Organizational Management
Knowledge Management and Decision Making
BBUS 507
Professor Vandra L. Huber, DBA
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Session 1: Course Introduction
Agenda
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Administrative matters and course
objective
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Course Requirements
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Exercise: BARNGA
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Today’s topic: Definitions & Knowledge
Management Models
Administrative Matters
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Contact information on syllabus
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Office hours: By appointment
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Course materials:
- Course pack available from Kinkos, BothellEverett Highway
- Additional materials distributed by me
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Honor code issue
Honor Code
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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;
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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
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Class Participation 20%
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Professionalism 5%
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Out of Class Project Participation 10%
Qualitative Team Project Survey 5%
Team Project 40%
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On time
No complaining or whining
Ethical behavior
Respect for others
Project outline 5%
Oral presentation 10%
Final Written Report 25%
2 Individual Assignments 40%
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Knowledge debriefings
Case Analyses
Knowledge Management Basics
Origins of
Knowledge Management
IT Track
Knowledge =
Objects
Organizational Re-engineering
Level
Individual AI -Specialists
Level
People Track
Knowledge =
Process
Organizational
Theorists
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
Stage 3
Stage 4
Information + Application
Knowledge + Intuition
Wisdom (Tacit Knowledge)
Hierarchy of Knowledge
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Skill
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Know-How
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Ability to act according to rules which depend on feedback
from a non-social environment.
Includes skill and is the ability to act in social contexts.
Knowledge
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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
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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
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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
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Explicit Knowledge is articulated in formal
language
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Grammatical Statements
Mathematical equations
Specifications
Manuals
Tacit Knowledge is personal knowledge embedded
in individual experience
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Personal beliefs
Emotion
Perspective
Experience
Intuition
Item 2 represents tacit knowledge
Invoice
Date_______
To:_______________
_______________
Item
Description of Service, Parts, etc.
Item 1
Hitting pipe with hammer
Item 2
Knowing which pipe to hit and
where to hit it
$9,999.00
Total
$10,000.00
Please remit
within 30 days
Cost
$1.00
What is knowledge management?
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"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…
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Ability to create, transfer, assemble,
integrate and exploit knowledge assets
Knowing-Doing Gap
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Difficulties arise not in accessing
knowledge
But in utilizing knowledge
Knowledge Economy In WA
Indicator
Rank
Score
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
High
Customer Adaptation
Knowledge
Problem solving non routine problems
Smaller
Creative
Adhocracy
High Education
No economies of scale
Economy of scope in intangible assets
Low
Service
Servicing Routine Problems
Bigger
Productive
Hierarchy
People Intensive
Low Education
Economies of Scale
Tangible
Cash
Tangible and
Intangible
Assets of
Knowledge
Organization
Accounts Receivable
Computers, Offices
Human Capital
Information Capital
Organizational Capital
Intangible
Models of Knowledge Management
Constraints and Opportunities
Knowledge Management Processes
Transformations
Inputs
Stakeholder
Expectations
Strategy/Vision,
Mission, Values
Information
Outputs
Information Capital
Satisfied
Stakeholders
(Customers, Public,
Policy Makers)
Organizational Capital
Profitability
Organizational
Systems
System
Effectiveness
Human Capital
Employee
Satisfaction
/Performance
External
Business &
Economic
Environment
Competitors
Environ ment
Social Values/
Community
Environment
Technology
Legal/ Public
Policy
Environment
Balanced Scorecard’s
Explore Cause-and-Effect Relationships
Financial
ROCE
Customer
Customer
Loyalty
Internal
Business
Process
Intangible
Assets
Quality
Quantity
Employee
Skills
Process of Knowledge
Creation and Innovation
Which Firm Operates
Sources
Formal and informal Networks
Internal and External Acquisitions
Individual and
organization’s
ability to absorb
information and
turn it into
know how
Uses
Quality of Problem Solving/
Decision Making
Outcomes
New organizational
knowledge flows
from activities
and decisions
Innovation
Market/ Financial
Performance
Total Systems Model
Vision
Strategy
Leadership
Human
Capital
Organizational
Capital
Information
Capital
Human Capital Knowledge
Professional Knowledge
 Rules
 Programs
 Manuals
Organizational Knowledge
 Strategy Making
 Marketing
 Human Resources
 Accounting
Personal Mastery
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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.
Human Capital
Professional Knowledge
High
Low
Professionals
Leaders
Supporters
Managers
Low
Organizational Knowledge
High
Informational Capital
Systems
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Collecting knowledge
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Organizing knowledge
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Distributing knowledge
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Securing/Protecting knowledge
Databases
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Harvesting Data
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Storing Data
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Divergent – Free to all
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Convergent – Reviewed by experts
Networks
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Intranet
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Internet
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Global
Informational Capital
Database Subsystems
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Allows managers and employees to share the right information in a
timely and efficient manner
Organizational Language Subsystem
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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
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Retrieve and acquire information and knowledge from internal and
external sources
Transfer Subsystem
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Transfers information between individuals or creates new knowledge
Four Fold Focus
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Generating
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Identifying desired content proactively
Getting people to contribute ideas.
 Evaluating based on contributions
Organizing
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Selection and refinement of material
Distillation of material
Chunking data into knowledge objects
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7 plus or minus 2 tidbits of information
SME review, certify & bless material
Four Fold Focus
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Developing
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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
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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 era
James Brian Quinn
Organizational Capital
Corporate Brand
 Image
 Reputation
Culture
 Organizational
 Global
Leadership
 Development
 Strategic Focus
Teamwork
 Integration
 Knowledge Sharing
Culture
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A shared set of enduring meanings,
values and beliefs that characterize an
organization, national, ethnic, and other
groups and orient behavior.
Includes:
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Behavior Patterns
Values and Norms
Rules, Concepts and Assumptions
Process of Knowledge Creation
Social
Capturing
Transacting
“Holding On”
“Exchanging Knowledge”
Bestowing
Indwelling
“Sharing”
“Looking With”
High
Care
Low
Individual
Knowledge
George von Krogh, California Mgt Review, 1998
Leadership
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Having a definitive leadership brand
Embedding formal and informal leaders
through the organization (Up, down and
across)
Establishing development programs for
leaders
Alignment
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Individual actions are directed towards
achieving high level objectives
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Understanding of strategy
Sense of urgency
Clear line of sight between vision and
behavior and reward
Empowerment
Teamwork (knowledge sharing)
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Development of communities of practice
Ensuring communication of best
practices
Common global system of knowledge
sharing
Integration of employees
Concluding Thoughts
Knowledge Nuggets
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All organizational learning (knowledge) is
leveraged in delivering business advantage to the
customer
Knowledge Management focuses on
Intangible Assets:
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Human Capital
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Informational Capital
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Organizational Capital
“Learn Once, Use Anywhere!”
Knowledge Nuggets
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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
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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
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Knowledge management requires organizational
commitment.
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Planning and decision-making
Internal customer service
Technology
Financial
Time
The knowledge life cycle consists of multiple stages:
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Knowledge
Knowledge
Knowledge
Knowledge
Knowledge
Generation
Organizing
Generating
Diffusing
Reusing
Hmmm…
Do You Agree or Disagree?
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Knowledge never can be transferred.
We can only transfer information.