"Knowledge Management: Philosophy, Processes, and Pitfalls"
California Management Review
Summer 2002, pp. 129-150
This article identifies four main components which embody a firm's knowledge management system: (1) a database subsystem that allows managers and employees to share the right information in a timely and efficient fashion; (2) an organizational language subsystem that allows individuals to understand the meaning of things; (3) a networking subsystem that allows individuals to retrieve and acquire information and knowledge from sources both internal and external to the firm; and (4) the transfer subsystem whereby systemic knowledge is either directly transferred between individuals or new knowledge is created by the unique combination of information with the individual's experience base.
Using mail survey from a study of 317 firms, a number of results were obtained: (a) The greater is formal and informal networking, the greater is information and knowledge acquisition; (b) The greater individual and organizational ability to absorb information and know-how, the more new information and know-how is acquired and the better is the basis for decision-making; (c) The more effective decision making that is applied to a larger stock of information and knowledge, the more new knowledge is created; (d) The greater is the level of new knowledge creation, the greater is the amount of innovation; and (e) The greater the amount of innovation, the greater the market and financial performance.
The article also identifies a set of lessons learned about potential "knowledge traps" which can victimize even the best firms: (1) Formal databases must be treated as strategic tools rather than mere storage facilities; (2) Managing formal database systems per se does not equate to knowledge management; (3) Informal networking is an important source of knowledge, but over-reliance on it can be detrimental; (4) To ensure that informal networking is less susceptible to randomness, it should be made more structured; (5) Senior management may not know the true state of their firm's knowledge systems; (6) Firms fail to recognize that certain individuals are either innately unable to absorb new knowledge or personal and organizational incentives make them unlikely to ever want to do so; (7) Unless carefully managed, knowledge can be a "dark power" which is not necessarily utilized for the benefit of the entire organization; and (8) Creativity in problem solving is the main driver of new knowledge creation and innovation, but it needs to be supported by appropriate mechanisms.
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