
career development with employees. §
Have
detailed job descriptions for all positions. §
Reviews
product process to shorten length of production time. §
Salary
in line with market rates and performance appraisals. § Identifies necessary knowledge
through customer needs. §
Have
detailed job descriptions for all positions. §
Encourages
employees by informing them about the value of the project. §
Encourages
through career development discussions. §
Difficult
to motivate employees due to unionisation. §
Training
offered based on performance appraisals. §
Salary
in line with market rates, performance appraisals, tenure and experience.
However, there is a danger that the lessons learned are not being passed on to future projects, such as in Oil Co., where, for example, files of previous projects are not easily accessible by employees to be reviewed before new project begins. This could lead to employees being unaware of knowledge that already exists within the organisation and it could lead to mistakes being repeated. In addition, any information gained would benefit the organisation as Du Toit (2003) states that participation from new international competitors with different cost structures and different production manufacturing processes are drastically changing and reducing the manufacturing life-cycle and thus, affecting the competitive edge of companies. Therefore, efficient management of knowledge is required by each of the organisations in order to remain competitive within the respective industries.
5. Conclusion
This paper looked at how knowledge within certain organisations from different industries is identified and how organisations encourage their employees to become more knowledgeable in the workplace. This ability to identify and change knowledge has become a source of power for organisations (Jacques, 2000) as the knowledge gained can be used to develop further products and processes for the organisation. It is found that by having discussions with the employees or through experiences in doing the work itself is sufficient for organisations to find out what knowledge is crucial to the workplace as done by Pill Co. and Build Co. Communicating with employees or utilising work experience as a means to gain knowledge is similar to what has been mentioned by Cappabianca (2002) who stress the importance of social networking and on-the-job experience as means of gaining knowledge. In addition, having detailed job descriptions and conducting job analysis for all jobs within the company help organise and determine knowledge that is required in the organisation. Furthermore, by discussing possible career progression with the employees as well as giving them the opportunity to take on more interesting work encourages the employees to try and gain more knowledge for their own benefit as well as for the company. Moreover, it is found that the organisations would conduct a review to examine the progress of a project in order to discover ways of reducing the time and cost it took to complete the project. Therefore, this research shows that it is through basic social interactions among employees as well as with management that identification of knowledge is determined and employees are encouraged to increase their knowledge levels to benefit themselves as well as the organisation’s knowledge base.
Moreover, it is found that the companies would utilise training schemes, a flexible reward system as well as a fair salary scheme that is benchmarked with the current market to help manage and maintain the knowledge base within the company. Therefore, this paper shows that the HR support systems are indirectly involved with the KM strategy in encouraging employees to contribute to the knowledge base within the company by retaining the employees’ services as well as motivating them to get more involved in gaining more knowledge for the survival of the company. It is hoped that through this paper, organisations would realise that they do not need to invest in expensive technological systems but that through the various soft-skills management and support systems, they can manage and maintain the knowledge base of their employees and their company effectively.
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About the Author:
Zabeda Abdul Hamid holds
a PhD in Human Resource Management from the