EMBA 610 Management Information Systems Dave Salisbury ( ) (web site)

This Week’s Episode Data v Knowledge v Information Explicit Knowledge Tacit Knowledge Knowledge and Strategic Change When Codifying it is a Bad Thing What’s Your Strategy for Managing Knowledge?

Data v Knowledge v Information Data –Facts & figures Information –Data with context Knowledge –Information with wisdom

Explicit Knowledge Easily expressed Readily transmittable Codified Clearly elaborated Example: Accounting procedures

Tacit Knowledge Difficult to codify Not readily communicated to others Learn by doing Background understandings Culturally-based Example: “How we do things around here”

Knowledge & Competitive Advantage Resource-Based View of the firm Resources –Valuable –Rare –Inimitable –Non-Substitutable Knowledge is therefore a resource

Organizational Change Strategies Reconfigure existing resources Reconfigure with new resources Acquire new resources without reconfiguring them Business as usual

Knowledge Management Strategies Creation –Creativity, experimentation, shared understanding Transfer –Rapid dissemination of knowledge Protection –Maintain and keep it from unauthorized transfer

Information Technology Uses Codify knowledge for transfer –Easily reusable –People to documents –Individual-level standardization

Information Technology Uses Create networks among expert knowledge holders –Knowledge lies in experts, not easily resuable –Person to person –Individual-level uniqueness and innovation

Change Strategy Knowledge Type Knowledge Management Strategy Codify Knowledge Create Networks Reconfigure Existing Resources Acquire and Reconfigure Resources Acquire Resources Without Configuring Business as Usual Explicit Tacit Creation Transfer Protection Information Technology Application Knowledge Management & Change Strategy (From: Bloodgood & Salisbury, 2000)

When Codifying is a Bad Thing Codification (e.g. by making tacit knowledge explicit) can be a bad thing If knowledge is more easily transferred, it’s more easily transferred out of the firm Consequently one can end up depleting a valuable resource

Knowledge Management Initiatives Creating knowledge repositories Enabling access to knowledge bases Creating an environment conducive to knowledge creation, transfer and use Managing knowledge as an asset

Valuing Knowledge Capital ® Strassman, 1998 Bias in accounting toward only tangible assets Market value of firms far outstrips their assets; those that in firms where this is not true they are takeover targets Value of intellectual property –Found in use, not in cost –Allowance for goodwill

What’s Your Strategy for Managing Knowledge? Codification versus Personalization Implications for: –Competitive strategy –View of economics of knowledge –Knowledge management strategy –Use of information technology –Human resource acquisition

What’s Your Strategy for Managing Knowledge? How does this knowledge management stuff fit in with Sawhney’s idea of “Where Value Lies in a Networked World”? What about the ideas put forth by Dell in his concept of “Virtual Integration”?