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Researchers Propose a Model to Better Manage Knowledge and Innovation in Multinational Corporations

knowledge management

Researchers Propose a Model to Better Manage Knowledge and Innovation in Multinational Corporations

With a clear understanding of knowledge management, executives can make more effective managerial decisions. Knowledge management has been evaluated from various perspectives. This variation may differ because knowledge management is understood in many different ways and therefore different scholars focus on different aspects of it and offer several options of managerial application. These perspectives are discussed below.

Taking a Technological Perspective

Executives know that they can take a technological perspective. In this case, the executive understands how knowledge management as facilitating organizational processes and activities uses information technology to organize existing information. Executives have found that knowledge management embraces information technology to convert individual knowledge into valuable resources for their organization. Executives focus on individuals as the major source of knowledge and show how followers tie together so that they can effectively share the storage, transfer, and application of knowledge within organizations. Executives, therefore, see these connections, and the related shared knowledge and memory, as central to the effectiveness of knowledge management.

Taking an Economic Perspective

Executives agree with Doyle McCarthy, who sees society as a product of knowledge. Defining culture as various forms of knowledge and symbols that make up an organization’s culture. However, knowledge is a by-product of culture and knowledge’s role in guiding and facilitating people’s action is key to executive decision-making. Four scholars by the names of Bernard Marr, Oliver Gupta, Stephen Pike, and Goran Roos define knowledge management as “a set of activities and processes aimed at creating value through generating and applying intellectual capital.”

Executives direct practices that create value from intangible organizational resources. For executives, it is clear that the objective of managing knowledge is to add value to organizations. The focus here is that executives consider the fact a firm’s knowledge is positively associated with its outcomes.

Taking a Process Perspective

The process perspective focuses on knowledge flows that executives use through embracing the processes of knowledge management for strategic management decision-making. Managing knowledge is not new, scholars have considered the various processes involved. Executives can look at three-step processes of knowledge accumulation, integration, and reconfiguration. Jang-Hwan Lee and Young-Gul Kim’s model for managing knowledge takes a strategic process-oriented approach and is relevant to executive leadership. Executives build a climate of openness for individuals to exchange ideas. Knowledge is accumulated by creating a new approach to gathering, evaluating, and disseminating information throughout the organizations.

Executives inspire people to create new ideas and develop effective mechanisms to acquire knowledge from various sources such as suppliers, customers, business partners, and competitors. This is similar to a value-chain approach. Executives need to first support this approach for the model to work because they play a strategic role in expanding the knowledge accumulation through applying incentives as mechanisms to develop a more innovative climate and managing effective tools to acquire knowledge from external sources.

Executives then integrate knowledge internally to enhance the effectiveness and efficiencies in various systems and processes, as well as to be more responsive to market changes.

Accumulated knowledge is synthesized to produce higher quality outcomes. Thus, knowledge integration focuses on monitoring and controlling knowledge management practices, evaluating the effectiveness of current knowledge, defining and recognizing core knowledge areas, coordinating expert opinions, sharing organizational knowledge, and scanning for new knowledge to keep the quality of their product or services continuously improving.

Executives can promote knowledge integration by creating expert groups or steering committees to enhance knowledge quality and evaluate knowledge assets. Follower’s diversity of skills and interpersonal relations that is based on trust and reciprocity can improve the performance of group cohesiveness.

Therefore, in the process of knowledge integration, knowledge enters organizational processes and provides valuable contributions to products and services. Executives as leaders steering the organizational strategy facilitate this process, by undertaking initiatives that improve knowledge transfer, thus enhancing the performance of employees and the implementation of effective changes to maintain the quality of products and services. The burden of success when the effective implementation of knowledge integration is concerned is heavily dependent on the capabilities of the organization’s leaders.

Executives must also curtail knowledge within organizations. This knowledge needs to be reconfigured to meet environmental changes and new challenges. At the same time, it should not be leaked to the competition in any shape or form unless agreed upon by senior executives. When executives agree to share knowledge with other organizations in the environment, studies have shown that that knowledge is often difficult to share externally. One reason is that other organizations have too much pride to accept knowledge or are apprehensive to expose themselves to the competition.

Therefore, executives may lack the required capabilities to interact with other organizations, or distrust sharing their knowledge. In addition, just the notion of creating an expert group or steering committee may be shortsighted because such groups may not have sufficient diversity to comprehend knowledge acquired from external sources. On the other hand, executives are aware of networking with business partners is a key activity for organizations to enhance knowledge exchange.

Networking is a critical concern for leaders in this process is developing alliances with partners in external environments. Executives and their expert groups and/or steering committees are the ones who can make final decisions about developing alliances with business partners.   Figure 1 depicts this model of knowledge management.

In Conclusion

There are some executives that like to look at academic journals but unfortunately, the crossover literature has not reached them enough. This article attempts to blend scholarly concepts with real-world applications. This article introduces an applicable model to evaluate knowledge management success. Also, this article provides evidence that knowledge management is used in corporate infrastructure for strategic decision-making.

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Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.

Knowledge management

The Design and Implementation of Effective Knowledge Management System in Multinational Corporations

Executives agree with Doyle McCarthy, who sees society as a product of knowledge. [1] Defining culture as various forms of knowledge and symbols that make up an organization’s culture. However, knowledge is a by-product of culture and knowledge’s role in guiding and facilitating people’s action is key to executive decision-making.

Knowledge also creates values, thereby fulfilling the strategic functions of “producing and guiding social action, of integrating social organizations, of protecting the identity of individuals and groups, of legitimatizing both actions and authorities, and of serving as an ideology for individuals, groups, classes, and entire nations”. [2] In addition, Thomas Beckman explains that knowledge management is “the formalization of and access to experience, knowledge and expertise that create new capabilities, enable superior performance, encourages innovation and enhances customer value,” [3]  and Bernard Marr and his colleagues define knowledge management as a set of activities and processes aimed at creating value through generating and applying intellectual capital.

[4] Moreover, knowledge management has also been regarded as a “conscious strategy of getting the right knowledge to the right people at the right time and helping people share and put information into action in ways that strive to improve organizational performance”. [5] Executives direct practices that create value from intangible organizational resources. For executives, it is clear that the objective of managing knowledge is to add value to organizations. The focus here is that executives consider the fact a firm’s knowledge is positively associated with its outcomes. This article portrays a more detailed picture of the effects of leadership and organizational factors on knowledge management performance that have been mentioned but not placed in a model in the past. Executives can use the model proposed in this article to improve knowledge management performance in companies.

What Can Executives Take From Previous Academic Research?

Executives that manage knowledge and use it as an important driving force for business success find their organization to be more competitive and on the cutting edge. However, knowledge management implementation in organizations is determined by a set of critical success factors, one of which is the strategic dimension of leadership. For now, executives can develop conducive organizational climates that foster collaboration and organizational learning in which knowledge, as a driver of improved performance, is shared and exploited. Academicians point out that if leaders do not adequately support knowledge dissemination and creation through various mechanisms such as rewards or recognition for employees who create new ideas or share their knowledge with others, knowledge management cannot be successful.

Furthermore, it is safe to say that knowledge management effectiveness can be enhanced today with the use of information technology. Information technology can play a critical role in the success of knowledge management.

For instance, a scholar in Universiti Teknologi Malaysia (UTM) by the name of Kuan Yew Wong highlights the importance of information technology in facilitating knowledge flow and communication. [6] Ying-Jung Yeh and his colleagues at the National Taiwan University of Science and Technology and National Chung Cheng University indicate that the effectiveness of knowledge management implementation is positively associated with using information technology and setting up useful software and systems to enhance strategic decision-making. [7] Effective leaders can, therefore, develop information technology through employing IT professionals and allocating more budgetary resources to share and utilize knowledge within organizations.

Moreover, it is clear that executives around the globe realize that they play a critical role to achieve the best climate and for implementing knowledge management that creates learning and growing the organization. Engaging followers and getting them to participate in leadership activities is an important part of knowledge management practices. Scholars subsequently suggest that success is also dependent upon how executives formulated their organization’s mission, vision, and strategy.

The key is for executives to inculcate an effective strategy, culture and structure so that information can be found and used instantaneously. The fact that executives steer the strategic direction of organizations is indicative of empowering people and making them more responsive to the constant changes in technology, economic fluctuations, and other pertinent and vita changes that occur on a day-to-day basis.

Executives Are Now Introduced to the Proposed Model

Based on an integrated framework of the above ideas and scholarly research, I depict and applicable and reliable model for executives as Figure 1. This framework of the model highlights a relationship between knowledge management, leadership, strategy, culture, structure and information technology. I show the relationships in Figure 1. In Figure 1, leadership has a positive impact on knowledge management which leads to higher knowledge management performance. And finally, better strategy, better culture, better structure and better information technology lead to better  performance.

In Conclusion

This article blends scholarly concepts with real world application and investigates how scholarly research can be applied in the organizational boardroom. Also, scholars see that I expand upon the subject matter of organizational factors. Through introducing a more comprehensive model for implementation, I add to the current and extant literature. In particular, I suggest that if these factors are not completely in favor of supporting knowledge management, organizations cannot effectively implement knowledge management projects and may become obsolete, taken over, or acquired.

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Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.

References

[1] McCarthy, E.D. (1996). Knowledge as Culture: The New Sociology of Knowledge, New York: Routledge.

[2] Strasser, H., & Kleiner, M. (1998).  Knowledge as Culture: The New Sociology of Knowledge, European Sociological Review, 14(3), 315-318.

[3] Beckman, T.J. (1999). The Current State of Knowledge Management. In J. Liebowitz, (Eds.), Knowledge Management Handbook, New York: CRC Press.

[4] Marr, B., Gupta, O., Roos, G., & Pike, S. (2003). Intellectual Capital and Knowledge Management Effectiveness. Management Decision, 41(8), 771-781.

[5] O’Dell C., & Grayson C.J. (1998). If only we knew what we know: identification and transfer of international best practices, New York: Free Press.

[6] Wong, K.Y. (2005). Critical Success Factors for Implementing Knowledge Management in Small and Medium Enterprises. Industrial Management & Data Systems, 105(3), 261-279.

[7] Yeh, Y.J., Lai, S.Q., & Ho, C.T. (2006). Knowledge management enabler: a case study. Industrial Management & Data Systems, 106(6), 793-810.