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The 19th International Workshop on CSM/The 6th International Symposium on KSS Key Laboratory of Management, Decision and Information Systems, CAS Chinese.

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Presentation on theme: "The 19th International Workshop on CSM/The 6th International Symposium on KSS Key Laboratory of Management, Decision and Information Systems, CAS Chinese."— Presentation transcript:

1 The 19th International Workshop on CSM/The 6th International Symposium on KSS Key Laboratory of Management, Decision and Information Systems, CAS Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences Study on to Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Associate Professor Lingling Zhang Prof. Shouyang Wang, Yong Shi Aug IIASA, Austria

2 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 2 Agenda Background Game analysis Motivation mechanism Conclusion

3 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 3 Knowledge Sharing in Knowledge-Intensive Organization  Importance - Knowledge has become the hard- core of an employee’s ability - KS becomes the main approach that employees acquire knowledge and make creation - The objective of KS is to achieve a corporate task(always a new knowledge product) - Frequency and depth of knowledge sharing is greater than other kind of company.  Barriers Why interesting and important?  In Knowledge-Intensive Organization, making use of intangible, intellectual knowledge is more important.  In knowledge-intensive organizations, there are more barriers in knowledge sharing : - nature of knowledge itself : Tacit, knowledge is difficult to clarify and explain in words - transmitter of knowledge: They are usually unwilling to share it with others - lack of effective platform and motivation that help to knowledge sharing Davenport and Prusak (1998) A formula of knowledge sharing: sharing=transmit + absorb.

4 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 4 Literature review  Teece has proposed the concept of knowledge share for a long time. After this, knowledge sharing has gradually become a hotspot in knowledge management.  In Kought and Zander (1992) ‘s opinion, the capacity of knowledge share is an important element for a company to survive.  Dixon (2000) has studied the face to face knowledge communication and sharing.  Lynne(2001) suggested to use a electronic knowledge-base to realize synchronous and asynchronous knowledge communication and sharing.  After studying the possible barriers of knowledge sharing in individual, technology and organization, Richard and Gillian (2000) thought that the main barrier of knowledge sharing is individual.

5 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 5 Literature review  Nonaka and Takeuchi(1995) proposed an organizational knowledge creating model based on Polanyi’s distinction tacit knowledge and explicit knowledge.  Nonaka also emphasized a “Ba” during enabling process. The concept of ba has recently been explored as a supportive platform for recently been explored as a supportive platform for knowledge creation(Nonaka ans Konno, 2001).  “Ba” can be thought as a shared mental space for emerging relationships. This space can be physical(e.g. office, dispersed business space), virtual (e.g. e- mail, teleconference) or mental (e.g. shared experiences, ideas, ideals). Originating Ba (Socialization) Face-to face Originating Ba (Socialization) Peer-to-Peer (Internalization) Exercising Ba On-the-site (Combination) Systematizing Ba Collaboration Resource: Nonaka et,al.

6 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 6 Literature review  In these models, we can see they mainly emphasizes on the function of “Ba”, “place” or “platform” in improving the efficiency of knowledge sharing. That is, how to create a good place, tool or platform to make players convenient and willing to share their knowledge.  We agree that in knowledge sharing, platform or “Ba” is very important, but in knowledge-intensive organizations, situation is more complex and difficult, where knowledge is very important for individuals to keep advantage in organizations, so they are usually unwilling to share it with others, or ‘contribute’ their personal knowledge to the company. So, effective platform or place can make employees to share a few knowledge, but once personal benefit involved, for reasonable consideration, employees will “keep secret” of their knowledge.  To share knowledge well, we have to consider motivation methods. Current knowledge sharing theories are seldom regard motivation as an important element, or just regard it as an element of platform or place creation or use management control methods and organizational background to replace it.

7 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 7 Our Opinion  We think that to share knowledge effectively, organizations must at least solve two problems simultaneously, platform (or place) and motivation mechanism. Figure 2 shows the above-mentioned relations. The efficiency and effectiveness of knowledge sharing in one organization is determined by the effectiveness of “platform” and motivation mechanism. Especially in knowledge intensive company, it is more important. Motivation Platform /Ba Weak Strong Motivation Ba Motivation+Ba Rational Perceptual Strong I Strong Ba, Weak Motivation IV Share Enough Strong Ba and Motivation II Weak Ba , Weak Motivation III Weak Ba , Strong Motivation

8 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 8 Our Opinion  In quadrant I, strong platform/Ba, but motivation is weak. In this situation, company provides a good platform/Ba and place for employees to share knowledge, such as meeting room, good company culture, good organization structure and skill, etc., where employees feel happy and likely to share knowledge with others, but once personal benefit is involved, they’ll consider it rationally and keep core knowledge secret. To improve efficiency and effectiveness of knowledge sharing, design of motivation mechanism is a must.  In quadrant II, weak platform/Ba, weak motivation mechanism, which is a common phenomenon in some companies, they don’t think it’s necessary to share knowledge among employees. In this situation, the effect of knowledge sharing is worst, especial those tacit knowledge. To improve the knowledge sharing in these companies, one should design motivation mechanism and create appropriate platform/Ba to make employees willing to share knowledge.

9 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 9 Our Opinion  In quadrant III, the leader of organization has realized the importance of knowledge and designed some motivation mechanism, but not realize the importance of company culture or ”Ba”, so fail to create a platform for knowledge sharing, restrict employees’ passion. For these organizations, they should take more consideration in creation of platform/Ba.  In quadrant IV, the effect of knowledge share is the best. In these organizations, good motivation mechanism and platform/Ba encourage employees to share knowledge perceptually and rationally. The combination of platform and motivation mechanism can cause a high efficient knowledge sharing, both in quality and quantity.  In knowledge sharing, company should know which quadrant it belongs to, and then take specific method accordingly.  For the role of “Ba” or “platform” in knowledge, Nonaka and etc has had a detailed paper. So in this paper, we’ll emphasize on the role of motivation mechanism in knowledge sharing within organization.

10 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 10 Agenda Background Game analysis Motivation mechanism Conclusion

11 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 11 Game analysis  Without motivation mechanism, individuals of organization are unwilling to share knowledge with others because they are afraid of standing in their own light. A simple complete information static gaming model can be used to analyze this process.  According to the situation of knowledge share in knowledge-intensive organizations, knowledge can be sorted into two parts: a, nontransferable knowledge, mainly tacit knowledge that cannot be transfered or imitated in a short term, or cost too much to share. b, transferable knowledge, mainly explicit and part tacit knowledge, Which is part of core technical knowledge. Except for directly absorbing resource knowledge of others to get value, individuals will also obtain new creative value because of the synergetic effect and leverage of knowledge. These new creative value includes synergetic value and multiplication value. The more dependence among organization members are, the more the synergetic value is. On the other hand, recipient using obtained knowledge and causes value loss of knowledge provider, such as knowledge loss because of losing monopoly.

12 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 12 Game analysis  Suppose player A and B are individuals of an organization, they are rational, the knowledge they’ll share and sharing is useful for organization.   U A1 、 U A2 、 U B1 、 U B2 Member A and B’s nontransferable knowledge value and transferable knowledge value  α A (0 < α A <1)and α B (0 < α B <1): Knowledge absorbency coefficient  U A3 、 U B3 : Synergetic value after knowledge sharing because of synergetic effect of knowledge  U A4 、 U B4 : Multiplication value because of leverage of knowledge  U A5 、 U B5 Recipient using obtained knowledge and causes value loss of knowledge provider, such as knowledge loss because of losing monopoly.

13 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 13 Game analysis  For analyzing convenient, we divided the sharing process into two processes: A to B process and B to A process. In this way, we will analyze each company’s knowledge gain after a simple round.

14 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 14 Participant A’s knowledge value structure after sharing knowledge with B Participant AParticipant B U A1 +U A2 U B1 +U B2 + α B U A2 +U B3 +U B4 U A2 Participant AParticipant B U B1 +U B2 + α B U A2 +U B3 +U B4 -U B5 U A1 +U A2 + α A U B2 +U A3 +U A4 -U A5 Two companies’ knowledge value structure after knowledge sharing U B2 U A2 Figure 3 Knowledge sharing process Participant AParticipant B U A1 +U A2 U B1 +U B2 Knowledge value of both participants before sharing Participant B’s knowledge value structure after sharing knowledge with A Participant AParticipant B U B1 +U B2 U B2 U A1 +U A2 + α A U B2 +U A3 +U A4 a. A shares knowledge to B. Company B absorbs shareable knowledge value (α B U A2 ) of company A, at the same time, because of synergetic effect and leverage combined with knowledge of A, causes new value (include synergetic value U B3 and multiplication value U B4 ). b. B shares knowledge to A. Company A absorbs shareable knowledge value (α A V B2 ) of company B, at the same time, because of synergetic effect and leverage combined with knowledge of B, causes new value U A3 、 U A4. c. After knowledge sharing of both companies, Obviously, after a simply round, both values of player A and B are increased than before. a b c

15 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 15 Game analysis  Suppose all the players are rational. The aim of sharing knowledge is for maximal payoff. Simply, we just consider the situation of only two players: A and B. Each player selects one strategy: sharing knowledge or not. So there are four combinations. Its payoff matrix is as table 1. Table 1 Payoff Matrix of the Game A Strategy B Strategy SharingNot sharing Sharing α A U B2 +U A3 +U A4 -U A5 , α B U A2 +U B3 +U B4 -U B5 -U A5 , α B U A2 +U B4 Not sharing α A U B2 +U A4 , -U B5 0,00,0

16 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 16 Game analysis M.levy has demonstrated that there is no relevancy between low synergetic value and high multiplication value, because he found that low synergetic value always goes with low value loss, and high synergetic value always goes with high value loss. By comparing synergetic value with value loss while increased value is bigger than value loss, We can see that the game has two Equilibrium outcomes, as table 2: Table 2 Equilibrium Outcome of the Game Equilibrium Outcome U A3 U A5, U B3 U A5, U B3 >U B5, (not-sharing, not-sharing) (sharing, sharing)

17 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 17 Game analysis  a . Prisoners’ dilemma. When any player’s t synergetic value is less than value loss, (not- Sharing, not-sharing) is the only Equilibrium Outcome. That is to say, to each player the not- sharing payoff is better than sharing strategy absolutely, so they both select not-sharing strategy. It is a dominant strategy equilibrium.  But if both of them select not sharing, their payoffs are less than the payoffs ones when they all select sharing ones. To get the maximal benefits they should choose the sharing strategy and cooperation respectively. It is the conflict between collectivity and individual rationality. That is to say, though cooperation and sharing knowledge are favorable to each player, in a one time game, the two players would also get in Prisoners’ dilemma. The reason is that when synergetic value is less than value loss, the synergetic value from knowledge sharing can’t make up risk from cooperation. So the players both select not sharing.  In the knowledge intensive companies, players are risk-evade. So how to design a mechanism to let them select strategy of sharing knowledge is a critical problem. The method to solve this problem is repeated game.. In this condition the knowledge sharing becomes possible.

18 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 18 Game analysis  b. Assurance Game. Only when the two players’ synergetic value is bigger than their value loss, U A3 >U A5 and U B3 >U B5 the Equilibrium Outcome are (not-Sharing, not- sharing) and (Sharing, Sharing).  That is to say, the players would get the maximal benefits while they make the same choose. There is First-mover advantage. when synergetic value is bigger than value loss, players will wait and see. If A player selects sharing strategy, B’s best selection is sharing, if A player selects not-sharing strategy, player B’s best strategy is not- sharing.

19 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 19 Agenda Background Game analysis Motivation mechanism. Conclusion

20 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 20 Motivation mechanism  How to deal with prisoner’ dilemma (Not sharing, Not sharing) is critical to improve knowledge sharing.  In Game theory, infinitely repeated game can break “prisoner’ dilemma”. In a repeated game, players (employees) will think how his present action will influence the other player’s future strategy. He is not only get his present outcome but also his future outcome. So in a repeated game, cooperation (Knowledge sharing) is possible.  If employees did not know when they would leave the company exactly, the knowledge sharing game can be looked as infinitely repeated game. So as long as the player is patient enough, the equilibrium outcome can appear.  Equilibrium outcome and its stability of the infinitely repeated game are concerned with player’s strategy.

21 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 21 Motivation mechanism  a. Grim Strategy  At the very beginning, Players select sharing knowledge strategy, and then, if one selects sharing knowledge strategy the other would selects it as well. But if the other player select not sharing one time, he will select not sharing for ever.  Let R A =α A U B2 +U A3 +U A4 -U A5 T A =α A U B2 +U A4 S A =- U A5 P A = 0  In this condition, if the player selects sharing knowledge strategy, his expected utility is: If he select not sharing strategy, his expected utility is:  Here is discount factor, it reflects player’s attitude to the future income. The Bigger of represents the more important the future income to the player. also reflects the feasibility of players meet each other in the future. Bigger, more feasibility.  When, players will select sharing knowledge.  So, as long as is big enough, effective knowledge sharing equilibrium outcome can be realized by repeated game. It means that bigger the long term expected utility and longer the time to work together, then easier for knowledge sharing.

22 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 22 Motivation mechanism  b. Tit-for-Tat Strategy. In a Infinitely repeated game, Tit-for-Tat is the best strategy.  But the strategy is not fit for the knowledge sharing game. First, It is difficult to have both “retaliation” and “toleration”. Once break faith will result in permanent and hard to cooperate again. Second, because of the difficulties of expression and receiving information it is also difficult to measure how much knowledge is shared during the game, it is impossible to select alternatives in sharing and not sharing continually. The third, Tit-for-Tat Strategy need players know the other player’s strategy in short time, it is impossible in reality.

23 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 23 Motivation mechanism  How to improve efficiency of Knowledge sharing in knowledge-intensive company  We can see that, suppose players are rational, they will select not-sharing knowledge which is the best strategy to them. So, to improve efficiency of knowledge sharing in knowledge-intensive company, except to “Ba”, the company must emphasis on the motivation mechanism.  It has been proved that, as long as the discount factor is big enough, the effective knowledge sharing can be realized. Factors influence discount are: expected income, possibility of long term relationship, return of cooperate, punish to betrayer.  The knowledge intensive company can improve its efficiency of Knowledge sharing by:  1. Keeping the employee team in a relative stability, to improve their long term expected outcome and cooperate opportunities Which will improve discount factor and realize effective Equilibrium Outcome.  2. Establishing motivation mechanism, encourage employee to share knowledge, improve expected outcome for a long term cooperation and decrease the excepted outcome of betrayer and temptation of the not-sharing  3. Creating an effective and cultural environment for knowledge sharing.

24 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 24 Agenda Background Game analysis Inspirit mechanism. Conclusion

25 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 25 Conclusions and Future research  In this paper, we analyzes Characteristic of Knowledge Sharing and barriers in Knowledge-Intensive Organizations.  We believe, to improve the efficiency of knowledge sharing, two problems should be solved: Ba (Platform, place) and motivation mechanism. Especially in Knowledge- Intensive Organizations, motivation mechanism is more important.  Analyzing problem of ‘ prisoner ’ dilemma ’ between individuals in knowledge sharing, and show the effective motivation mechanism to improve the efficiency of knowledge creation and sharing among individuals. Knowledge of Resources Knowledge of recipient Knowledge Sharing Sharing channel Platform / “Ba” and Motivation Mechanism BeginImplementingAdjustingconformity Figure 4 Knowledge sharing with motivation mechanism and “ba”

26 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 26 Conference  1. Bell D The Coming of Post-industrial Society. Basic Books: New York.  2. Castells M The Information Age: Economy, Society and Culture, Vol.1: The Risk of the Network Society. Blackwell: Oxford.  3. Kallinikos J Organizations in an age of information Lund: Academia Adacta.  4. Kought, B.&U.Zander Knowledge of the firm, Combinative capabilityes, and the replication of technology. Organization Science,3:  5. Dixon,N. M. Common Knowledge : How Company Thrive by Sharing What They Know,Harvard Business School Press,Boston,MA  6. Lynne,M. M. Toward a Theory of Knowledge Reuse : Types of Knowledge Reuse Situations and Factors in Reuse Success. Journal of Management Information System,2001 ;18(1) (  7. Richard J Barson1, Gillian Foster1, Thomas Struck : Inter - and Intra -Organizational Barriers to Sharing Knowledge in the Extended Supply - Chain. http :/ / www. corma. net/ download/ e2000.pdf  8. Davenport, T. H., Prusak L. Working Knowledge, Boston MA, Harvard Business School Press,1998  9. Jeffrey Cummings. Knowledge Sharing : A Review of the Literature, http :/ / lnweb18. worldbank. org/ oed/ oeddoclib. nsf/ Doc UNID View For JavaSearch/ D9E389E7414BE9DE85256DC600572CA0/ $ file/ knowledge - eval - literature - review. Pdf)  10. Arrow K J. The economic implications of learning by doing [J]. Review of Economic Studies. 1962, 29:  11. Romer, Paul M. Increasing returns and long run growth. Journal of Political Economy, 1986,94 (5):  12. Foss, N.J., Knowledge-based approaches to the theory of the firm: A paradox in managing in the west and Japan. In P. Lorange, B. Chakravarthy, J. Roos, & A. Van de Ven(Eds.), Implementing Strategic Process: Change, Learning, and Co-operation. Oxford: Basil Blackwell:  13. Leonard-Barton. D Core capabilities and core rigidities: A Paradox in managing new product development. Strategic Management Journal,13:  14. Gupta, A.K. & Govindarajan Knowledge flows and structure of control within multinational corporations, The Academy of Management Review,16:  15. Nonaka I., Takeuchi Y., Knowledge Creating Company. New York: Oxford University Press.  16. Nonaka I., Nonno N., Toyama R., Emergence of “Ba”, in Nonaka I. and T. Nishinguchi eds., Knowledge Emergence, Oxford Universty Press. PP13-29.

27 CSM/KSS Study on Improving Efficiency of Knowledge Sharing in Knowledge-Intensive Organization Chinese Academy of Sciences Research Center on Data Technology and Knowledge Economy Management School of Graduate University of Chinese Academy of Sciences. 27


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