1. Part Two KM Approaches KM as a Process Approach Chapter Four Knowledge Creation Process Lecture (4 ) Chapter Four Knowledge Creation Process Lecture (4 ) 1

2. Learning Objectives 1.Introduction 2.KM approaches 3.KM as a process 4.KM Processes and the Dynamic Capabilities 5.Knowledge Creation Process 6. Nonaka's Theory of Organizational K Creation 7.The spiral model of organizational knowledge creation 8.Knowledge Creation Process in Practice 9. CASE STUDY: Japanese-Style versus Western-Style in Organizational Knowledge Creation 2

3. Introduction The term KM is often problematic; it is complex phenomena (Alavi and Leidner 2001) there are a variety of perspectives on what KM is about ;  KM is about systems and technologies.  KM is about people and learning organizations.  KM is about processes, methods and techniques.  KM is about managing knowledge assets.  KM is about management practice and philosophy.  KM is a holistic initiative across the entire organization. 3

4. KM Approaches According to the literature, three main approaches can be determined in addressing KM; 1. KM as a process approach 2. KM as an infrastructure approach 3. KM as an intellectual capital approach 4

5. KM Approaches Intellectual capital Approach Infrastructure Approach Process Approach K codification K dissemination K utilization K acquisition K creation 5

6. KM as a PROCESS APPROACH 6

7. KM is defined as" the process that creates Knowledge and manages the dissemination and use of knowledge within and between organizations" (Darroch 2003:41). 7

8. According to this approach knowledge is viewed as a flow and KM is focusing on the processes of creation, sharing, and distribution and using this knowledge. 73% of 260 UK and European organizations voted for the business definition of KM as the collection of processes that govern the creation, dissemination, and utilization of knowledge to fulfill organizational objectives (Murray & Myers 97 P: 29) 8

9. KM process can be considered a source of competitive advantage. If organizations success in creating new knowledge, spread it within and between organizational units and use it into new products and services (Nonaka and Takeuchi, 95). 9

10. Knowledge Management Cycle Acquisition Storage Dissemination Integration Creation Learning Utilization Categorization 10

11. KNOWLEDGE MANAGEMENT AS A PROCESS APPROACH However the variety of KM processes as a numbers and as a level of details, we recognized that there is no agreement among authors about how KM begins, or how it is end, but there is a strong relation between KM activities some of these activities run in parallel, and they to some extent support each other. Organization aims through the application of km process to achieve several objectives such as making better decision, create value, increase the payoff,……..etc 11

12. KM Processes and the Dynamic Capabilities KM processes is determined as an organizational capability which increase firm's ability to renew and develop its k resources through some activities. In the dynamic environment, for firms to achieve and sustain competitive advantages it will be insufficient to have just the organizational capabilities ; it must posses a strong dynamic capabilities which increase firm's ability to renew and develop its resources (Teece et al. 1997). 12

13. Organizational capabilities Refers to” the firm's ability to perform repeatedly a productive task It relates to a firm's capacity for creating value through effecting transformation of inputs into output. The result of this capabilities is the ability to produce goods and services. (refers to firm’s ability to exploit the existing resources ) 13

14. Dynamic capabilities refers to the firm's ability to integrate, build and reconfigure internal and external competences to address rapidly changing environment so the result of this capabilities is the ability to renewing and developing the firm's resources and organizational capabilities. (refers to firm's ability to renew and develop its resources) 14

15. The firm dynamic capabilities stems from its processes and its development, exploitation, and protection of the-strategic assets (knowledge ) 15

16. According to literature there are abundant of mechanisms to create the dynamic capabilities. Nielsen (2006) suggested that one of them is the integration of the KM activities into three key dynamic capabilities ; First : the knowledge development capability ; where the firm creates, acquires and subsequently captures new knowledge. Second : The knowledge re-combination capability ; where knowledge-based resources in the firm is being combined and integrated in order to form organizational capabilities. Third : knowledge use capability ; where the firm's existing and already integrated k resources are being used in the value creating activities of the firm. These three dynamic capabilities are seen as key to achieve the value from the investment in knowledge 16

17. Knowledge process as a main sources of dynamic capabilities in organizations We will focus in details on three of the km process; k. creation, k. shared/ transfer (dissemination) and k. utilization as a source of the key dynamic capabilities in the firm, through which companies can achieve and sustain the competitive advantages. 17

18. Knowledge Creation Process 18

19. Knowledge Creation Process K creation process has many terms; k integration ; k coordination ; K conversions; k harvesting k generation and development; k innovation ; K. construction ; It defines as “ the process which concerned with the development of new organizational k in the firm ” It is also defined as “ the process by which organization adds value to previous knowledge through innovation “. However, K creation is concerned with the development of new organizational knowledge in the firm,it is also related to knowledge addition and /or the correction of existing knowledge. 19

20. Nonaka's Theory of Organizational K Creation To understand the knowledge creation process, we must understand Nonaka's theory, Professor Ikujiro Nonaka, dubbed "Mr.Knowledge" by the Economic magazine (May 31, 1997 issue), he is the most influential thinkers in the km movement. Through the dynamic theory of organizational k creation, he addressed the k creation process through two dimensions; epistemologically and ontologically 20

21. Epistemological Dimension Explicit Knowledge Ontological Dimension Tacit knowledge Individual Group Organization Inter-organization Knowledge Level Two Dimensions of Knowledge Creation Current Focus Source: Adapted from Knowledge-Creating Company, p. 57. 21

22. Epistemologically; knowledge creation is recognized as the conversion process between the two famous types of knowledge (tacit k and explicit k) which included four modes; 22

23. 1- The Socialization mode (from tacit to tacit) Refers to conversion of tacit k to new tacit knowledge through social interactions and shared experience among organizational members. – A process of sharing experiences – Apprenticeship through observation, imitation, and practice 23

24. 2- The Externalization mode (from Tacit to Explicit) Refers to converting tacit knowledge to new explicit knowledge – A process of articulating tacit knowledge into explicit concepts – A quintessential knowledge-creation process involving the creation of metaphors, concepts, analogies, hypothesis, or models – Created through dialogue or collective reflection 24

25. 3- The Combination mode (From Explicit to Explicit ) Refers to the creation of new explicit knowledge by merging categorizing, reclassifying, and synthesizing existing explicit knowledge. – A process of systemizing concepts into a knowledge system – Reconfiguration of existing information and knowledge 25

26. 4- The Internalization mode (from Explicit to Tacit) Refers to creation of new tacit knowledge from explicit knowledge. – A process of embodying explicit knowledge into tacit knowledge – Learning by doing – Shared mental models or technical know-how – Documents help individual internalize what they experience 26

27. Four SECI Modes of Knowledge Conversion Socialization Externalization Internalization Combination Tacit knowledge Explicit knowledge Tacit knowledge Explicit knowledge To From Source: Knowledge-Creating Company, p. 62. 1 + 1 3 27

28. Knowledge Spiral Socialization Externalization Internalization Combination Dialogue (Collective Reflection) Linking Explicit Knowledge Field Building Learning by Doing Source: Knowledge-Creating Company, p. 71. 28

29. Contents of Knowledge Created in Four Modes To From Source: Knowledge-Creating Company, p. 72. Tacit knowledge Explicit knowledge Tacit knowledge Explicit knowledge (Socialization) Sympathized Knowledge (Externalization) Conceptual Knowledge (Internalization) Operational Knowledge (Combination) Systemic Knowledge 29

30. Contents of Knowledge Created in Four Modes Sympathized knowledge: Shared mental models and technical skills. Conceptual knowledge: Analogies & metaphors of products or processes. Systemic knowledge: Prototypes or new technologies. Operational knowledge: Project management, production process, new product usage, and policy implementation 30

31. Ontologically, knowledge is created only by individuals. Since organization cannot create knowledge without individuals, therefore the role of organization is just support the creative individuals and provides a context for such individual to create knowledge. 31

32. As a result organizational knowledge creation can be understood as a" process in which organization amplifies the knowledge created by individuals and crystallizes it as a part of its knowledge network” 32

33. Through the integration of the two dimensions (the epistemological and the ontological) Nonaka introduce the spiral Model for the organizational k. creation as the following figure (2-3) illustrates. 33

34. Epistemological Dimension Explicit Knowledge Ontological Dimension Tacit knowledge Individual Group Organization Inter-organization Knowledge Level Two Dimensions of Knowledge Creation Source: Adapted from Knowledge-Creating Company, p. 73. Internalized Externalized Socialization Combination 34

35. The spiral model of organizational knowledge creation The idea behind this model is that the interaction between tacit and explicit k will be larger in scale and faster in speed as more actors in, and the process of knowledge creation can be viewed as an upward spiral endless process, starting at the individual level and expanding as it moves through communities of interaction (individual- group- organization – inter organization). 35

36. The concept of Ba It is useful to consider the conditions and environments that facilitate new k creation. Nonaka and Konno (1998) introduced a term (Ba) defined as “a shared context in which k is created, shared, and utilized “. For the Japanese Ba defined as a “common place or space for knowledge creation” it has a function of serving as a platform of knowledge creation, Ba -------- can be a physical space (a meeting room), Ba---------can be a virtual space (e-mail - teleconference), Ba ---------can be a mental space (shared experiences, ideas -mental model) Ba -------can be a combination of them (Bas). 36

37. Criticism Some authors ( Boland et.al, 94 ) criticize Nonaka theory since it is difficult to use the distinctive categories of knowledge which are in the social practice interrelated and inseparable items. Others found it is difficult to focus on the abstract integration of these inseparable categories apart from the way firms use k in practice (Tsoukas 1996 ). Others also claimed that the SECI model failed to explain some important keys such as; how individual generate tacit k., how the emerging problems are resolved, and what are the closure means for k creation in organizations,. Spender (1996) However Nonaka's theory still has a wide acceptance and application among km authors and practitioners 37

38. Knowledge Creation Process in Practice Regarding to the tacit ness nature of knowledge K. creation process cannot be managed in the traditional management. Authors replaced it by the concept of knowledge enablers and barriers The explaining factors that influences positively (enablers) and some factors influence negatively on knowledge creation process 38

39. K. Creation Enablers  The most important k creation enablers are:- 1.Management commitment 2. knowledge asset (KAs) 3.The available degree of relationship- 4.the organizational culture 5.the organizational structure 6. The 7 Cs (connection, concurrency, comprehension communication, conceptualization, collaboration, and collective intelligence), 7.Resource allocation. Generally speaking we can consider the lack of any of knowledge creation facilitator as barriers for successful knowledge creation process. 39

40. CASE STUDY Japanese-Style versus Western-Style In Organizational Knowledge Creation 40

41. Japanese-Style vs. Western-Style Organizational Knowledge Creation Group-based Tacit knowledge-oriented Strong on socialization and internalization Emphasis on experience Danger of group thinking & over- adaptation to past successes Ambiguous organizational intention Group autonomy Creative chaos through overlapping tasks Requisite variety through cross-functional teams Japanese Organization Western Organization Individual-based Explicit knowledge-oriented Strong on externalization and combination Emphasis on analysis Danger of paralysis by analysis Clear organizational intention Individual autonomy Creative chaos through individual differences Requisite variety through individual differences 41

42. The End I wish to know what we knew 42