2004/12/12OASIS 2004 Workshop1 Knowledge Management at SMEs Yukika Awazu 1 Kevin C. Desouza 1,2 Institute for Engaged Business Research, The Engaged Enterprise 1 Dept. of Information & Decision Sciences, University of Illinois at Chicago 2

2004/12/12OASIS 2004 Workshop2 Introduction Managing knowledge is a critical capability for SMEs to master because it helps them leverage their most critical resource. Organizational knowledge is the most salient resource at the disposal of SMEs in terms of availability, access, and depth. Successful SMEs are those who can leverage their knowledge in an effective and efficient manner, so as to make up for deficiencies in traditional resources, like land, labor, and capital. In our research, we discovered that SMEs do not manage knowledge the same way as larger organizations. We draw our findings from a nine month investigation of knowledge management practices at 25 SMEs.

2004/12/12OASIS 2004 Workshop3 1: Dominance of Socialization in the SECI Cycle SECI Cycle – (Nonaka et al ) Knowledge creating cycle comprises of four activities: socialization, externalization, combination, and internalization (SECI). In SMEs we found the presence of S ECI model - a variant of the SECI model Socialization was the predominant way through which knowledge transfer occurred from owner to employees and between employees.

2004/12/12OASIS 2004 Workshop4 2: Common Knowledge In SMEs, each employee is given a deep introduction into the way the SME conducts business. Facilitates ease of communication and sensemaking. Forms a shared context for interpretation and communication. Emphasized by training initiatives Results in each employee had very similar foundation and grounding in organizational matters. In larger organizations, for the most part, employees have scant “common knowledge” due to excessive specialization of duties and distributed nature of work assignments.

2004/12/12OASIS 2004 Workshop5 3: Knowledge Loss – Not a Problem SMEs never considered it a real problem or issue. The core knowledge is held by the owner/managers of the organization. Deliberate mechanisms in place to prevent knowledge loss from becoming a problem. Promotions from within the Organization Backups in terms of Knowledge Work Presence of Common Knowledge

2004/12/12OASIS 2004 Workshop6 4: Exploitation of External Sources of Knowledge Appetite and ability to exploit foreign sources of knowledge Utilization of ready-made knowledge of external sources Well-connected to local communities Reason: SMEs cannot afford to invest resources in the creation of new knowledge, as they are starved for resources, especially during the initial conception and growth stages.

2004/12/12OASIS 2004 Workshop7 5: People Centered Knowledge Management Technology is almost never used as a central means to manage knowledge. Knowledge is created, shared, transferred, and applied via people based mechanisms such as face-to-face meetings, observations, apprenticeship, etc. Knowledge generated is immediately put into practice, rather than being stored in some obscure technology artifact, like an electronic repository, e.g. Intranet Portal.

2004/12/12OASIS 2004 Workshop8 6: Managing Ignorance SMEs are normally quick to admit ignorance areas they lack competency in. Not afraid to call experts to help them gain knowledge in areas of ignorance. This is important as SMEs cannot afford to spare resources on “risky”, “unknown”, or “futile” projects. They do extensive homework before committing, one aspect being checking if they have the requisite knowledge.

2004/12/12OASIS 2004 Workshop9 7: Knowledge Management or Management by Knowledge Focus on “management” by knowledge, i.e. knowledge guides all management efforts. Unlike with larger organizations, knowledge is the key asset that drives most actions, the weight placed on other assets, like financial capital, is significantly lower.

2004/12/12OASIS 2004 Workshop10 Conclusion Viewing SME knowledge management practices as scaled down versions of the practices found in larger organizations is incorrect. SMEs have understandable resource constraints, and hence have to be creative in working around these limitations in order to manage knowledge. Our goal of this presentation is to shed a light on peculiarities in SME knowledge management practices, with the hope of enticing scholars and practitioners to follow-up with more detailed research undertakings. Future Research Avenues: [1] Write-up detailed case studies, [2] Link SME knowledge capabilities with organizational success outcomes, [3] Develop a metric to study knowledge process maturity in SMEs and use it to conduct “gap analyses”, and [4] Data permitting, study how knowledge programs get transformed as SMEs expand or transform themselves to larger organizations.

2004/12/12OASIS 2004 Workshop11 Questions? Contact Information Yukika Awazu Research Fellow Institute for Engaged Business Research The Engaged Enterprise Website: Please us for a copy of the research paper.