Defining a knowledge strategy framework for process aligned organizations: an IBM case

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& Research Article Defining a Knowledge Strategy Framework for Process Aligned Organizations: An IBM Case Stephen McLaughlin y and Robert A. Paton * School of Business and Management, University of Glasgow, Glasgow, Scotland, UK Many organizations struggling to capitalize on their knowledge assets tend to let their knowl- edge management systems emerge from existing IT systems and infrastructure. Within a complex business environment this can cause a mismatch between how knowledge assets are, and should be managed. In order to help organizations develop dynamic and effective KM systems, the authors’ suggest that organizations need to re-think how knowledge is created and shared around their core business processes. To be more specific the author’s contend that for organizations where inter/intra organizational collaboration is vital to overall end-to-end performance, such as in a supply chain, organizations need to consider first the relationship between what the authors see as four key components. These are knowledge strategy, core process optimization, core process performance and knowledge barriers. This paper will explain why these components are important, and the relationship between them. The findings put forward in this paper are based on research concerned with improving process performance through knowledge transfer. The research follows a critical theory approach to identify best knowledge transfer practice across complex organizations. The research is exploratory in nature and a case study methodology is used to support this line of inductive theory building. The findings presented are based on data collated within, and across IBM’s integrated supply chain. Copyright # 2008 John Wiley & Sons, Ltd. INTRODUCTION Managing knowledge capture, creation and transfer is vitally important to successful innovative organ- izations (Nonaka and Takeuchi, 1995), indeed knowledge itself is recognized as an important component of value creation and competitive advantage (King and Zeithalm, 2003). However, many organizations tend to develop their knowl- edge management systems from their existing IT strategy (McDermott, 1999). In essence, the knowl- edge management system becomes an extension or expansion of the existing IT infrastructure (Johan- nessen et al., 2001). This approach may not necessarily be bad for the organization, but in general a failure to consider how knowledge, in particular tacit knowledge, is created, shared and utilized, as opposed to simply focusing on how explicit knowledge is created, shared and stored may seriously impact an organizations ability to innovate and build a competitive advantage. Therefore, in order to improve and encourage innovation, an organization must understand how knowledge is created, shared and utilized across the Knowledge and Process Management Volume 15 Number 2 pp 126–139 (2008) Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/kpm.304 *Correspondence to: Professor Robert A. Paton, School of Business and Management, University of Glasgow, West Quad- rangle, Gilbert Scott Building, Glasgow G12 8QQ, Scotland, UK. E-mail: [email protected] y Adam Smith Senior Research Fellow. Copyright # 2008 John Wiley & Sons, Ltd.

Transcript of Defining a knowledge strategy framework for process aligned organizations: an IBM case

Knowledge and Process Management

Volume 15 Number 2 pp 126–139 (2008)

Published online in Wiley InterScience

04

(www.interscience.wiley.com) DOI: 10.1002/kpm.3

& Research Article

Defining a Knowledge StrategyFramework for Process AlignedOrganizations: An IBM Case

Stephen McLaughliny and Robert A. Paton*

School of Business and Management, University of Glasgow, Glasgow, Scotland, UK

*CorBusirangE-mayAda

Cop

Many organizations struggling to capitalize on their knowledge assets tend to let their knowl-edge management systems emerge from existing IT systems and infrastructure. Within acomplex business environment this can cause a mismatch between how knowledge assetsare, and should be managed. In order to help organizations develop dynamic and effective KMsystems, the authors’ suggest that organizations need to re-think how knowledge is created andshared around their core business processes. To be more specific the author’s contend that fororganizations where inter/intra organizational collaboration is vital to overall end-to-endperformance, such as in a supply chain, organizations need to consider first the relationshipbetween what the authors see as four key components. These are knowledge strategy, coreprocess optimization, core process performance and knowledge barriers. This paper will explainwhy these components are important, and the relationship between them. The findings putforward in this paper are based on research concerned with improving process performancethrough knowledge transfer. The research follows a critical theory approach to identify bestknowledge transfer practice across complex organizations. The research is exploratory in natureand a case study methodology is used to support this line of inductive theory building. Thefindings presented are based on data collated within, and across IBM’s integrated supply chain.Copyright # 2008 John Wiley & Sons, Ltd.

INTRODUCTION

Managing knowledge capture, creation and transferis vitally important to successful innovative organ-izations (Nonaka and Takeuchi, 1995), indeedknowledge itself is recognized as an importantcomponent of value creation and competitiveadvantage (King and Zeithalm, 2003). However,many organizations tend to develop their knowl-

respondence to: Professor Robert A. Paton, School ofness and Management, University of Glasgow, West Quad-le, Gilbert Scott Building, Glasgow G12 8QQ, Scotland, UK.il: [email protected] Smith Senior Research Fellow.

yright # 2008 John Wiley & Sons, Ltd.

edge management systems from their existing ITstrategy (McDermott, 1999). In essence, the knowl-edge management system becomes an extension orexpansion of the existing IT infrastructure (Johan-nessen et al., 2001). This approach may notnecessarily be bad for the organization, but ingeneral a failure to consider how knowledge, inparticular tacit knowledge, is created, shared andutilized, as opposed to simply focusing on howexplicit knowledge is created, shared and storedmay seriously impact an organizations ability toinnovate and build a competitive advantage.

Therefore, in order to improve and encourageinnovation, an organization must understand howknowledge is created, shared and utilized across the

Knowledge and Process Management RESEARCH ARTICLE

entire organization. In order to do this, the authorsbelieve organizations must take a proactiveapproach in developing their knowledge manage-ment system, and resist the temptation to simply letit emerge from existing IT systems. Through thisproactive approach, the organization should focuson developing an organization wide strategy thatlooks at managing both knowledge assets andinformation flows and repositories.

So how then does an organization determine thebest strategy for managing knowledge and infor-mation across its business? The authors content thatin order to do this, organizations must considertheir knowledge management strategy; not only interms of technology enablement but also the impacton performance of knowledge sharing/creatingpractices amongst employees, and how processesare aligned to optimize knowledge creation andtransfer.

To this end, what this paper proposes to do, basedon primary research conducted across IBM’s supplychain organization, is put forward a ‘KnowledgeManagement System Dependency Model’(KMSDM). This model will highlight the keyaspects of a complex operating environment thatshould be considered when developing a dynamicand effective knowledge management system.

The authors also make the point that an effectiveknowledge management system cannot be deploy-ed as a generic approach across the entire organiza-tion. For the knowledge management system to beeffective, it must take cognisance of the fact thatdifferent parts of the organization will havedifferent knowledge needs, and understandingthese needs will ultimately determine the mostsuitable knowledge management system.

THE NEED FOR A KNOWLEDGEMANAGEMENT STRATEGY

This term ‘knowledgemanagement strategy’ is usedby the authors to denote the focused, proactive andpremeditated development of a strategy specificallyconcerning the long term management of bothpersonalized and codified knowledge systems(Hansen et al., 1999) in a way that best supportscompetitive advantage. Due to the emergentnature of many knowledge management systems,the authors believe that the development of aneffective knowledge management system nowdemands that organizations re-think how theyinitially identify their knowledge requirements.So, what should an organization consider whendeveloping a knowledge management strategy?

Knowledge Strategy FrameworkDOI: 10.1002/kpm

For a knowledge management strategy to beeffective, it must consider the different types ofknowledge required at certain key points across theorganization and the knowledge transfer barriersthat impact across the organization (Barson et al.,2000; McLaughlin et al., 2008). A fundamentalconsideration made by the authors in developingtheir findings is that an effective knowledge strategyis based around how tacit and explicit knowledge iscreated and flows along core business processes.The reason for this is simple. The performance ofcore business processes will have a direct impact onbusiness performance. Therefore, by concentratingon how explicit and tacit knowledge flows along thecore business processes, an organization can bettermatch its knowledge management improvementsmore directly to process performance (McLaughlinand Macbeth, 2006a). In a sense, these processescan be viewed as knowledge arteries or pathways.In general terms, organizations can manage theirtacit and explicit knowledge through a combinationof personalized and codified systems, respectively.

Hansen et al. (1999) and Gupta and Michailova(2004) have identified themain aspects that separatecodified/personalized ‘knowledge’ systems. Theimportant thing to remember with these twoapproaches is that they are designed to fit differentbusiness environments. Therefore, one is not alwaysbetter than the other. The suitability of the approachwill depend on the type of organization that isimplementing the ‘knowledge’ approach (Tiwana,2000). The key aspects of both approaches arecompared and outlined in Table 1. The Tablecharacteristics outlined are supported by Guptaand Michailova (2004) and are an expansion on theoriginal comparison as put forward by Hansen et al.(1999). The tension between technology dominanceand interpersonal dynamics in knowledge sharingis reflected in the distinction between codificationand personalization (Hansen et al., 1999; Tiwana,2000). Codification is based on technologies, such asintranets, repositories, databases etc. Personaliza-tion emphasizes knowledge sharing among indi-viduals, groups and organizations through socialnetworking and/or engaging in ‘communities ofpractice’ or ‘epistemic communities’ (Hansen et al.,1999; Brown and Duguid, 2000; Wenger, 2000).Social and interpersonal aspects seem to overridetechnology-based and procedural mechanisms interms of ‘meaningful knowledge management’(Hansen et al., 1999). McDermott (1999) concludedthat the great trap in knowledge management isusing information management tools and conceptsto design knowledge management systems. Hansen(1999) maintained that strong network ties areimportant for the sharing of tacit knowledge, while

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Table 1 Codified and personalized systems

Business strategy Codification approach Personalization approach

What is the organizationbusiness?

Provide high quality, reliable, fast andcost effective services and products

Provide creative, rigorous and highlycustomisable services and products

How much data is reusedto support new projects?

Reuses portions of old documents tocreate new ones

Every problem has a high chance ofbeing a ‘one off’ and unique problem.Highly creative solutions are called for

What is the costing modelused for organizationsproducts or services?

Price-based competition Expertise-based pricing. High pricesnot detrimental to business. Price-basedcompetition barely (if at all) exists

What are the organizationstypical profit margins?

Very low profit margins; overall revenuesneed to be maximized to increase netprofits

Very high profit margins

How best can the role ITplays be described?

IT is a primary enabler; the objective is toconnect people distributed across theorganization with codified ‘knowledge’such as reports, documentation, code etcthat is in some reusable form

Storage and retrieval are not theprimary applications of IT. IT is usedto enable communication and bettercontact. Conversations, socializationand exchange of tacit knowledge areconsidered to be the primary use of IT

What are the rewardstructures?

Employees are rewarded for using andcontributing to databases such as Notesdiscussion databases

Employees are rewarded for directlysharing their knowledge withcolleagues and for assistingcolleagues in other locations/officeswith their problems

How isknowledge/informationtransferred?

Employees refer to a document or bestpractices database that stores, distributesand collects codified knowledge

Knowledge is transferred person toperson; intra-organizational networkingis encouraged to enable sharing oftacit knowledge, insight, experienceand intuition

Where do the organizationseconomies of scale lie?

Economies of scale lie in the effectivereuse of existing knowledge andexperience and applying them to solve newproblems and complete new projects

Economies rest in the sum total ofexpertise available within theorganization; experts in various areasof specialization are consideredindispensable

What are the typical teamstructure demographics?

Large teams; most members are junior-levelemployees; a few project managers lead them

Junior employees are not an inordinateproportion of a typical team’s totalmembership

What do the organizationservices resemble?

Accenture Consulting, The Gartner group,Delphi Consulting, ZDNet, Delta Airlines,Oracle

Boston Consulting Group, McKinseyand Company, Rand Corporation

What do the organizationproducts resemble?

Pizza Hut Dell Computers, Gateway,Microsoft, SAP, People Soft, Baan, AmericaOn-line (AOL), Bell South,Lotus, SAS Institute, IBM, Hewlett-Packard,Intranetics, 3Com

A custom car, or bicycle manufacturer,Boeing, a contract research firm, aprivate investigator

Source: Tiwana (2000).

RESEARCH ARTICLE Knowledge and Process Management

non-redundant weak ties play an important role foraccessing explicit knowledge. According to Johan-nessen et al. (2001) there is a real danger that becauseof the focus IT solutions have on mainly explicitknowledge, this may relegate tacit knowledge to thebackground and hence a knowledge mismatch.

RESEARCH CONTEXT ANDMETHODOLOGY

The research methodology follows a critical theoryapproach in identifying best knowledge transferpractice across complex organizations. The research

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is exploratory in nature and a case study (Yin, 2002)methodology is used to support this line ofinductive theory building. The findings presentedin this paper are based on data collated within andacross IBM’s integrated supply chain (ISC). For thepurpose of the research, the authors surveyed over150 individuals working across an IBM core end-to-end business process; in this case, the supplychain order flow process was used. The authorsused a semi-structured questionnaire and one-to-one interviews to identify the organization’sknowledge habits with respect to a core businessprocess. The analysis of the data has been used tounderstand the different explicit and tacit knowl-

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edge sharing habits of the workforce, and theperceived barriers which influence these habits alonga core business process. The analysis also identifiedwhere along the core process the existing knowledgemanagement approach (codified or personalized)was at odds with employee tacit and explicitknowledge sharing habits. By understanding thedifferent knowledge creation and sharing practicesalong the core process, the authors have been able todevelop a picture of the dominant knowledgeapproaches, not just by business function but moreimportantly by the different parts of the organizationas they relate and interact along the core process.

The information gathered through the primaryresearch allowed the organization to re-focus on howto improve knowledge and information flows inorder to improve process performance (McLaughlinet al., 2006b). The practical application of the findingsacross the core business process helped define theKMSDM as presented in this paper.

Although the first author was a manager withinthe ISC organization, the research conducted alsoformed the basis for the author’s doctoral research(undertaken on sabbatical from IBM), which in turnis part of an inter-disciplinary and multi-sectoralresearch initiative (Paton and McLaughlin, 2008).As there is little academic research on actual barriersto information and knowledge transfer alongprocess pathways, the authors relied on pre-understanding (Gummesson, 1991) of the processand organization as a valid starting point forconducting this research.

Ultimately the aim is to develop an underpinningtheory and associated models related to improvingprocess performance in complex organizations. Theresearch and analysis outlined in this paper hasbeen conducted using qualitative and quantitativemethods with all data gathering complying withvalidation criteria as outlined by Yin (2002).

CASE STUDY: IBM’S INTEGRATEDSUPPLY CHAIN

This case looks at a recent performance-related issueimpacting IBM’s ISC in Europe. The organizationwas required to make significant changes to its coresupply chain process in order to drive improvedend-to-end performance. The supply chain organ-izationwas hierarchically structured and initially allchanges were assessed and driven at departmentand function level. Unfortunately, the initial imple-mented changes did not produce the requiredprocess improvement, so a different approach toprocess improvement was required.

Knowledge Strategy FrameworkDOI: 10.1002/kpm

What in effect happened was the organizationidentified a need to assess end-to-end performanceon a process basis as opposed to looking atperformance as it related to functional businessunits (McLaughlin and Macbeth, 2006a). As part ofthe programme for process improvement, IBMneeded to understand how knowledge transferwas being impacted along core processes, and howthis is related to the actual process performance. Asan outcome of the process improvement pro-gramme, IBM reassessed how it needed to manageknowledge at different points along the corebusiness processes, in paying particular attentionto how the improvements related to technology,process, culture and people (Kakabadse et al., 2001).

Once the process improvement changes wereimplemented, overall end-to-end performance overa 4–6-month period was seen to increase signifi-cantly (McLaughlin andMacbeth, 2006a). As part ofa process improvement initiative over 100 process,system and organizational changes were identifiedand implemented (McLaughlin et al., 2006b). Thechanges were assessed to see if they impactedcodified or personalized knowledge transfer, and adominant knowledge approach could then beidentified for each process work group.

The changes, which were identified by a cross-functional process improvement team (McLaughlinet al., 2006b), were seen to target barriers which inturn could be identified as having an impact on thepreferred knowledge approach (Figure 1) for eachof the different work groups connected with theprocess. Through the process improvement initiat-ive’s targeting of identified barriers, the end-to-endorder flow process saw a 20–22% improvement inthe time taken to accept, process, build and delivercustomer orders throughout EMEA. In order toachieve this level of improvement, IBM had toapproach the process from a ‘bottom–up’ improve-ment perspective. Knowledge and information habitshad to be considered not at an organization-widelevel, but at a process work group level, and anunderstanding as to how barriers impacted along thecore process needed to be developed. This resulted inthe different knowledge approaches being imple-mented across the core business processes.

It must be pointed out that the KMSDM is basedon the findings of one case study, and is therefore,presented as ‘inductive’ theory building.

CONSIDERATIONS IN DEVELOPING AKNOWLEDGE MANAGEMENT SYSTEM

When developing a knowledge management sys-tem, an organization should assess how it wishes to

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Figure 1 Dominant knowledge approaches across core supply chain process

RESEARCH ARTICLE Knowledge and Process Management

capture, create and share both tacit and explicitknowledge. In reality how this happens may varysignificantly across different organizations. Thisproblem becomes more acute when trying to definea knowledge management system for a complexorganization. If an organization decides to opt for amainly codified approach it needs to consider theamount of interaction employees will have with thesystems involved (Hansen et al., 1999). If the systemsare unstructured and allow data to be input as richtext, context might be difficult to determine and theemployees will have more control over the amountof information they wish to share. However, at theother end of the spectrum with highly structureddata-formatted systems, gleaming knowledge froma ‘tacit to explicit to tacit exchange’ may be difficult(Marwick, 2001). Also the systems may becomeinflexible when trying to meet the demands of adynamic and changing market place. To that endthe choice of a codified or personalized approachused to support the way an organization views andmanages its knowledge is important (Hansen et al.,1999; Tiwana, 2000). However, even when organ-izations have decided on a knowledge managementstrategy, a successful implementation is not alwaysguaranteed (Kluge et al., 2001; Grossman, 2006).This paper contends that this is because of theassessment for a top–down, organization-wideknowledge management system which fails toproperly consider the cultural aspect relating tohow individuals create and share knowledge.Table 2 shows how in the case of IBM the dominantknowledge systemwas out off line with the needs ofthe different parts of the process-aligned organiz-ation. Also, current assessments fail to take into

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consideration the complexities of today’s organiz-ations. In particular, the complexities inherent inmanaging a supply chain, which by virtue of itscomplexity may span both multiple businessfunctions and organizations.

To highlight this point, IBM’s supply chainorganization was assessed using Tiwana’s frame-work for determining a dominant knowledgeapproach (Table 2). However, due to the complexityof the organization involved in the management ofcore supply chain business processes, the assess-ment was not able to clearly identify a suitabledominant knowledge approach. What in fact theassessment exercise did show was how variedthe organization’s knowledgemanagement require-ments were along the core horizontal order flowprocess.

KNOWLEDGE MANAGEMENT SYSTEMSFOR COMPLEX ORGANIZATIONS

Tiwana’s (2000) comparison between codified andpersonalized knowledge approaches provides aclear understanding of the different strategies thatorganizations can take in developing a ‘knowledgeaware’ environment. The comparison betweencodified and personalized is still valid when oneconsidered that Table 1 really refers to howorganizations handle information currency andflow within their boundaries (explicit), whilstunderstanding the need to engage human cognitiveproblem solving and reasoning skills over dataavailability systems when operating within aunique problem-solving environment (tacit). The

S. McLaughlin and R. A. PatonDOI: 10.1002/kpm

Table 2 Best-fit strategy for knowledge enablement

Business strategy question IBM ISC position Approach

What type of business is theorganization in?

Providing high quality, cost effectiveservice

Codified

How much data is reused to supportnew projects?

Reuse contract templates and reportingmetrics and formats

Codified

What is the costing model used fororganizationsproducts or services?

Price-based competition. Costefficiency—driving cost out of thebusiness. . .

Codified

What are the organizations typical profitmargins?

Supply chain seen as a way of takingcost out of the business

Codified

How best can the role IT plays bedescribed?

IT used to store and retrieve information.Also to automate generic/standardprocesses

Codified

What is the organization’s rewardstructure like?

Employees are rewarded for sharingknowledge directly with peers, andhelping problem solve in other partsof the organization

Personalized

How is knowledge/informationtransferred?

Employees refer to documents of bestpractice, and use databases for storingcommon information. However, alsoencouraged to share person to person

Codified and personalized

Where do the organizationseconomies of scale lie?

Economies lie in the effective reuse ofinformation. However, subject matterexperts within key areas of the processsupport information sharing

Codified and personalized

What are the typical team structuredemographics?

Matrix organization with varying sizesof teams. Organization invests in MBAs,Post-grad and PhDs within supply chainspecialization

Personalized

What services do the organizationsresemble?

IBM services sections moving to apersonalized services setup

Personalized with strongIT support

What products do the organizationsresemble?

Core supply chain process is processdriven. However, supply chain usedto support project type customer requirements

Codified and personalized

Knowledge and Process Management RESEARCH ARTICLE

differences outlined in Table 1 refer to two ends of aspectrum and as such an organization should notuse a totally codified or personalized strategy. Thequestion from the authors perspective is howrelevant is the criteria in Table 1 in determining asuitable knowledge management approach for acomplex organization such as IBM’s ISC group? Thequestions outlined in Table 1 were asked of the IBMISC group. Table 2 shows, in the case of IBM,Tiwana’s criteria which indicates how the need for acodified or personalized knowledge approach willvary significantly across a complex organization.Therefore, a complex organization’s knowledgestrategy cannot be easily defined against thequestions outlined in Table 1.

From Table 2 it cannot be easily determinedwhich dominant knowledge approach should beused for IBM’s supply chain organization. It doesnot mean the existing approach is wrong, just thatthe assessment, as it stands, is inconclusive withrespect to identifying a suitable knowledgemanage-ment approach. Developing a suitable strategymust

Knowledge Strategy FrameworkDOI: 10.1002/kpm

be based on how employees access, create and shareknowledge.

Gupta and Michailova (2004) believe that anindividual’s ability to appreciate new knowledge isa function of their absorptive capacity (Cohan andLevinthal, 1990; Szulanski, 1996). What is interest-ing about Gupta and Michailova (2004) research isthat it does not look at the organization as a singleentity but as a collection of departments workingtogether, and the different demands they place onknowledge creation.

This is an important view as the reality of today’sorganization, especially a complex supply chain, isthat roles and expected deliverables will varybetween departments and business units. There-fore, when defining a knowledge managementstrategy an understanding as to how the organiz-ation’s constituent parts use information and createknowledge must be taken into consideration.

The reviewed literature suggests that whentechnology is the primary focus in knowledgedelivery systems they have failed to deliver (Barson

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RESEARCH ARTICLE Knowledge and Process Management

et al., 2000; Pawar et al., 2002; Gupta andMichailova,2004). The assumption that knowledge manage-ment relies heavily upon social patterns, practicesand processes goes far beyond computer-basedtechnologies and infrastructures (Coleman, 1998;Davenport and Prusak, 1998). Empirical evidenceon inhibitors to knowledge sharing stresses theimportance of behavioural and cultural factorsrather than to outline reasons associated withtechnology (Skyrme and Amidon, 1997; DeLongand Fahey, 2000). The emphasis on the role oftechnology specifically knowledge codification hasalso been questioned by Spender (1996) andTsoukas (1996).

Pawar et al. (2002) also question the effectivenessof a purely codified approach to KM. It is their beliefthat modern management practice has only tendedto focus on centralizing, controlling and standardiz-ing knowledge. Such codification allows the mar-ginal cost of knowledge acquisition to be reduced byeconomies of scale (assuming the codified knowl-edge is relevant and useful). This underlyingphilosophy has stimulated immense interest overthe last decade in knowledge management. Pawaret al. (2002), at the same time, realize the placetechnology has within the effective coordination ofknowledge. However, they feel that humans playmore of a central role in the identification,acquisition, generation, storage, structuring, distri-bution and assessment of knowledge. It’s interest-ing that Pawar et al. (2002) views, although takingthe softer aspects of knowledge management in toconsideration, do not really look at how organiz-ations get their employees to ‘pull’ knowledge(Kluge et al., 2001).

Malhotra (2001) also believes in line with Klugeet al. (2001) that there is an overarching need forthe building of a knowledge management culturewithin an organization, and the responsibility fordeveloping this culture does not rest with theinformation technology specialists. However, inorder to achieve this, barriers to knowledge andinformation transfer need to be identified andmanaged (Szulanski, 1996; Barson et al., 2000;Argote, 2005).

KNOWLEDGE MANAGEMENTBARRIERS

A common theme that has emerged is that knowl-edge management must be viewed from a holisticperspective (Malhotra, 2001). Failure to do so willresult in an organization’s failure to realize thepotential it has to create and share knowledge(Kluge et al., 2001). Although Barson et al. (2000)

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provide a comprehensive list of issues that supportthe findings of previous research but they do notprovide any empirical evidence as to how thebarriers impact knowledge creation and sharingwithin a complex organization such as IBM’s ISCactivity. There are also aspects of Pawar et al.(2002), Kluge et al. (2001) and Szulanski’s (1996)research that are not taken into account. Ofparticular interest is the impact that an imbalanced‘push–pull’ knowledge strategy can have oninformation flow and knowledge creation. AlsoSzulanski’s work on identifying barriers whicheffect knowledge ‘stickiness’ within an organizationneed to be considered when assessing barriers inany large complex organization. Therefore, thefindings from the different research papers havebeen collated together and assessed for over-lap(McLaughlin and Macbeth, 2006a). The barriersidentified were categorized under the TOP head-ings used by Barson et al. (2000) and are shown inTable 3.

This list of barriers identified in Table 3 was usedin assessing themain barriers to knowledge creationand transfer along the ‘order flow’ process withinIBM’s ISC supply chain. Barriers impact upon theway knowledge is shared across an organization,and Table 3 contains a list of the most commonlyidentified barriers to knowledge transfer (Szulanski,1996; Barson et al., 2000; Kluge et al., 2001; Argote,2005). In order to assess how they impact across anorganization, IBM’s ISC employees, working alonga core process, were asked whether they had anyexperience of the barriers, and to what degree. Fromanalysis of their responses it became apparent thatthe barriers could be addressed by using technology(codified), team building (personalized) (Hansenet al., 1999) techniques or a combination of the two.However, another point to note was that somebarriers seemed to have little or no impact acrosscertain parts of the organization. This does notnecessarily mean that these barriers do not exist, butin fact the barriers are already being managedthrough existing codified/personalized aspects ofthe existing knowledge strategy. Table 3, in the caseof IBM’s ISC, looks at the identified barriers andmatches them to a dominant approach thatminimizes their respective impact.

What is clear from Table 4 is that an assessment ofthe barriers against an organization not onlyidentify areas where knowledge creation andsharing are impacted, but also how the organizationcurrently access, value and share tacit and explicitknowledge. This is important when defining aknowledge management strategy as the barrieranalysis can indicate how individuals prefer toaccess and share. It also shows that barriers to

S. McLaughlin and R. A. PatonDOI: 10.1002/kpm

Table 3 Concise list of barriers

Source Cross category barriers

Barson et al. (2000) Existing resources (money, time, technology, skills, data transfer)Barson et al. (2000); Kluge et al. (2001) Rewards (individuals rewarded for sharing/creating K)Szulanski (1996) Arduous relationshipBarson et al. (2000); Kluge et al. (2001) Culture (K strategy)

Technology barriersBarson et al. (2000) Available technology (does IT support K requirement)Barson et al. (2000) Legacy systems (are legacy systems impacting K transfer)

Organizational barriersGupta and Michailova (2004) Knowledge strategy implementationSzulanski (1996) Causal ambiguityBarson et al. (2000) Poor targeting of knowledgeBarson et al. (2000) Knowledge costBarson et al. (2000); Pawar et al. (2002) Proprietary knowledgeBarson et al. (2000); Pawar et al. (2002) Distance (geo, culture, language, legal)Szulanski (1996) Unproveness (is knowledge rated as being of value)Szulanski (1996) Organizational contextSzulanski (1996) Info not perceived as reliableSzulanski (1996); Kluge et al. (2001) Lack or motivation (knowledge as power syndrome)

People barriersBarson et al. (2000); Kluge et al. (2001) Internal resistance (protect interests of Org/BU)Barson et al. (2000) Self interest (expose knowledge to competition)Barson et al. (2000) Trust (trust for individuals sharing knowledge with)Barson et al. (2000) Risk (fear of penalty, losing profit)Barson et al. (2000); Pawar et al. (2002) Fear of exploitationSzulanski (1996) Lack of motivation (not invented here syndrome)Kluge et al. (2001) Fear of contaminationSzulanski (1996); Gupta and Michailova (2004) Lack of retentive capacitySzulanski (1996) Lack of absorptive capacity

Source: McLaughlin and Macbeth (2006a).

Knowledge and Process Management RESEARCH ARTICLE

information and knowledge sharing can provide animportant control mechanism that prevents thedissemination of information/knowledge to unde-sirable locations and recipients (risk, self interestand proprietary knowledge). Organizations maynot necessarily wish to remove such barriers, butinstead strive to understand and manage thebarriers as effective information/knowledge flowcontrol mechanisms. However, before this can bedone, one needs to understand how the barriersmanifest themselves across the key business pro-cesses.

Table 4 also shows how each barrier can bealigned to either a personalized or codified knowl-edge approach. Organizations will see differingmanifestations of the barriers, and therefore, theapproach chosen will depend upon particularbarrier profiles/interactions. That said, Table 4identifies, in the case of IBM, the dominantapproach in managing the barriers as being apersonalized approach. However, onemust remem-ber that the barriers may not always be present, andeven when they are their impact may vary.

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From Table 4 it can be seen that in order toaddress the identified barriers the main knowledgemanagement approach is personalized. However,this does not, and should not be taken to mean thatcodified implementation methods should be dis-missed. The information in Table 4 simply points tothe fact that organizations need to:

(1) i

dentify how these barriers manifest and impactacross their key business processes;

(2) u

nderstand how information and knowledge sharinghappens as a consequence of the existence of thesebarriers;

(3) u

nderstand whether any of the barriers are importantfor the operational control of information or knowl-edge;

(4) u

nderstand and decide on a suitable knowledgemanagement system based on the existence, and needto manage barriers.

What in effect this means is that the organizationmore effectively maps its knowledge managementsystem to how the individuals currently manageknowledge (McLaughlin et al., 2006b). However, it

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Table

4Approachesto

managingbarriers

Cross

category

barriers

Preferred

approachto

man

agingbarrier

Existingresources

(money

,time,

tech

nology,skills,datatran

sfer)

Codified

orpersonalized

—In

thecase

oftheISC

theresources

that

weremainly

impactedarepersonnel,trainingan

dtime.

Howev

er,tech

nology

mightalso

beacontributingfactorin

other

organ

izations

Rew

ards(individualsrewarded

forsh

aring/creatingknowledge)

Personalized

—Therewardssystem

isbased

ondev

elopinga‘team-w

orking’ap

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ance

Ard

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ipPersonalized

—Ard

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ipsareim

proved

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Culture

(KStrateg

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Personalized

—Asa‘Pull’cu

lture

isthedesired

optionthis

cannotbeachieved

throughtech

nology.Individualsneedto

bemotivated

toseek

anduse

inform

ation

Technologybarriers

Available

tech

nology

Codified

—This

barrier

specificallylooksat

tech

nologyas

anim

pactoninform

ation/knowledgesh

aring

Leg

acysystem

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—This

barrier

specificallylooksat

tech

nologyas

anim

pactoninform

ation/knowledgesh

aring

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izational

barriers

KStrateg

yim

plemen

tation

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orpersonalized

—This

isakey

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asitlooksat

how

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valuab

leinform

ation

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salam

biguity

Personalized

—Itis

more

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leto

dev

elopwithin

individualsabetterunderstan

dingoftheE2E

process

andhow

thefailure

tosh

areinform

ationmay

impactperform

ance

atdifferentstag

esin

theprocess

Poortargetingofknowledge

Codified

orpersonalized

—W

hen

lookingto

providean

swersto

uniquequeriestheindividual

caneither

target

data

sources

such

asDatab

ases,orthey

canreferto

subject

matterexperts

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Funding—

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barrier

refers

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ilityoftheorgan

izationto

finan

cethenecessary

codified

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provinginform

ation/knowledgecreationan

dsh

aring

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refers

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share(trust)than

themechan

ismsforsh

aring(technology)

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(geo

,cu

lture,

languag

e,legal)

Codified

orpersonalized

—Technologymay

impactthecommunicationan

dtran

sfer

ofinform

ationbetweenseparate

work

groups/

individuals

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ess

Codified

orpersonalized

—This

dep

endsonwhether

individualsvalueinform

ation/knowledgemore

highly

from

system

sover

peo

ple,orviceversa

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izational

context

Personalized

—This

refers

tohow

theorgan

izationis

aligned

.Does

it’s

structure

create,orremovebarriersto

inform

ation/knowledgesh

aring

Info

notperceived

asreliab

leCodified

orpersonalized

—This

may

bedep

endan

tontheperceived

qualityan

dreliab

ilityoftheexistingIT

system

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deliveringinform

ationin

atimelyan

daccu

rate

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ner.Oritcandep

endonhow

individualsrate

thereliab

ilityoffellow

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they

hav

elittle,ornocontact

Lackofmotivation

(knowledgeas

power

syndrome)

Personalized

—Red

ucingthis

barriersim

pactis

aboutim

provingindividual’s

open

nessto

sharinginform

ationan

dknowledge

Peo

ple

barriers

Internal

resistan

ce(protect

interestsofOrg/BU)

Personalized

—This

dep

endsonhow

strongly

anindividual

feelstheneedto

protect

theirdep

t,function,organ

izationby

restrictingtheflow

ofinform

ation/knowledge

Selfinterest

Personalized

—This

barrier

refers

tohow

individualswillrestrict

theflow

ofinform

ation/knowledgeto

ven

dors

orbusiness

partnersin

case

theinform

ation/knowledgeis

then

passedonto

acompetitor

Trust

Personalized

—This

refers

tohow

oneindividual

trustsan

other

touse

theinform

ationprovided

intheman

ner

intended

Risk

Personalized

—This

barrier

exists

when

individualsrestrict

theflow

of

inform

ation/knowledgebased

onpotential

loss

ofearnings,

customer

dissatisfaction,orincu

rred

pen

alty

pay

men

ts

134 S. McLaughlin and R. A. PatonDOI: 10.1002/kpm

RESEARCH ARTICLE Knowledge and Process Management

Fearofexploitation

Personalized

—This

refers

toinform

ation/knowledgereciprocity.

Ifindividual

shares

inform

ationhow

importan

tis

itthey

get

inform

ationback

Lackofmotivation

(notinven

tedheresyndrome)

Personalized

—Red

ucingthis

barriersim

pactis

aboutim

provingindividual’s

open

nessto

acceptinginform

ationan

dknowledgethat

has

beencreatedelsewhere

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Personalized

—Inform

ationan

dknowledgesh

aringis

relatedto

thelevel

ofcompeten

ce/professionalism

experienced

bytheindividual

whomay

belookingto

share

Lackofretentivecapacity

Codified

—This

refers

tohow

wellan

organ

izationcanstore

new

inform

ationorknowledge

Lackofab

sorptivecapacity

Codified

orpersonalized

—How

does

theorgan

izationen

sure

theindividual

getsaccess

totheright

inform

ation/knowledge,

andknowswhat

todowithit

Knowledge and Process Management RESEARCH ARTICLE

Knowledge Strategy FrameworkDOI: 10.1002/kpm

is important to remember the mapping processesmust happen along the defined core businessprocess. That way the barrier analysis across theorganization is assessed against individuals andwork groups who are interacting along processpathways. This is important as the need forperformance improvement is dependant on ensur-ing knowledge sharing pathways are managedeffectively, not simply within functional hierarch-ical structures but along cross-functional processpathways (Van Weele, 2005). In the case of IBM’ssupply chain organization, the differences inknowledge creation and sharing practices becameapparent when the work groups involved with theorder flow process where questioned about barrierimpact. This was done through the on-line ques-tionnaire and a series of personal interviews withsenior management, the analysis of which allowedthe authors to identify where along the core processthe barriers existed. By linking a codified orpersonalized approach to managing the individualbarriers, a dominant approachwas identified for thedifferent work groups associated with a corebusiness process. Figure 1 shows how the dominantknowledge creation and sharing processes alternatebetween codified and personalized in relation to theorder flow process.

The preference for either a codified or personal-ized approach will differ from organization toorganization. However, what is important to realizeis that along core processes different work groupswill identify with different knowledge approaches.Therefore, because of this the implementation of anorganization-wide knowledge approach will nothelp effectively tomaximize the knowledge creationand sharing across core business processes.

RELATIONSHIP BETWEEN STRATEGY,BARRIERS, PROCESS ANDPERFORMANCE

From the research findings and the mechanismsrequired to identify and assess barrier impact acrosscore processes, the authors believe that the for-mation of an effective knowledge managementsystem cannot be developed in isolation of per-formance, barrier impact or the organizationalunderstanding of key end-to-end processes.Table 5 outlines the four key elements which theauthor’s believe made up the KMSDM.

Figure 2 shows the relationship, as the author’snow see it, between the four key elements: knowl-edge management strategy (codified/personal-ized), process optimization, barrier impact andend-to-end process performance. This perspective

135

Table 5 Research findings underpinning KMS elements

KMSDM elements Research findings

Knowledge strategy Different parts of the process require different knowledge approaches(codified/personalized/mixed)

Process optimization The effectiveness of the process is dependant on its weakest link. Therefore, theend-to-end process must be defined in terms of process alignment, and notfunctional alignment

Knowledge barriers Barriers to information and knowledge sharing will exist in every organization.What is important is that organizations understand and manage these barriers

Process performance Performance is impacted by how people/systems create, store and shareinformation and knowledge

RESEARCH ARTICLE Knowledge and Process Management

differs slightly fromHall et al. (1994) andMaull et al.(1995) findings in two main areas. First, the impactof ICT is viewed from a knowledge create/transferbarrier perspective as the focus is more on theimpact of ICT on knowledge and informationsharing practices as opposed to the technologyitself. Second, human factors, as highlighted by Hallet al. (1994) and Maull et al. (1995) are alsoconsidered under the heading knowledge create/transfer barrier as it is the impact of human factorson information and knowledge sharing that is to beconsidered. Also, process optimization considershuman factors as they relate to the formation anddevelopment of a process optimization team. Thediagram in Figure 2 is intended to outline therelationship between what the author’s propose,based on the IBM case study findings, are the fourkey elements of any knowledge managementsystem.

Figure 2 Knowledge Management System Dependen

136

This relationship between the key elements doesnot work in isolation but is also impacted by largerorganizational drivers. The elements tie in closelywith existing elements of the overall businessstrategy, such as organizational structure andculture (Tsoukas, 1996; Fuller, 2002; Starkeyet al., 2004; Simons, 2005). This underlines the factthat the knowledge management system must forman integral part of the overall organizationsstrategy.

Process optimization is also impacted by organ-izational structure/alignment and resource avail-ability, as these determine theway processes developnot just vertically within an organization, but alsohorizontally. Knowledge barriers are impacted byorganizational culture, which in turn will impact‘push–pull’ knowledge or information acquisition,team working, motivation to share based on thereward structures and trust. Knowledge strategy

cy Model (KMSDM) with defined relationships

S. McLaughlin and R. A. PatonDOI: 10.1002/kpm

Knowledge and Process Management RESEARCH ARTICLE

will be impacted by overall business strategywhich will set performance targets, organizationalstructures and impact overall organizational culture.The type of impact described is not just one-way, butcan be bi-directional, as in the case of processoptimization changes that can have organizationalstructural impact. Also, changes that modify barrierbehaviour can impact culture, and changes toknowledge strategy can drive changes that, in turn,can impact overall business strategy decisions—especially concerning the use of technology, training,organization structure and timeline to meet per-formance goals. This interdependency shows howthe development of a knowledge strategy isdependant on feedback from process optimization,barrier analysis and performance. This identifiesthe need to develop a real-time, business environ-ment-sensing system that is able to monitor itsenvironment for change; change that is to beexpected in a complex customer-focused businessenvironment. This interdependency illustrates howthe development of a knowledge strategy is

Table 6 KMSDM relat

Relationshipbetweenelements

Description

KS–PO Shape/Prioritize—Knowledge strategy will sneeded across core processes in order to m

PO–KS Impact—The operation of key core processesdecisions which will shape the overall knowit will support/hinder desired strategy, andat supporting new product/customer requi

KS–PP Desired performance—The knowledge implesupport and drive to achieve the desired bu

PP–KS Actual performance—When shaping the knogiven to the actual performance of the coreto ensure the strategy implementation meth

KS–KB Target/Reduce—The knowledge implementaimpact the way information or knowledge

KB–KS Impact—In order for the knowledge implemeflow efficiently across the organization, thehow barriers impact across key processes

PO–PP Impact—Effective process optimization will ibeing optimized. However, in order for optprocess must be optimized from an end-to-boundaries

PP–PO Identify—As processes are being optimized tback into the optimization process

KB–PP Impact—Information and knowledge sharingif they are not checked and managed

PP–KB Prioritized barriers—As processes are optimiwill help identify which barriers are impac

PO–KB Target—Process optimization looks to implemtechnology considerations, but also look atcreation and sharing

KB–PO Impact—As the process is optimized key bareffect of reducing/removing one barrier ha

Knowledge Strategy FrameworkDOI: 10.1002/kpm

dependant on feedback from process optimization,barrier analysis and performance. The relationshipsbetween the four elements are described in moredetail in Table 6.

It is this inter-dependant relationship betweenknowledge strategy, process optimization, barriersand performance that forms the basis for theauthors’ proposed theory. It is the interaction ofthese four elements that needs to be consideredwhen developing a responsive knowledge manage-ment system.

DEVELOPING ANORGANIZATION-WIDE APPROACH

Tiwana’s (2000) criteria for assisting in determiningsuitable knowledgemanagement approach requiresan assessment that is based on the type oforganization and what are the output goals.However, the assessment does not take intoconsideration organizational structure or focus(functional or process orientation). In order to

ionship breakdown

hape and prioritize changes and improvementseet the overall strategic objectives, and how they are structured will impact theledge strategy, such as existing technology and howthe alignment of processes and how flexible they are

rementsmentation strategy needs to be developed in order tosiness performance for core processes

wledge implementation strategy consideration must beprocess. This feedback mechanism is necessary in orderods are targeting key performance issuestion strategy must target barriers which adverselysharing across the organizations key processesntation strategy to ensure information and knowledgeimplementation strategy must take full consideration of

mprove overall end-to-end efficiency of the processesimization to successfully improve the efficiency, theend perspective regardless of inter/intra-organizational

he impact of any change must be understood, and fed

barriers will impact end-to-end process performance

zed and barriers identified end-to-end performanceting performanceent changes which don’t just consider informationhow barriers impact information and knowledge

rier impact must be monitored to ensure the dynamics on other key barriers are understood

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RESEARCH ARTICLE Knowledge and Process Management

define a strategy, an understanding as to how theexisting organization performs, and what barriers(McLaughlin et al., 2008) exist to improving end-to-end performance must be understood.

The main shortcoming with using the assessment(Table 1) to determine the most appropriate knowl-edge strategy is that it does not consider thespecifics of how information is created and shared,both from a codified and personalized perspective.Should the responses to the assessment indicate apersonalized strategy, there is no indication givenas to what barriers might exist and how individualsand teams should be directed andmanaged in orderto overcome them. For example the importance indeveloping a ‘pull’ strategy over a ‘push’ strategy,or the impact of barriers such as motivation,reciprocity or trust are not considered. If, however,the response indicated a codified strategy, nowarning is given as to the importance of theinformation and knowledge creating/sharingissues surrounding legacy system compatibility,system data formats and system-to-system compat-ibility across internal and external boundaries.

In essence, complex organizations should steeraway from developing a ‘one strategy fits all’approach. The danger here is that such a strategywould fail to meet the specific needs at key pointsalong the core processes based on their infor-mation/knowledge creation and sharing practices.Instead the organization needs to develop a flexiblestrategy that responds to how knowledge is createdand shared along the core processes; this may meana combination of codified and personalized sys-tems. The difference being the strategy is notmatched to how the organization builds/costs/develops products and services, but rather howemployees and teams access, create and shareinformation/knowledge horizontally and verticallyinternally and externally.

CONCLUSION

In conclusion the authors believe any approach todefining a strategy must be based on the core beliefthat the effective ‘management’ of knowledge is notdependant on the selection of an organization widecodified or personalized knowledge managementsystem. It is, however, dependant on the effectivemanagement of the knowledge ‘creating andsharing’ work environment. The subtle implicationhere is that the organization needs to understand,first and foremost, how individuals create and shareintangible assets such as tacit and explicit knowl-edge across the organization. Trying to capture and

138

directly control this process through the use oftechnology will not work. As the act of creating andsharing knowledge is dependant on an individual’sinnate capability and motivation, to do thisrelegates the use of technology to a support rolein the dissemination of information and sharing ofknowledge. This is an interesting position consider-ing the high value organizations currently place onthe use of technology in shaping and driving bothcodified and personalized KM systems (Bhatt, 2001;Bollinger and Smith, 2001; Kluge et al., 2001;Grossman, 2006).

However, for a KMS to provide real value to anorganization, its development must also considerhow it best supports business performance. Byidentifying knowledge transfer barriers along corebusiness processes, organizations are better placedto develop the process improving knowledgeinitiatives. This belief coupled with the need todrive process performance brings together, withinthe KMSDM, a framework for organizations onwhich to build effective, responsive knowledgemanagement systems.

Although the KMSDM is based on the findingsfrom one organization, the authors believe that thisframework provides a good starting point inunderstanding how best to develop knowledgemanagement systems that are directly related to theperformance improvement.

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