APPROACHES TO KNOWLEDGE MANAGEMENT

Two approaches to knowledge management have been identified by Hansen et al (1999):

1. The codification strategy – knowledge is carefully codified and stored in databases where it can be accessed and used easily by anyone in the organization. Knowledge is explicit and is codified using a ‘people-to-document’ approach. This strategy is therefore document driven. Knowledge is extracted from the person who developed it, made independent of that person and re-used for various purposes. It will be stored in some form of electronic repository for people to use. This allows many people to search for and retrieve codified knowledge without having to contact the person who originally developed it. This strategy relies largely on information technology to manage databases and also on the use of the intranet. 

2. The personalization strategy – knowledge is closely tied to the person who has developed it and is shared mainly through direct person-to-person contacts. This is a ‘person-to-person’ approach which involves sharing tacit knowledge. The exchange is achieved by creating networks and encouraging face-to-face communication between individuals and teams by means of informal conferences, workshops, brainstorming and one-to-one sessions.

Hansen et al state that the choice of strategy should be contingent on the organization; what it does, how it does it, and its culture. Thus consultancies such as Ernst & Young, using knowledge to deal with recurring problems, may rely mainly on codification so that recorded solutions to similar problems are easily retrievable. Strategy consultancy firms such as McKinsey or Bains, however, will rely mainly on a personalization strategy to help them to tackle the high-level strategic problems they are presented with, which demand the provision of creative, analytically rigorous advice. They need to channel individual expertise, and they find and develop people who are able to use a person-to-person knowledge-sharing approach effectively. In this sort of firm, directors or experts can be established who can be approached by consultants by telephone, e-mail or personal contact. 

The research conducted by Hansen et al established that companies which use knowledge effectively pursue one strategy predominantly and use the second strategy to support the first. Those who try to excel at both strategies risk failing at both.

The knowledge-creating company 

In the opinion of Nonaka and Takeuchi (1995), a core competitive activity of organizations is knowledge creation – ‘an organic, fluid and socially constructed process in which different knowledges are blended to produce innovative outcomes that are predicted or predictable’. Fundamental to knowledge creation is the blending of tacit and explicit knowledge through processes of socialization (tacit to tacit), externalization (tacit to explicit), internalization (explicit to tacit) and combination (explicit to explicit).

The resource-based approach 

Scarborough and Carter (2000) describe knowledge management as ‘the attempt by management to actively create, communicate and exploit knowledge as a resource for the organization’. They suggest that this attempt has technical, social and economic components:

● In technical terms knowledge management involves centralizing knowledge that is currently scattered across the organization and codifying tacit forms of knowledge. 

● In social and political terms, knowledge management involves collectivizing knowledge so that it is no longer the exclusive property of individuals or groups. 

● In economic terms, knowledge management is a response by organizations to the need to intensify their creation and exploitation of knowledge.