Organizational ManagementKnowledge Management and Decision

Making

BBUS 507Professor Vandra L. Huber, DBA

Session 1: Course Introduction

Agenda

Administrative matters and course objective

Course Requirements

Exercise: BARNGA

Today’s topic: Definitions & Knowledge Management Models

Administrative Matters Contact information on syllabus

Office hours: By appointment

Course materials:

- Course pack available from Kinkos, Bothell-Everett Highway

- Additional materials distributed by me

Honor code issue

Honor Code Prepared and on time for all simulations Do not show your confidential case

instructions to the other parties. Do not make up facts or information

that materially change the power distribution of the exercise

Do not borrow notes or discuss roles outside of class.

Class discussion stays in class

Attendance/Participation Policy

You will be penalized one letter grade on final course grade, if you:

Fail to participate in more than one exercise or case discussion

Arrive after 10 minutes of the beginning of class;

Are unprepared or not present to obtain simulation assignments for the next class (don't ask me to email them to you)

Must inform me of absence 48 hours in advance.

Grading Class Participation 20%

Professionalism 5% On time No complaining or whining Ethical behavior Respect for others

Out of Class Project Participation 10% Qualitative Team Project Survey 5%

Team Project 40% Project outline 5% Oral presentation 10% Final Written Report 25%

2 Individual Assignments 40% Knowledge debriefings Case Analyses

Knowledge Management Basics

Origins ofKnowledge Management

IT TrackKnowledge = Objects

People TrackKnowledge = Process

Organizational

Level

Re-engineering

Organizational

Theorists

Individual Level

AI -Specialists

Psychologists

What is knowledge?

Knowledge is the combination of data and information to which is added expert opinion, skills and

experience, to result in a valuable asset which can be used to aid

decision making.”

Four Stages of Learning

Stage 1 Data + Relevance + Purpose

Stage 2 Information + Application

Stage 3 Knowledge + Intuition

Stage 4 Wisdom (Tacit Knowledge)

Hierarchy of Knowledge Skill

Ability to act according to rules which depend on feedback from a non-social environment.

Know-How Includes skill and is the ability to act in social contexts.

Knowledge Includes know-how + the ability of reflection. Implies the ability of know-how within a

certain domain and the ability not only to submit to the rules but also by reflection influence the rules of the domain or the tradition.

Test Your Tacit Knowledge Shut your eyes. Then

try to touch the tip of your nose with your index finger. At the same time, concentrate hard on what you are doing and on where your arm is at all times.

Do the exercise slowly. Allow a minimum 20 seconds for it.

Test Your Tacit Knowledge Now, explain to the

person sitting next to you exactly how you did the exercise, describe how you held your index finger, every movement your arm was doing, all different angles, all the way up to your nose.

Was it easy to describe in words how you did the exercise?

Why or why not

Two Types of Knowledge Explicit Knowledge is articulated in formal

language Grammatical Statements Mathematical equations Specifications Manuals

Tacit Knowledge is personal knowledge embedded in individual experience

Personal beliefs Emotion Perspective Experience Intuition

Item 2 represents tacit knowledge

InvoiceDate_______

To:_______________ _______________

Item Description of Service, Parts, etc.

Cost

Item 1 Hitting pipe with hammer $1.00

Item 2 Knowing which pipe to hit and where to hit it

$9,999.00

Please remit within 30 days

Total $10,000.00

What is knowledge management?

"Knowledge Management embodies organizational processes that seek synergistic combination of data and information processing capacity of information technologies, and the creative and innovative capacity of human beings to improve organizational capabilities”

Why Knowledge Management Because we want superior performance

and competitive advantage For innovation and to avoid decline To improve quality and customer

relations To increase our ability to manage change For energized committed work force To expand boundaries and to engage in

community

Competitive Advantage Of the Firm

Lies in its… Ability to create, transfer,

assemble, integrate and exploit knowledge assets

Knowing-Doing Gap Difficulties arise not in accessing

knowledge But in utilizing knowledge

Knowledge Economy In WAIndicator Ran

kScore

Overall 2 86.21

Aggregated Knowledge Jobs 5 13.24%

Managerial, Professional and Tech Jobs 14 27.7%

Job Churning (New start-ups and failures combined)

10 21.3%

High Tech jobs as a share of total employment 9 6.6%

“Gazelle” Jobs with 20% growth for 4 or more years

1 16.5%

On-line population % of adults with access 7 61.3%

Initial public offerings (weighted by number and value)

1 11.78%

Patents per 1,000 workers 9 1.03%

R&D Industry investment as a % of Gross State Product

11 2.25%

Venture capital investment as a % of GSP 5 1.34%

Progressive Policy Institute, Washington, D.C. 2002

Knowledge Versus Service

KnowledgeProblem solving non routine problemsSmallerCreativeAdhocracyHigh EducationNo economies of scaleEconomy of scope in intangible assets

ServiceServicing Routine

ProblemsBigger

ProductiveHierarchy

People IntensiveLow Education

Economies of Scale

High Customer Adaptation Low

Tangible and IntangibleAssets of Knowledge Organization

Cash

Accounts Receivable

Computers, Offices

Human Capital

Information Capital

Organizational Capital

Tangible

Intangible

Models of Knowledge Management

Human Capital

Information Capital

Organizational Capital

Organizational Systems

TransformationsInputs

Stakeholder Expectations

Strategy/Vision, Mission, Values

Information

Outputs

Satisfied Stakeholders (Customers, Public, Policy

Makers)

Profitability

System Effectiveness

Employee Satisfaction

/Performance

External Environ ment

Knowledge Management Processes

Business & Economic Environment

Competitors Social Values/ Community Environment

Legal/ Public Policy Environment

Constraints and Opportunities

Technology

ROCE

CustomerLoyalty

QualityQuantity

EmployeeSkills

Balanced Scorecard’sExplore Cause-and-Effect

RelationshipsFinancial

Customer

InternalBusinessProcess

IntangibleAssets

SourcesFormal and informal Networks

Internal and External Acquisitions

UsesQuality of Problem Solving/

Decision Making

OutcomesInnovation

Market/ FinancialPerformance

Individual and organization’s

ability to absorb information and

turn it into know how

New organizational knowledge flows from activities and decisions

Process of KnowledgeCreation and Innovation

Which Firm Operates

Total Systems Model

Strategy

Human Capital

Information

Capital

Organizational Capital

Vision

Leadership

Human Capital KnowledgeProfessional Knowledge Rules Programs Manuals

Organizational Knowledge Strategy Making Marketing Human Resources Accounting

Personal Mastery

To learn, grow, and achieve personal mastery that fuels and provides substance to all learning organizations is the basic human need.

No organization can truly be a learning organization without its individual members being free to learn.

High

Low

Human Capital

Professionals Leaders

Supporters Managers

Low Organizational Knowledge High

Pro

fess

ion

al

Know

ledg

e

Informational CapitalSystems Collecting knowledge Organizing knowledge Distributing knowledge Securing/Protecting knowledgeDatabases Harvesting Data Storing Data Divergent – Free to all Convergent – Reviewed by expertsNetworks Intranet Internet Global

Informational CapitalDatabase Subsystems Allows managers and employees to share the right

information in a timely and efficient manner

Organizational Language Subsystem Allows understanding of the meaning of things Decoding & Codifying into usable data for others Systematic language that allows people to recognize the

deeper meaning

Networks Retrieve and acquire information and knowledge from internal

and external sources

Transfer Subsystem Transfers information between individuals or creates new

knowledge

Four Fold Focus Generating

Identifying desired content proactively Getting people to contribute ideas.

Evaluating based on contributions

Organizing Selection and refinement of material Distillation of material Chunking data into knowledge objects

7 plus or minus 2 tidbits of information SME review, certify & bless material

Four Fold Focus Developing

Organized so it can be represented, retrieved and used

Navigational tools, user interfaces, Position and linkages among elements Divergent versus convergent processes

Difusing and Distributing Insuring its use internally and externally Training and rewarding Choice between “push” or “pull” systems

Organization Capital

The capacity to manage human intellect -- and to transform

intellectual output into a service or a group of services

embodied in a product – is fast becoming the critical executive

skill of this eraJames Brian Quinn

Organizational CapitalCorporate Brand Image ReputationCulture Organizational GlobalLeadership Development Strategic FocusTeamwork Integration Knowledge Sharing

Culture A shared set of enduring

meanings, values and beliefs that characterize an organization, national, ethnic, and other groups and orient behavior.

Includes: Behavior Patterns Values and Norms Rules, Concepts and Assumptions

Process of Knowledge Creation

Capturing“Holding On”

Transacting“Exchanging Knowledge”

Bestowing“Sharing”

Indwelling“Looking With”

KnowledgeIndividual Social

Care

H

igh

Lo

w

George von Krogh, California Mgt Review, 1998

Leadership Having a definitive leadership

brand Embedding formal and informal

leaders through the organization (Up, down and across)

Establishing development programs for leaders

Alignment Individual actions are directed

towards achieving high level objectives Understanding of strategy Sense of urgency Clear line of sight between vision and

behavior and reward Empowerment

Teamwork (knowledge sharing)

Development of communities of practice

Ensuring communication of best practices

Common global system of knowledge sharing

Integration of employees

Concluding Thoughts

Knowledge Nuggets All organizational learning (knowledge) is

leveraged in delivering business advantage to the customer

Knowledge Management focuses on Intangible Assets:

Human Capital Informational Capital Organizational Capital

“Learn Once, Use Anywhere!”

Knowledge Nuggets

Tacit Knowledge is critical and resides most often in the heads of individuals.

Knowledge is enmeshed with its use.

The flow of knowledge is as important as the stock of knowledge.

Knowledge Nuggets Experimentation is pivotal to

knowledge generation Technological should not be

substituted for human interaction A fundamental intermediate

purpose of knowledge management is to create a shared context

Knowledge Nuggets Knowledge management requires

organizational commitment. Planning and decision-making Internal customer service Technology Financial Time

The knowledge life cycle consists of multiple stages:

Knowledge Generation Knowledge Organizing Knowledge Generating Knowledge Diffusing Knowledge Reusing

Hmmm…

Do You Agree or Disagree? Knowledge never can be

transferred. We can only transfer information.