The Management of Knowledge in a Corporate

Environment:An Examination of the

Determinants of Success

Scott BurgerMay 7, 2003

The Importance of Knowledge “The basic economic resource—‘the

means of production,’ to use the economist’s term—is no longer capital, nor natural resources (the economist’s ‘land’), nor ‘labor.’ It is and will be knowledge.” –

Peter Drucker, “The Next Society,” The Economist

The Importance of IT During the years 1995-2000 labor

productivity grew at an annual rate of 2.5 percent—nearly twice the 1972-1995 rate of 1.4 percent—while concurrently, expenditures on information technology (IT) doubled - “U.S. Productivity Growth, 1995-2000,” McKinsey Global Institute Report

The Importance of IT? Link between greater productivity and IT

is entirely attributable to six sectors which account for 30% of GDP: Retail Wholesale Securities Telecommunications Semiconductors Computer Manufacturing

Outline of Presentation Define Objective of Study Describe Literature Review Explain Study Methodology Explore Results Draw Conclusions

Objective of Study To determine whether competitive

advantage/higher firm performance (from a knowledge management initiative) is dependent on the successful execution of five moderating factors, not dollars spent on information technology.

Thesis Model

Information Procurement and Dissemination

Cross-Functional Communication

Culture

Absorptive Capacity

Organization Assessment/IT Strategy Review Process

Independent Variable Moderating Factors Dependent Variable

IT Infrastructure

Competitive Advantage / Better

Performance

Literature Review Relationship between IT and knowledge

management (KM) not linear (McKinsey Global Institute Report)

Role of unobservable effects contributing to above-average performance (Mueller; Jacobson; Rumelt; DeTienne, et al; Senge; Grant; Nonaka, et al.)

Intangible moderating factors are important—e.g., culture (Bourgeois, et al; Lei, et al; Dash; Comeau-Kirschner; Pan)

Study Methodology Two-firm qualitative case study most

appropriate because of elusive nature of variables (Itami, et. al; Yin; Jacobson)

Firm Selection Sun Microsystems

Enterprise Services Operations, Americas

Lockheed Martin Ground Systems, Aeronautics Division Computing and Network Services,

Enterprise Information Services

Sun Microsystems Firm Details Knowledge Management Goals

Extend technical knowledge Improve process and procedures Build the collective knowledge of

employees

Lockheed Martin Firm Details Knowledge Management Goals

Provide efficient access to data Learn from previous projects

Results Sun Microsystems

Employee efficiency has risen 50-60% because of:• Information Procurement and Dissemination• Cross-Functional Communication• Culture

Results Lockheed Martin

Outbidding competitors because produce better, cheaper products as a result of:• Absorptive Capacity• Organization Assessment and Technology

Strategy Review Process

Conclusions Five moderating factors proposed

are important

Thesis Model

Information Procurement and Dissemination

Cross Functional Communication

Culture

Absorptive Capacity

Organization Assessment/IT Strategy Review Process

Independent Variable Moderating Factors Dependent Variable

IT Infrastructure

Competitive Advantage / Better

Performance

Thesis Model

Conclusions Five moderating factors are

important Other important considerations:

Fluidity between physical and virtual interactions

Relevance and currency of knowledge Information overload

A Special Thanks To… Mark Smith Larry Stimpert Venture Grant Hilliard Fund

Questions? I know it was a great presentation,

but someone has to have a question…