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This is the third in our series of Knowledge Management, updating previous reviews and adding several abstracts in the areas of Intellectual Capital Management. The Information Age has forced organizations to see knowledge as an asset, as several decades of Human Resource Management has failed to do. But how do you manage, develop and protect assets that, as distinct from materials and physical objects, seem initially intangible and subjective? As Karl M. Wiig states in his article abstracted below - "...Globalization has placed businesses everywhere in new and different competitive situations where knowledgeable, effective behavior has come to provide the competitive edge..." In the developing countries, including those in Asia, theft of intellectual property in the form of software, brand name, and audio/video piracy is entrenched. Even in supposedly developed Hong Kong, a recent survey concluded that educated professionals saw the use of pirated software as acceptable. In Indonesia it is estimated that 95% of software installed on computers is pirated, and Singapore only recently has clamped down on outlets selling such software openly. The Western world certainly can't claim innocence. Bangkok's Panthip Plaza and KL's Chinatown to name just 2 examples are full of Western tourists buying up software for around $2 - 4 US a CD. And it goes far beyond consumer goods. The recent Asian crisis provided an opportunity for many supposedly respectable Western companies to poach staff from Asian companies who did not have the legal or financial muscle to bring them to account. Many of the following articles investigate new models and methods of placing a value and managing knowledge resources from staff, to patents, to intellectual outputs created by staff employed in an organization, using the organization's existing knowledge, financial and physical assets. Much of the research work in the area seems to be carried out outside the region, though there are several cases below set in Australia, Malaysia and Japan. Elsie L. Echeverri-Carroll, for example, examines the different way Japanese companies manage their knowledge, sharing more information with customers, resulting in faster and more effective product development. New methods of managing intellectual capital and knowledge such as the The Cap Gemini Ernst & Young Center for Business Innovation's value creation index described below, is one example of the work now being undertaken to manage the new intangible assets that now make the difference between survival and failure. ..And not just for new economy companies exclusively. A critical review of knowledge management as a management tool Over the past several years there have been intensive discussions about the importance of knowledge management within our society. The management of knowledge is promoted as an important and necessary factor for organisational survival and maintenance of competitive strength. To remain at the forefront organisations need a good capacity to retain, develop, organise, and utilise their employees' capabilities. Knowledge and the management of knowledge appear to be regarded as increasingly important features for organisational survival. Explores knowledge management with respect to its content, its definition and domain in theory and practice, its use and implications, and to point out some problems inherent in the concept. The main contribution of this paper is an extensive literature survey on knowledge management.
Keywords: Knowledge management, Knowledge, Strategy
How do managers use knowledge about knowledge management? Despite the ever-burgeoning literature and growth of conceptual models and tools, hard-pressed managers seem to find it difficult to appreciate the special significance that knowledge management (KM) has for redefining their managerial work. In two complementary articles, this problem is investigated and ideas developed to help turn existing information about KM into "usable ideas". In this first article, the importance of helping managers to relate knowledge management to what is organisationally important (currency), to what furthers an individual's goals and interests (personal relevance), and to what is practical within an individual's current capacity (actionable), is explained. Currency is explored using a managerial knowledge portfolio that identifies the knowledge to be managed in the critical areas of managerial focus, strategy, operational processes and change management. Actionability is explored using an organisational knowledge management activity matrix that describes KM activities in terms which are meaningful and provides a basis for a KM audit.
Keywords: Knowledge management, Influence, Effectiveness, Organizational change, Innovation
The transfer of knowledge and the retention of expertise: the
continuing need for global assignments With ongoing globalisation, organisations are increasingly confronted with worldwide competition. In order to build and sustain their competitive advantage, the knowledge and expertise of an organisation's staff needs to be seen as a critical strategic resource. This paper presents a general overview of knowledge management and discusses the transfer of knowledge and expertise throughout organisations operating on a global scale. A particular emphasis is placed on the importance of global assignments in transferring knowledge and furthermore on the implications for HRM practices to ensure the successful and effective retention of expertise. Practical examples are presented from Robert Bosch AG, a German multinational organisation and its Australian subsidiary. In this paper, the term "expatriate" is used, however the importance of host country nationals as well as third country nationals should not be ignored in the effective transfer of knowledge and the retention of expertise.
Keywords: Knowledge management, Knowledge transfer, Global marketing, Expatriates, Human
resource management, Information technology
How does knowledge management influence innovation and competitiveness? Is concerned with human value management, examines the relationships between organizations' competitiveness, innovation advancements, and knowledge management and presents a set of considerations regarding how these relationships affect strategic management and the formulation of competitive strategies. By considering how knowledge development is related with personal characteristics and personal development, this article attempts to provide useful insights on the linkages between innovation and competitiveness. These considerations point out the importance of knowledge development and the role of knowledge management in order to assure competitiveness. This work proposes also a conceptual model, with special focus on the relationships between knowledge management, competitiveness, and innovation. The major factors are presented and directions for future research are suggested according to the proposed model.
Keywords: Knowledge management, Innovation, Competitiveness
From learning organisation to knowledge entrepreneur Establishes the clear link between learning and knowledge, and proposes a simple model, which makes this relationship explicit. A range of definitions of the learning organisation are drawn from the literature. Much of this literature makes little reference to that which is being learned although those authors who have introduced the concepts of the learning laboratory, the knowledge creating organisation and the knowing organisation acknowledge the significance of knowledge in organisational development and learning. Other perspectives on the organisational processes associated with knowledge come from the recent literature on knowledge management. It is argued that indiscriminate knowledge creation will not lead to organisational learning, and that knowledge is not something that can be viewed as a neutral tool in the learning process. A number of characteristics of knowledge need to be recognised, and accommodated in learning processes and knowledge management. Finally, the concept of a knowledge entrepreneur is proposed.
Keywords: Learning organizations, Knowledge workers, Knowledge management, Entrepreneurs
Communities of practice in the distributed international environment Modern commercial organisations are facing pressures which have caused them to lose personnel. When they lose people, they also lose their knowledge. Organisations also have to cope with the internationalisation of business forcing collaboration and knowledge sharing across time and distance. Knowledge management (KM) claims to tackle these issues. This paper looks at an area where KM does not offer sufficient support, that is, the sharing of knowledge that is not easy to articulate. The focus in this paper is on communities of practice in commercial organisations. We do this by exploring knowledge sharing in Lave and Wenger's (1991) theory of communities of practice and investigating how communities of practice may translate to a distributed international environment. The paper reports on two case studies that explore the functioning of communities of practice across international boundaries.
Keywords: Communities of practice, Case studies
Knowledge flows in innovation networks: a comparative analysis of
Japanese and US high-technology firms The Japanese firm and the "traditional" US firm have different inter-firm knowledge systems; in particular, Japanese firms tend to exchange information more frequently with their main suppliers, customers and other kinds of organizations (i.e. non-profit organizations). As a result, they tend to develop new products and processes faster than the "traditional" US firm. Shows that non-Japanese high-technology firms that adopt Japanese-style networks tend also to develop new products and processes faster than their competitors.
Keywords: High technology, Innovation, Japan, Competitiveness
Knowledge management: the new challenge for the 21st century This paper defines the newly emerging concept of knowledge management. The topics presented include: principles and practices of knowledge management, organization, distribution, dissemination, collaboration and refinement of information, and the effect on productivity and quality in business today. The technical applications and tools currently utilized within this discipline are also discussed. Case studies are included on the following firms: Teltech, Ernst & Young, Microsoft, and Hewlett Packard. These are analyzed to determine the effect knowledge management practices have on quality improvement and increased productivity. The authors have included a recommended strategy for implementation of knowledge management "best practices". Finally, conclusions are drawn regarding the strategic direction of this new discipline and its effect on competition, productivity and quality for the business of tomorrow.
Keywords: Knowledge management, Information technology, Case studies, Implementation
What future knowledge management users may expect Globalization has placed businesses everywhere in new and different competitive situations where knowledgeable, effective behavior has come to provide the competitive edge. Enterprises have turned to explicit and systematic knowledge management (KM) to develop the intellectual capital needed to succeed. Further developments are expected to provide considerable benefits resulting from changes in the workplace and in management and operational practices. Changes will partly come from information technology and artificial intelligence developments. However, more important changes are expected in people-centric practices to build, apply, and deploy knowledge and understanding for support of innovative and effective knowledge-intensive work. Much remains to be done. Next generation KM methods will still be crude. Our understanding of knowledge and how people use it to work has a long way to go. We need a"theory of knowledge" and perhaps a new theory of the firm to create a solid foundation for future KM. Still, users can expect significant benefits from KM as it develops over the next decades.
Keywords: Intellectual capital, Knowledge management, Organizational learning, Teamwork
"If only HP knew what HP knows": the roots of knowledge management at Hewlett-Packard While the term "knowledge management" is relatively new, many of the concepts have deep historical roots. Hewlett-Packard's strong culture and traditional business practices established an environment that encouraged innovation and the sharing of knowledge throughout the company. However, the reliance on local and informal approaches eventually became a weakness when the company had to deal with rapid growth and increased competitive pressures. The growing gap between the potential and actual value of HP's collective intellectual assests was reflected in a widely quoted management complaint from the 1980s, "If only HP knew what HP knows." However, the need for more explicit and deliberate strategies for managing knowledge has only recently become clear, as the disruptive technology of the Internet and the World Wide Web triggered an explosion in the availability of information and knowledge, but did nothing to expand our limited attention capacity.
Keywords: Attention capacity, Corporate culture, Hewlett-Packard, Intranet, Knowledge
management
Intellectual capital: current issues and policy implications Substantial differences between company book values and market values indicate the presence of assets not recognised and measured in company balance-sheets. Intellectual capital assets account for a substantial proportion of this discrepancy. At present, companies are not required to report on intellectual capital assets, which leaves the traditional accounting system ineffective for measuring the true impact of such intangibles. Regulations currently in place are analysed in this article. Prior research concerning intellectual capital is presented. Frameworks for intellectual capital are compared. Indicators used for the measurement of intellectual capital are examined. The research methodologies employed for collecting information about the use of intellectual capital accounts in companies are reviewed. Guidelines available to companies for reporting on intellectual capital are considered and also the efforts made towards developing an accounting standard for intellectual capital. Finally, current issues and policy implications of accounting for intellectual capital in the future are examined.
Keywords: Intangible assets, Intellectual capital
The next generation of IC measurement - the digital IC-landscape A methodology (based on multi-dimensional scaling and mathematical statistics) is introduced that reduces the high dimensionality of "IC-differencing components" into a 3-D dimensional representation - the digital IC-landscape. Building and maintaining a digital IC-landscape supports systematically: pedagogical display of IC complexity, migration of IC-affecting knowledge, exploratory retrieval of high IC-efficiency, investment planning and forecasting. In this project, 11 companies - with a total of 20-64 "essential variables" and "free parameters" - have been analyzed and results of the study reported.
Keywords: Intellectual capital, Intangible assets
The value creation index The Cap Gemini Ernst & Young Center for Business Innovation (CBI) has conducted a series of studies on the role of intangibles in creating value in the modern corporation and developed a rigorous, comprehensive model - the value creation index - of value creation for progressive companies, one that enables users to measure the impact of key intangible asset categories on a company's market value. By devising a set of standardized measures, weighted according to their relative impact, managers have the tools to better drive and monitor their company's future performance. At the same time, if disclosure rules change in parallel, investors will be armed with a more uniform, less subjective and more robust way of evaluating companies. Over time, the value creation index will evolve, continuing to identify value creation drivers, while remaining sufficiently flexible so it can adapt to the constantly changing nature of companies in the connected economy.
Keywords: Value analysis, Intangible assets, Performance measurement, Open market value,
Innovation
Organizational practices for generating human resources in non-corporate research and technology organizations In the present context an organization competes in terms of its knowledge intensity. In this article we are focusing on human resource development, sustenance and enhancement as a process in non-corporate research and technology organizations (RTOs), based on an international study on "Benchmarking the best practices for research and technology organizations", coordinated by WAITRO. The basic function of these RTOs is to generate knowledge to effectively enhance their client's competitive strength. A best RTO can be the one that provides a structure, which encourages people to take initiatives to generate new knowledge and effectively translate clients' technological requirements into research results. For this, the RTO has to be a learning organization. To develop and sustain capabilities is essential for any RTO's survival and growth. How best an organization performs depends upon its capability to build and enhance this knowledge base, i.e. the human capital. This in turn depends upon the way various activities are organized to generate human resource from the manpower they have. Keywords: Organization, Human resource development, Knowledge creation, Learning organizationsArticle Type: Comparative/evaluators Content Indicators: Research Implication- *, Practice Implication- *, Originality- *, Readability- *
Intellectual capital literature reviewMeasurement, reporting and
management The rise of the "new economy", one principally driven by information and knowledge, is attributed to the increased prominence of intellectual capital (IC) as a business and research topic. Intellectual capital is implicated in recent economic, managerial, technological, and sociological developments in a manner previously unknown and largely unforeseen. Whether these developments are viewed through the filter of the information society, the knowledge-based economy, the network society, or innovation, there is much to support the assertion that IC is instrumental in the determination of enterprise value and national economic performance. First, we seek to review some of the most significant extant literature on intellectual capital and its developed path. The emphasis is on important theoretical and empirical contributions relating to the measurement and reporting of intellectual capital. The second part of this paper identifies possible future research issues into the nature, impact and value of intellectual management and reporting.
Keywords: Intellectual capital, Knowledge management, Intangible assets, Research, Methodology
Intellectual capital: recognizing both assets and liabilities Contends that the current treatment of intellectual capital possessed by organizations (either knowledge intensive or otherwise) has been somewhat superficial. For instance, the terms "intellectual" assets and "intangible" assets have often been used interchangeably, although a case can be made that there are differences between these two groups of assets. To date there has been too much focus on intellectual assets - and to some extent an implied equivalence between intellectual assets and intellectual capital. Considers the issue of the other factor within the intellectual capital equation, namely, intellectual liabilities. For if double entry is to apply in the area of intellectual capital then with every debit (in the sense of a building up) there should also be allowed the possibility of a credit (in the sense of a reducing down). In fact intellectual capital is more appropriately derived as a net figure (subtracting intellectual liabilities from intellectual assets) rather than a mere summation of the organization's identified intellectual assets. Whether or not actual absolute values can be derived is also considered questionable. Keywords: Intellectual capital, Intellectual assets, Knowledge managementArticle Type: Theoretical with application in practice Content Indicators: Research Implication- *, Practice Implication- **, Originality- *, Readability- *
Developing knowledge management metrics for measuring intellectual
capital Measuring intellectual capital is a growing area of interest in the knowledge management field. Metrics are being developed and applied by some organizations, but there needs to be more research throughout the international community to better define these measures. One limitation of the current measures is that they do not necessarily address the "knowledge level" and the types of value-added knowledge that individuals obtain. This paper takes a look at the current measures, discusses some possible limitations, and suggests some additional measures that could be used in the intellectual capital area to complement existing measures.
Keywords: Intellectual capital, Metrics, Knowledge management, Human capital
Intellectual capital and business performance in Malaysian industries The purpose of this empirical study is to investigate the three elements of intellectual capital, i.e. human capital, structural capital, and customer capital, and their inter-relationships within two industry sectors in Malaysia. The study was conducted using a psychometrically validated questionnaire which was originally administered in Canada. The main conclusions from this particular study are that: human capital is important regardless of industry type; human capital has a greater influence on how a business should be structured in non-service industries compared to service industries; customer capital has a significant influence over structural capital irrespective of industry; and finally, the development of structural capital has a positive relationship with business performance regardless of industry. The final specified models in this study show a robust explanation of business performance variance within the Malaysian context which bodes well for future research in alternative contexts.
Keywords: Intellectual capital, Human capital, Structural capital, Customer capital, Partial least
squares
Using intellectual assets as a success strategy You may be surprised to discover that millions of dollars in revenue are sitting, undiscovered, inside your own organization. Follow the authors as they walk you through different areas of your business to discover the untapped potential of "forgotten" intangible assets that may already exist, including patents, trademarks, licensing arrangements, employee know-how, infringement protection plans and much more. Learn how to manage these assets to their fullest potential by creating an Intellectual Asset Management Portfolio (I-AMP). The authors reveal their own five-step process and then present three case studies (an energy company, a high-tech manufacturer and a telecom company), which illustrate the remarkable increases in revenue generated by this program. In one case, $1 billion was shifted from the expenditure to the revenue side of the ledger!
Keywords: Intellectual capital, Intangible assets, Knowledge value, Value creation
Profiting from intellectual capitalLearning from leading companies Over the course of the 1990s the level of interest as well as the sophistication of best practices in the management of intangible assets have increased dramatically. This article is intended to provide information on the current state of best practices in the management of intellectual capital. In addition, the article will discuss the evolution of best practices in ICM, concepts underlying the activities of companies sophisticated in the management of their intangibles, factors affecting the measurement of intellectual capital, and the ways in which companies tailor their ICM activities to match the needs of their different business strategies.
Keywords: Intellectual capital management, Intellectual asset management, Intellectual property
management, Value extraction
As always we have only skimmed the surface of relevant articles this week and only those that are particularly relevant for Asia-Pacific managers. Many other articles are available as well including those focusing on other countries and international perspectives.
Knowledge Management Jan 2000 |
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