Knowledge Management Strategy

Abstract: Companies’ management, organization and corporate strategy have changed considerably in recent years. These changes have manifested the transition from the industrial society to an era
indicated by the concepts such as knowledge society.

Hence, knowledge has become a critical resource of the economy. In order to transform an organization into a learning organization and ensure an effective knowledge management (KM) strategy, a knowledge audit should be conducted, which will provide a current state of knowledge capability of the organization and a direction of where and how to improve that capability in order to be competitive in this fast changing knowledge era. This paper assesses the adoption of the knowledge management concepts, using a systematic knowledge audit approach. A study on the Malaysian company Tekmark will contribute in conceptualizing the importance of KM audit. Meanwhile, serious consideration on the KM drivers, enablers and blockages is needed for an effective KM strategy. This paper extended the recommendation on the KM strategy in the organizations.

1. Introduction

Many organizations are recognizing that to sustain in complex and dynamic environment, they should be efficient in managing knowledge. As far as knowledge society is concern, organizations nowadays engage in knowledge management in order to leverage knowledge both internally and externally to their stakeholders (Rubenstein-Montano et al., 2001). These stakeholders are not only the employees but also include the shareholders and customers. Organisational theorists such as Nonaka and Takeuchi (1995) also highlighted the necessity to view knowledge as embedded in, and constructed from and through social relationships and interactions in a community or network of people. As a result of these exposure and perceived value-creating processes, there has been a popular development of the notion of knowledge management as a key to competitive advantage.

Knowledge Management (KM) can be defined as the collection of processes that govern the creation, dissemination and leveraging of knowledge to achieve organizational objectives (Lee & Yang, 2000). It includes the strategies and processes for identifying, capturing, sharing, and leveraging the knowledge required to sustain and compete effectively in the business environment (Gautschi, 1999). However, a majority of managers are facing several challenges in understanding the practical characteristic of knowledge management (Davenport et al., 1998). Christensen (2000) pointed out that KM might be considered a rational instrument implemented into the company and which has been institutionalized as a rational myth.

Leveraging on organizational knowledge and learning to create new knowledge have become the critical strategic issue for organizations that capitalize on innovation. However, many KM programs failed because the organizations are lack of understanding of their knowledge needs (Guptara, 2000). A KM audit will provides sound investigation into an organization’s core information and knowledge needs and uses in an organization (Dalkir, 2005). The audit should also include an examination of organization’s strategy, leadership, collaborative, learning culture and technology infrastructure in its various knowledge processes. Hence, a knowledge audit should be conducted, which will provide a current state of knowledge capability of the organization and a direction of where and how to improve that capability in order to be competitive in this fast changing knowledge era.

The aims of this paper are to assess the adoption of the knowledge management concepts, using a systematic knowledge audit approach. Firstly, a study on the Malaysian company Tekmark Sendirian (Sdn.) Berhad (Bhd.) will contribute in conceptualizing the importance of KM audit. The objectives are to study and develop a deeper understanding of organization existing knowledge communities and content. Second section explained the rational of the research process used. Subsequently, serious consideration on the KM drivers, enablers and blockages is needed for an effective KM strategy. This paper extended the recommendation on the KM strategy in the organizations and proposed the knowledge metric for effective KM.

2. Company Background

Tekmark Sdn. Bhd. was formed as a trading company in Malaysia on the 22nd February 1994. Tekmark specializes in the test and measurement business. It provides measurement solution to the telecommunications, broadcast and semiconductor industries nationwide. Tekmark also provides comprehensive services such as pre-sale consultancy, full commissioning, testing, training and after-sales support. With the head office located in Kuala Lumpur, Tekmark has operations in Penang, Johor and Sarawak Internationally, Tekmark has been expanding to: Australia, Singapore, Brunei and Thailand.

TekMark vision is to be a reputable global company in measurement business and its mission carries the tagline of “total customer satisfaction”. Tekmark are dedicated to increase and enhance its competitiveness by delivering excellent quality products and excellent services. Meanwhile, Tekmark is to strive for continuous improvement and differentiating itself with continuous value innovation in ensuring customer satisfaction and retention.

The test and measurement business segment provides standard test and customized solutions that were used in the design, development, manufacture, installation, deployment and operation of electronic equipment, systems and communications networks and services. These solutions included test and measurement instruments and systems, automated test equipment; communications network monitoring, management and optimization tools, software design tools and associated services. Tekmark existing major clients are Panasonic, Radio and Television Malaysia (RTM), TM, and Astro. Few of the main suppliers are Tektronix and PCTEL, Inc., both from United States of America (USA), and Topward from Taiwan.

As a global player, Tekmark’s business environment has also been transformed by contemporary shifts in the global economy. With the intensifying of competition and market becoming more uncertain and complex, Tekmark has attempted to evolve their business structure through the use of KM.

3. Research Process

The research utilized an exploratory methodology, which is well suited to assess Tekmark current state of KM activities. Exploratory research is characterized by flexibility and versatility, with respect to the methods, because formal research protocols and procedures are not employed (Malhotra, 1999).

Casual interviews were conducted with Group Managing Director, Mr. Ralph Khor, and staffs from different regional offices. Interviews with Mr. Ralph Khor are extremely important in order to understand the commitment of KM at top management level. Staffs and researcher have undergone a series of analytic and feedback loops prior to the interviews.

Despite of internal staffs, the research also utilized the interviews with industry experts (Winett, 1995). This includes interview with individual knowledgeable about the KM practices in Malaysia. Chief Information Officer of Senstech Malaysia Sdn. Bhd., En. Shamsul Azmal was invited for the interview . The purpose of interviewing expert is to assist in assessing key KM activities. Therefore, expert information is obtained by unstructured personal interview, without administering a formal questionnaire.

4. Findings

The KM audit of Tekmark was conducted basing on the Wiig KM Cycle (Wiig, 1998). Factors concerning the use of knowledge, such as the blockages, enablers and drivers for KM initiatives were analyzed .

4.1 Tekmark KM Initiatives & Drivers

Tekmark considers knowledge, especially KM, to be a core capability for achieving competitive. Tekmark have spent more than 0.5 million Ringgit Malaysia (RM) on Information Technology (IT) to facilitate the KM system. Knowledge and intelligence that is drawn from the experiences of particular client projects, is one of the most crucial forms of knowledge for the company. Whereas previously this kind of knowledge may simply have been collected and added to a relatively static database, Tekmark now concentrates on more highly skilled and operationally experienced KM professionals interpreting, assessing and classifying this kind of knowledge.

During the early days, KM had been sponsored and managed by service lines or geographic regions that resulted in a somewhat segregated approach (Smith, 1998). This meant that project teams might be contacted by a number of different KM groups from different regions, often seeking similar or related information. After a number of years of growth, the company soon realized that it had a large but relatively unwieldy set of databases and the next phase involved a long process of editing, refining and reclassifying the knowledge onto the knowledge exchange, such as the Tekmark E-Portal. The E-Portal is the heart of Tekmark KM program, covering more than 5,000 individual databases that are subdivided into various topics. The objective of the E-Portal was to help managers reduce planning time, minimize risk, and improve the quality of the client deliverable products.

Harnessing and adding value to knowledge is one of the key areas where Tekmark’s KM initiative has attempted to develop new capabilities. According to the managers surveyed from Tekmark, the key to understanding the contemporary role of knowledge in businesses is to understand that it is relevant information that can be used to quickly act upon, in contrast to the more traditional methods of handling business information as a guarded secret that is stored and protected by regional system administrators. This also implies that the key KM is the rapid accessibility and timely availability of knowledge. The current KM model relies on everybody within the company, especially key project management individuals and corporate support manager, being prepared to make time to discuss their findings, experiences and insights and commit to contributing to knowledge databases. In order for this to work successfully, Tekmark needed to create a ‘knowledge sharing culture’ within the organization.

In order to achieve a more developed utilization of knowledge, Tekmark continues to spend over RM 250,000 on Customer Relationship Management (CRM) while employing experience professionals who increasingly come from a consulting and industry background. Tekmark has been able to use fewer staff in these roles partly because technological improvements have meant that there is less need for manual intervention. Nevertheless, it was conceded that staffing this analytical KM function with experienced and relatively senior staff represented a major resource commitment by the company to KM.

4.2 Tekmark KM Blockages

Despite Tekmark’s significant efforts and vast resources, the company was unable to effectively harness and transfer knowledge across its global business units. From the KM audit, it can be concur that the heart of the organization’s problem had little to do with the technology being used or the professionals involved, but rather can be traced to a few very critical elements that appeared to have been overlooked in the company’s global KM strategy. The company’s “one global firm” vision did not adequately address the cultural and motivational complexities associated with KM in a global context and failed to create the ‘knowledge sharing culture’ that would gave insured global participation required for this initiative to be completely successful. The exploratory research identified that the major shortcomings in Tekmark’s global KM practices can be broken down into three areas:
• Lack of appreciation for regional knowledge;
• Inadequate support for challenges at the local office;
• Insufficient allowances for local control.

The most critical shortcoming in Tekmark’s managing of intellectual capital and knowledge is that the regional subsidiaries were never successfully integrated into the KM application, thus not becoming a part of the larger whole. One of the managers in Malaysia expressed this view when he wrote “knowledge management is a symbol of being one global firm…If Tekmark is one global firm, it would be represented in how we share knowledge across offices and regions…Otherwise, we are not a global company”. Tekmark had failed to effectively transcend global boundaries and created a unilateral flow of information from Australia and Singapore into Malaysia and Thailand. Malaysian managers frequently used the E-Portal but were hesitant to post submission and those that did never receive any feedback that their knowledge information was being utilized.

Organizational culture plays a critical role in creating a learning atmosphere, which eventually proves to be highly instrumental in creating and disseminating knowledge (Senge, 1990). Tekmark’s global culture appeared to represent an assumption that all good management knowledge is generated only in certain countries, thus effectively alienating the company’s Malaysian counterparts. The Malaysian offices and subsequently Malaysian personnel operating in the region felt isolated due to a limited interaction with the company’s headquarter in Kuala Lumpur. The company did not monitor employee’s perceptions of equity and make sure that the employees believed that fairness was being delivered by the management on a global level. While the exact means employees may have intentionally used to restore equity may be difficult to determine, assuredly almost all are harmful to organization.

Tekmark failed to establish effective cross global communication and faced cultural challenges at various local offices that were not adequately addressed. For example, in Singapore submissions to the E-Portal were frowned upon by employees as some sort of self-promotion and went against their concept of a team effort. While in Thailand many engineers felt knowledge sharing did not serve to benefit them personally and wondered why Australians contributed so openly. “Perhaps engineers in the Australia are more interested in contributing…others are in general not so interested in doing something that does not have a direct benefit for themselves”.

Another blockage that hindered effective cross global communication was the language barrier because all submissions by the engineers into the E-Portal had to be translated into English, the official language of the company. Although most Asian engineers could converse in English, they were not proficient at translating lengthy documents nor did they have sufficient time during or between projects to submit the standardized forms. When the company urged an Asian colleague to submit a KM report on a project, a common response was, “Sorry, but my English is not very good”. The lack of available translational resources, to include sufficient time, made available to the Asian subsidiaries greatly hampered their contribution into the E-Portal.

Tekmark’s focus on using technology to provide opportunities for person-to-person knowledge transfer relies heavily on open dialogue between all employees. Despite corporate-wide communication that required post-project contribution of all projects, there was some ambiguity among East Malaysia and Thailand employees and staff member over which projects required mandatory KM contribution. Without clear guidance within various regional offices, cooperate KM purpose was never made clear, allowing for a breakdown in responsibilities and regional disagreements in how the organization would function in regards to use and input of the company’s KM program.

5. Recommendation on KM Strategy

Tacit and explicit knowledge is a vital item in any company (Kidwell, Karen, Linde & Johnson 2000), and more in the companies like Tekmark; they should not rely just in the capacity and ability of their people to spread knowledge within the organization. Tekmark should focus primarily on both the codification and personalization of KM strategies (Hansen et al., 1999). Tekmark needs to implement strategies, processes and systems to keep that knowledge in the organization, ready to be distributed to all the members of the company. The SECI process given by Nonaka and Takeuchi (1995) depicts four modes of knowledge conversion with the underlying understanding that Tekmark could creates knowledge through the interactions between explicit knowledge and tacit knowledge .

5.1 Processes

The increasingly competitive environment and the imperative of many of the company’s clients and employees to be able to adapt and capitalize on ideas and innovations quickly, has made efficient and effective KM central to Tekmark continuing success as a knowledge organization. However, in the pursuit to create a “one global firm,” Tekmark must recognize the need to decentralize control as the KM program expands globally and by allowing for a natural development of workplace diversity. This would allow local managers leeway to address regional differences, such as motivational behavior and language, and build programs that provide incentives based on the cultural differences, thus adequately meeting the varying employee’s needs.

5.2 People

The performance appraisal criteria for management should include ‘developing others’ and ‘knowledge contribution’ as key measures. These criteria’s can also used when assessing promotion candidates. For example, a Manager seeking promotion would have to demonstrate his or her own knowledge sharing behaviors as well as illustrating how he or she had encouraged or enabled others to develop knowledge sharing skills. Under these circumstances then, managers have a vested interest in contributing to knowledge sharing. Evidently this ensures significant support for the KM processes, knowledge sharing and associated training and development activities. Operational knowledge transfer between subsidiaries in international and intra-firm network is crucial (Ferdows, 1999). Tekmark should embark on the contingency relationship between the rate of change of operational knowledge, the extent to which it is codifiable, and the roles of facilities within Tekmark intra-firm network.

5.3 Culture

In order for KM to successfully work, Tekmark has to develop a knowledge sharing culture within their organization. Davenport et al. (1998) hypothesized that one of the most important factors influencing KM were culture. The organizations that will truly excel in the future will be the organizations that discover how to tap people’s commitment and capacity to learn at all levels in an organization (Senge, 1990). One of the ways in which the company can build and reinforce this culture is to create a capability development plan. Capability development would include identifying the skills required in KM, what training is needed, how the knowledge base and expertise of staff should be built, how to provide feedback to employee’s that submit, and which subject matter experts can be brought in to advise on methods and tools to meet these goals. According to one Tekmark Australian engineer: “It is human nature to want to share what we know with those around us, however, it is important that the knowledge be applied with context and understanding”.

5.4 Technology

The need to share information must be expanded throughout the company with full global participation in knowledge based vision. One way of encouraging participation would be through the advent of a positive feedback mechanism to track how submitted knowledge is being used by members within the organization, thus allowing submitters to observe how their knowledge input is being utilized. Staffs can embark on the existing E-Portal as the centralized KM system. By citing and promoting work from all regions with the organization, Tekmark will help influence a wider participation from engineers throughout the company. “If organizations are to be viewed from a holistic perspective, all their parts have to be considered as part of a system, rather than separate entities and factions” (Smith, 1998).

In order to successfully implement these KM strategy, Tekmark should embark on a holistic framework such as the KM gap (Lin et al., 2005) to fully illustrate the management gaps that might occur during the implementation of KM activities. The KM gap would analyze the corporate knowledge needs, evaluate the implementation activities of KM and identify any inhibitors to success.

6. KM Metric

Tekmark should embark on a clear action for where and how knowledge will be employed to generate business value. What is needed is a KM strategy and execution review that will reenergize the knowledge sharing process and use the right balanced scorecard metric.
A balanced scorecard is generally used to clarify and update the business strategy, link the objectives of the organization to the annual budgets, allow organizational change, and increase the understanding of the company vision and mission statements across the organization. It is a methodology that translates the objectives of the organizations into measures, goals and initiatives in four different perspectives, namely financial, customer, internal business process and learning and growth (Kaplan and Norton, 1996). A balanced scorecard can be used to translate an organization’s mission and vision statements into a broad set of objectives and performance measures that can be quantified and appraised, and measures whether management is achieving desired results.

The model can contribute to the dynamic alignment issue. The scorecard can also aid the effective deployment of KM strategy and aligned performance measures through teams at lower levels developing scorecards consistent with the strategic scorecard. Thus, consistency of deployment, identified by Neely et al. (1994) as a key issue in alignment, can be preserved.

7. Conclusion

As companies continue to transition from managing data to managing knowledge, it is important to keep abreast of the level of implementation. This study sought to discover what level of knowledge growth a selection of typical Tekmark managers believe their organization has and can attain. Many managers were very positive in their responses about the status and probably future of improving organizational knowledge processes that in turn will impact company performance. If the results of this study are a true indicator of understanding about the importance of knowledge management today, then there is hope that companies will continue to leverage their true assets. Knowledge is indeed power, and companies are now leveraging the power of what they know. It is no longer just the physical assets, financial accounts, and other traditional assets that organizations depend on. The knowledge in the minds of employees, knowledge system, and organizational culture are the most valuable assets. Future studies should track the level of knowledge growth over time, to better measure the true level of KM awareness and usage. Therefore, this study is hopefully only a first step in an ongoing evaluation of the stages of knowledge growth in organizations today.

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