Knowledge Management Models

There are three broad categories of KM models, namely,

1. Knowledge Category Models

2. Intellectual Capital Models

3. Socially Constructed Models of KM

Knowledge Category Models

These types of model categorise knowledge into discrete elements. One of the most
renowned KM models fits into this category, the Knowledge Spiral model by Nonaka and
Takeuchi, (1995). This model is shown in its simplest form in figure 1 below.

to
Tacit Explicit

Tacit Socialisation Externalisation

from

Explicit Internalisation Combination

Figure No 1 - Knowledge Spiral Model

Nonaka and Takeuchi, (1995)

This model presents a high level conceptual representation of the knowledge dimensions,
namely tacit and explicit knowledge. The model makes a number of assumptions,
namely,

1. tacit knowledge can be transferred through a process of socialisation (everyday

comradeship) to become the tacit knowledge of others – top left quadrant

2. tacit knowledge can become explicit knowledge through a process of externalisation

(formalising a body of knowledge) – top right quadrant

3. explicit knowledge can be transferred into tacit knowledge in others through a

process of internalisation (translating theories into practice) - bottom left quadrant
4. explicit knowledge can be transferred to explicit knowledge in others through a
process of combination (combining existing theories) -bottom right quadrant.

One criticism of the model is that knowledge transfer in organisations is much more
complicated and convoluted than this simple matrix suggests. The model also assumes a
desegregation of tacit and explicit knowledge; often this is not the case.

A simpler but more elaborate version of Nonaka’s model is shown in figure 2 (Hedlund
and Nonaka, 1993).

Inter
Individual Group Organisational
Organisation
Domain
KnowingQuality circle’s Organisation Supplier’s
Articulated calculus documented chart patents and
Knowledge analysis of its documented
performance practices
Cross- Team Corporate Customer’s
Tacit cultural coordination culture attitudes to
Knowledge negotiation in products and
skills complex work expectations

Figure No 2- Knowledge M anagement M odel

Hedlundand Nonaka, (1993)

This model assumes there are four different levels of ‘carriers’, or ‘agents’, of knowledge
in organisations, namely the individual, the group, the organisation and the inter-
organisational domain (customers, suppliers, competitors, etc.). This model is similar to
that of Despres and Cheuvel, (1999) in that the individual, group and organisation are all
viewed as pertaining specific roles within the knowledge environment. While the above
model is helpful by relating the carriers to the types of knowledge, it remains problematic
in that it assumes the carriers, like the knowledge, can be simply segregated.

Another example of a knowledge category model is that of Boisot, (1998), as shown in

figure 3. Boisot’s model considers knowledge as either codified or uncodified, diffused
or undiffused, within an organisation. Boisot uses the term ‘codified’ to refer to
knowledge that can be readily prepared for transmission purposes (e.g. financial data).
The term ‘uncodified’ refers to knowledge that cannot be easily prepared for transmission
purposes (e.g. experience). The term ‘diffused’ refers to knowledge that is readily shared
while ‘undiffused’ refers to knowledge that is not readily shared.
 Figure No 3 - Knowledge Category Model (Boisot, 1998)

The model presents the following characteristics: -

1. knowledge categorised as both codified and undiffused is referred to as propriety

knowledge. In this case, knowledge is prepared for transmission but is deliberately
restricted to a selectively small population, on a ‘need to know’ basis (e.g. projected
profits, share price issues) – top left quadrant

2. knowledge that is relatively uncodified and undiffused is referred to as personal

knowledge (e.g. perceptions, insights, experiences) – bottom left quadrant

3. knowledge that is both codified and diffused is referred to as public knowledge (e.g.
journals, books, libraries) – top right quadrant

4. knowledge which is relatively diffused but also uncodified is labelled common sense
– bottom right quadrant. Boisot, (1998) considers such knowledge as being built up
slowly by a process of socialisation, harbouring customs and intuition.

There are a number of parallels between Nonaka’s model and that of Boisot. For
example, Nonaka’s categorisation of explicit and tacit knowledge has a degree of
correspondence with Boisot’s reference to codified and uncodified knowledge. Also, in
both models the horizontal dimension relates to the spread or diffusion of knowledge
across the organisation. However, Boisot’s model suffers the same limitations as
Nonaka’s model in that codified and uncodified are but two discrete categories of
knowledge. Also, the idea of diffused knowledge is rather general and it is not clear if it
includes incorporating knowledge within the organisation, as well as disseminating it.
2 Intellectual Capital Models

Management gurus such as Drucker, (1993), Stewart, (1997), and Brooking, (1997) and
practitioner icons such as Edvinsson, (1997) and Svieby, (1997) elucidated the notion of
Intellectual Capital. By the end of the 1990s, references to IC were commonplace.
While the term ‘Intellectual Capital’ is relatively new, knowledge and capital have been
linked together for many years. For example Marshall, (1890) stated,

‘Capital consists in a great part of knowledge and organization …

Knowledge is our most powerful engine of production’

Drucker, (1969) reiterates this view,

‘Knowledge, during the last few decades, has become the central
capital, the cost centre and the crucial resource of the economy’

Although this connection has been around for a considerable time, there is a lot of
confusion between the terms Knowledge Management and Intellectual Capital [IC].
Quite often the terms are used interchangeable, for example in the case of the European
Foundation for Quality Management (EFQM, 1997). However, others contend that while
KM and IC are related, they are distinct issues. Drucker, (1995) infers this via his
statement,

‘we are entering the knowledge society in which the basic economic
resource is no longer capital…. but is and will be knowledge’

Here knowledge is being capitalised as a resource comparable to land or oil. However,

we also need to focus on the intangible elements which knowledge contains such as
employee skills, experiences, patients, copyrights, brands, licensing opportunities,
research and development, innovative use of assets such as databases, etc. (Quintas et al,
1997). As these type of elements are not normally recorded on the traditional
organisational balance sheet they are referred to Intellectual Assets; hence the term
Intellectual Capital.

Brooking, (1997) suggests that KM is actively concerned with the strategic outlook and
operational tactics required for managing human centred, intellectual assets. KM from
this standpoint is seen as leveraging IC (Peters, 1992), or as recognising or rediscovering
assets that the organisation are not using to full potential, ultimately employees. This
approach is similar to that of Handy, (1989) who spoke of creating value from intangible
assets. As these approaches imply that the key areas of KM are the management of IC it
is worth reviewing a typical IC model. The model, shown below in figure 5, is the
Intellectual Capital model from Skandia Insurance. The model is adopted from Chase,
(1997) and Roos and Roos, (1997).
 Figure No 5 –Intellectual Capital Model of KM (Chase, 1997)

The model assumes IC or KM can be separated into human, customer, innovative and
process elements, contained within two main categories, namely, human capital and
organisation or structural capital. Bontis, (2000) defines these terms as follows,

‘Human Capital is the combined knowledge, skill, innovativeness, and

ability of the company’s individual employees to meet the task at hand.
It also includes the company’s values, culture and philosophy. Human
capital cannot be owned by the company’

‘Structural Capital is the hardware, software, databases, organizational

structure, patents, trademarks, and everything else of organizational
capability that supports those employees’ productivity – in other words,
everything that gets left behind at the office when employees go home.
Structural capital also provides customer capital, the relationships
developed with key customers. Unlike human capital, structural capital
can be owned and thereby traded’
 ‘Intellectual Capital equals the sum of human and structural capital’

According to Edvinsson and Malone, (1997) IC encompasses the applied experience,

organisational technology, customer relationships and professional skills that provide
Skandia with a competitive advantage in the market.

One problem that can be associated with this model is the adoption of a scientific
approach to knowledge. This is evident through the classification of knowledge as a
commodity linking it to organisation capital. This view of Intellectual Capital ignores the
political and social aspects of KM. The IC model also assumes that KM can be
decomposed into objective elements rather than being a socio-political phenomena. This
is similar to the Nonaka and Takeuchi, (1995) approach.

As befits a new area of inquiry where, to paraphrase Francis Bacon, ‘nothing has been
measured, counted or weighed’, much analytical work is focused on categorising,
mapping and measuring of knowledge types and processes. Although this is helpful, the
epistemological basis of the field cannot be ignored. Hence, we need to embrace socially
constructed models of KM.

3 Socially Constructed Models of KM

This group of models assumes a wide definition of knowledge viewing it as being

intrinsically linked within the social and learning processes of the organisation. There is
a large area of commonality between these types of models and those models seeking to
represent the Learning Organisation and Organisational Learning (Scarborough et al,
1999).

KM is concerned with the construction, capture, interpretation, embodiment,

dissemination and use of knowledge. These components are represented in Demerest’s
(1997) Knowledge Management model, shown overpage.
 Figure No 6 - Knowledge Management Model
Demerest, (1997)

The model is developed from the original work of Clark and Staunton, (1989) and
Nonaka and Takeuchi, (1995). It can be compared to that of Jordan and Jones, (1997)
who speak of knowledge acquisition, problem solving, dissemination, ownership and
storage and that of Kruizinga et al, (1997) who include knowledge policy, infrastructure
and culture. Parallels can also be drawn with Scarborough’s, (1997) approach that covers
strategic knowledge, structural and cultural knowledge, systems knowledge and
communities of practice and routines.

Firstly, the model emphasises the construction of knowledge within the organisation.
The model assumes that constructed knowledge is then embodied. Next the embodied
knowledge is disseminated throughout the organisation. Ultimately the knowledge is
used to gain economic value with regard to organisational outputs. The solid arrows in
figure 6 show the primary flow direction while the plain arrows show the more recursive
flows.

Demerest’s model is attractive in that it does not assume any given definition of
knowledge but rather invites a more holistic approach to knowledge construction.
However, it does imply a simplistic processual approach to the flow of knowledge
transfer, while in reality this may be extremely rapid and circulatory.

To overcome this gap a slightly modified version of Demerest’s model has been
developed, figure 7. Firstly the model emphasises the construction of knowledge within
an organisation where either a scientific or social paradigm may be adopted. The
scientific view of knowledge takes a ‘knowledge is truth’ view (Morgan, 1986). This
view considers that knowledge is a body of facts and rational laws (Scarborough, 1997)
thus promoting a non-personal view of knowledge, skills and tasks (Lave and Wenger,
1991). On the other hand the social view of knowledge is concerned with the social and
learning processes within an organisation. This approach to knowledge construction
considers inequality, conflict, domination, subordination and manipulation influences as
well as more traditional behavioural questions associated with efficiency and motivation
(Alvesson and Wilmott, 1996). Thus social knowledge construction is a dynamic process
of contextuality rather than the assimilation of a body of facts. In the model depicted in
figure 7 knowledge construction is not limited to scientific inputs through explicit
programmes but includes a process of social interaction.

The implications of this wider concept of knowledge construction must be reflected in the
embodiment/dissemination of knowledge as part of the organisation’s KM approach.
There is little point in widening the concept of knowledge construction only to limit the
embodiment and dissemination techniques used or to force existing techniques onto new
knowledge. Attempting to do so will lead to disappointing results, frustration and a
negative view to Knowledge Management caused by the mismatch between conception
and application. Knowledge usage must also be reflected via the knowledge initiatives
installed in the organisation.

In his original work Demerest, (1997) describes ‘use’ (as deployed in figure 6) as ‘the
production of commercial value for the customer’. While increasing commercial value is
a key objective of KM, it is not the only objective. Therefore knowledge use must be
employed through the application of a complementary approach for emancipatory
enhancements and organisation outputs. This will permit the organisation to be viewed
and reformed from different perspectives that will facilitate continuous innovation, thus
creating the ultimate business benefits for the organisation as a whole. While the
interconnecting vectors (solid arrows) show the primary flow of activity, more recursive
arrows are added to reflect the circulating nature of activity flows, thus depicting that KM
is not a simple sequential process.
 Scientific paradigm Social Paradigm

Knowledge
Construction

Knowledge Knowledge
Embodiment Dissemination

Use

Knowledge
Business Employee Management
Benefits Emancipation

Figure No 7 - Modified Version of Demerest’s Knowledge Management Model

(McAdam and McCreedy, 1998)

The table overpage provides a summary of all the models presented in this article.
 Summary Knowledge Management Models

Name of Model Author Focus of Model

Knowledge Category Models
Knowledge Spiral Nonaka & Takeuchi, Dimensions of Knowledge –
Model (1995) Tacit and Explicit
Knowledge
Knowledge Hedlund & Nonaka, Carriers or agents of
Management Model (1993) Knowledge – individual,
group, organisation and inter-
organisation domain
Knowledge Category Boisot, (1987) Categories of Knowledge –
Model codified or uncodified,
diffused or undiffused
Intellectual Capital Models
IC Model of KM Chase, (1997) Connects IC and KM -
categorises them into human,
customer, innovative and
process elements under
human capital and
organisation capital headings
Socially Constructed Models
Knowledge Demerest, (1997) Components of KM –
Management Model knowledge construction,
capture, interpretation,
embodiment, dissemination
and use
Modified Version of McAdam and Scientific and Social view of
Demerest’s McCreedy, (1998) knowledge construction,
Knowledge capture and interpretation
Management Model Wider approach to
knowledge embodiment,
dissemination and use
Knowledge use benefits
business and employees