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The Role of Knowledge Management in Supporting Innovation and Learning

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Tayyab Maqsood
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The Role of Knowledge Management in Supporting Innovation and
Learning in Construction

A thesis submitted in fulfilment of the requirements for the degree of Doctor

of Philosophy

Tayyab Maqsood
B.Sc. (Civil Engineering)
M.Eng (Construction Engineering and Management)

School of Business Information Technology

RMIT University
June 2006
 DECLARATION

I certify that except where due acknowledgement has been made, the work is that of the
author alone; the work has not been submitted previously, in whole or in part, to qualify for
any other academic award; the content of thesis is the result of work which has been carried
out since the official commencement date of approved research program; and, any editorial
work, paid or unpaid, carried out by a third party is acknowledged.

Signed:

Tayyab Maqsood

June, 2006

ii
 ACKNOWLEDGEMENTS

I feel short of words when it comes to thanking my senior supervisor Professor Derek Walker,
(Professor of Project Management at RMIT University) for his precious guidance, immense
patience, constant encouragement that made this study possible. I will remain forever
indebted for his efforts that he has put not only in getting this study done but also for
enhancing my learning skills and improving my confidence as a researcher.

I am also immensely grateful to Dr. Andrew Finegan (Senior Lecturer at Charles Darwin
University) who supervised me at RMIT University before moving to Charles Darwin
University. He initiated my interest in the research methodology employed in this research
and taught me how to best use this. I will remember his continuous encouragement,
motivation and guidance in both formal and informal ways that has made possible for me to
be more confident in my work.

I am thankful to CRC for Construction Innovation and their industry partners for providing
me with the financial support to carry out this study. I am grateful to Gerry Shutt who acted as
my industry supervisor. He showed great interest in my research and provided me with great
help in obtaining the data required for this research. I fully acknowledge the help from my
respondents who made this study possible and thank them for their participation. I am highly
grateful to RMIT University especially School of Business Information technology and
Research Development Unit for providing me with all the necessary facilities required to
carry out the research. I am thankful to Professor Bill Martin who motivated me on various
occasions and acted as my research director. Thanks are also due to my second supervisor Dr.
Hossein Zadeh who encouraged me all the time and provided me with feedback on the thesis
draft. I would also like to acknowledge the support of my friend Vachara Peansupap during
my research period at RMIT University.

I wish to thank my grandmother and parents who always inspired me and supported me to
obtain the highest possible education. I cannot thank enough my wife Sadia for supporting me
and showing extreme patience during all these years of research and study. I must thank my
two years old daughter Eleeza for her patience and say sorry for all attention that she missed
because even daddy was physically near he was mentally away thinking about his research.

iii
 TABLE OF CONTENTS

DECLARATION ......................................................................................................................ii
ACKNOWLEDGEMENTS ....................................................................................................iii
TABLE OF CONTENTS ........................................................................................................iv
LIST OF TABLES..................................................................................................................vii
LIST OF FIGURES...............................................................................................................viii
LIST OF PAPERS PUBLISHED............................................................................................x
GLOSSARY OF TERMS .....................................................................................................xiii
ABSTRACT ..............................................................................................................................1
Chapter 1 ...................................................................................................................................2
Introduction ..............................................................................................................................2
1.1 Research Background- The relevance of KM to the construction industry .....................2
1.2 Rationale for the Research................................................................................................4
1.3 Research Objectives .........................................................................................................4
1.4 Research Questions ..........................................................................................................5
1.5 Research Proposition ........................................................................................................5
1.6 Research Methods ............................................................................................................5
1.7 Research Scope and Limitations.......................................................................................5
1.8 Structure of the Thesis......................................................................................................6
1.9 Summary...........................................................................................................................8
Chapter 2 ...................................................................................................................................9
Literature Review .....................................................................................................................9
2.1 The Construction Industry ..............................................................................................10
2.1.1 Contribution in National Economy..........................................................................10
2.1.2 Nature of Construction Industry and its Culture .....................................................10
2.1.3 The Case for KM as an Innovation in the Construction Industry............................12
2.1.4 Benefits for the Construction Industry ....................................................................14
2.2 KM..................................................................................................................................15
2.2.1 Background..............................................................................................................15
2.2.2 What is KM?............................................................................................................15
2.2.3 Evolution of KM and Emergence of the Knowledge Economy..............................16
2.2.4 KM a Fad? ...............................................................................................................19
2.3 Understanding Knowledge .............................................................................................20
2.3.1 What is Knowledge?................................................................................................20
2.3.2 Types of Knowledge................................................................................................21
2.3.3 Other Knowledge Classifications ............................................................................22
2.3.4 Dimensions of Knowledge ......................................................................................23
2.3.5 Strategic Implications of the Knowledge ................................................................25
2.3.6 Knowledge Stickiness..............................................................................................26
2.3.7 Knowledge Transfer for Overcoming Knowledge Stickiness.................................27
2.4 The Hidden Side of Tacit Knowledge ............................................................................29
2.4.1 Human Information Processing - Factors affecting Knowledge Construction........30
2.4.2 Variations in Learning Style and Knowledge Acquisition......................................32
2.4.3 Tacit Knowledge Construction – a practical example.............................................33
2.4.4 The Importance of Context......................................................................................33
2.4.5 Importance of Timing..............................................................................................34
2. 5 Dimensions of KM ........................................................................................................35
2.5.1 Categorical Dimension of KM ................................................................................35
2.5.2 Intellectual Capital (IC) Dimension ........................................................................38
2.5.3 Socially Constructed Dimension of KM .................................................................39
2.6 Organisational KM Initiatives ........................................................................................45

iv
 2.6.1 Unsuccessful Initiatives and Their Causes ..............................................................45
2.6.2 Successful Initiatives ...............................................................................................47
2.7 KM Initiatives and Frameworks .....................................................................................56
2.8 KM Techniques and Tools .............................................................................................61
2.9 Organisational Learning and Learning Organisation .....................................................63
2.9.1 Organisational Learning and a Learning Organisation............................................63
2.9.2 Link with KM ..........................................................................................................64
2.9.3 Challenge of Project Learning through KM ............................................................65
2.9.4 Project Learning Barriers.........................................................................................67
2.10 Innovation and KM.......................................................................................................68
2.10.1 Models of Innovation ............................................................................................69
2.10.2 Stages of Innovation ..............................................................................................70
2.10.3 The Life Blood of Innovation- KM .......................................................................71
2.10.4 Adoption and Diffusion of Innovation ..................................................................71
2.10.5 ICT as an Innovation in the Construction Industry ...............................................73
2.10.6 Importance of ICT and Benefits to the Construction Process ...............................73
2.11 Emerging Directions in KM .........................................................................................76
2.11.1 Enmeshing Supply Chain Management and KM ..................................................76
2.11.2 KM and Human Resource Management (HRM)...................................................86
2.12 Link between KM, Organisational Learning and Innovation.......................................87
2.13 Summary.......................................................................................................................87
Chapter 3 .................................................................................................................................91
Research Method and Design ................................................................................................91
3.1 Understanding the Philosophy of Research....................................................................91
3.2 Positivism and Social Constructivism Paradigms ..........................................................92
3.3 Research Approach and Strategies .................................................................................94
3.4 Culture of the Construction Industry and Culture of the Research ................................97
3.5 Selecting the Interpretive Paradigm for this study .........................................................99
3.6 Understanding Grounded Theory .................................................................................100
3.6.1 Selecting Grounded Theory Approach for This Research.....................................103
3.7 Understanding Soft Systems Methodology (SSM) ......................................................105
3.7.1 Use of SSM in the Construction Industry..............................................................111
3.8 Research Design ...........................................................................................................111
3.9 Research Participants....................................................................................................113
3.10 Summary.....................................................................................................................114
Chapter 4 ...............................................................................................................................116
Use of Grounded Theory......................................................................................................116
4.1 Grounded Theory Application......................................................................................116
4.1.1. Organisations Selection and their Background ....................................................116
4.1.2 Participants Selection ............................................................................................118
4.1.3 Phenomenon Explored in the Study Using the Grounded theory Approach.........118
4.1.4 Pre-conceptualisation Propositions........................................................................118
4.1.5 Interview Questions...............................................................................................119
4.1.6 Building Grounded Theory....................................................................................120
4.1.7 The Grounded Theory of ICT Innovation and Knowledge Use............................124
4.1.8 The use of Literature..............................................................................................127
4.1.9 Achieving the State of Theoretical Saturation in Grounded Theory.....................128
4.1.10 Formulating the Model ........................................................................................130
4.1.11 Validity and Reliability of the Proposed Theory and Model...............................131
4.2 Extending the Model ..............................................................................................132
4.3 Summary.......................................................................................................................134
Chapter 5 ...............................................................................................................................136

v
Using SSM as a KM tool ......................................................................................................136
5.1 SSM as a KM Tool .......................................................................................................136
5.2 Selection of the Organisation and Business Process ....................................................137
5.3 Investigating Pre-tendering Process Using SSM..........................................................138
5.4 Investigating the Technology Component Associated with Pre-tendering Process Using
SSM- Project Histories .......................................................................................................146
5.5 Investigating People Component Associated With Pre-tendering Process ..................150
5.5.1 Participant 1: An Example of a Bridge Project .....................................................151
5.5.2 Participant 2: An Example of a Road Project........................................................154
5.5.3 Participant 3: Use of an Innovative Product in a Project.......................................157
5.6 Summary.......................................................................................................................161
Chapter 6 ...............................................................................................................................163
Integrating People, Process and Technology .....................................................................163
6.1 SSM Contribution towards Knowledge Capture and Elicitation..................................163
6.2 SSM Contribution towards Knowledge Creation.........................................................165
6.3 SSM Contribution towards Knowledge Sharing ..........................................................168
6.4 Learning in the SSM and a Move towards a Learning Organisation under KM..........168
6.5 Summary.......................................................................................................................169
Chapter 7 ...............................................................................................................................170
Conclusions and Recommendations ...................................................................................170
7.1 Main Research Findings ...............................................................................................170
7.2 Contribution of the Research........................................................................................175
7.3 Recommendations ........................................................................................................177
7.4 Recommendations for Future Research........................................................................178
7.5 Summary.......................................................................................................................180
References..............................................................................................................................181
Appendix A: Sample Notes Taken in Phase 1
Appendix B: Sample Notes Taken in Phase 2

vi
 LIST OF TABLES

Table 2.1 Manager’s tools through the decades---------------------------------------- 17

Table 2.2 Evolution of KM based on historical economical developments-------- 17
Table 2.3 Dimensions of knowledge---------------------------------------------------- 23
Table 2.4 Twelve types of knowledge-------------------------------------------------- 24
Table 2.5 Five knowledge transfer strategies------------------------------------------- 27
Table 2.6 The 4 I’s knowledge processes----------------------------------------------- 38
Table 2.7 Dimensions of culture-------------------------------------------------------- 49
Table 2.8 Various aspects of the culture promoting or inhibiting the
organisational culture---------------------------------------------------------- 50
Table 2.9 KM tools------------------------------------------------------------------------- 61
Table 2.10 The usage and effectiveness of KM tools and techniques---------------- 62
Table 2.11 Process-based methods for history collection------------------------------ 66
Table 2.12 Document-based methods for history collection--------------------------- 67
Table 3.1 Various research approaches and strategies-------------------------------- 95
Table 3.2 Various approaches in Interpretive Paradigm------------------------------ 96
Table 3.3 Classification based on the purpose of the study-------------------------- 97
Table 3.4 Number of the participants and their role along with the number of
the interviews conducted in Phase 1 (Grounded Theory)---------------- 113
Table 3.5 Number of the participants and their role along with the number of
the interviews conducted in Phase 2 (SSM)-------------------------------- 114
Table 4.1a An example of a coded interview, participant is a Project Manager
with Organisation A----------------------------------------------------------- 121
Table4.1 b Memos regarding the above interview-------------------------------------- 122
Table 4.2 Emerging categories forming a theory from first six interviews--------- 123
Table 4.3 Literature supporting the emerged categories------------------------------ 128
Table 5.1 Structures, Processes, Perceptions and Beliefs elicited in interviews--- 140
Table 5.2 Discussion on the activities of the conceptual model-Pre-tendering
process--------------------------------------------------------------------------- 144
Table 5.3 Discussion on the activities of the conceptual model--------------------- 148
Table 5.4 Discussion on the activities of the conceptual model--------------------- 153
Table 5.5 Discussion on the activities of the conceptual model--------------------- 157
Table 5.6 Discussion on the activities of the conceptual model--------------------- 160
Table 6.1 Knowledge elicited in SSM investigation---------------------------------- 164
Table 6.2 Knowledge creation in SSM investigation---------------------------------- 166

vii
 LIST OF FIGURES

Figure 2.1 Knowledge strategic analysis----------------------------------------------- 25

Figure 2.2 Knowledge from tacit to explicit------------------------------------------- 26
Figure 2.3 Human information processing--------------------------------------------- 30
Figure 2.4 Nonaka and Takeuchi KM model exhibiting categorical dimension
of KM-------------------------------------------------------------------------- 36
Figure 2.5 Heduland and Nonaka’s KM dimension----------------------------------- 37
Figure 2.6 Boisot’s knowledge category dimension---------------------------------- 37
Figure 2.7 Intellectual capital dimension of KM-------------------------------------- 39
Figure 2.8 Socially constructed KM model and dimension-------------------------- 40
Figure 2.9 Social capital in the creation of IC----------------------------------------- 43
Figure 2.10 The role of Social Capital in creating IC---------------------------------- 44
Figure 2.11 A model of trust and commitment under tested conditions------------- 45
Figure 2.12 The Galbraith 'Star' model of change management---------------------- 54
Figure 2.13 The CLEVER framework--------------------------------------------------- 57
Figure 2.14 KM: A conceptual framework---------------------------------------------- 58
Figure 2.15 The K-Adv model------------------------------------------------------------ 59
Figure 2.16 Building a KM pyramid----------------------------------------------------- 60
Figure 2.17 Progression of innovation from dependence on single to multiple
factor--------------------------------------------------------------------------- 69
Figure 2.18 Model of the innovation-decision process--------------------------------- 70
Figure 2.19 The social interaction perspective of diffusion--------------------------- 73
Figure 2.20 Data flows in various construction stages--------------------------------- 75
Figure 2.21 A model of trust--------------------------------------------------------------- 77
Figure 2.22 Trust and distrust------------------------------------------------------------- 79
Figure 2.23 Construction process--------------------------------------------------------- 82
Figure 2.24 Supply chain in construction------------------------------------------------ 82
Figure 2.25 Trading partners adopting SCM and KM--------------------------------- 83
Figure 2.26 Various modes of interactions among trading partners------------------ 84
Figure 2.27 Link b/w KM, Learning Organization and Innovation------------------ 87
Figure 3.1 The research process for basic and applied research in Positivism
paradigm----------------------------------------------------------------------- 94
Figure 3.2 The research process-interpretive approach------------------------------- 96
Figure 3.3 Glaser (1978, 1992) place of induction, deduction and verification in
grounded theory analysis---------------------------------------------------- 101
Figure 3.4 Strauss (1987), Strauss and Corbin (1990) place of induction,
deduction and verification in grounded theory analysis----------------- 101
Figure 3.5 Underpinning framework of Grounded theory used in this research-- 105
Figure 3.6 The Nature of wicked problems-------------------------------------------- 106
Figure 3.7 Summary of SSM as a seven-stage process------------------------------- 108
Figure 3.8 Research methodology adopted for this research------------------------ 112
Figure 4.1 Construct developed from the theory-------------------------------------- 130
Figure 4.2 Organisational learning and transformation through KM--------------- 134
Figure 5.1 Pre-tendering process illustrated-------------------------------------------- 138
Figure 5.2 Rich picture of pre-tendering process-------------------------------------- 142
Figure 5.3 Root Definition, CATWOE and Conceptual Model of Pre-tendering 143
Process-------------------------------------------------------------------------
Figure 5.4 Rich Picture for project histories------------------------------------------ 146
Figure 5.5 The Root Definition, CATWOE and Conceptual Model of Project
Histories------------------------------------------------------------------------ 148
viii
Figure 5.6 Rich Picture of the Bridge Project------------------------------------------ 151
Figure 5.7 Root Definition, CATWOE and Conceptual Model of the Bridge 153
Project--------------------------------------------------------------------------
Figure 5.8 Rich Picture of the Road Project------------------------------------------- 155
Figure 5.9 Root Definition, CATWOE and Conceptual Model of the Road
Project-------------------------------------------------------------------------- 156
Figure 5.10 Rich Picture of The Bamtec Study----------------------------------------- 158
Figure 5.11 Root Definition, CATWOE & Conceptual Model of the BAMTEC 159
study----------------------------------------------------------------------------
Figure 7.1 Organisational learning and transformation through KM--------------- 174

ix
 LIST OF PAPERS PUBLISHED

Book Chapters

• Walker, D. H. T., Maqsood, T. and Finegan, A. (2005), The Culture of the Knowledge
Advantage (K-Adv)-A Holistic Strategic Approach to the Management of Knowledge.
KM in the Construction Industry: A Socio-Technical Perspective. Kazi A. S. Hesinki,
Finland, Idea Group Publishing, p223-248.
• Walker, D. H. T., Maqsood, T. and Finegan, A. (2006). A Prototype Portal For Use as
a KM Tool to Identify Knowledge Assets in an Organisation, Encyclopedia of Portal
Technology and Applications. Arthur Tatnall, Idea Group Publishing, (forthcoming).

Journal Papers

• Maqsood T., Finegan, A. D. and Walker D. H. T. (2004) Biases and Heuristics in

Judgment and Decision Making: The Dark Side of Tacit Knowledge, Issues in
Informing Science and Information Technology, 295-301.
• Maqsood, T. and Finegan, A. D. (2003) Applying models of KM to an industry case
study. International Journal of Knowledge, Culture and Change Management, Vol 3.
• Maqsood, T., Walker, D.H.T., Finegan, A.D.,(2006) Applying Project Histories and
Project Learning through KM in an Australian Construction Company, The Learning
Organisation Journal Vol 13 No1, 80-95.
• Maqsood, T., Walker, D.H.T. Finegan, A.D., Creating the learning supply chains by
unleashing Innovation and Creativity through Managing Knowledge, Submitted to
Supply Chain Management Journal, Provisionally Accepted in The Learning
Organisation Journal for Januray 2007 issue.

Referred Conference Papers

• Maqsood, T., Walker, D.H.T., Finegan, A.D.,(2005) A Model for Developing

Organisational Learning Transformation through KM, 19th ANZAM conference 2005,
7-10 December, Canberra
• Maqsood T., Walker, D. H. T and Finegan, A., (2005) The Role of KM in Enhancing
Knowledge Pull in the Construction Organisation to Deliver Innovation: A Case
Study, The 21st Annual ARCOM Conference 2005, 7-9 September, London, 539-548.
• Maqsood T., Walker, D. H. T and Finegan, A., (2005) Unleashing Innovation and
Creativity through Managing Knowledge in Supply Chains: Creating the Learning
Chains, Third International Conference on Construction in the 21st Century (CITC-
III): Advancing Engineering, Management and Technology, 15-17 September, Athens
(CD-ROM paper92).
• Maqsood T., Finegan, A., and Walker, D. H. T. (2005) Tacit Knowledge and
Worldviews – A Case Study of the Construction Tendering Process, Meeting and
International Conference Information and KM in a Global Economy: Challenges and
Opportunities for Construction Organizations, 19 - 20 May, 515-522.
x
• Finegan A., and Maqsood T., (2005) A Case Study of the Adoption of ICT Innovation
in a Remotely Located Construction Organisation: Meeting and International
Conference: Information and KM in a Global Economy: Challenges and Opportunities
for Construction Organizations, 19 - 20 May, 165-174.
• Maqsood T., Walker, D. H. T. and Finegan, A., (2004) An Investigation of ICT
Diffusion Issues in an Australian Construction Contractor Company Using SSM,
Proceedings of the CIB2004 Globalisation and Construction, 17-19 November,
Bangkok, Thailand. 485-496.
• Maqsood, T., Walker, D. H. T. and Finegan, A. (2004) Current State of KM, Potential
and Trends: Implications for the Construction Industry, Proceedings of the ‘Clients
Driving Innovation’ International Conference of the Collaborative Research Centre for
Construction Innovation, 25-27 October, Surfers Paradise, Australia.
• Maqsood, T., Walker, D. H. T. and Finegan, A. (2004) Project Histories and Project
Learning - A KM Challenge, Proceedings of the 20th ARCOM Conference, 1-3
September, Edinburgh Scotland. Vol 1, 561-570.
• Maqsood , T., Finegan, A.D. and Walker, D.H.T. (2003) 'Extending KM across the
supply chains in the construction industry: Knowledge sharing in construction supply
chains', 2nd International Conference on Construction in the 21st Century (CITC-II),
Hong Kong, 10-12 December,121-126.
• Maqsood, T., Walker, D.H.T., Finegan, A.D. and Staedler, A. P (2003) 'Investigating
the role of ICT in improving productivity in Construction Supply Chains in Australian
Construction Industry', 2nd International Conference on Construction in the 21st
Century (CITC-II), Hong Kong, 10-12 December, 511-516.
• Maqsood , T., Finegan, A.D. and Walker, D.H.T. (2003) 'A soft approach to solving
hard problems in construction project management', 2nd International Conference on
Construction in the 21st Century (CITC-II), Hong Kong, 10-12 December, 312-317.
• Maqsood, T. and Finegan, A.D. (2003) ‘Applying Models of KM to an Industry Case
Study’, The Third International Conference on Knowledge, Culture and Change in the
Organisations, Penang, Malaysia, 11-14 August.
• Maqsood, T., Finegan, A.D. and Walker, D.H.T. (2003) ‘A conceptual model for
exploring knowledge channelisation from sources of innovation in construction
organisations: Extending the role of KM’, ARCOM 2003: 19th Annual Conference,
Brighton, UK, 3-5 September.
• Walker, D.H.T., Finegan, A.D. and Maqsood, T. (2003) ‘Using a Soft Systems
Methodology Approach to Knowledge Elicitation – An Australian Case Study’
Knowledge Construction: Joint International Symposium of CIB Working
Commissions W55, W65 and W107, Singapore, 22-24 October.

xi
Submitted Papers

• Maqsood, T., Walker, D.H.T., Finegan, A.D., Facilitating Knowledge Pull to Deliver
Innovation through KM: A Case Study, Engineering, Construction and Architectural
Management (ECAM) Journal (Under Review)
• Walker D. H. T., Grisham T., Maqsood, T. and Srinivasan P., Frameworks For KM
Initiatives In The Field Of Project Management-Using Metaphor for Improved
Visibility, Joint International Conference on Construction Culture, Innovation, and
Management (CCIM), Dubai, November 26th -29th 2006 (Submitted)

xii
 GLOSSARY OF TERMS

ABS = Australian Bureau of Statistics

ADSL = Asymmetric Digital Subscriber Line
CATWOE = Customer, Actor, Transformation, Weltanschauung, Owner, Environment
CIB = International Council for Research and Innovation in Building Research
COP = Communities of Practice
CRC CI = Co-operative Research Centre in Construction Innovation
EDMS = Electronic Document Management System
HTTP = Hyper Text Transfer Protocol
HRM = Human Resource Management
IC = Intellectual Capital
ICT = Information Communication Technologies
ISDN = Internet Service Digital Network
ISP = Internet Service Provider
IT = Information Technology
K-adv. = Knowledge Advantage
KM = KM
LAN = Local Area Network
MBO = Management by Objective
PERT = Program Evaluation and Review Technique
SSM = Soft Systems Methodology
TQM = Total Quality Management
WAN = Wide Area Network
WWW= World Wide Web

xiii
 ABSTRACT

The research investigates the role of Knowledge Management (KM) in supporting innovation
and learning in the construction industry. The Construction industry is complex in nature and
notoriously fragmented suffering high losses in productivity. Being a substantial part of the
national economy, the construction industry greatly influences the country’s GDP (Gross
Domestic Product). Innovation has lately been regarded as the key to improve its productivity
and to change traditional and fundamental thinking that has plagued the industry for a long
time leading to new and more rational philosophies. The research demonstrates that KM may
act as an enabler of such innovation by facilitating organisational learning.

The research is carried out in two phases. In Phase 1, the research employs grounded theory
methodology to develop and map out the current state of knowledge related activities being
undertaken in two leading Australian construction organisations. This results in the
development of a model, the main depiction of which is a segregation between three crucial
components (people, process & technology) of an organisation required to successfully carry
out the construction work. It also helps identify the gap between the organisation’s internal
and external knowledge sources that restricts the pull of knowledge from external knowledge
sources. The culture of the organisation is considered to provide this resistance. An
improvement in this state through KM is the main objective of the research which is realised
in Phase 2. Soft System Methodology (SSM) is utilised as a KM tool to achieve this objective
in this phase. As one of the systems approaches, it has the capacity to make sense of intricate
systems like construction where a complex interaction between people, process and
technology occurs all the time. A mission critical business process of pre-tendering of a
leading Australian construction contractor organisation is selected to carry out the SSM
investigation that resulted in four SSM case studies. This investigation helps explain how KM
initiatives through SSM improve the integration of people, process and technology; increasing
the capacity of the organisation to pull external knowledge and improve its own internal
knowledge bank. All these improvements help an organisation to transform itself into a
learning organisation that could continually innovate.

1
 Chapter 1
Introduction

This research is descriptive and qualitative in nature. It investigates the role of Knowledge
Management (KM) in facilitating innovation and learning in the construction industry. The
main objective of the research is to demonstrate a link between innovation and transformation
of an organisation into a learning organisation through KM. This is essential for putting
forward a convincing case for the construction industry to adopt a KM philosophy as a means
of becoming innovative with greater ability to learn and adapt. Such an organisation would be
better shaped and equipped to confront the challenging dynamics of the construction business
and its inherent volatility. The theme of the research is pre-dominantly qualitative involving a
general in-depth investigation of two leading Australian Construction Contractor
organisations in the first phase and then a more detailed study one of these two in the second
phase.

The aim of the research is to assist senior management to better understand the potential of
KM and its promise to deliver innovation and learning within an organisation. This is
achieved through developing model in phase one (with validation in phase two) that
establishes an easy-to-understand link between innovation, learning organisation and KM.

This chapter provides an overview and outlines the scope of the thesis. It describes the
research background, the rationale for the research, research objectives, research questions,
research propositions, research methods, and scope and limitations of the current research.

1.1 Research Background- The relevance of KM to the construction

industry

The construction industry is notoriously characterised by its culture of resisting change

resulting from adoption and diffusion of innovative approaches and knowledge. This culture
is then embedded in the organisations that collectively form the industry. For this reason,
organisations are not only slow to absorb new innovative knowledge (Barthorpe et al., 2000),
but are also slow in harnessing the intellectual capital available to them in order to produce
innovation (Egbu et al. 2001a). Being a substantial part of the national economy of any
country, it is vital to challenge this situation. There is a need for the construction industry to
2
become more innovative and provide greater value for money through instilling learning in
their organisations (Murray and Langford 2003).

For a considerable period of time the industry has experienced low productivity levels and
huge material, labour and management energy waste. Researchers and practitioners alike have
agreed that traditional construction management approaches that the industry adopts, is not a
solution to the above identified problems and is unlikely to improve the industry’s
productivity and profitability. However, ‘innovation’ has gained recent popularity in the
construction industry. The basic purpose of being innovative, therefore, is to delineate and
differentiate new/creative thinking from old fundamental/traditional thinking. The search for
‘innovative approaches’ has thus become a contemporary theme in the construction industry.

Achieving innovation in the construction industry is dependent upon how its knowledge is
managed—including knowledge generated by academia and collaborative research centres
together with knowledge that organisations possess in the form of intellectual capital. KM is,
therefore, being recognised as a vehicle through which innovation and improved business
performance is possible (Kamara et al. 2002). Success of various KM initiatives in other
industries - mainly pharmaceuticals (Normann and Ramirez 1993; Powell 1998), electronics
(Sieloff 1999), and manufacturing (Andrews 1996) - provides a model for the construction
industry.

KM itself is an innovation but its adoption and diffusion paves the way for developing other
innovative knowledge (such as supply chain management, relational contracting, partnering,
virtual reality etc) to be effectively adopted and utilised. KM allows organisations to devise
mechanisms that could bring them closer to knowledge communities thereby generating new
knowledge and producing innovations. This interaction can allow a flow of knowledge
between internal and external knowledge communities so that instead of an organisation
responding reactively to a knowledge-push it can pull that knowledge into itself, adapt it and
effectively use it. At the same time, it establishes the mechanisms by which these intangible
assets of the organisation are best exploited to benefit the organisation.

3
1.2 Rationale for the Research

The construction management literature discusses the importance of innovation as a means of

improving productivity but it does not sufficiently describe mechanisms through which
innovation can be embedded into the construction industry’s operating culture. This may
result in failure to innovate and/or tardy adoption and diffusion of innovation thus locking the
industry into a status quo position. KM has the capacity to challenge this situation in the
construction industry. Currently, KM research in the construction industry is relatively new.
As with any new initiative, the current research initiatives are more related to clarifying and
building the underlying sense of the KM domain, sculpting KM initiatives and developing
appropriate tools/techniques (Egbu et al. 2001 a, b; Egbu and Botterill 2002; Kamara et al.
2002). These efforts indicate that a link between innovation, learning and KM may exist but
this relationship has not been explicitly discussed.

Thus, it is fitting for this research to build upon the strengths of existing research carried out
by noted authors and their research teams (i.e. teams such as that of Charles Egbu at Glasgow
Caledonian University, UK; Chimay Anumba at Loughborough University, UK; Derek
Walker at RMIT University, Australia, etc.) that investigate how KM is related to innovation
and what role it can play in enhancing learning in an organisation with a view of transforming
it into a learning organisation. This research undertakes this endeavour and strives to not only
investigate the theoretical link between innovation, learning and KM but also practically
demonstrate it with a view of providing enough proof of the concept that may eventually help
the construction industry to adopt and practice KM.

1.3 Research Objectives

The rationale developed in the above section leads to the following set of objectives:

1. To investigate the role of KM as an enabler of innovation.

2. To investigate the role of KM in enhancing learning and transforming an organisation
into a learning organisation.
3. To demonstrate the role of KM in enhancing learning and, more specifically,
enhancing learning in construction organisations.

4
1.4 Research Questions

The research objectives translate into the following research questions:

1. How does KM support innovation?

2. How is KM supported by the learning organisation concept?
3. Can it be demonstrated that KM has a role to play in enhancing innovation and
learning in the construction organisations?

1.5 Research Proposition

The two basic research propositions that are developed in this research are presented below:

1. Continuous innovation is important to improve the productivity of the construction

industry.
2. Effective management of knowledge has the capability of producing such innovation by
transferring an organisation into a learning organisation that continually enhances its capacity
to learn and adapt.

1.6 Research Methods

The first two objectives and research questions were investigated by conducting an extensive
cross-disciplinary literature review. The fulfilment of third objective and answering the third
question required the research to be divided into two phases (Phase 1 and Phase 2). During
Phase 1 of this research, the aim was to map out the current situation in the two leading
Australian Construction Contractor organisations regarding the use of knowledge and related
issues. A Grounded Theory approach was used in this part of the research that facilitated the
development of the model. Phase 2 of this research dealt with the demonstration of KM in
improving the weaknesses identified in the model developed in Phase 1. Soft Systems
Methodology (SSM) was employed in this part of the research that served the dual purpose of
a KM tool as well as a research methodology.

1.7 Research Scope and Limitations

This research is qualitative and has relied on an in-depth investigation of small sample size
(i.e. two Australian Construction Contractors in Phase 1 and one Australian construction

5
contractor in Phase 2). The main research objective of the research is to demonstrate the effect
of KM on innovation and learning. It can only be practically fulfilled by focussing on a small
sample of case study examples and study these in detail. A quantitative study approach was
deemed not suitable for this research for the reason that KM is relatively new in the
construction industry and not many organisations are familiar with its underlying philosophy.
They often confuse KM with an IT initiative. It is for this reason that the first two objectives
of this study were fulfilled through a comprehensive literature review and not through
empirical means. The results obtained in this research are specific to the organisations studied
but may have general implications in understanding the role of KM in enhancing innovation
and learning.

Phase 2 of the research involved the investigation of three components of the model
developed in Phase 1 i.e. process, people, and technology. The investigation of the process
component included six persons, but only three further volunteered to remain as participants
in the research, when people component was investigated. The implications of this reduction
in number of participants is not very concerning as it doesn’t negate, or in any way effect, the
basic premise and logic of the research methodology of Phase 2.

The SSM investigation consists of 7 stages. The last stage is an action taking stage where
actions suggested in Stage 6 are actually undertaken and their effect recorded. This would
present a complex lengthy and time consuming process, hence it was not practicable to
implement these actions during the time limit available for conducting this study. Although
actions were not implemented, general consensus of the participants were achieved on the
viability and effectiveness of the proposed actions.

1.8 Structure of the Thesis

This thesis comprises seven chapters. Chapter 1 provides an overview of this research. It
addresses the research background, research rationale, research objectives, research questions,
research propositions, research methods and scope and limitation of the research.

Chapter 2 reviews the literature in diverse fields such as Management Science, Decision
Making, Leadership, Innovation, KM, Construction Management, Cognitive Psychology,
Organisational Planning and Development, Organisational Learning, Information Systems
etc. It discusses the construction industry and its culture and develops a case for the KM
deployment in the construction industry. It then explains terms as they are currently being
6
understood in the literature (such as KM, knowledge, and the knowledge economy). It
provides a link between KM and innovation; and KM and Learning Organisations that is
manifested in the form of a conceptual and theoretical model linking KM, innovation and
learning organisations. The chapter ends after providing emerging directions of research in the
field of KM.

Chapter 3 presents the research approach discussing the philosophical assumptions

underpinning this research, the research study approach and the research design. The chapter
also describes in detail, two qualitative research methodologies employed in this research i.e.
Grounded Theory and SSM. This chapter establishes the basis for dividing the research into
two phases (Phase 1 and Phase 2).

Chapter 4 describes the research work carried out in Phase 1 of the research that involved the
employment of a Grounded Theory methodology. It put forward a model that was formulated
as a part of the execution of Grounded Theory methodology. This model was then extended to
show the effect of innovation and learning through KM.

Chapter 5 describes the use of SSM as a KM tool in Phase 2 of the research. The SSM
investigation was carried out to study the three components of the people, process and
technology model developed in Chapter 4. This chapter also presents SSM case studies for
each of the component that ends with a list of actions which have the capability of causing an
improvement when undertaken.

Chapter 6 describes how the list of actions that resulted from SSM investigation in Chapter 5
can be collated in order to realise the integration of three components of people, process and
technology that lies at the heart of this research. This chapter also discusses how SSM as KM
tool has played part in knowledge elicitation, creation and sharing.

Chapter 7 summarises the research findings that were related to the research questions. The
chapter discusses the research contribution and recommendations arising from this research. It
concludes with future research recommendations.

7
1.9 Summary

This chapter provides an introduction to this doctoral study. The main premise of this research
is that continuous innovation is important for improving the productivity of the construction
industry. While the current construction management literature emphasises the value of
innovation, it does not explicitly and adequately describe the mechanism through which
innovation can be embedded in the industry’s culture. This maintains the industry’s status quo
in terms of its uptake of innovation knowledge. KM has the ability to challenge this status
quo. Recent successes of KM in other fields and current research work undertaken to establish
the underlying philosophy of KM in the construction industry, provides a rationale for this
research to build upon the existing research to develop and demonstrate a link between KM,
innovation and learning. This research may serve as sufficient proof of concept for the
construction industry to consider a more widespread adoption of ideas offered in this thesis.
After establishing the research rationale, this chapter states the research objectives and lays
down the research questions and research proposition. It then provides a brief description of
research methods employed in this research and ends by describing the limitations of the
research and outlining the structure of the thesis.

8
 Chapter 2
Literature Review

The purpose of this chapter is to provide a sound basis for understanding the concept of
knowledge and KM and how it is related with organisational learning and innovation. The
literature from the following disciplines were reviewed:

Management
Leadership

Management science
Innovation

Decision Making
KM

Cognitive Psychology
Organisational Learning

Organisational Planning and
Information Systems
Development
Construction Management

The start of the chapter highlights the nature of the construction industry, its culture and
problems and presents a case of KM as an innovation having the capability of improving
industry productivity. It then delves into explaining what is meant by term ‘KM’ and explains
its evolution linking it with the present knowledge economy era. The concept of knowledge,
which lies at the heart of KM, is established next. Various types and dimension of knowledge
as available in the literature have been discussed. A section is devoted next, to understand the
‘stickiness’ of the knowledge that explains why it is difficult to transfer the knowledge from
one entity to other. This creates a question about the effectiveness of the knowledge usually
termed as ‘tacit’ knowledge that is being captured for use. Hence, the next section explains
the often hidden tacit knowledge perspective.

Various researchers have studied KM from different perspectives and dimensions. These
dimensions are the focus of discussion of the next section. Having established the basic
concept of knowledge and KM, the following section describes successful and unsuccessful
KM initiatives and discusses the causes of any failures. The same section also explains what it
takes to deliver a successful KM initiative. Hence issues like culture, leadership, rewards and
change management are discussed. The next two sections describe KM frameworks identified
from the relevant body of research and what sorts of KM tools are currently available. The
next few sections establish the role of KM in organisational learning and innovation to
remove any confusion about these contemporary concepts relating to improving an

9
organisation’s productivity. Two emerging directions in KM research are then discussed,
followed by presentation of a model (linking KM, innovation and organisational learning) that
forms the basis of this research. The chapter ends with a brief summary of various concepts
discussed in the chapter. The author of this thesis was a key researcher in the team that
investigated the various ways that KM could be applied in the Australian Construction
Industry. This involved intimate work on both the literature review stage and in co-writing
numerous publications as provided at the start of the thesis.

2.1 The Construction Industry

2.1.1 Contribution in National Economy

The construction industry is a vital element of any economy and has a significant impact on
the efficiency and productivity of other industries. The Australian construction industry, for
example, in 2003-2004, contributed 6.1% to the gross product of all industries, as measured
by production-based Gross Domestic Product (chain volume measures) (ABS 2006). The case
with other developed countries is also not dissimilar. For example, The Bureau of Economic
Analysis1 in the U.S. reported that the construction industry contributed towards 4.7% of GDP
in 2004. In 2004, the Canadian construction industry contributed 5.7% to Canada’s GDP2.
The GDP contribution of the construction industry in UK in 20043 was 6.2 %. A key study by
Stoeckel and Quirke (1992) carried out in Australian context has indicated that a 10% gain in
efficiency in construction could lead to a 2.5 per cent gain in GDP. This shows the
construction industry greatly influences country’s economic growth (GDP) which makes it
necessary for the efforts to be put together in order to improve its productivity hence
achieving increase in the GDP.

2.1.2 Nature of Construction Industry and its Culture

Murray and Langford (2003) gathered a series of UK government reports relating to

construction productivity and the nature of the construction industry that provide meta-data of
over five decades of history of the UK construction industry. The UK construction industry is
1
http://www.bea.gov/bea/industry/gpotables/gpo_action.cfm?anon=174&table_id=14095&format_type
=0 accessed September 2006.
2
http://www40.statcan.ca/l01/cst01/econ41.htm accessed September 2006.
3
United Kingdom National Accounts (The Blue Book) 2006, ONS
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=1143 September 2006

10
viewed as a stubborn, risk averse and highly traditional industry and has been criticised as
being a laggard at adopting innovation when compared to other advanced manufacturing
industries such as automotive, ship building or aerospace. The situation in Australia is similar
to that of the UK (Lenard 1996; Lenard and Bowen-James 1996).

The construction industry by its very nature has a very complex structure. Public
sector/private sector involvement, uses a variety of financing/funding sources, deploys
numerous procurement methods, and involves number of actors (organizations /trading
partners) that cause considerable fragmentation. Also, firms often work for their individual
benefits with the competitive basis of selection of actors being aimed at achieving low cost
often ignoring its impact on quality/safety. This generates adversarial relationships mostly
ending in expensive litigations and giving rise to win-lose attitude. Coupled with above,
complex human-technology interaction and aversion to risk have flooded the industry with a
series of problems of both macro and micro scale. All these attributes contribute towards the
formation of a culture that resists new adoption and diffusion of innovation, be it a new
innovative technology or innovative process (Latham 1994; DETR 1998; Department of
Industry Science Resources 1999). Most innovative initiatives are very difficult to undertake
and often lead to failure.

Barthorpe et al. (2000, p346) observe:

“The casual, fragmented and hierarchical nature of the construction industry

illustrates the incapability of the industry to operate in a co-ordinated,
homogeneous way when dealing with universal issues such as training, quality
standards, education, research and development, innovation, skills certification,
public relations, marketing and government lobbying. Levels of innovation in the
construction industry compared to other industries have been at best modest. The
industry portrays a conservative and at times ‘laggardly’ approach to new ideas,
mainly due to its fragmented nature and lack of ability to invest time and money
into innovation, research and development”.

Building and civil construction organisations, made up of contractors, subcontractors and

specialist contractors, are different when compared with other innovative organisation in
various industries. Construction is a very demanding and stressful process (Lingard and
Sublet 2002). Construction teams work long hours and are constantly under pressure to meet
deadlines in order to save their organisations from liquidated damages. Under such

11
circumstances it is extremely difficult for the people to spend their time and creative energy in
developing alternative innovative solutions to carry out tasks, even though they are capable of
it. The main concern of the organisation is ‘to get the work done’ as early as possible to avoid
the threat of project time loss. Experimenting with new ideas and seeking innovative
alternatives are often considered as increasing uncertainty and may put project success at risk.
This risk avoidance culture deters people from performing innovatively.

Many innovations go unnoticed by construction industry practitioners with few innovations

penetrating its resistive culture, even after being successful applied in other industries (e.g.
Total Quality Management, Information Communication Technologies (ICT), KM etc.). Even
penetration does not guarantee full adoption and diffusion and chances of successful
implementation remain dubious. Resistance to change, inflexible culture, lack of motivation
and reward systems, weak leadership, poor strategy and vision, absence of learning
mechanisms, lack of awareness about the direction of construction research and not foreseeing
the immediate benefits of adopting innovations lead to this discrepancy (Oglesby et al. 1989;
Bresnen and Marshall 2001; Gann 2001; dos Santos et al. 2002).

Effective adoption and diffusion of innovation has the potential to increase construction
industry productivity. Jones and Saad (2003, p268) argue that the construction industry has
considerable barriers to accepting innovation in general, mainly due to its culture of
conservatism, lack of appropriate leadership, a poor learning organisational orientation, lack
of investment in people and its timidity in leading the adaptation of new technologies. The
Latham report (1994) highlighted this as being a likely result of low profit levels and clients
who insist on a dominance of lowest-price criteria to award contracts. These issues make it
very difficult for the construction industry to make significant inroads in investing in the
adoption and diffusion of innovation with technology push rather than demand pull being the
dominance influence on the construction industry considering to adopt new technologies
(Maqsood et al. 2003a).

2.1.3 The Case for KM as an Innovation in the Construction Industry

Murray and Langford (2003) report that construction industry leaders and governments have
expressed, through various construction industry reports, the need for the industry to become
more innovative and provide greater value for money through instilling learning in their

12
organisations. The construction industry must accept the challenge to change and modernise if
it is to match the performance of industries that generate higher profits and can more easily
attract high-calibre talent (DETR 1998). Success of various KM initiatives in other industries
- mainly pharmaceuticals (Normann and Ramirez 1993; Powell 1998), electronics (Sieloff
1999), and manufacturing (Andrews 1996) - provides a model for the construction industry.

While there are encouraging signs of changes to the way that construction industry and
construction research knowledge exchange operates, these are relatively few and under-
developed. For example while there are signs of the construction industry embracing a more
systemic approach to innovation through supply chain management in the UK (Jones and
Saad 2003), and a relationship-based procurement approach in Australia (Walker and
Hampson 2003a), innovation adoption still tends to be generally characterised by incremental
or modular ad hoc adoptions rather than system or radical innovations (Slaughter 1998;
Slaughter 2000). (Winch 1998) argues that the project integration process is partially to blame
for this because it is complex using fragmented teams, so innovation tends to happen on
projects rather than as company wide initiatives (where lessons do not readily transfer from
the project boundary to the organisational units involved in the project). The above literature
suggests that most construction contractors in many countries are deeply rooted in traditional
practices with a climate of suspicion of risks involved in trying new products or processes—
unless there are well-established examples to follow.

KM allows organisations to devise mechanisms that could bring them closer to knowledge
communities generating new knowledge and producing innovations. This interaction can
allow a flow of knowledge between internal and external knowledge communities so that
instead of an organisation responding reactively to knowledge-push it can pull that knowledge
into itself, adapt it and effectively use it.

KM has gained attention in the last eight years in the construction industry. The increased
chance of success of adopting KM principles, and its diffusion into construction
organisations, is beginning to act as an impetus for academic researchers to develop best
practice KM for construction organisations (Walker 2005). This is evident from increasing
numbers of publications and conferences on the topic of KM in the construction industry (see
for example the ARCOM4 and construction industry CIB W1025 conferences proceedings

4
http://www.arcom.ac.uk/current-conf/conferences.html
13
2.1.4 Benefits for the Construction Industry

Knowledge is being recognised as a vital resource and source of competitive advantage in

today’s dynamic and changing business environment (Burton-Jones, 1999). Organisational
and individual knowledge is vital for business entrepreneurship and for managing change
(Nonaka and Takeuchi 1995; Egbu 2000). Knowledge identification, creation, acquisition,
transfer, sharing and exploitation is now generally accepted as vital for efficient working in
projects and for improving organisational competitiveness.

The foregoing is also true for construction industry. Effective management of knowledge in
the construction industry is likely to produce innovation, reduce project time, improve quality
and customer satisfaction (Kamara et al. 2002; Love et al. 2003). Through the process of KM,
the exploitation of an organisation’s intangible assets creates value and knowledge both
internally and industry wide. (Snowden 1999; Davenport and Prusak 2000; Liebowitz and
Megbolugbe 2003). In the project environment, KM will assist project managers to improve
communications within teams. It will also provide informed knowledge to the project
manager and project teams. KM can ensure better sharing of best practice documents, lessons
learned, project management and system engineering methodologies, and review and
document the rationale for strategic decision-making (Liebowitz and Megbolugbe 2003).
Failure to capture and transfer project knowledge leads to an increased risk of ‘reinventing the
wheel’, wasted activity, and impaired project performance (Siemieniuch and Sinclair 1999a).
These potential benefits of KM are convincing enough for the construction organisations to
venture into adopting its principles.

A successful KM initiative will install learning and facilitate knowledge-sharing culture and
environment, provide vision and effective leadership to overcome learning barriers. This will
help an organisation to be transformed into a learning organisation that is open to learn new
techniques and continuously changes itself based on learned knowledge. This change
increases the absorptive capacity of the organisation, which is a function of how organisations
retain and distribute knowledge internally to practically exercise KM (Cohen and Levinthal
1989; Cohen and Levinthal 1990). Furthermore, prior knowledge of particular knowledge
domains tends to make it easier to understand new knowledge (Burton-Jones 1999). It enables
organisations to recognise the value of new information, assimilate it and apply it to

5
http://cibworld.xs4all.nl:8080/4DCGI!index.shtml?RSES=2005223107106993
14
commercial ends (Cohen and Levinthal 1990). Liebowitz and Megbolugbe (2003) observe
that with the creation and capture of knowledge, learning takes place and knowledge is
applied and embedded within individual and organisational processes. Organisations may
learn effectively from the experiences and utilise them efficiently.

2.2 KM

2.2.1 Background

The quest for obtaining knowledge and effectively utilising it is not new. This struggle is as
old as the history of human thought (Spiegler 2000). Plato, Descartes and Kant have all made
attempts to define and understand the nature of knowledge and to unearth the forces
underpinning various phenomena in life. The methodologies used by these philosophers in
their pursuit to obtain and construct knowledge still serve today as the fundamental guidelines
for basic and applied research.

Research in KM has gained tremendous pace since its inception in the last decade as
evidenced by the extensive existing literature and its further growth (Ponzi and Koenig 2002).
This section describes the concepts of KM in depth and explains different dimensions of it.

2.2.2 What is KM?

KM is multi-faceted and incorporates different inter-linked processes (Egbu et al. 2001b). The
purpose is to create a thriving working and learning environment that fosters the continuous
creation, aggregation, use and reuse of both personal and organizational knowledge in the
pursuit of a new business value (Kikawada and Holtshouse 2001). Quintas et al (1997)
express the same view about KM where they consider it as the process of continually
managing knowledge of all kinds to meet existing and emerging needs, to identify and exploit
existing and acquired knowledge assets to develop new opportunities. The integration of the
key management issues and achievement clarity and cross functional awareness is a key to be
successful in KM (Webb 1998.) Egbu et al. (2001b) present their understanding of KM as the
identification, optimisation, and active management of intellectual assets to create value,
increase productivity and gain and sustain competitive advantage. Egbu et al. (2001a) argue
that KM mobilises intangible assets (intellectual capital IC) of an organisation that is often of

15
greater significance to the organisation than its tangible assets (IT). By developing a body of
methods, tools, techniques and values through which organisation can acquire, develop,
measure, distribute and provide a return on their investment (Snowden 1999).

Bhatt (2000) explains that it is the interplay between the different types of knowledge that
creates a rich and continuous cycle of knowledge development. Because of these complex
dimensions, management of knowledge becomes so important. KM encompasses various
processes. Ruggles (1997) considers these as generating, codifying and transferring
knowledge. Egbu et al. (2001a) state that KM is about the processes by which knowledge is
created, captured, stored, shared, transferred, implemented, exploited and measured to meet
the needs of an organisation. Tiwana (2002) categorise these process as create new, package
and assemble, apply, and reuse and revalidate knowledge. This is in accordance with
processes mentioned by Siemieniuch and Sinclair (1999b) cited in Carrillo et al. (2004) who
consider these processes as generate, propagate, transfer, locate and access, and maintain and
modify. All these processes can be iterative and cyclic and having different requirements
(Laudon and Laudon 2000).

2.2.3 Evolution of KM and Emergence of the Knowledge Economy

The quest for obtaining knowledge and effectively utilising it is not a new endeavour. The
discovery, creation and construction of knowledge encapsulated in a form of various
management theories in the twentieth century supported the industrial revolution, which
evolved later into the information revolution. In turn, this has made it possible to attain
business goals in a more profound and realistic way. But it was not until mid 1980’s that
individuals and organisations began to appreciate the increasingly important role of
knowledge in the emerging competitive environment (Wiig 1997).

Tiwana (2002) asserts that KM grew from the 1950’s in the form of various management
philosophies that have developed and modified over time. Table 2.1 describes such
management philosophies and managers tools. The purpose of all these tools is to strive for
better performance. KM epitomises all these tools.

16
Table 2.1: Manager’s tools through the decades (Modified from Tiwana (2000))

The 1950s Management by objective (MBO), Program Evaluation and Review Technique
(PERT), Diversification, Quantitative Management, Electronic Date Processing
The 1960s Theory Y, Conglomeration, T-groups, Centralisation and Decentralisation
The 1970s Strategic Planning-Mintzberg and Porter, The Experience Curve, Portfolio
management, Automation
The 1980s Total Quality Management (TQM), Management by Walking Around, Corporate
Culture, Theory Z, Downsizing,
The 1990s Core Competencies, The Learning Organisation, Reengineering, Strategic
Information systems, Intranets and Extranets
The 2000s KM, IC, Enterprise Integration, Knowledge Sharing Culture

For this reason Collins (2000) notes that he was struck by an eerie sense of déjà vu’ when
analysing ‘knowledge work’. The current KM philosophies find their roots in many initiatives
started in late 1980’s and early 1990’s under the name of knowledge engineering, artificial
intelligence, and expert systems. These initiatives did not achieve strong adoption by the
business communities. This failure and non-use is attributed to the complexity and poor
usability of such technologies, rendering them ineffective (O' Brien 1997).

Wiig (1997) provides the following perspective of evolution of KM by considering the

historical economical developments over time as shown in Table 2.2

Table 2.2: Evolution of KM based on historical economical developments (Adapted from

Wiig (1997))
Agrarian Economies Creating products for consumption and exchange
Natural Resource Economies Natural resource exploitation dominate while customer intimacy was
pursued separately by expert tradesmen and guilds
Industrial Revolution Operational Excellence through efficiency that means emphasise
leadership in price and customer convenience by minimizing
overhead costs, eliminating intermediate productions steps, reducing
transaction and friction costs and optimizing business processes
(Treacy and Wiersema 1993)
Product Revolution Product leadership through variability and sophistication. Which
means emphasise creation of a stream of state-of-the-art products by
services by being creative, commercialising ideas quickly and
relentlessly pursuing new solutions often by obsolescing their own
products (Treacy and Wiersema 1993)
Information revolution Continued focus on operational excellence and product leadership
Knowledge Revolution New focus Customer intimacy which means emphasise tailoring and
shaping products and services to fit and increasingly better definition
of the customers needs to personalize offerings to make the customer
successful (Treacy and Wiersema 1993)

17
The knowledge revolution in the last decade has set the foundation for knowledge economy
and it is becoming far more complex and involved. Organisations and individuals are
increasingly required to understand more and more about their customers and their customers’
needs. Hence to gain a competitive advantage knowledge and understanding is becoming far
more important than data and information. The role of knowledge economy is evident in
providing value for customers, the way in which each individual plays his/her part and more
about how individuals play their part so that continual improvement can be achieved through
improving product process and relationships. It is important to know how to get customers to
articulate and contribute to innovation through their knowledge and exploration or speculation
of what they might want or need. This focus on customer feedback and interaction has
developed into a sophisticated interest in customer relationship management that is based on
customer knowledge (Berry 1983; Gronröos 1994; Kavali et al. 1999).

Gary Hamel and C.K. Prahalad argue that existing approaches to business strategy were
failing to deliver true innovation. They argue that the key to creating business sustainability
lies in organisations competing for the future by delivering true value to customers and the
broader community. They maintain that this can be achieved through a constant cycle of
organisations reinventing and re-skilling themselves to be able to anticipate and align
themselves with their customer’s customer needs in order to deliver unique products and
services. They reason that in doing so this would radically transform organisations and
reconfigure existing industries and generate entirely new ones (Hamel and Prahalad 1994).

Intellectual Capital (IC), under the current focus on information and knowledge services is
being considered as critical resource, people being the critical asset and development of new
ways of unleashing ideas, intellect, and creative energy as the core response (Boudreau and
Ramstad 1997).

Knowledge and information is not only used to drive business performance but is also used to
enable transformation of opportunities into reality through innovation. The emergence of this
knowledge revolution has led to the rise of the perceived value of the knowledge worker. It
started in the last quarter of the 20th century with phenomenal growth in the influence of
information and communication technologies specialists but now the focus interest and
influence has shifted to KM and more recently to developing ways in which human and social
resources can be harnessed. The emerging elites are those that enable, energise and are
activists in the use of knowledge of a wide and deep range of an empowered workforce to

18
unleash innovation and creativity (Edvinson 1997; Sveiby 1997; von Krough et al. 2000;
Handy 2001).

Stewart (2000, p15) explains how knowledge about money, finance and other tangible
resources has become more valuable than the tangible object itself with an air travel industry
example illustrating the growth of the perceived value of knowledge as a product.

“The air travel industry has become two different industries: the
flying industry, which is marginally profitable at best, and the
information-about-flying industry, which makes money hand over
fist.” (2000, p15)

Another example is that of Boeing which has repositioned its business enterprise from being
suppliers of aerospace products through to service and maintenance providers and are now
providers of strategic and operational information about aerospace products and services
(Szymczak and Walker 2003). This is really the ‘The Race for the Future’, where business is
shaped and sculpted around knowledge about tangible goods to provide intangible services.

Walker (2004) notes that this notion of shaping the future requires organisations like
Microsoft, in moving from being an operating software supplier to e-business applications
coordinator. These organisations need to continually learn to learn and also how to learn to
unlearn. Skills required are not only specific to the technology at hand but also enable
organisations to know how to move from delivering one technology, product or service to a
new one. These ‘competencies and skills relate to acquiring existing knowledge, generating
new knowledge, sharing and morphing new and existing knowledge and knowing how to
discard or recast knowledge that has exceeded its use-by date’ (Walker 2004).

2.2.4 KM a Fad?

Spiegler (2000) states “Reading recent KM articles, one cannot escape the impression of a
recycled concept” but later concedes “knowledge is the essence of KM without which this
new endeavour is a merely recycling of management topics. Without articulating the K word,
the whole area may turn out to be yet another fad that will fade away with time”. Spiegler was
comparing KM with concepts like BPR (Business Process Re-engineering), EIS (Executive
Information System), MIS (Management Information System), DSS (Decision Support

19
Systems) etc. All these concepts were put forward to improve the performance of the
organisation but their narrow focus on data and information make them different when
compared with KM. Kanter (1999) states that broadening the definition of knowledge to
include implicit knowledge carried in an individuals mind and not presented in company
databases suggests something of a new direction.

Vanhoenacker et al. (1999), while criticising Business Process Change and the concept of
Business Process reengineering, argue that failure to develop and exploit and capitalize on the
organisation knowledge for inducing business change is a key reason behind the unsuccessful
applications of business process change methodologies. It is for this reason that after a decade
of experience with the business processes phenomenon, there are still fundamental problems
restricting its successful applications (Vanhoenacker et al. 1999).

This suggests KM is far from being a management fad like TQM, BPR, downsizing, etc
(Hilmer and Donaldson 1996; Wiig 1997; Kidd 2001; Malhotra 2004). It is fundamentally
different in both objective and scope. It is broad, multidimensional and covers most aspects of
the enterprise activities (Wiig 1997). It is paradigm in its own right and occupies a separate
domain of investigation (Maqsood et al. 2004).

2.3 Understanding Knowledge

2.3.1 What is Knowledge?

The concept of Knowledge can be described by a simple world “understanding”. This

understanding gives birth to reality that humans construct in their minds as a result of
experiences and interpretation. Davenport and Prusak (2000,p5) comprehensively states the
concept of knowledge as follows:

“a fluid mix of framed experience, values, contextual information, and

expert insight that provides a framework for evaluating and incorporating
new experiences and information. It originates in and is applied in the minds
of knowers. In organisations, it often becomes embedded not only in
documents or repositories but also in organisational routines, processes,
practices, and norms”.

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Knowledge is ‘a body of understanding and skills that is mentally constructed by people’
(Standards Australia 2001,p7). Stewart (2000) mentions knowledge, while differentiating it
from data and information, as ‘a conclusion that is drawn from data and information’. Data is
just a raw product. It is set of discreet objective facts about events and a collection of any
number of required observations on one or more variables (Levin 1987; Davenport and Prusak
2000). When data is processed to provide certain useful context it becomes the information
and can be used in decision making (Standards Australia 2001). Further processing of
information provides an understanding and grasp of reality that is then termed as knowledge.
Knowledge is the power to act and to make value-producing decisions that adds value to the
enterprise (Polanyi 1962; Kanter 1999; Vail 1999) and is held to be true in a given context to
drive people to action (Bourdreau and Couillard 1999).

2.3.2 Types of Knowledge

Knowledge is a slippery and fragile thing that is hard to define or categorize (Spiegler 2000).
Egbu et al. (2001b) consider knowledge as a 'messy' concept that cannot be characterised by a
linear pattern of categorisation. The literature in cognitive psychology and management
broadly classify knowledge into two types. These are explicit knowledge and tacit knowledge
(Nonaka and Takeuchi 1991; Nonaka and Takeuchi 1995). Best (1989) describes the
classification of knowledge as declarative knowledge ‘knowledge that’ and procedural
knowledge ‘knowledge how’.

Declarative knowledge or Explicit knowledge is formal and systematic (Carrillo et al. 2004).
It is a type of knowledge that can easily be explained in explicit terms. It is flexible and can
often be reorganised to suite our purposes (Best 1989). In theory it can easily be recorded for
later use in textual, pictorial or other recorded forms. In organisations it exists in a form of
code of practice and product specifications. This is the knowledge that is taught in class
rooms and available through books. It is easy to communicate and hence share. For this
reason it can be easily encoded in programs to run machines.

On the other hand, tacit knowledge is often embedded in procedural knowledge is ‘knowledge
how’. The organisation of procedural knowledge is often unknown to us, nor is procedural
knowledge usually very describable (Best 1989). Tacit, according to the dictionary, means
silent, not openly expressed but implied, understood or inferred—from the Latin taceo I am
silent (Macquarie 1987, p1727). This type of knowledge is highly personal, individualistic

21
and concomitant with various surrounding contexts within which it is shaped and enacted. It
is the type of knowledge that refers to underlying skilful actions (Quinn et al. 1996) and
follows the saying “it is easier to show than tell”. A bicycle rider would find it easier to show
his skills by riding a bike rather than telling how he actually rides a bike. Polanyi (1997)
explains this concept by giving an example of face recognition. He mentioned that we can
recognise a particular person’s face, even someone from the past or someone whom we have
never met, from the thousands and indeed millions of faces presented to us yet we cannot
explain how we know that particular face (Polanyi 1997, p136).

Reuber (1997) and Carrillo et al. (2004) consider procedural knowledge or tacit knowledge as
expertise developed from experience. The hard to formalize nature of tacit knowledge renders
it difficult to communicate and share. Fernie et al. (2003) argue that tacit knowledge is a
problematic esoteric concept that doesn’t lend itself easily to codification. Hence a belief that
knowledge can be easily captured and shared through machines is not a realistic belief.

Collins (1995) sees three types of tacit knowledge that present challenges to epistemological
concerns of management. Embodied knowledge describes a type of knowledge that is a
function of the physical environment. It cannot be easily transferred from one brain to
another, as it is specific to the unique 'hardware' that accompanies an individual's brain, it is
an integral part of the unique make-up of the human body. For example, a boxer's knowledge
of fighting may be transferred to a professor but the latter may not be physically able to use
that knowledge in practice (Egbu et al. 2001b). Embrained knowledge describes a type of
knowledge that is specified by the exclusive physicality of an individual brain and encultured
knowledge describes a type of knowledge that is embedded within a social context and cannot
exist apart from it.

2.3.3 Other Knowledge Classifications

Drew (1999) comes up with four types of knowledge while trying to understand the concept
of knowledge as:
1. What we know, we know
2. What we know, we don’t know
3. What we don’t know, we know
4. What we don’t know, we don’t know.

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Zack (1999,p42) provides the following typology: declarative knowledge (knowledge about
or know what), procedural knowledge (know how), causal knowledge (know why), conditional
knowledge (know when), and relational knowledge (know with).

2.3.4 Dimensions of Knowledge

Davenport and Prusak (2000,p70) rather than providing an explicit classifcation of knowledge
toiled to develop an understanding of knowledge by explaining various dimensions of
knowledge. They propose seven dimensions of knowledge shown in Table 2.3 below.

Table 2.3 – Dimensions of knowledge (Source: (Davenport and Prusak 2000))

Scores 1 Scores 5
1 Tacit Explicit
2 Not teachable Teachable
3 Not articulated Articulated
4 Not observable in use Observable in use
5 Rich in subtext/context Schematic
6 Complex Simple
7 Undocumented Documented

It is important to have a typology such as this because it provides us with a basis for gaining
valuable insights into how to effectively transfer knowledge. Table 2.3 becomes a guideline to
craft a strategy that can address several dimension of knowledge while carrying out KM. It is
clear from Table 2.3 that tacit knowledge is difficult to explain through the spoken word or in
text form—that is to be made explicit. In order for knowledge to be easily transferable and
available through out an organisation, it must be able to be explained explicitly. Some
knowledge is unteachable in that the only way to learn it is through experience. Faith-based
knowledge is an example. Many balance-type sports like bike riding, surfing etc come in this
category. Their techniques and theory can be taught (Knowledge What) but it is only by
experimenting and experiencing these sensations that let the body’s peculiar sensing systems
take over from programmed ‘rule-based’ knowledge to develop the subtle knowledge of the
‘how’ to balance and why to do so in each of these sports. Some knowledge cannot be easily
articulated because other physical senses are more useful for this purpose. Culinary skills for
example involve using knowledge extracted from the physical senses relating to judgement of
taste and consistency of substances like pastry. This knowledge may be explicitly
transferable, however, with difficulty by using ingenious and highly resource-consuming
means such as the use of multi-media and experiential learning (Walker 2004). Nonaka and

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Takeuchi (1995) discuss the Japanese invention of a bread-making machine as an example.
This innovation required a production design engineer to undergo sustained period of
apprenticeship and interaction with an expert pastry chef in order to enable the chef to
articulate and make explicit concepts such as dough consistence and kneading techniques.
Once this was successfully accomplished the production engineers designed the bread-making
machine by using the chef’s transferred knowledge and developed the machine through
further experimentation using trial and error.

Some knowledge is not observable—hidden inside the mind. An example is the creative
thought processes of artists, musicians and elite sportspeople. Knowledge may be schematic,
easily reducible to rules and patterns, or be so rich in context (known only from using
multiple senses) that definition clouds all clarity that might be sought to explain this kind of
knowledge. Schematic knowledge lends itself to being framed in tables, rules and other forms
of clear representation. Complexity versus simplicity also defines ends of a knowledge
spectrum. Knowledge about predictions like weather predictions or any other types of
prediction represent this dimension. Finally, some knowledge is documented and other is not.
Knowledge of ancient languages is dependent of documented sources—whether inscribed
upon rock, on papyrus or paper. More prosaically, lessons learned from projects are often
rarely documented in the commercial building industry (Walker and Sidwell 1996).

Table 2.4 - Twelve types of knowledge

Knowledge type (E) E1: Explicit E2: E3:

Action type (A) Tacit Self-transcending
A1: Performing Know-what Knowledge in use Reflection in action
A2: Strategising Know-how Theory in use Imagination in action
A3: Mental modelling Know-why Metaphysics in use Inspiration in action
A4: Sculpting Know-who Ethics/aesthetics in use Intuition in action

Claus Sharmer expresses a view of knowledge being much like an iceberg. Above the water
line he envisages explicit knowledge. Below the water line he identifies embodied tacit
knowledge (knowledge in use) and what he calls self-transcending knowledge (not yet
embodied knowledge) (Scharmer 2001, p70). This notion led him to categorise four types of
action in using knowledge; delivering results that create value (performing); improving the
process of performing (strategising); reframing the assumption of performing (mental
modelling); and re-conceiving the identity of performing (sculpting). Through developing a

24
matrix of the three types of knowledge he identified four actions of knowledge use. He
developed a categorisation of knowledge into twelve elements as illustrated in Table 2.4.

2.3.5 Strategic Implications of the Knowledge

Zack (1999,p139) discusses the process involved in developing a knowledge strategy. This is
presented in Figure 2.1 below.

Innovative
Knowledge Innovator
Your Organisation

Viable
Competitor
Leader
Advanced
Knowledge

Laggard
Core At
Knowledge Risk

Core Advanced Innovative

Knowledge Knowledge Knowledge
Competitors

Figure 2.1 - Knowledge strategic analysis

He stresses that organisations need to have ‘core knowledge’ which is the minimal knowledge
they require to stay in the business. Advanced knowledge enables a firm to be viable relative
to its competitors, while it may have generally similar scope and quality of knowledge to its
competitors but it may be able to have specific differentiated knowledge that places it in a
niche market situation. Innovative knowledge allows it to lead its industry segment(s) and
significantly differentiate itself from competitors.

Zack argues that knowledge is dynamic- advanced knowledge today would just become core
knowledge tomorrow. In Figure 2.1 he provides a useful map to illustrate the competitive
positions of organisations in terms of being ‘at risk’, a ‘laggard’, a ‘viable competitor’, a
‘leader’ and an ‘innovator’. This simple model clearly indicates the value of having advanced
and innovative knowledge to have the chance to be able to stay ahead among competitors.
Dixon (2000, p149) shares the same notion where she identifies a “shift from thinking about
knowledge as a stable commodity to thinking of knowledge as dynamic and ever changing”.
This knowledge is seen not as a commodity locked in a warehouse, but as a flow like water
across the organisation.

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2.3.6 Knowledge Stickiness

Stickiness can be characterised as a property of knowledge by which it makes its transfer from
one mode to other or from one individual to other difficult. In simple words, it is to refer to
barrier to knowledge transfer. Burton-Jones (1999) describes some kinds of tacit knowledge
as ‘sticky’, that is, difficult to codify or explain–it tends to stick to the person with that
knowledge and is only transferred with a fair bit of consideration and effort. Stickiness of
knowledge poses considerable problems for organisations wishing to maximise the
conversion of tacit knowledge in people’s heads into explicit knowledge that has been
codified.

Kulkki and Kosonen (2001) graphically present conversion of knowledge from tacit to
explicit in and is shown in Figure 2.2. This makes it clear that the conversion process is not an
easy and simple one.
Explicit knowledge
Models Prototypes
Concepts

Manuals Definitions

Ways of acting Ways of

Ways of interacting communicating Feelings
Value Ways of reasoning Ways of managing
judgements and organising Beliefs
Cognitive
models Organising
Problem-solving Affections
Emotions modes Horizons of principles
expectations Cultural and Intentions
Values Orientation in risks
World View social history
and uncertainties Concepts of
Beliefs
self
Sources of individual Autonomy
Tacit knowledge

Figure 2.2: Knowledge from tacit to explicit

(Source: Kulkki and Kosonen (2001))
Szulanski (2003) discusses stickiness of knowledge in great depth by conducting a series of
studies into the transfer (often failure to fully transfer) of best practice within organisations
and concluded that the three major sources of knowledge stickiness (barriers to transfer of
knowledge) were absorptive capacity, causal ambiguity and the quality of the relationship
between source and recipient of knowledge.

Absorptive capacity essentially is a capacity to absorb knowledge. Cohen and Levinthal

(1990) argue that this is largely a function of prior related knowledge—people learn best by

26
association, linking related accumulated knowledge and experience. Walker (2004) explains
for this reason that if you get used to ‘toolbar’ on any one application in Microsoft Suite of
Office products, you will find a similar ‘feel’ for other applications. Companies that
encourage R&D or who encourage their employees to undertake training and development
courses find it less difficult to be prepared for knowledge transfer. Thus an absorptive
capacity is a crucial factor in knowledge being transferred either from tacit to tacit or tacit to
explicit—the recipient is bounded by his/her absorptive capacity to understand the shared
knowledge content and context. Causal ambiguity is the inability to be able to make a cause
and effect link. If a link cannot me made, then mistakes are repeated. This will become an
inability to replicate best practice and the management of valuable knowledge becomes
extremely difficult. The third major influence on knowledge stickiness is the relationship
between the source and recipient of knowledge. If the source disseminated the knowledge in a
user friendly way, the recipient will get it easily. For example in the case of search engines as
a source, and we as recipient, we get either few ‘matches’ or we get an overwhelming number
of them that hinders our capacity to deal with the information provided. When the source is
people and the recipient is also people (people to people), the issue of culture and
communication plays a major and often critical role. An organisational culture can encourage
or inhibit knowledge sharing.

2.3.7 Knowledge Transfer for Overcoming Knowledge Stickiness

Dixon (2000, p169) is at the forefront of the research in knowledge transfer. She has provided
great insights into her research of KM used in company such as Bechtel, BP, Buckman
Laboratories, Chevron, Ernst & Young, Ford, Texas Instruments and the US Army. She
identified 5 types of knowledge transfer shown below in Table 2.5:

Table 2.5: Five knowledge transfer strategies (Source: Dixon (2000))

Serial Transfer the knowledge a team has learned from doing its task that can be transferred
to the next time that particular team does the task in different setting
(context). Such tasks are frequent and non-routine using both tacit and
explicit knowledge.
Examples include the US Army’s After Action Reviews (AAR) and BP’s
“Learning during” reports and Bechtel – Steam Generator group reports;
Near Transfer the explicit knowledge a team has gained from doing a frequent and
repeated task that the organisation would like to replicate in other teams
that are doing very similar work. Such tasks are frequent and routine using
explicit knowledge.
Examples include Ford’s use of best practice replication, Texas
Instruments’ Alert Notification, and Ernst & Young’s KnowledgeWeb;

27
Far Transfer the tacit knowledge a team has gained from doing a non-routine task that
the organisation would like to make available to other teams that are doing
similar work in another part of the organisation. Such tasks are frequent and
non-routine using tacit knowledge.
Examples include BP’s Peer Assist, Chevron’s Project Development &
Execution Process CPDEP, and Lockheed Martin’s LM21 Best Practice;
Strategic Transfer the collective knowledge a team needs to accomplish a strategic task that
occurs infrequently but is of critical importance to the whole organisation.
Such tasks are infrequent and non-routine using both tacit and explicit
knowledge.
Examples include BP’s Knowledge Assets, the US Army’s Centre for
Army Lessons Learned CALL and also their use of Learning Histories;
Expert Transfer the technical knowledge a team needs that is beyond the scope of its own
knowledge but can be found in the special expertise of others in the
organisation. Such tasks are infrequent and routine using explicit
knowledge.
Examples include Buckman Labs’ Techforums, Tandem’s Second Class
Mail, and Chevron’s Best Practice Resource Map

Far, strategic and expert knowledge transfer involves high profile impact upon organisations.
Serial and near knowledge transfer provides high level overall rewards and benefits, along
with far transfer due to the value gained from frequently reaping rewards.

Dixon (2000, p147) explains the above transfer by developing a decision tree which was
based on four questions:

1. Will the same team be using the lessons learned?

2. Is the knowledge tacit?
3. Does the knowledge impact upon the whole organisation?
4. Is the task both routine and frequent?

Knowing this, helps organisation to be highly responsive and effective. They don’t have to
reinvent the wheel so they will act quickly and by transferring the knowledge from one
context to another, they use the knowledge and also create a new knowledge as they apply the
knowledge to a new context.

Holden (2002) is as an expert in linguistics. He carried out research in the cross-cultural

knowledge transfer process which he views as knowledge translation He studied four
transnational companies (TNC’s) case studies, Novo Nordisk and Lego both of Scandinavian
origin, Matsushita (Japanese origin) and , Sulzer Infra (Swiss based). Each of these case
studies were concerned with cultural adjustment across these TNCs’ international operations
to ‘roll out’ the corporate systems, processes and organisational culture (Holden 2002). The
interesting aspect of these studies were that Holden looked at these case studies as examples

28
of knowledge transfer. Considering, Dixon’s framework, Holden’s case studies could be
classified as being ‘strategic transfer’ and also, to a lesser extent, expert knowledge transfer.
He argues that as tacit knowledge (in particular) is exchanged and socialised it is translated
into different contexts and worldviews and thus both parties gain benefit from gaining a
glimpse into the other’s way of internalising this knowledge. This truly takes knowledge
transfer to a state of knowledge creation.

Knowledge is sticky and both expensive (in terms of transaction costs) and difficult to transfer
because knowledge is more than just facts and information. Knowledge is about context, the
history and hidden myriad inferences and cause and effect loops that explain why something
did or did not happen in a particular way. Documented manuals and procedures fail to cover
all eventualities and are time consuming to access and absorb. The next section sheds light on
another side of tacit knowledge, often hidden.

2.4 The Hidden Side of Tacit Knowledge

The main focus of current KM research is to capture the knowledge that tacitly resides in the
employees’ heads and to turn it into the explicit form for others to use. Researchers agree that
knowledge is a very ‘messy’ and esoteric concept. Therefore, capturing it is a task fraught
with difficulties. But if captured and put into explicit form, tacit knowledge is a driving force
behind any sort of innovation, be it new technology, new process or a new technique. Tacit
knowledge, by its very nature, actually ‘emerges’ from the people’s heads. The various
mental processes that shape and construct certain types of knowledge are very difficult to
comprehend. This sort of knowledge is a key behind exercising judgment in human decision-
making and employing intuition or ‘gut-feeling’. It is seen in experienced managers; because
of their tacit knowledge and expertise based on this sort of knowledge, they are able to make
better-informed and effective intuitive decisions. However, there is also a probability of these
managers making a wrong judgment ending up in wrong decisions.
This section examines (when trying to capture tacit knowledge) what can be done to make
sure that tacit knowledge stays effective when captured and used in decision-making. Help
from the literature in cognitive psychology has been sought and presented below.

29
2.4.1 Human Information Processing - Factors affecting Knowledge Construction

It is important to know how human information processing occurs as sensing information and
utilizing it is a key to further knowledge construction in a human mind.

Perception and Recognition

The first element involved in the human information processing that facilitates knowledge
construction is perception of the event, and then use of memory to give this perception
recognition. Figure 2.3 illustrates how perception of displays occurs through stimuli generated
by various sensory inputs - e.g. vision, audition, chemical senses - i.e. smell and taste.

Knowledge
Knowledge use, reuse Memory
Construction

Displays
Problem Decision
Conceptualization Solving Making

Sensory Action
Inputs taking
Perception Judgement
Outputs

Reasoning CENTRAL
INFORMATION
PROCESSING

Affect Need -
relatedness

Figure 2.3: Human information processing (Modified from Kolasa (1982))

This system recognizes the information, assembles it, and makes comparisons with previously
stored material (knowledge). Knowledge is used, reused and iteratively reconstructed.
Perception is a selective process and certain amounts of information from the outside are
selected because not all of the information coming in can be assimilated. Perception is
affected by factors such as attitudes, values, motives, stress and a person’s background.

30
Cognitive Styles

Gigch van (1991) defines cognitive style as “an individual’s way of performing perceptual
and intellectual activities”. It depends upon genetic makeup and environmental factors such as
education and experience. Managers or thinkers can be classified as systematic, intuitive,
receptive and perceptive. The diversity in their education and experience causes differences in
their perception and judgment thus rendering their cognitive styles different. Their cognitive
structure guides their decision making style whether heuristic or deterministic or a mixture of
the two. Cognitive style may also be referred to as high analytical or low analytical.

Heuristics and Biases in Judgment

‘Heuristic’ is a term used by psychologists to denote general problem solving procedures that
often work in solving everyday problems. It is a rule-of-thumb, a guideline for coming up
with a solution (Best 1989). Skitmore et al. (1989) argue that cognitive heuristics or principles
are systematic rules that operate instead of a detailed analysis of the available information
thus conserving mental effort. The use of heuristics is very widespread in the construction
industry (Flanagan and Norman 1993). Although employment of heuristics enables the mind
to analyse very complex situations, it sometimes leads to severe and systematic errors or
biases. Biases have high potential for coming into play when a decision task has a high degree
of complexity, high degree of procedural uncertainty and when it is performed under
circumstances involving a high degree of stress and time pressure. The susceptibility of
human judgment to errors and biases can be attributed to the limitations of human cognitive
capacity - the capacity to store, retrieve and process information.

Tversky and Kahnemann (1974) have described three common heuristics: Representative,
availability, adjustment and anchoring. The representative heuristic states that the probability
that event A is related to event B is evaluated by the degree to which A resembles B. The
representative heuristic involves search and compare strategies (Chi and Fan 1997). The
answer to the more familiar problem is adopted as the most likely solution to the present one.
Availability of heuristics determines the instances of large classes of problem solutions being
usually recalled better and faster than instances of less frequent classes. Events that are easily
computed are perceived as more common and are consequently more available than events
whose likelihood is hard to compute (Best 1989). Adjustment and anchoring refers to the
development of beliefs by starting from a particular reference and adjusting it according to the
31
available information. This adjustment process is often faulty. Baron (1998) finds that the
influence of this heuristic appears to be quite strong and occurs unintentionally and
unconsciously.

Functional Fixedness and Mental Set

Baron (1998) describes ‘functional fixedness’ as a tendency to use a device or things in a way
they have been used in the past and not thinking of creative uses. A mental set is the impact of
past experience on present problem solving, specifically the tendency to retain methods that
were successful in the past even if better alternatives now exist. It is common on construction
sites to deal with repetitively occurring problems in a routine way, even if better ways are
available.

Mental Models

Best (1989) describes mental models as internal representations of problems that are formed
over a period of time by various experiences of a similar nature. Organisms do more than
react to their environment, they learn about it. Learning consists of building representations of
the environment that are consulted prior to behaviour. These representations are known as
cognitive maps ((Tolman 1948) cited in (Vandenbosch and Higgins 1996)). Barlett (1932),
cited in (Vandenbosch and Higgins 1996) proposes that memory is guided by a mental
structure called a schema, an active organization of past reactions, and past experiences. The
active nature of a schema is that it is emergent in nature and constantly changing and
developing in response to experiences. These mental models determine how environmental
stimuli will be interpreted and incorporated or synthesized. Mental models also make
knowledge and information processing more efficient by making it unnecessary to construct
understanding from the start each time similar stimuli are encountered. They facilitate
learning by allowing humans to fill gaps in both information and memory.

2.4.2 Variations in Learning Style and Knowledge Acquisition

Every human has a unique learning style. Learning depends on the ability of the individual for
the acquisition of information and for using it properly and in a timely way for effective
decision-making. The key to better decision-making lies in obtaining relevant, accurate and
timely information and using the cognitive capacity of the individual, then translating
information into knowledge and decision-making (Wilson 1995). Learning emerges from the
32
interaction of the stimulus and the mind of the learner and results in the change of the
learner’s mental model (Vandenbosch and Higgins 1996). Ford and Ford (1983) observe that
individuals differ in ways in which they can and do structure information in learning and
problem solving contexts. Norman (1982) cited in (Vandenbosch and Higgins 1996) identifies
three modes of learning: ‘Accretion’ is the addition of new knowledge to existing schemata.
This is the most common mode of learning. ‘Structuring’ is the formation of new schemata.
The existing models are not sufficient to handle the problem faced so new models have to be
developed. ‘Tuning’ is the fine adjustment of knowledge to a task. Adjustment is needed
because the existing schemata are too general or because they are mismatched to the
particular use that is required of them.

2.4.3 Tacit Knowledge Construction – a practical example

The learning process of a new graduate joining a construction site starts when s/he begins
working as a site engineer. Engineering education doesn’t contribute greatly to the knowledge
required to handle construction tasks (Warszawski 1984), so site engineers tend to learn
everything from the site process. While passing time in this trade s/he will go through various
mental model building and maintenance stages to develop expertise. The development of
expertise is different for various site managers even if they spend the same time on the job
(Baird 1989). This shows that expertise is not only a matter of spending time in a certain
trade. The number of years passed is only a crude measure of gauging expertise in placing
confidence in the person. However, the person who has passed adequate time observing site
processes but is not able to develop adequate expertise will not perform as effectively as the
person who has developed enough expertise. There are no direct measures of criteria to
determine expertise. It can be indirectly gauged by observing the quality of performing site
processes. This leads to the point that tacit knowledge elicited by these site managers would
be of different nature and quality, even if they have experienced similar work routines.

2.4.4 The Importance of Context

Fernie et al.(2003) discuss the importance of context when comparing organizations with a
view of utilizing knowledge gained in one sector and applying to other sectors. They
emphasized that while doing so - industry context, which involves political, economic, social,
technological, legal, environmental and structural factors inherent in each sector - must not be
overlooked. Knowledge needs to be extracted from one context and be converted and adapted

33
to another context. Thompson et al. (2001) consider this process as recontextualization.
Sometimes recontextualization alters knowledge to such an extent that it represents new
knowledge (Fernie et al. 2003).

Every task in a construction process has a certain context associated with it in which it is
executed and completed. The constructed knowledge that occurs is deeply dependent on this
context. This context provides the boundary conditions for the constructed knowledge, and it
is considered valid provided it satisfies the limiting boundary conditions (i.e. context). Ideally
it means that the knowledge can be applied repetitively to the situations if the context under
which it is constructed remains unaltered. Practically, it is very hard to find a situation where
the context is an exact replica of a previous event. Especially in a construction process,
context is always varying. This difference in contexts is one of the reasons that construction
managers are often misled into wrong decision-making when using tacit knowledge. The
basis upon which they are making the decisions has shaped itself under a different context. If
managers are aware of the context in which they gain a certain experience, and keep that
context in mind to alter their decision-making processes to reflect the changes in the context,
then they are in a position to minimize biases and hence have great chance of successful
decision-making.

The same holds true while attempting to capture tacit knowledge. Capturing tacit knowledge
without capturing the context in which it was constructed may seriously jeopardize its
effectiveness. Knowledge managers need to be fully aware of this aspect of knowledge
elicitation. When the captured knowledge is to be further shared and used, related context
must also be communicated. It becomes necessary to recontextualize it to reflect the changes
in the context to use it efficiently.

2.4.5 Importance of Timing

The human mind has a lot of limitations and one of the severe limitations is that the
knowledge starts to lapse from memory or become faded and confused over time. Where
construction tasks are heavily repetitive, this limitation may not be a problem. However, for
unique and innovative tasks, delay in timing to capture a constructed knowledge may pose
problems in the validity and effectiveness of the knowledge captured. Aligned with the
concept of KM is a concept of project histories or project databases that may be maintained as

34
a part of KM initiative in an organization and contains knowledge generated in various
projects to be used on future projects.

Schindler and Eppler (2003) have reviewed and discussed various ways to harvest project
knowledge. They identified two ways of capturing project knowledge. Process-based methods
(Project Reviews/Audit) gather lessons learned from the concluded projects and
documentation-based methods (Micro Article, Learning Histories, RECALL) to learn from
project experiences on an on-going basis. Documentation based methods are superior to the
process based methods because they offer continuous project learning through regular
reviews. The events are more recent and the subsequent learning can be recalled more easily
(Schindler and Eppler 2003).

2. 5 Dimensions of KM

The above discussion on knowledge and KM paves the way for developing more
understanding in the area of KM. KM research has seen a variety of conceptual models and
dimensions advanced. McAdam and McCreedy (1999) would prefer to call these as models of
KM. Because these models express different dimensions of KM and represent a certain school
of though in the debate of KM, it is logical to classify these as ‘dimensions’ instead of
presenting them as mere ‘models’. A review of KM literature presents three dimensions of
KM. McAdam and McCreedy (1999) identified three models of KM: category, IC and
socially constructed. A dimension based taxonomy will consider these as Categorical
Dimension, IC Dimension of KM and Socially Constructed Dimension of KM

2.5.1 Categorical Dimension of KM

The Nonaka and Takeuchi (1995) SECI dimension illustrated in Figure 2.4 serves as a useful
starting point in understanding this dimension of KM and how knowledge creation occurs as a
flow from tacit to explicit knowledge and a combination of knowledge push and pull. Nonaka
and Takeuchi (1995, p71) explain the process as beginning with a Socialisation phase, sharing
and exchange of tacit to tacit knowledge. Tacit knowledge is more difficult than explicit
knowledge to create, capture, codify, communicate and transfer because it is highly
intellectually energy intensive.

35
 Dialogue
collective reflection appropriate metaphors or
analogies help articulate hidden tacit Spirals of
knowledge knowledge
continue to
build

Socialisation Externalisation

Linking
Field
Explicit
Building
Sharing Knowledge
experiences & Networking
mental Internalisation Combination crystalising into
models product, process,
innovations.
Prototypes tested.

Learning by Doing
Internalising tacit knowledge. This may trigger
a new round of improvement and expansion .

Figure 2.4: Nonaka and Takeuchi KM Model exhibiting categorical dimension of KM

Explicit knowledge is openly available in books and recordings on all kinds of

communications media. However, explicit knowledge often does not have an accompanying
explanation of the context of that knowledge. While explicit knowledge may be conveniently
available, it is of less value than sound tacit knowledge because tacit knowledge embeds
context. When people socialise their tacit knowledge they swap stories about contexts and
experiences and thus expand their repertoire of how to use that knowledge. The output from
this process is externalisation, involves turning value-added tacit knowledge into an explicit
form often through metaphors for example ‘it is like this …’ when designing something or
planning an action using existing knowledge in a novel way. This includes documentation,
explanation or recording the cumulative experience of the situation under consideration. This
allows knowledge combination to occur where the new knowledge is combined with existing
knowledge stocks to make the result explicit. This leads to people internalising the knowledge
whereby they experiment and then reshape in their mind how this knowledge is of use and
how it can be usefully deployed. Essentially, the SECI dimension incorporates learning as
well as a knowledge creation and the cycle continues in a spiral rather than a circular mode.

36
 Individual Group Organisation Interorganisational Domain

Knowing Quality circle’s Supplier’s patients

Articulated calculus documented analysis and documented
Organisational
of its performance practices
Knowledge chart

Customer’s attitudes
to products and
Tacit Cross-cultural Team coordination in Corporate culture
expectations
Knowledge negotiation skills complex work

Figure 2.5: Heduland and Nonaka’s KM dimension (Source: Hedlund and Nonaka (1993))

Codified
Proprietary Public
Knowledge Knowledge

Personal Common Sense

Tacit Knowledge Knowledge

Tacit Explicit
Figure 2.6: Boisot’s knowledge category dimension (Boist, 1998)

Other categorical dimensions that share similarity with Nonaka and Takeuchi’s model are
Hedlund and Nonaka (1993) and Boisot (1998) shown in Figure 2.5 & 2.6. These
representations are basically an attempt at giving high-level conceptual understanding of KM
and essentially consider KM as a knowledge creation process occurring across levels of an
organisation rather than amongst small groups of individuals. The knowledge transfers in
organisations is much more complicated and complex than these simple matrix dimension
suggest. This dimension is ‘mechanistic’ in its approach to knowledge categorisation even
though that some aspects of the models emphasize socialisation (McAdam and McCreedy
1999). Crossan et al. (1999) propose a 4 I’s model of organisational learning: Intuiting,
Interpreting, Integrating and Institutionalising occurring at the individual, group and
organisational level. This posits that a complex social process is taking place with context
understood in terms of prevailing cultures as illustrated in Table 2.6 (Crossan et al. 1999,
p525).

37
Table 2.6: The 4 I’s knowledge processes
Level Processes Inputs/Outputs Comments
Individual Intuiting Experiences Socialisation and dialogue,
Images self-reflection - external
Metaphors knowledge pull
Interpreting Language Culture providing means to
Cognitive map interpret and share insights -
Conversation & external knowledge pull
dialogue
Group Integrating Shared understandings Culture providing means to
Mutual adjustment interpret and share insights –
Interactive systems internal knowledge building
push & pull
Organisation Institutionalizing Routines Culture and combination re-
Diagnostic systems framing and adapting
Rules and procedures

The Crossan model envisages the SECI approach being very much both a push and pull of
knowledge between individuals and their wider societal groups and various categories shown
in Table 2.6 helps to better visualise the role of groups and the role of culture in facilitating
dialogue (that is knowledge push and pull) so that knowledge is framed, re-framed,
challenged through activity and routines. Crosson et al. (1999) argue that metaphors, rooted in
culture that transcends the need for explicit descriptions in words, provide a powerful set of
contextual meanings. They argue that knowledge is fed forwards (pulled) by individuals to
groups and hence to the wider organisation as well as knowledge being fed back (pushed)
from the top down through rules, procedures, performance measures etc.

2.5.2 Intellectual Capital (IC) Dimension

Another school of thought in the KM debate views KM as IC management. A number of

models can be found in the literature espousing this point of view. A typical IC example is the
Skandia IC dimension as illustrated in Figure 2.7 that was adapted from Edvinsson (1997,
p369). This dimension assumes that IC (the management of which is KM) can be segregated
into human, customer, process and growth elements categorised as comprising human and
structural capital (McAdam and McCreedy 1999). This dimension assumes a scientific
approach to knowledge and is more about what knowledge is assumed to be as an asset rather
than how it is developed and the model completely ignores any political and social aspects.
Like the Category Dimension this IC Dimension also assumes that KM can be decomposed
into objective elements rather than being a socio-political phenomenon where intangible
objectives can be tightly controlled (McAdam and McCreedy 1999).

38
 Market Value

Equity Intellectual Capital

Human Capital Structured Capital

Customer Capital Organisational

Capital
Customer Base
Innovation Capital Process Capital
Customer
Relationships

Customer
Potential

Figure 2.7: Intellectual capital dimension of KM (Skandia)

This way of understanding knowledge and how it may be managed is useful to the extent that
it views knowledge as an important and strategic asset to be nurtured.

2.5.3 Socially Constructed Dimension of KM

This dimension according to McAdam and McCreedy (1999), is considered as more probably
a true representation of what KM is and should be. The socially constructed dimension of KM
is intrinsically linked with the social and learning process within the organisation. A socially
constructed model modified by McAdam and McCreedy (1999, p98) from Demerest (1997) is
shown in Figure 2.8.

39
 Scientific Paradigm Social Paradigm

Knowledge Construction

Knowledge
Knowledge
Embodiment Knowledge Dissemination
Embodiment

Use

Business Benefits Employee Emancipation

Figure 2.8: Socially constructed KM model and dimension

This dimension gives a more balanced approach between the scientific and social approaches
to KM. The ‘uses/benefits’ of KM are viewed as both emancipatory and business oriented.
Knowledge flows are seen as highly recursive rather than as sequential and mechanistic.
According to McAdam and McCreedy (1999) this model allows KM to be associated with the
emerging social paradigm while at the same time contributing to the current scientific
paradigm

Conferences, workshops, professional development gatherings of colleagues are events that

follow the Figure 2.8 model. This is because participants are able to construct their own
personal knowledge through scientific knowledge being disseminated in a conference while at
the same time provide them with an excellent opportunity to further enhance knowledge being
gained through socialisation with other experts and knowledge carriers attending the
conference. Emmitt (2001) found, from a study, predominantly of design professionals, that
the perception of learning from other experts is viewed as being far more attractive than
receiving trade literature or speaking to technical sales representatives. The above models
clearly indicate the importance and complexity of social factors that facilitate and inhibit
knowledge generation and exchange. While they are useful, they do not adequately illustrate
what is happening in a particular knowledge exchange activity.

40
Social Network, Networking and Community of Practice

The socially constructed dimension of knowledge also entails developing social networks and
networking where tacit knowledge transfers and sharing is possible (Bresnen et al., 2003;
Augier and VendelØ, 1999 and Swan et al., 1999; Hearn et al., 2002). A further adaptation of
this concept is the development of communities of practice (Wenger and Snyder 2000) that
construct knowledge from active participation by communities of practice (COPs). Etienne
Wenger defines COPs as “groups of people informally bound together by shared expertise
and passion for a joint enterprise” (Wenger and Snyder 2000, p139). These communities of
practice may be real and exist in the physical form of conference/seminars/workshops, or in
the virtual form of online forums or web-discussion boards. In either form, experts can
interchange ideas and leave their expertise and knowledge in the forum for others to utilise
and share further (Liebowitz and Megbolugbe 2003). This reflects a shift in thinking from
“knowledge as it resides with individuals to thinking of knowledge as embedded in a group or
community” (Dixon 2000, p149).

Orr (1990) , Brown and Duguid (1991) and Davenport and Prusak (2000) quote the example
of a Communities of Practice (COP) of photocopying machine technicians who formed an
informal (but highly focussed) technical support group to help them solve complex and often
perplexing problems relating to breakdowns and malfunctions of these machines. Through
this COP, a number of individuals share a common enterprise and objective of repair and
maintenance of photocopying machines. Their support group share both knowledge and
perceptions through narratives (war stories) where they discuss details of problems, their
contexts, the messiness and quirkiness of the situation in all its rich detail of tacit details and
sub-text.

Key elements of the Orr example and that of many from COP has been categorised by Brown
and Duguid (1991) as follows:
• Narration or ‘storytelling’ that provide the thick and rich subtextual knowledge that
underpins understanding of complex situations;
• Collaboration that enables the development of joint problem solving by peers in a
largely power dimension free environment so that individuals share knowledge as
equals in terms of their potential contribution to results;

41
 • Social constructions through sharing and developing insights and modelling mentally
through what-if scenarios, alternative solutions or explanations by peers using a shared
language that connects areas of tacit knowledge in the SEconstruction industry
socialisation process;
• Bricolage—that is a tendency to cope with complex problems by making do with
whatever is at hand so that ingenious use is made of materials, systems, knowledge etc
to shape the materials at hand to perform the required task to solve the problem. Often
this results in leaps of inspiration and innovation.

A COP is both reflective and analytical in purpose. This is what makes it different from an
unfocussed chat between individuals. It analyses complex situations and probe them deeply
for causal relationships and strive for feasible solutions. These COPs may be real and exist in
the physical form of conference/seminars/workshops, or in the virtual form of online forums
or web-discussion boards. In either form, experts can interchange ideas and leave their
expertise and knowledge in the forum for others to utilise and share further (Liebowitz and
Megbolugbe 2003). ICT has a valuable part to play in the process of bringing communities
and individuals together in virtual space. One important way that it is used for socialisation is
through using groupware communication technologies. A particular example of this is
provided by John Seeley-Brown in discussing the BP Virtual team where a group of experts
located in different places throughout the world were linked by email, video-conferencing and
other group tools to work on finding innovative solutions to design the Andrew oil and gas
drilling rig that saved over US$120million and 6 months off the schedule (Prokesch 1997,
p156). BP like many companies these days routinely use groupware tools to facilitate
knowledge transfer through ‘virtual socialisation’. The BP COP software was later adapted
and successfully used by one major UK construction contractor (Jewell and Walker 2005).

A COP requires a trusting and safe environment in which contributions are valued and where
social capital is recognised as a highly desirable outcome from an organisation’s activities.
The next section deals with the issue of social capital and its implications on socially
constructed dimension of KM and also on a COP

42
Social Capital and its implications

The need for support for generation of social capital is a prerequisite for COPs and also for
effectively functioning KM. Walker (2004) considers social capital as providing credentials
for members of a COP in the same way a credit card is used by purchasers and traders. This
implies that social capital is embedded within networks of mutual acquaintance and
recognition. The obligation of being in the network then feeds the process. An individual feels
an enhancement in the status and reputation while sharing knowledge.

Social capital can be described in three dimensions (Nahapiet and Ghoshal 1998, p243). The
structural dimension is the way that it is configured structurally through network ties having
various network configurations; much of this is invisible and intangible. The cognitive
dimension comprises shares codes, languages and narratives. The relational dimension
comprises trust, norms and obligations. Nahapiet and Ghoshal (1998) advocate that through
developing social capital in this way by socialisation, a combination and exchange of IC
occurs and that this results in the creation of new IC as illustrated in Figure 2.9.
Creation of
Social capital Combination and exchange new intellectual
of intellectual capital capital
(A) Structural dimension C3
Access to parties for
Network ties A1
combining/exchanging
Network configurations A3 A2
intellectual capital
Appropriate organisation A4
C4 New intellectual
B1 Anticipation of value capital created
(B) Cognitive dimension B2 through combining/ through
Shared codes and language exchanging intellectual combination
C2 capital and exchange
Shared narratives B4
C8
C1 Motivation to combine/
C5 exchange intellectual
capital
(C) Relational dimension C7
Trust B3
Norms C6
Combination
Obligations C9 capability
Identification

Figure 2.9: Social Capital in the creation of IC (Source: Nahapiet and Ghoshal (1998, p251))

This helps to explain how the second dimension of KM (IC) and third dimension (socially
constructed dimension of KM) are supporting each other.

Walker (2004) gives his representation of the role of social capital in creating IC and hence
providing knowledge advantage as shown in Figure 2.10 . This indicates that new IC is
created through COP access to enable the exchange and combination of existing IC, thus
access to both tacit and explicit knowledge sources is necessary. Walker (2004) also provides

43
a model of trust and commitment under tested conditions in Figure 2.11 to explain in more
detail the role of trust and commitment in developing social capital and COPs.

Trust
Results – Results –
Willingness Share
Credibility to commit Valuable knowledge
knowledge transfer
Respect Genuine
participation
Proof of COP Builds COP
cultural
compatibility
at assumptions
+ values levels

Enhances
Social Capital K-Adv
increases - Builds &
strengthens
relationships

Figure 2.10: The Role of Social Capital in creating IC (Source: Walker (2004))

Commitment is the physical and mental manifestation of the concept of trust. It is the proof of
trust. It is the willingness to reciprocate energy invested through trust in the process of
transformation of this energy into tangible results. Loyalty occurs when trust and commitment
are tested. It can be viewed as the bankable capital of goodwill to reciprocate trust in times of
adversity (Walker and Hampson 2003a, p191). One demonstration of an act of loyalty is to
sacrifice something in the short term to maintain a long-term relationship intact and
functioning for mutual advantage.

44
 Yes … but:
Builds • Re-evaluation
Partners A + B • Reticence
Partners A + B • Lower commitment
committed to
trust each other
each other
Builds
Continue
relationship?

TEST OF LOYALTY A needs B’s support

Builds Doesn’t
relationship Gets it gets it

Trust + Trust +
commitment is commitment is
reinforced diminished

No ...
Abandon
relationship
Adds Loyalty Detracts
Bank

Figure 2.11: A model of trust and commitment under tested conditions (Source: Walker 2004)

2.6 Organisational KM Initiatives

The aim of this section is to illustrate various frameworks available in the literature that can
be termed as organisational KM initiatives. This section also describes what constitutes a
successful initiative and what are the reasons for unsuccessful initiatives in the past?

2.6.1 Unsuccessful Initiatives and Their Causes

Since the inception of the KM in last two decades, organisations have undertaken various KM
related initiatives. Lucier and Torsiliera (1997) notes that 84% of KM programs fail to have
any real impact and a very high proportion of programs initiated with great vigour are cut
back within two or three years. Lawton (2001) quoted KM pioneer Larry Prusak, that may
organisations who implemented KM systems with little thought to deployment methodology
contributes to 50-60% of failure of all deployments.

KM took off as a technological initiative. Researchers and practitioner alike sought to develop
a technology that could bring to reality the perceived vision of KM. It was manifested in the
building of expert systems and knowledge base systems in late 80s and early 1990’s (Kamara

45
et al. 2002). These technologies did not achieve strong adoption by the business communities.
This failure and non-use is attributed to the complexity and poor usability of such
technologies, rendering them ineffective (O' Brien 1997). As technology advanced and
technologies such as ICT, the Internet, and intranets were available during the mid 1990s,
organisations tried to exploit these to capture, codify, transfer and share knowledge.
Unfortunately, these initiatives again met with failure (Aouad et al. 1999; Davenport and
Prusak 2000; Fernie et al. 2003).

Consistent technological failure gave impetus to various researchers to identify the causes of
failures and look for alternative ways of embarking on the KM challenge. The identified
causes of these failures include (Davenport and Prusak 2000; Malhotra 2000; Kamara et al.
2002; Fernie et al. 2003; Liebowitz and Megbolugbe 2003; Walker 2004):

 High technological dependence of these initiatives,

 Inability to properly understand the complexity of knowledge and its esoteric nature,

 Neglect of human related factors associated with any change,

 Lack of recognition of appropriate leadership, vision, strategy and culture,

 Ignoring individual value system and notions of trust, and

 Insufficient rewards systems and motivation.

Storey and Barnett (2000) conducted a study “KM initiatives: Learning from Failures” and
suggest the main causes of failure of KM initiatives are insufficient specific objectives,
insufficient focus on one or two strategic business objective, incomplete program architecture
and top management sponsorship without active ongoing involvement (i.e. absence of
leadership).

Tiwana (2002) provides advice for companies in order to save themselves from vendors that
are re-branding their products as search engines, portals and AI (Artificial Intelligence) tools
as KM tools & systems (Lawton 2001) as follows:

KM is not a knowledge engineering; in fact it is a business problem and falls in a
domain of information systems and management, not in computer science.

KM is about process, not just digital networks,

46

KM is not about building a smarter intranet. A KM system can use a company’s
intranet as a front end but this should not make an intranet as KM system

KM is not about a one-time investment. It requires consistent attention and continued
evaluations and hence attracts funds.

KM is not about enterprise-wide “infobahns”

This suggests that the chances of success of IT based initiatives are quite meagre and that
organisational and people issues not readily solved by IT systems need addressing (Kamara et
al. 2002). Egbu et al. (2001b) recognises that good KM does not result from the
implementation of information systems alone. Malhotra (2000) recognises over time that
radical changes in the business environment suggest limitations in the traditional information-
processing view of KM. The programmed nature of heuristics underlying such systems may
be inadequate for coping with the demands imposed by the new business environments. It is
therefore concluded that the new business environment, characterized by dynamically
discontinuous change, requires a re-conceptualization of KM. It means that the conventional
approach to KM (where knowledge is machined by developing knowledge based systems) has
to be replaced by a new broad approach of KM that recognizes that humans possess and carry
knowledge and should be regarded as IC (Malhotra 2000; Egbu et al. 2001b).

2.6.2 Successful Initiatives

Davenport and Prusak (2000,p173) argue that KM is predominantly a human interaction

exercise with information and communication technologies (ICT) as providing a supportive
and facilitative role. They suggest the ratio of 1/3rd technology 2/3rd people-related issues as
being a useful guideline for successful KM initiatives. According to Egbu (2000), the human
factor is so powerful and significant that they express it as having a contribution of 90% (with
10% contribution from technology) for a successful KM initiative. Cavaleri et al. (2005,p214)
makes it clear that in terms of financial terms, because knowledge related initiative is a human
and social processes, about 80% of all funding should be allocated directly towards human
investment and 20% should be invested in support technologies.

47
The dominance of people related soft factors thus paves the way for describing these factors
in more detail and is the aim of next section. Any new management initiatives inevitably
induce organisational that is almost always resisted. McShane et al. (2003) explain that
resistance to change can be grouped into several contexts such as:

investment cost
intervention into routine

political issues
difference with conventional systems

fear of change
unsuitability to norms.

Success of any change management initiative depends on how well these change resisting
factors are handled or how well change management is incorporated into any new KM
initiative.

Change Management
The forgoing is also significantly true for a successful KM initiative. Hence change
management becomes an integral part of any KM initiative. Any change management
program works on understanding and changing the culture of the organisation through
effective leadership and reward systems. These are discussed as follows:

a) Culture
The concept of culture is central to the idea of change management.

William et al. (1993,p11) state:

“When we know what culture is, we know what needs to be

changed for culture to change. Only once we appreciate its nature
can we understand how it might be changed. When we know its
role, we can comprehend its importance”

Both the general management and construction management literature place great emphasis
on the implicit relationship between organisational culture and organisational performance
(Hofstead 1980; Handy 1993; Liu and Fellows 2001; Rowlinson 2001). Not only does culture
become important from a change management point of view but also to achieve competitive
advantage and improved performance (Schein 1997; Sadri and Lees 2001).

48
Various researchers have defined culture in several different ways. British anthropologist
Edward B. Taylor is credited with being the first to use the term in its anthropological sense in
1871 (Barthorpe 2002). Helman (1994) and Barthorpe (2002) cite Taylor’s definition of
culture as “That complex whole which includes knowledge, belief, art, morals, law, custom
and any other capabilities and habits acquired by man as a member of society.”

Kroeber and Kluckhohn (1963) state ‘Culture consists of patterns, explicit and implicit, of and
for behaviour, acquired and transmitted by symbols, constituting the distinctive achievement
of human groups, including their embodiments in artefacts; the essential core of culture
consists of traditional (i.e. historically derived and selected) ideas and especially their
attached values; culture systems may, on the one hand, be considered as products of action, on
the other as conditioning elements of further action’.

Bodley (1994) provides a categorized table showing various dimensions of culture based on
the list of 160 definitions related to culture published by Kroeber and Kluckhohn, American
anthropologists, in 1952. This is shown in Table 2.7.

Table 2.7: Dimensions of culture

Topical: Culture consists of everything on a list of topics, or categories, such as social
organization, religion, or economy
Historical: Culture is social heritage, or tradition, that is passed on to future generations
Behavioural: Culture is shared, learned human behaviour, a way of life
Normative: Culture is ideals, values, or rules for living
Functional: Culture is the way humans solve problems of adapting to the environment or living
together
Mental: Culture is a complex of ideas, or learned habits, that inhibit impulses and distinguish
people from animals
Structural: Culture consists of patterned and interrelated ideas, symbols, or behaviours
Symbolic: Culture is based on arbitrarily assigned meanings that are shared by a society

Most of the definitions above are grounded in the field of anthropology and behaviour
sciences but these definitions and understanding about culture are crucial when one ventures
to understand culture of the organisation. Burack (1991) considers organisational culture as
‘the ways things are done in the organisations’. He emphasised organisational culture is
“shared assumptions, beliefs and value which define behavioural norms and expectations; this
is the glue that holds the corporate community together”. Scholez (1987) considered corporate
culture as the implicit, invisible, intrinsic and informal consciousness of the organisation
which guides the behaviour of the individuals and which shapes itself out of their behaviour.

49
Organisations in today’s age have a mix of employees ranging from a young highly computer
literate generation bought up with intensive use of computer technology to an older generation
who are still anxious when faced with having to use IT. Not understanding these differences
of attitudes within the organisation will be a barrier towards IT implementation.
Understanding this factor assists formulating a strategy that may entice the older generation to
use any newly adopted technology through reward and recognition systems. A KM initiative
emphasises knowledge creation, transfer, sharing, socializing etc. Understanding the culture
of the organisation is the first step that needs to be taken before implementing the initiative. A
KM strategy has to be carefully crafted if any knowledge ‘silos’ exist within the organization,
where people don’t share knowledge, resulting from fear of possibly loosing a competitive
edge and hence a place in the organisation. A ‘one size fits all’ KM strategy should be
avoided (Cavaleri et al. 2005) because this has produced consistent failures over time. Egbu et
al. (2003) provided a list of various aspects of organisational culture that would support a KM
initiative. At the same time they also recognised various aspects of a culture that may affect
an organisation negatively. These are summarised in Table 2.8.

Table 2.8: Various aspects of the culture promoting or inhibiting the organisational KM
initiative

Aspects of culture contributing positively to KM Aspects of culture contributing negatively to KM

initiative initiative

An environment which encourages innovation to
Time pressure (e.g. limited time available to reflect
deliver better value on project

Willingness to embrace technological
developments including IT
Inward looking silo mentality

Awareness of the importance of KM including
Reluctance to change & embrace new ideas &
the provision of leadership developments In the sector

Degree to which individual initiatives &
Inability & unwillingness to share knowledge across
freedom are encouraged (e.g. empowerment) business

Encourage employees to get formal training
Difficulties encountered in finding the ‘right’
person, information, knowledge

Motive to become more entrepreneurial

Rigid QA arrangements which Increase paper-work

High safety awareness/ continuously improving
safety standards
Lack of reward for wider organisational
performance

High level of camaraderie

Low level of job security

Culture of promoting research & development,
experimentation
Paper-based document dissemination

Effective, flexible top down, bottom-up, lateral
Transience of company principles & objectives
communication |

‘Unrealistic’ strategic targets

50

Sense of pride in company achievements

An endemic blame culture in organisations

Encouragement to network with different
regions Facilitating peer-learning

Senior members of staff have hands on approach

to day to day activities

Usage of project review

b) Leadership

Leadership is a force that drives whole change producing initiative vigorously. In the absence
of leadership nothing much can happen. The role of leader and concept of leadership is widely
and thoroughly investigated by management researchers. Through leadership, a person
influences others to accomplish an objective and directs the organization to achieve some
unified goal (Dwyer 1993; Northouse 2001; Harris 2002).

Leadership is a necessary component behind the formation of any supportive culture so that it
not only supports diversity in the ways people think and ‘know’ beyond traditional
approaches, but also sets out a clear vision of how people within an organisation can be
energised to maximise their own creativity and build upon the ideas and knowledge of others
they interact with (Collins and Porras 1996).

Leadership is about empowerment, energising and enabling people to use knowledge and
tangible resources to achieve their vision. However vision by itself is inadequate for the
purpose and it needs to be translated into effective action. While leadership helps create the
vision, it needs sound project management skills and a hands-on leadership style and practical
application of the vision to deliver and deploy the conceptual big-picture vision (Kotter 2001).
One of the most strategic leadership features is envisioning a preferred future and charting a
way to get to that future. A knowledge vision provides corporate planners with a mental map
of three related domains: the world they currently live in; the world they ought to live in; and
the knowledge they ought to see (von Krough et al. 2000, p103). A knowledge vision should
specify what knowledge that members need to seek and create. Cavaleri et al.(2005) explicitly
mention that an era of the knowledge leader is emerging and is inevitable. It is through
leadership that a successful KM initiative can be undertaken. Maqsood et al. (2004) also
provide the case of forming a separate KM department with a view of having a knowledge
manager as a ‘knowledge leader’ to advance organisational KM initiatives.
51
C. Reward Systems

Rewards system development is critical for the success of KM initiatives. The literature
supports the strong influence that incentives and rewards have on people’s commitment to
sharing knowledge. Pedler et al. (1996) identify reward flexibility as a key driver of change
with a number of case studies to illustrate their argument.

Griego et al. (2000,p9) found two significant factors in their gender-balanced study of 48
professionals from a wide range of backgrounds participating in a Human Resource
Development Master’s Degree program that investigated predictors of learning in
organisations. The two significant factors were rewards and recognition followed by training
and education.

Wageman (1997,p56) focused upon 43 team leaders at the Xerox Corporation Customer
Service organisation and identified seven critical success factors for creating superb self-
managing teams. She advocated linking rewards to strategy and high levels of team reward
and maturity for self-evaluation against goals. She proposes rewarding team members equally
in where at least 80% of the reward should be awarded equally to individuals within a team
with the residue being either used to reward team leaders for demonstrating supporting action
such as coaching etc or rewards being divided unequally but on a transparent rational and
generally agreed basis.

Stretch goals represent outcomes that are realistically achievable. They are short-term
performance targets used to specify the outcomes that can be fairly confidently expected to be
achieved in the near term. The whole purpose of stretch goals is to inspire efforts to go well
beyond what is currently feasible and such goals are only achievable if they stimulate and
inspire creativity, invention and innovation. Anil Gupta and Vijay Govindarajan in their paper
on lessons learned from the highly innovative and successful US steel company Nucor Steel,
acknowledge significant stretch goals coupled with high powered incentives sparks
breakthrough thinking that moves organisations well outside continuous gradual improvement
(Gupta and Govindarajan 2000,p78). The important role of stretch goals as the trigger for
incentive schemes cannot be understated. It has been used as a risk and reward driver for the
enhancement of the concept of partnering to embrace project alliancing and was particularly
successful in its application on the National Museum of Australia project (Walker et al. 2002;
Walker and Hampson 2003b).

52
In strict KM terms, knowledge creation is a process of framing and re-framing knowledge, it
is therefore difficult to determine exactly who owns the resultant knowledge and therefore
who should be rewarded and on what basis. Therefore, considering knowledge sharing is a
communal activity, it could be appropriate to rewards teams for delivering knowledge assets
rather than rewarding individuals that my enter and leave teams (and organisations). The
financial capabilities relating to various stages in the life cycle and human capital capabilities
leading to an organisation's absorptive capacity should have a major impact on the application
of team-based pay (Balkin and Montemayor 2000).

Cacioppe (1999,p325) summarises six key points relating to reward systems drawing upon the
lessons learned from the development of high performance teams at Motorola and Trigon that
share knowledge and are highly innovative. These are as follows:

1. Have a clear strategic purpose for teams and rewards;

2. Communicate about the rewards and the team results;
3. Plan the type, criteria and use of rewards and recognition;
4. Have financial measures and stretch objectives;
5. Include training in interpersonal and teamwork skills; and
6. Evaluate and review the reward system’.

Change Management Model

The above three factors, culture, leadership, rewards are vital components of any change
management program. A successful KM initiative needs to have a change program built in.
Various researchers explain the change management process. One example is illustrated in
Figure 2.12, the Galbraith (2002, p74) ‘Star’ that presents a dynamic change model.

53
 1- Strategy

2 - TASK
Process analysis, vision,
goals and objectives

3a - PEOPLE 3 - STRUCTURE
Identification & implementation Identification of teams, design
of skills and development of organisational form,
needs roles & accountabilities

5 - REWARDS 4 - PROCESSES
Align goals with rewards,
Information distribution,
motivations, promotion
production, delivery etc:
prospects etc

Figure 2.12: The Galbraith 'Star' model of change management ( Source: Galbraith (2002
,p10))

It is not adequate to merely introduce change by training and development to diffuse

knowledge or any other change initiative. First, an organisation needs to have a strategic
vision to want to change. Strategic intent needs to be translated into action through a process
of analysis of the situation and developing goals and objectives to achieve the vision. People
can then work in communities and in organisational structures, whether formal or informal,
and for that to effectively occur. There needs to be an agreed set of role and accountability
issues—that is structure. People undertake this but people cannot implement change in
isolation. For the strategic intent to be realised through people there needs to be an
identification and implementation of the skills required to make change happen. There also
needs to be a set of processes that provides for the communication, production and transfer of
knowledge. People need to be motivated by the correctly aligned reward system to make their
change efforts worthwhile. Galbraith’s mode is a dynamic one, as any part of this star model
is changed it impacts upon other parts of the system. For example if strategy is changed then
this will require changes to all other nodes of the star. Likewise a change in structure affects
people and may require a different reward regime to be deployed, which in turn requires
amended processes.

Another concept associated with change process is that of ‘Anxiety’ put forward by Edgar
Schein and his seminal work is vital for understanding the psychological process of change
motivation. Considering people are at the centre of change process and acknowledging change

54
is a painful prospect for most people, Schein (1993,p86) expresses a notion that two types of
anxiety govern people’s willingness and commitment to change.

Anxiety 1 is the feeling associated with an inability or unwillingness to learn something new
because it appears too difficult or confronting. In this situation people deny the problem,
search to blame others for the symptoms requiring the change, or simplify the perceived
problem triggering change in terms that when seen in retrospect, appears ridiculous.
Unfortunately, Anxiety 1 behaviours are universal and all too evident with a management
response to mount more pressure to conform to the expected response. This can exacerbate
the situation as it drives people towards panic.

Anxiety 2 is the fear, shame, or guilt associated with not learning anything new, particularly
when survival is challenged without action being taken, is the type of anxiety that change
activists need to cultivate (Schein 1993, p88).

Change agents need to ensure that Anxiety 2 pressure is greater than Anxiety 1. Organisations
often find this difficult to accept, as it requires expensive and extensive support and
resourcing to provide the relief from this form of anxiety. For this reason a usual way that
organisations follow in a change process it to opt for a strategy of putting pressure on
individuals or business units and then leaving them to sort out the dilemma. Apparently this
strategy superficially appears to cost less but it always cost more through failed plans, dreams
and commitments inhibiting delivery of the expected results. The result is frequently blame
and negativity. If Anxiety 2 is responded to, then change agents can make a positive
difference through providing enabling support systems. They can prepare a general outline for
a solution to the problem that enables people to find their own way to channel their energies
and commitment to move from a position of defensiveness to one of confidently addressing
the change deployment.

Kotter (1995) another well respected writer on leadership and change management, proposes
an 8-step process for successful change that is line with on-going change management
discussion. These can be summarised as follows:
1. Establish a sense of urgency
2. Forming a powerful guiding coalition
3. Creating a vision
4. Communicating the vision

55
 5. Empowering others to act on the vision
6. Planning for and creating short-term wins
7. Consolidating improvements and producing still more change
8. Institutionalising new approaches.

2.7 KM Initiatives and Frameworks

The above discussion sets the basis for the conceptualising of successful KM initiatives.
Tiwana (2002) proposes his 10-step knowledge road map as follows:

1. Analyse the Existing Infrastructure

2. Align KM and Business Strategy
3. Design the KM Infrastructure
4. Audit Existing Knowledge Assets and System
5. Design the KM Team
6. Create the KM Blueprint
7. Develop the KM System
8. Deploy, Using the Results-driven Increment Methodology
9. Manage Change, Culture and Reward Structures
10. Evaluate Performance, Measure ROI (Return on Investment), and Incrementally
Refine the KM system

Tiwan’s road map gives due consideration to change, culture and reward system and hence
increase the chances of the success of the KM initiative in the organisation. Tiwana (2002)
notes and cautions that this is a road map not a methodology with a deceptive look of ‘cookie-
cutter’ formulation. The KM strategy and the system will have to be unique for each
company.

Kamara et al. (2002) and Al-Ghassani et al. (2002) provide a methodology for developing
KM strategies within the CLEVER (Cross-sectional learning in the Virtual Enterprise)
research project. Kamara et al. (2002) indicate that the main focus of the CLEVER project
was on organisational and culture dimensions of KM within a project context. The aims were
as follows:
1. To generate ‘as-is’ representations of KM practices in project environments both
within and across enterprises in the manufacturing and construction sectors.

56
 2. To derive generic structures for these practices by cross-sectoral comparisons.
3. To develop a viable framework for KM in a multi-project environment, within a
supply chain context, together with requirements for support
4. To evaluate the framework using real-life projects and scenarios supplied by the
participating companies.

The framework itself consists of 5 stages as shown in Figure 2.13:

Define KM
problem

Identify ‘To-
Be’ solution

Identify Critical
Migration Paths

Select Appropriate
KM process

Figure 2.13: The CLEVER framework (Source: Kamara et al.(2002))

Egbu and Botterill (2002) and Egbu et al. (2001b) present a conceptual framework shown in
Figure 2.14. This framework highlights people, process and systems, knowledge content and
technology. Technology is considered only as an enabler but the important one enabling
people, process and knowledge content and is show as dotted line. Other factors that are
critical to the success of the KM initiative are also considered like organisational strategy and
structure, culture, leadership and commitment, motivation and competition.

57
 Knowledge Cycles (e.g. create, capture,
share, transfer, implement, exploit,
measure)

Organisational Life
Organisationa
Leadership
l
People
Climate Strategy

Culture Content
Trust

Process Technology
Structure Motivation

Communication Commitment
Core Competencies Schools of
Knowledge
thought in the
Types (e.g.
knowledge
tacit, explicit)
paradigm (e.g.
science,
psychology,
sociology,
capital assets,
resource-based
perspective)

Figure 2.14: KM: A conceptual framework (Source Egbu et al.( 2001b) and Egbu and
Botterill (2002)).

Walker (2004) and Walker (2005) provide a detailed framework that they name as “K- Adv”
(Knowledge Advantage). Walker (2004) states while explaining the concept of K-adv as:
An organisation’s K-Adv is its capacity to liberate latent creativity
and innovation potential through effective management of knowledge
both from within its organisational boundaries and its external
environment.

58
The model comprises of three elements facilitating delivery of a K-Adv:
• Knowledge leadership that provides the organisational support, backing, championing
and vision to create strategies and implement them;
• A well-functioning and supportive ICT infrastructure to enhance communication,
coordinate problem solving activities that generate knowledge in new contexts and
transfer of both explicit (easier to achieve) and tacit (highly complex to achieve)
knowledge; and
• A supportive and facilitating people infrastructure to focus in particular on the highly
problematic tacit knowledge as well as transferring explicit knowledge.

The K-Adv requires a coordinated approach in addressing leadership actions to establish and
deploy a vision of what the K-Adv means to the organisation, to support the people
infrastructure necessary to effectively use knowledge in their business activities, and to
provide the necessary enabling information and communication technologies (ICT)
infrastructure to do so. Figure 2.15 illustrates the K-Adv model.

Knowledge Advantage

ICT Enabling Leadership People

Infrastructure Infrastructure
Vision
Envisioning
Realisation
Social Process
ICT h/w & s/w ICT System
Capital Capital
Infrastructure Support

Identifying Trust + Commitment

stakeholder K-Value
Knowledge Creation
Functioning Personal Developing core
Hardware Assistance Vision issues
Knowledge Sharing
+ Transfer
Developing
Functioning Training + Vision options Knowledge Use
Networks Development + Sensemaking
Articulating
the Vision Business Systems
Capacity + Rejuvenation
Functioning Planning
Software
Planning vision realisation Reward Systems
Functioning Mobilising resources Problem Solving,
Portals Archiving Experimentation
+ Interface + Learning
Deploying the vision
Knowledge
Sharing Processes
Maintaining the vision

Figure 2.15 – The K-Adv Model

The central and focal point of the concept is knowledge leadership. This is linked to the ICT
and people infrastructures that help turn the idealised knowledge advantage vision into reality.
These three components or attributes dynamically interact to shape a preferred future. If we

59
first concentrate upon the knowledge leadership element we see that strategy and its
enactment comprises two sub-elements—envisioning and vision realisation. Knowledge
leadership recognises that a K-Adv is realised through people and their creative energies and
knowledge that is grounded in their individual experience and ability to interpret and re-
interpret meaning from experience. Thus, a knowledge vision depends upon people,
moreover, it depends upon a range of people from both within and external to any
organisation. An important part of the K-Adv is an ability to envision a preferred future
knowledge strategy through the identification and value of useful stakeholder knowledge.
That depends upon first identifying and understanding stakeholder environments, which
naturally leads to identifying stakeholders and the knowledge that they possess.

Liebowitz and Megbolugbe (2003) provide their framework in order to aid project managers
in conceptualising and implementing initiatives. The framework is shown in Figure 2.16.

Sustaining &
Extending s K-sharing

Full
Implementation

Change
KM Pilots Mgt
& Measures

KM KM Org. COP
tools/tech Element Building/
Nurturing

KM KM KM
KM Target Taxonomy Bench
KM markin
Strategy Areas
Awareness
g

Figure 2.16: Building a KM pyramid (Source: Liebowitz and Megbolugbe (2003))

60
They take a pyramid approach where the first level which they refer to as ‘building blocks’ is
concerned with: providing awareness of KM; performing knowledge benchmarking to see
what other organisations of similar nature are doing; developing a knowledge taxonomy to
serve as a vocabulary and structure while construction the KM system; developing a KM
strategy; and targeting areas where that would mostly use KM initiatives. The next level
involves selecting techniques and tools, developing a KM organisational infrastructure and
building and nurturing of online communities of practice (COP). As this happen, KM pilots
can be conducted and measurements can be made. It is to taken in conjunction with a change
management process with in the organisation. Finally it will result in full implementation of
KM systems and process and this needs to be maintained and sustained by upholding a
knowledge sharing culture.

2.8 KM Techniques and Tools

Egbu et al. (2003) completed a comprehensive study on KM in Construction in the UK. They
recognise techniques and technology employed for the purpose of managing knowledge not
necessarily are IT based. They quoted a study of Al-Ghassani (2002) that considered, the term
‘KM techniques’ for non-IT based tools and “KM tools” for IT based tools in order to bring
simplicity to the understanding of term ‘tools and techniques’ in KM debate. Various
techniques and tools are shown in Table 2.9.

Table 2.9: KM tools (Modified from Egbu et al. (2003))

KM Techniques- Non-IT tools KM Tools- IT tools

Brainstorming, Face-to-face interaction, Data and text mining, Groupware, Intranet, Extranet,
communities of Practice (COPs), Post-project Knowledge bases, taxonomy, Ontologies
reviews, Recruitment, Apprenticeship, mentoring,
Training

KM techniques have high focus on tacit knowledge, easy to implement and maintain. These
are affordable to the organisations. Most organisations employ these techniques one way or
another as matter of performing day to day work. KM tools have focus on explicit knowledge
(work manual, procedures, specifications, etc.), require a dedicated IT infrastructure, difficult
to maintain and involve significant financial commitments (Al-Ghassani (2002) in Egbu et al.
2003). It is the effective and balanced combination of both KM techniques and KM tools that
is required to act as a successful enabler of KM initiative.

61
In another study Egbu and Botterill (2002) investigate the use and effectiveness of KM
techniques and technologies in construction organisations in UK. The results are shown in
Table 2.10 below:

Table 2.10: The usage and effectiveness of KM tools and techniques (Source: Egbu and
Botterill( 2002)).
Techniques and Tools Mean Values Techniques and Tools
Usage Effectiveness
Telephone 4.3 4.1 Telephone
Internet/Intranet 4.0 4.0 Face-to-face meetings
Documents and reports 3.9 4.0 Documents and reports
Face-to-face meetings 3.9 4.0 Interaction with supply chain
Interaction with supply chain 3.7 4.0 Internet/Intranet
Formal on-the-job training 3.5 3.7 Formal on-the-job training
Formal education and training 3.4 3.7 IT-based database
IT-based database 3.4 3.6 Informal networks
Work manuals 3.3 3.6 Formal education and training
Informal networks 3.2 3.4 Coaching and mentoring
Brainstorming sessions 2.9 3.3 Brainstorming sessions
Project Summaries 2.8 3.2 Project Summaries
Coaching and mentoring 2.7 3.1 Cross-functional teamwork
Bulletin boards 2.6 3.1 Work manuals
Cross-functional teamwork 2.5 2.9 Job rotation
Help Desks 2.1 2.8 Knowledge-based Expert
systems
Knowledge-based Expert systems 2.0 2.7 Bulletin boards
Job rotation 1.8 2.5 Decision support systems
Communities of Practice 1.8 2.4 Help Desks
Decision support systems 1.8 2.4 Quality circles
Storytelling 1.7 2.2 Communities of Practice
Quality circles 1.5 2.2 Video-conferencing
Knowledge Maps 1.4 2.1 Knowledge Maps
Groupware 1.4 2.0 Storytelling
Video-conferencing 1.4 2.0 Groupware

The above results are based on a questionnaire survey of 55 usable questionaries from five
UK based project organisations. The respondents were asked both use and effectiveness of
KM tools and techniques on the scale of 1 to 5, with ‘1’ representing as never used/least
effective and ‘5’ as highly used/highly effective.

The above study highlights various techniques and tools that can be used for KM. It also
highlights what is the general perception of the organisation towards use and effectiveness of
these technologies. Egbu and Botterill (2002) do not make it clear whether these organisations
use these tools specifically for carrying out KM or just for carrying out their daily routine
procedures. With a limited proliferation of KM philosophy in the construction industry so far,
it is highly unlikely that these organisations have some KM initiative being undertaken and
these tools are specifically used for KM purposes. However, the organisations have to manage

62
the work and related knowledge, in their daily routine. This study sets the basis for
understanding the tools that are currently being used to carry out the work. Telephone,
Intranet and Documents and reports are regarded as having high usage and effectiveness. This
clearly indicates most of the organisations are concerned with the management of explicit
knowledge. Although the telephone may facilitate tacit knowledge sharing, it is more likely to
be used as a medium of communicating information or responsibilities, or at the most
disseminating work progress. This strays away from the objective of knowledge creation and
sharing. Tacit sharing techniques like COPs, story telling and Groupware to share both tacit
and explicit knowledge are rated low both in usage and effectiveness. This indicates that
awareness of these tools to enhance knowledge sharing and to serve as effective KM is very
restricted. This suggests that organisations studied in above research weren’t involved in any
significant live KM initiatives.

2.9 Organisational Learning and Learning Organisation

2.9.1 Organisational Learning and a Learning Organisation

Learning is generally associated with better outcomes. Having learnt lessons avoids
‘reinventing the wheel’ and ‘making the same mistakes again’. Argyris and Schön (1978) and
Senge (1990) introduce the idea of single loop learning and double loop learning,
organisational learning and the learning organisation.

Organisational learning is the set of processes used to obtain and apply new knowledge,
behaviour, tools and values (Bennis and Manus 1985). Through this process, members of the
organisation detect errors or anomalies and correct them by restructuring the current
organisational model (Argyris and Schön, 1978). Organisational learning is a collective
process of inquiry and experimentation that uses groups as a forum to help employees draw
new meanings from their paste experience (Cavaleri et al. 2005). This results in improved
actions through better knowledge and understanding. It is the process of information leading
to changes in a range of potential behaviours (Huber 1991).

Learning is so insinuated in the fabric of life that you cannot not learn (Senge 1990). Pedlar et
al. (1991) agrees, observing that an organisation can facilitate the learning of all its members

63
and so continuously transform itself. Such an organisation has the skills to create, acquire and
transfer knowledge, and then modifies its behaviour to reflect new knowledge and insights
(Gravin 1993). In resolving the discrepancy between terms of ‘organisational learning’ and
‘learning organisation’, Love et al. (2000) state that organisational learning is used mainly as
a descriptive term to explain and quantify learning activities and events. The ‘learning
organisation’ tends to refer to organisations designed to enable learning and having an
organisational structure with the capability to facilitate learning. Mirvis (1996) notes that the
learning organisation focuses on managing chaos and indeterminacy, flattening hierarchies,
and decentralization. It also encourages the empowerment of people, teamwork and cross-
functional teams, network relationships, adoption of new technologies and new forms of
leadership and mentoring.

2.9.2 Link with KM

It is clear from the above discussion that the concept of organisational learning and that of
learning organisations is not very different from KM. Newcombe (1999) notes that a parent
organisation will not learn from their projects if they do not have in place the mechanisms to
capture knowledge. For learning to occur, there is need for processes and structure to be in
place to help people create new knowledge, allowing them to continuously improve
themselves and the organisation (Love et al. 2000). Love et al. (2000) also note that currently
there is no defined road map for construction organisations to follow if the learning
organisation is its destination. They have quoted Gravin (1993) as identifying the following
five activities that a learning organisation in construction should be skilled at:

 Systematic Problem Solving

 Experimentation with new approaches

 Learning from their own experiences and past history

 Learning from the experiences and best practice of others

 Transferring knowledge quickly and efficiently through out the organisation

Cavaleri et al. (2005, p215) argue that knowledge is assumed to be product of organisational
learning processes, but many current organisational learning processes have not been aligned
with knowledge processes in a pragmatic way. Pragmatic knowledge is the ultimate action

64
knowledge because it is continually being customised and upgraded based on the
effectiveness of action taken in producing expected results (p31). The aim and vision is to
become a learning organization but methods for realising this vision have typically been so
vague that many mangers consider it more of an intellectual exercise than tangible way to
contribute to business performance. They propose the simplest way to achieve this vision is to
integrate organisational learning process with KM initiatives.

From the previous discussion, it appears evident that KM successful initiatives (comprising of
balanced use of technology and people factors) help organisations to become learning
organisations. Hence, we can deduce that successful KM initiatives facilitate transforming the
organisation into a learning organisation. Removing confusion and clarifying these terms is
useful to practitioners and research community members to distinguish between
organisational learning, the learning organisation and KM.

2.9.3 Challenge of Project Learning through KM

In project environments such as the construction industry, it is highly desirable that lessons
learnt captured from one project are put into use on subsequent projects, achieving reduction
in project times and subsequent efficiencies (Kamara et al. 2002). Construction organisations
usually develop project histories and databases as repositories to keep such knowledge of the
lessons learnt. KM provides a structured way for developing such repositories and ensures
that knowledge is disseminated in a timely fashion to the users. Where project histories have
been captured, their details are obtained through using a variety of debriefing techniques.
Schindler and Eppler (2003) classified these techniques into process-based methods, and
documentation-based methods.

65
Table 2.11: Process-based Methods for History Collection (Source: Schindler and Eppler
(2003, p222))
Method
Parameter Project
Post-project After Action
Review/Project Post control
Appraisal Review
Audit
After project
completion or in Approximately
Time of the course of the two years after During work
Exclusively at project’s end
execution project during project process
individual project completion
phases
External post-
Review: project appraisal
moderators unit (a manager
Carried out
respectively auditor Project manager and four Facilitator
by
Audit: project- assistants),
external people project
homework group
Project team and Project team and
third parties that Project manager (inclusion of third parties that
Participants Project team
are involved into project team not neglected) are involved into
the project the project
Status Serves as delimitation/in Learning from Learning from
classification, early addition to a more formal project mistakes, mistakes,
Purpose recognition of end that focuses on the sole knowledge knowledge
possible hazards, improvement of future project’s transfer to third transfer inside
team-internal focus goal conformity parties the team
Result is a formal document,
which considers the ranges of Best practice
Improvement of
aims of the project, quantitative generation for Immediate
team discipline,
goals, milestones, check points large-scale reflection of
prevention of weak
Benefits and budget goals and projects, the own doings
points and
Contains an evaluation of the improvement of to improve
validation of
project result as well as a forecasts and future actions
strategies
recommendation for future proposals
improvements
Non-cooperative form of
recording experiences, analysis
of existing project status reports,
milestones, checkpoints and Document
Interaction Face to face Cooperative
budget targets are being analysis, face to-
mode meetings team meeting
compared in order to identify face-meetings
relevant backgrounds of
differences between estimated
and actual effort
Partly in reports,
usually no
predefined Partly in reports, usually no
circulation with predefined circulation with
Codification knowledge transfer knowledge transfer as a primary Booklets Flip charts
as a primary goal goal (excluding predefined
(excluding distribution lists)
predefined
distribution lists)

The process-based methods illustrated in Table 2.11 gather lessons-learnt from the completed
projects. These are the methods associated with approaches that include: Project
66
Review/Project Audits, Post-Control, Post-Project Appraisal, and After Action Review. The
documentation-based methods collect project experiences as soon as they occur. Techniques
using this approach include: Micro Articles, Learning Histories, and RECALL. Table 2.12
illustrates the variation between these techniques.

Table 2.12: Document-based methods for history collection (Schinder and Eppler (2003,
p225))

Method
Parameter
Micro Article Learning Histories RECALL
Scope Between half and one page Between 20 and 100 pages Several screens
Possible but not required, Mandatory
IT-support Not required
unless multimedia is used (database interface)
Not explicitly stated, focus Individuals and teams depending
Participants individual user
one author on the process step
Supported by Learning historian necessary for Working group for
Author, reviewer
dedicated roles all process steps reviewing
Maximum once per project: after
Frequency On demand, regularly On demand
completion
Anonymity No Yes No
Embedding/ Paper-based, Cases with accompanying
Databases/intranet.
distribution databases/intranet workshops

2.9.4 Project Learning Barriers

The project nature of the industry poses great challenge and barriers to the project learning.
Schindler and Eppler (2003) explain the nature of these barriers as:

Experience gained while solving a problem during the course of project is not
adequately transferred to other people, when this is not a part of project’s
documentation practice. People complete the task and take any learning along with
them to new teams.

Relevant project documentation such as a feasibility study, a summary, a technical
report etc is only produced superficially and provides only business figures or the
projects results. They don’t capture or records reasons for failures or how certain
problem was resolved.

The end of the project marks the end of the learning of whole team. Limited
debriefing of the completed project occurs at the end of the project. It is because the
team is disbanded and sent onto new projects. Organisational amnesia starts to happen

67
 if these team members are not going to use that knowledge that they acquired from
previous project again on a new project.

If KM integration with learning across projects takes place, it will ensure that experiences (as
mentioned above) are accessible through informal networks. Also as problems happen,
solution can be devised, effectively capturing problems, causes, and how these are carried out.
This could also ensure that proper project debriefing occurs on projects and that
documentation based methods are adopted to capture project knowledge as it happens.

2.10 Innovation and KM

Research in innovation and its management is more than 50 years old. Organisations have
always looked for improved ways of business to keep themselves highly competitive and
sustainable in the market. As a result they continually create knowledge with a view to
differentiate and gain advantage over their competitors that may be termed as ‘innovation’.

Rogers (1995) defines it as “an idea, practice, or object that is perceived as new by an
individual or other unit of adoption.”. Innovation obviously involves a perceived need to
change from one state to another. Its purpose is Darwinian (evolutionary). It is about survival
and growth and about ecological (market) niches that are being filled by the exuberance of a
life force. Innovation is, therefore, a decision-making process to enact change in technology,
process, services rendered or other management approaches (Walker and Hampson 2003b,
p238).

Innovation is a pre-requisite for competitive advantage Egbu et al. (2001a). Product

innovation involves creating a new product while process innovation involves introducing
new ideas leading to an efficient method of production. Innovation can be radical or
incremental. Radical innovation results in total and sudden change of modus operandi while
incremental innovation deals with step-by-step improvement.

Schumpeter (1934) discusses how innovations occur, implications of innovation on the global
economy and for firms and their competitively sustainable position. Dosi (1982) and
Schumpeter (1934) see innovation as a process following a historical path. The impact of
technological and scientific change has occurred during five long waves of innovation
advancement. Sundbo (1999) and Jones and Saad (2003) describe these waves below. These
68
waves are identified after Kondratiev6 (Kondratieff and Stolper 1935) who along with
Schumpeter recognised the effect of innovation in terms of cycles.

1. the first ‘ kondratiev wave’ from 1785 to 1845 and which corresponds to steampower
2. the railways as the second ‘kondratiev wave’ from 1845 to 1900
3. the third ‘Kondratiev wave’ of 1900 to 1950 corresponding to electric power and the
automobile
4. the fourth wave 1950-1980 corresponds to mass production
5. the fifth wave is attributed to information and communication technologies beginning
in the early 1980’s

2.10.1 Models of Innovation

Jones and Saad (2003, p146) describe five models of innovation arguing that early models of
innovation consider it as a linear process comprising a succession of activities but subsequent
models considered innovation as a coupling and matching activity characterised by a multi
factor process that requires high level of interaction and integration at intra- and inter-
organisational levels. Following figure shows the progression of these models from single to
multiple factor analysis.
Multiple factors

Single factors Technology

+ Strong
market and integration,
economic networks
Technology environment and intra-
+ + organisational
market and organisation’s relationships
economic natural
Technology environment trajectory
Technology + + +
or market organisation’s organisation’s
market natural internal
trajectory environment

Figure2.17: Progression of innovation from dependence on single to multiple factor

(Source: Saad (1991)and (2000) in Jones and Saad (2003, p149).

6
Due to transcription from Cyrlic to Latin script kondratiev is often cited as kondratieff
69
 Innovation also forms part of an organisation’s competencies complementing the resource-
based view of the firm (Grant 1991) and how its knowledge base and change capacity can be
harnessed (Utterback 1994; Conner and Prahalad 1996; Grant 1996; Sundbo 1999; Slaughter
2000; Jones and Saad 2003; López 2005) to provide both price competitive advantage by
enabling more cost-effective processes or by adding value to products/services offered (Porter
1985).

2.10.2 Stages of Innovation

Wolfe (1994,p410) notes 10 stages that form the part of the innovation process in the
organisation. These stages are: Idea conception, awareness, matching, appraisal, persuasion,
adoption decision, implementation, confirmation, routinisation and infusion.

Rogers (1995) offers to summarise the 10 stages of Wolfe into 5 stages as knowledge,
persuasion, decision, implementation, and confirmation. This is shown in Figure 2.18.

COMMUNICATION CHANNELS

PRIOR lll.
ll. PERSUASION lV. IMPLEMENTATION
CONDITIONS l. KNOWLEDGE DEconstructi
V. CONFIRMATION

1. Adoption Continued Adoption

Later Adoption
Characteristics Perceived
of the Decision- Characteristics Discontinuance
Making Unit of the 2. Rejection Continued Rejection
Innovation

Figure 2.18: Model of the innovation-decision process

(Source: Rogers (1995, p 162))

The key concepts of the diffusion and innovation model are further explained by Awad et al.
(1984) and Sultan and Chan (2000) in the following manner:
• An innovation has a specific source, and particular characteristics.

• The creation of technological knowledge requires communication through channels.

• Innovation decisions will occur over time.

• Innovation takes place within the context of a social system.

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2.10.3 The Life Blood of Innovation- KM

Stewart (2000) explains that tacit knowledge of individuals is of immense value to the
organisation as a whole, and is the ‘wellspring of innovation’. The ability of KM to convert
people’s tacit knowledge into explicit knowledge is an essential part of innovation (Nonaka
and Taguchei, 1995; von Krogh et al., 2000). People are the ‘champions’ and ‘change agents’
(Maidique 1980; Rogers 1995). They bring the change through social interaction and networking
within and across organisations (Egbu et al. 2001a). Hence regulating this phenomenon through
KM and continually striving to convert their tacit knowledge into explicit will facilitate
innovation. A number of research initiatives are investigating the role of KM in producing and
supporting innovation in the construction industry (Miozzo and Dewick 2002; Husin and Rafi
2003; Salter and Gann 2003).

Innovation is central to a forward movement that depends on trying something different or

completely novel and testing theories about how the innovation could or should affect an
outcome against reflection of the experience of the experiment. This requires a ‘safe’
environment where it is acceptable to experiment and make mistakes—as long as lessons
learned are internalised, hopefully turned from tacit knowledge to explicit knowledge or at
least shared (Nonaka and Takeuchi 1995; Nonaka et al. 2001).

2.10.4 Adoption and Diffusion of Innovation

Diffusion of Innovation or Innovation diffusion is defined as the process in which a new idea,
concept or technology has been introduced throughout a social system over a time period
(Rogers 1995). Three innovation diffusion theories have been discussed by (Harkola 1995;
Larsen and Ballal 2005).

1. Cohesion theory states that social proximity of previous and potential users influences the
likely potential users’ subsequent decision to use that technology (Harkola 1994,p21). A
recipient respects the expertise and advice of the influencer, often through social or
professional networks. Emmitt (2001) describes how architects and specifiers respond to
building product technical representatives and act as gatekeepers where the opinion leaders
exercise strong power in adoption decisions.

71
2. Structural equivalence theory holds that adoption decisions are made on the basis of people
searching for innovation solutions by closely monitoring those they deem to be equivalent in
status/role so that they allow others to ‘show the way’ and they are content to be early
majority follow (Rogers 1995).

3. Threshold innovation theory holds that adoption is regulated by the nature and strength of
influence of group influence in communities (Granovetter 1978). This also recognises the
strength within social networks where a small number of influential members can tip the
balance in favour of a decision. This has more recently led to numerous explanations of how a
tipping-point is reached (Granovetter 1978; Gladwell 2000; Kim and Mauborgne 2003).
Larsen and Ballal (2005,p88) gathered data from 264 construction professionals, architects
builders and engineers and analysed innovation motivation patterns, they concluded that at the
diffusion opinion forming stages, cohesion more strongly influenced that structural influence
but at the decision adoption stage, a personal awareness threshold theory dominated. The
adoption-decision influences vary over the diffusion stage process.

Havelock’s (1969) model of diffusion and utilisation of knowledge incorporates social

systems, emphasising the importance of linkage, social interaction and problem solving.
These seminal models of diffusion and innovation form the basis of classical diffusion theory,
with the essential processes illustrated in Figure 2.19.

A new innovation that is adopted and diffused becomes transferred knowledge, percolating
through the organisation that accommodates and then manages the knowledge. The diffusion
of any innovation is a social issue and KM provides a comprehensive philosophy and
mechanisms to diffuse new knowledge within the organisation.

72
 Reference User
Groups Organizations

Resource
Organization
KEY
Individuals in
the social
system

Flow of new
knowledge

Formal Associations
organisational
structures

Informal
organisational
structures

Figure 2.19: The social interaction perspective of diffusion (Source: Havelock (1969))

2.10.5 ICT as an Innovation in the Construction Industry

IT and ICT (including the Internet, e-commerce, and groupware) experiences significant
growth in Australian businesses (Australian Bureau of Statistics, 2001)7. The Australian
construction industry is still in the initial stages of industry-wide adoption of ICT (Peansupap
et al. 2003), lagging behind other industries such as manufacturing, financing, and property
and business services (NOIE 2001). However, leading Australian construction organizations
have responded to the challenge of adopting ICT and recognise benefits that include helping
them manage their complex and diverse communications needs and protocols.

2.10.6 Importance of ICT and Benefits to the Construction Process

A major construction process demands heavy exchange of data and information between
project participants on a daily basis. It is essential to provide clear construction-related
information to project participants to avoid unnecessary problems. Duyshart (1997) notes that
much of the paper-based information exchange during the construction phase involves
duplication, continual translation and transcription from one medium or form to another, as

7
Business use of information technology, Australia, 1999-2000. Commonwealth of Australia, 2001 [cited July
11, 2002. Available from http://www.abs.gov.au/.]

73
well as the loss of information. The use of ICT minimizes such problems. Figure 2.20
describes the diverse types of data flows in the various construction stages.

ICT applications can help improve project planning, scheduling and cost control (Abudayyeh
et al. 2001; Sriprasert and Dawood 2002). Tam (1999) demonstrates that the development of a
total information transfer system for project management can save considerable time and cost
for document transfer. ICT can improve database distribution by the use of a web-based
electronic document management system (EDMS), with all documents stored in central
database and accessed from other locations (Björk 2002). ICT can encourage information
integration between construction processes and help reduce data re-entry errors and support
real-time construction project monitoring (Anumba 2000; Björk 2002). Integrated electronic
communication exchange provides various tangible benefits (cost and time reductions) and
intangible benefits (improved and effective service delivery) (Duyshart et al. 2003).

ICT has not only been used to decrease these integration problems, but also is used as an
effective way for experts to share knowledge and jointly solve problems. The BP virtual
office is one example where complex problems were solved using the expertise of a global
network of experts linked electronically (Prokesch 1997). Even e-mail, which is considered to
be information-poor due to being context-minimalist, is shown to be more effective than
expected when used as a tool for low-level knowledge in a knowledge intensive firm where
staff are familiar with it (Robertson et al. 2001).

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 Owner Owner’s Project Management
Staff

Project Concept Usable Space and Total Units

Feasibility Stage
Conceptual Design Market Absorption Model
Documentation Project Cost and Cash Flow
Project Schedules
Material and Labour quantity availability

Evaluation of
Preliminary Design of
the Project
Deign Team
Design Stage

Architect and Engineers

Project Management Team

Definition of the Project
& Preliminary Design

Bid Package & Notice

Approved Definition of the to Bidders
Project and Preliminary Design
Construction Planning Stage

Selection of the
Detail Design includes: Contractor
Detail Drawings & Specs Storage of Data
Base
Through
Internet and/or
Approved Final Owners intranet
Estimation CAD system Description
Construction Task Planning
Site Investigation
Regional Resource Planning
Detail Product Identification
Construction Management
Contractor
Construction Stage

Design Documents
Design Documents Terms of Functional Service
Project Cost & Cash Flows Project Cost and Cash Flow
Schedule Networks Schedule Network
Design and Site Changes Coordinate Teams Work
General Change Orders Construction Strategies
Material and Labour Availability Evaluation of Change Orders
Construction Strategies

Notes:
Solid Line representing how the date is sending to or receiving from the database storage
Dash line representing the interaction between the parties
However, the interconnection between the processes are taking place into one database

Figure 2.20: Data flows in various construction stages

(Source : Caballero et al. (2002))

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2.11 Emerging Directions in KM

2.11.1 Enmeshing Supply Chain Management and KM

The emerging concept of supply chains and supply chain management is revolutionising the
business world. This revolution is evident in changing the unit of competition from
organisation vs. organisation to chain vs. chain. At the forefront of this philosophy lie long
term and strong commitment and trust among the trading partners. This sort of commitment
and trust emanates from sharing knowledge with other trading partners in the supply chain as
well as joint problem solving within the concept of a ‘super-team’. Conventionally,
information flows from one end of the supply chain to other setting up potential KM elements
of supply chain management because knowledge not information alone flows from one end of
supply chain to the other. As a result, workmanship improves, quality gets enhanced and the
number of defective items reduces, producing significant amount of time and related costs
savings. KM principals are relevant to everyone in the supply chain. Reaping benefits from
knowledge varies and depends on the organisation’s position and role in the supply chain and
the type of knowledge required by the supply chain. It would be misleading to assert that KM
is principally applicable to large organisations—all organisations regardless of their size can
benefit from KM. KM strategies based should be on customized for each organisation,
dependent on its position in the supply chain.

Supply Chain Management (SCM)

SCM is an evolved form of purchasing and logistics-related activities (Croom et al. 2000; Tan
2001). For over a decade and half, the SCM literature shows a confusion of terminologies and
definitions (New 1997). Some of these include; integrated purchasing strategy, supplier
integration, supply base management, buyer-supplier partnership, supplier alliances, supply
chain synchronisation, network supply chain, value added chain, logistic integration, lean
chain approach, supply network, value stream, etc. (Dyer et al. 1998; Nassimbeni 1998;
Ellinger 2000);(Tan et al. 1998). While each term addresses elements of a phenomenon,
typically focussing on immediate suppliers of an organisation, SCM is the most widely used
(but often abused) term describing this process (Tan 2001). The most realistic and
comprehensive definition is provided by the Global Supply Chain Forum (GSCF), a group of
non-competing firms and a team of academic researchers dedicated to improve the theory and
practice of SCM. According to this group SCM is the integration of key business processes

76
from end user through original suppliers that provides products, services, and information that
add value for customers and other stakeholders (Lambert and Cooper 2000). This sort of
integration reduces the product delivery time, reduces waste, minimizes errors and saves on
transactional costs thus increasing productivity.

Trust and Commitment: A common foundation for KM and SCM

Trust and commitment lie at the heart of knowledge sharing. One widely accepted definition
of trust is “The willingness of a party to be vulnerable to the actions of another party based
upon the expectation that the other will perform a particular action to the trustor, irrespective
of the ability to monitor or control that other party” (Mayer et al. 1995, p73). The first
important aspect to understand is that trust is a state of mind or perception. Party X trusts
party Y in the sense that X believes that Y’s actions can be predicted and that Y’s actions will
not harm X. The second aspect that needs to be understood is that trust is a state of your
vulnerability that has to be tested to prove that this state of trust is not misplaced. Mayer et
al’s model, illustrated in Figure 2.21, provides a useful illustration of the influences at work.
Factors of
perceived
trustworthiness

Perceived
Ability Risk

Risk taking in
Benevolence Trust relationship Outcome

Integrity

Trustor’s
propensity

Figure 2.21: A model of trust (Source: Mayer et al. (1995, p715))

Figure 2.21 indicates three antecedents. Ability refers to the capacity to perform the predicted
action. Ability is not constrained to a physical or cognitive capacity but that the environment
in which a trust challenge may be situated allows Y to fulfil the response predicted by X.
Party Y may be both physically and mentally able to do something but may be constrained by
contractual-legal arrangements, hierarchy or some other influence and thus fail to be able to
77
respond as predicted by X. Benevolence is a sense that Y has X’s welfare at heart so that Y
will not harm X. Finally, integrity means that party Y has demonstrated through its past and
current actions that it acts in a predictable fashion and that there is an internal consistency or
logic—integrity—in actions taken. Ability, benevolence and integrity carry no specific moral
weight and are in a sense a measure of transparency and logic. These three elements comprise
the notion of trust.

Party X must also have a propensity to trust for trust to be evident. If party X has been
severely disappointed with Y or other parties in the past then X may have a lowered
propensity to trust and, trust of Y by X will be inhibited—even if Y can demonstrate high
levels of ability, benevolence, and integrity.

Also, for trust to occur X needs to be put at risk in a situation arising where X is vulnerable to
party Y. The risk taking event is crucial in building X’s trust in Y because it results in a test
that validates the trust of X in Y. The outcome of that trust refines the trustworthiness
perception that X has in Y. Zand (1972) linked trust with problem solving where control and
information disclosure are critical elements of the process of trust being generated, tested and
the trust perception refined.

Lewicki and McAllister (1998) extend our understanding of trust by introducing the notion
that parties neither trust nor distrust each other, rather they exist in a state of combined trust
and distrust as illustrated in Figure 2.22. This is a useful observation as it provides a maturity
model of the trust relationship. Further, as trust is essential for effective KM and SCM that
benefits the whole supply chain, it reinforces its place as a common foundation for KM and
SCM.

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 High Trust Trust but verify
High-value congruence
Characterised by: Relationship highly
• Hope Interdependence promoted segmented and bounded
• Faith Opportunities pursued Opportunities pursued and
• Confidence New initiatives down-side risks/vulnerabilities
• Assurance continually monitored
• Initiative 2 4
1 3
Low Trust Undesirable eventualities
Characterised by: Casual acquaintances expected and feared
• No hope Limited interdependence Harmful motives assumed
• No faith Bounded, arms-length
• No confidence transactions Interdependence managed
• Passivity Professional courtesy Pre-emption; best offensive
• Hesitance is a good defence
Paranoia
Low Distrust High Distrust
Characterised by: Characterised by:
• No fear • Fear
• Absence of scepticism • Scepticism
• Absence of cynicism • Cynicism
• Low monitoring • Wariness and watchfulness
• No vigilance • Vigilance
Figure 2.22: Trust and distrust (Source: Lewicki et al. (1998, p445))

At the naive trust maturity level there is a casual acquaintance relationship characterised by
low trust and low distrust (quadrant 1). Parties X and Y have no particular expectations above
the transactional nature of their interaction—no hopes, fears or expectations.

Interdependence is promoted and the trust relationship is fresh with opportunities and
initiatives being pursued with high levels of trust and low levels of distrust (quadrant 2). This
may be characterised by enthusiasm, confidence and high levels of faith but the testing of the
relationship may be underdeveloped and so the relationship could be said to be ‘hopeful’
rather that ‘trusting’.

A low trust and high distrust relationship (quadrant 3) may develop as challenges being
encountered to that relationship being poorly managed with numerous ‘withdrawals’ from
what the Walker and Hampson (2003a, p191) call a ‘loyalty bank’. The business relationship
may still exist but the quality of information is likely to be poor. Exercise of control is likely
to highly asymmetrical with both sides enmeshed in a power struggle that can be
dysfunctional behaviour and wasted energy being expended on negative relational behaviours.
79
The party with lower power will use various strategies and tactics to gain more power and
control, perhaps through highly filtered and selected use of information and level of sharing
knowledge to counter the imbalance.

The most mature quadrant of the Lewicki et al. (1998) trust-distrust model is high trust and
high distrust (quadrant 4). This at first appears paradoxical because it seems incongruous to
promote the notion of distrust. However, Lewicki et al. (1998) refer to this as a ‘trust but
verify’ situation and they recognise in this that there are environmental limitations such as
laws, rules and accountabilities to a plethora of stakeholders and. ‘Trust and verify’ is the
most sophisticated state that a knowledge sharing relationship can aspire to because it
provides critical feedback.

The key issue that emerges from our discussion on trust is that:
• Trust is a frame of mind, it requires challenges and conflict to be validated;
• That trust and distrust coexists;
• That the nature of trust changes over the time that the relationship continues;
• That power imbalances and quality of information and knowledge exchange are tightly
bound up in the trust-distrust experience.

The implication of this is that trust influences commitment to share information and
knowledge and it also influences the deployment of power associated with knowledge
generation, exchange and use.

Commitment is the physical and mental manifestation of the concept of trust. It is the proof of
trust. It is the willingness to reciprocate energy invested through trust in the process of
transformation of this energy into tangible results. Commitment means that another party will
take this trust on board and 'live up to' the spirit of the bargain by probably committing more
personal pride and obligation to 'do the right thing' than would otherwise be the case. Meyer
and Allen identify three types of commitment (1997, p11). Affective (want to) commitment
requires intrinsic motivational responses. Continuance commitment (a need to comply) relates
to a transactional exchange in which extrinsic rewards are provided. While normative (ought
to) commitment results in obligation and duty in which grudging acceptance, or dutiful
deference can prevail. One could see normative commitment as marginally higher than mere
compliance.

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Clearly the most sophisticated and valuable conditions for trust and commitment are
represented by high levels of trust and distrust with a healthy appreciation and understanding
of the limits to which party X can rely on party Y to do what it wishes or needs to do. It also
required that the levels of ability, benevolence and integrity are high under this situation with
the relationship having been successfully tested to both generate and maintain trust. There
also would need to be affective commitment so that party X is comfortable with the
experienced sense of vulnerability and that party X desires to trust and be inter-dependent
with party Y. Mature sophisticated supply chains would more closely fit with this
characterisation rather than being either dangerously naïve or sceptical to the point of being
dysfunctional.

Trust and commitment is therefore depicted as providing a degree of predictability and

transparency of both intent and action. It also indicates a matching or at least understanding of
the values, norms, language and culture between the organisation and those dealing with it as
stakeholders. The need for common or translatable value systems, language, symbolic
artefacts and protocols or etiquette (Trompenaars 1993; Swierczek 1994; Brown 1998;
Hampden-Turner and Trompenaars 2000; Holden 2002) has been shown to be important for
developing shared understanding and thus enhancing the chance of trust and commitment.
This environment should be created not only in any particular organisation but also across the
whole SC so that each trading partner increases trust in the others in the SC to keep them
committed.

A sense of commitment to creating an innovative solution to challenges is necessary because

a differentiated competitive advantage generally relies on being unique or highly unusual so
that it transcends the obvious or ‘norm’ (Nonaka et al. 2001). Commitment is fostered
through an environment of trust and care where individuals feel positively obliged to share
ideas and knowledge that benefits all within an organisation rather than the individual or
small group concerned (Walker 2003; Walker and Hampson 2003a).

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The Proposed concept of Learning Chain

In the construction industry, organisations come together with their specialities and
knowledge to complete a construction project. Each organisation contributes its knowledge in
a form of people, processes and technologies, to the construction process as shown in Figure
2.23 and 2.24. Traditionally, the selection of these organisations or trading partners is based
upon a spot rate basis. This makes transactional exchange the dominant form of business in
the construction industry (Dubois and Gadde 2000). The suppliers’ competition in each
transaction is assumed to be the most appropriate means of securing efficiency of operations.
Therefore, actor constellations change all the time, making it difficult to utilise the experience
gained in previous projects (Dubois and Gadde 2000). Cox and Thompson (1997) observe
that this creates inefficiencies as the supplier climbs a new learning curve for each project.
SCM deals with these problems by promoting relational contracting, long-term commitment
and an atmosphere of high trust and commitment.

Designers, Architects, Estimators, Planners,

People Project Managers, Labourers, Foremen, etc

Raw Materials Finished Product

Process Technology
Designing, Estimating, Planning, Project Assisting technologies, Computer technology,
Management, Method statements Robotics, Automation, Construction technologies

Figure 2.23: Construction process

Supplier Designers
Supplier
Sub Owner

Contractor
Supplier
Supplier Sub

Supplier

Project Site Activity

Figure 2.24: Supply chain in construction (Source: (O'Brien et al. 2002))

82
Through systematic KM, trading partners are able to minimise wasteful activities and improve
productivity and efficiency. KM, together with SCM, will ensure that knowledge, not
information alone, is shared with the trading partners. Whereas the information may simply
specify what is required of the trading partner, KM can help to determine how best to deliver
that product or ensure the swift availability of the related knowledge. Figure 2.25 descibes
two such trading partners who are bound together by trust and committed for long term
relationship and have their key business process integrated under SCM. Each process gets
assistance from a knowledge layer set under KM on the top of these processes.

Supply Chain Supply Chain

Supplier Trust and Commitment Sub Upstream
Down Stream
Information
+
Knowledge Knowledge
Knowledge
Material

Integrating Key Business Processes

Supply Chain Management

Figure 2.25: Trading partners adopting SCM and KM

The mechanism of this nature would ensure that best available knowledge is utilized to
deliver the product and service and experiences gained on the projects would be efficiently
stored and utilized throughout the supply chain. Spekman et al (1998) presented another
point of view based on which a trading partner can decide how much knowledge it wants to
share with other trading partner. Figure 2.26 distinguished between three modes of
interaction, co-operation, coordination and collaboration. Cooperation is the starting point of
knowledge sharing while collaboration leads to maximum sharing of knowledge.

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 Cooperation Coordination Collaboration

• Fewer Suppliers • Information • Joint planning

• Longer term linkages •Technology
contracts • WIP linkages sharing
• EDI linkages

Figure 2.26: Various modes of interactions among trading partners (Source: Spekman et al.
(1998))

Spekman et al (1998) argue that ‘cooperation’ is the threshold level of interaction where
firms exchange essential information and engage some suppliers/customers in longer-term
contracts. The next level of intensity is ‘coordination’ where specified workflow and
information are exchanged in a manner that supports seamless linkages between and among
trading parties. The final stage is ‘collaboration’ where by partners engage in joint planning
and processes beyond levels that reach in less intense trading relationships. Collaboration
requires high levels of trust, commitment, and information sharing based upon partners who
share a common vision of the future. An organisation may work at any of these three levels of
trust and commitment with other trading partner to facilitate SCM, and may modify its
selection after monitoring the interaction to observe change in the effecting factors. These
various modes of interactions are in fact, limiting the magnitude of knowledge that can be
shared with a specific trading partner. KM in this context would be helpful to provide detailed
guidelines as to what sort of knowledge is appropriate to share in a certain mode of
interaction. A supply chain exhibiting such characteristics can be termed as a Learning Chain.

The literature on SCM indicates that there are variable levels of alignment in different
industry sectors. For example Michaels (1999) suggests that in the UK, by the closing decade
of the 20th century at least, the supply chain for aircraft components had patchy levels of
coherence in their ability to exchange knowledge and develop lean production and drive out
waste. In a more current paper, Childerhouse et al. (2003) indicate that at least at the first tier
of component suppliers in the automotive SC, substantial gains are being made in tuning
productivity and information flows for the automotive industry however, they identify

84
continuing barriers relating to technology, cultural and financial barriers that need to be
addressed to realise the potential for SC to effectively align their knowledge transfers. They
do indicate recent advances in ICT that is enhancing knowledge and information transfer such
as adoption of groupware, linked computer aided design (CAD) information and the
ubiquitous use of email and the Internet. They also indicate that what they call “product
champions” are helping to propagate good and best practice in SCM through knowledge
transfer.

The construction industry appears to be in a nascent stage of SCM using e-commerce tools
such as the UK and Australian versions of the INCITE procurement and information
exchange system for conducting e-business (Peansupap 2004; Taylor 2004). Thus while it
appears to be normal and expected that some parts of the SC will be more advanced than
others the longer-term aim should be to raise all members to a common higher level of SC
integration of knowledge and information transfer to squeeze out waste and create greater
value for SC members and additional value to customers. This said, Cox (1999) argues that
the aim of firm in general is to appropriate as much value that can be derived from a SC as
possible even at the expense of the customer and other SC members. His salutary and often
contested proposition is that successful SCM helps to elevate a SC’s group competitive
advantage to such an extent that it drives out other SCs or individual firms from the market
thus creating itself an oligarchic niche and which point it is free to move from a customer
delight delivery aim to determining itself what the customer will tolerate in terms of value
delivery by satisfying them The SC then appropriates excess value. Further, the dominant
members of the SC can appropriate value at the expense of weaker SC members (Cox 1999,
p171). This is a somewhat profit-only-centred proposition, however, Cox’s argument is
strongly argued with organisations like Microsoft and UK supermarket chains cited as already
holding this market position.

KM Proliferation in the Supply Chain

For supply chains to act as a learning chain would require that KM initiative is to be taken
throughout. Each trading partner has to adopt a knowledge advantage framework described
above. In this regard, a concrete effort from a certain trading partner who holds a vantage
point is required. Maqsood et al. (2002) consider ‘Power Management’ being an important
component of SCM where by a trading partner holding a vantage position is able to create a
supply chain and monitor and control the performance of a supply chain. Depending upon

85
how the supply chains have been created in the first place, either by a contractor or client, one
has to take control to synchronize downstream or upstream chain activities. The party
assuming power (e.g. contractor) needs to take responsibility for establishing knowledge
leadership in whole supply chain on a similar basis, as it would take for its own organisation.
Based on this knowledge leadership throughout the supply chain, it needs to ensure that other
components (ICT enabling infrastructure and People Infrastructure) to achieve knowledge
advantage are appropriately addressed (see Figure 2.15). It should ensure that each trading
partner takes an internal assessment of their knowledge processes according to K-adv
framework and help them to establish achievable targets to reach up on the scale of K-adv
framework. Help should be provided to adopt same ICT infrastructure across the chain.
Supply chain members are to be considered part of the people capital and should be rewarded
for their trust and commitment.

2.11.2 KM and Human Resource Management (HRM)

HRM for a long time is associated with handling of people’s intelligence. If KM is being
considered as a human related issue, it cannot be separated from HRM. Here lies an
opportunity for KM to assist and compliment existing HRM practices and provide a
framework where it may be possible to quantify how people’s intellect and knowledge is best
developed and leveraged to the benefit of the organisation.

Egbu (2001) and Olomolaiye and Egbu (2004) have placed great emphasis on pursuing this
stream of research. Potential research in this realm includes the re-evaluation of HRM as a
more active and strategic enabler of building organisational competencies, of developing
reward systems to more effectively facilitate knowledge exchange and embedding knowledge
and competence within organisations provides fertile ground for KM research. While HRM
has a wide scope of literature relating to KM, much of this has been adequately discussed in
this chapter relating to the establishment of a supportive management environment for
knowledge generation and transfer. Lessons learned from project histories and ongoing
knowledge capture for example, can be re-used as training and development and simulation
exercises.

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2.12 Link between KM, Organisational Learning and Innovation

Based on the literature discussed and review in this chapter, a conceptual model is proposed
in Figure 2.27 that interlinks KM, organisational learning and innovation.

KM Learning
Organisation
Organisation

Innovation
Figure 2.27: Link b/w KM, Learning Organization and Innovation

It has been discussed in section 2.9 that KM initiative will cause people in the organisations
and hence organisation as a whole to learn as it carries out its processes of capturing, sharing,
transferring of knowledge. This continuous cycle of learning will help achieve the
organisations a vision of being considered as a “Learning Organisation’ where only change is
constant. Such an organization will be continually challenging their output and outcomes
resulting in continual change and innovation. Hence innovation is linked to the output of a
learning organisation. This can help such organisations to improve their capabilities and
successful maintain their competitive advantage.

This sets the basis for the defining a model show in Figure 2.27. This simple model provides a
conceptual foundation of this research and thesis. The next chapter actually details what
happens inside the organisation and how organisational learning is achieved through KM and
how innovation becomes the routine out put of the learning organisation.

2.13 Summary

This chapter confirms that the construction industry is a vital element of the economy and has
a significant impact on the efficiency and productivity of other industries. Construction
industry innovation aims to increase productivity and improve project delivery outcomes. The
construction industry by its very nature has a highly complex structure and is often termed as
being old fashioned or traditional. The culture of the industry tends to resists new innovations
unless they are tested and trialled in other industries and proved to be successful. There is a
growing interest in KM in the construction industry due to its successful application in

87
pharmaceutical, electronics and manufacturing projects. Construction organisations can
innovate, reduce project time, and improve quality and customer satisfaction through effective
KM. Successful KM initiatives establish a knowledge-sharing environment /culture and
provide effective leadership to overcome any learning barriers. Thus it was important to
explain the meaning of KM and how organisations can consider knowledge as a resource and
a valuable intangible asset providing the means to improve business performance and
customer satisfaction.

Knowledge is a complex, messy and problematic concept to understand. A typology of

knowledge either being ‘tacit’ or ‘explicit’ is generally considered a useful starting point. The
exchange of knowledge from tacit to explicit from individuals to groups and entire
organizations forms a large part of the body of current KM research. Therefore, it is vital to
understanding this knowledge conversion process its pivotal role in producing innovation.
Limitations to knowledge transfer must also be understood and so this chapter noted a main
knowledge characteristic recognized in the literature, ‘stickiness’. Knowledge stickiness poses
considerable problems for organisations wishing to maximise the conversion of tacit
knowledge in people’s heads into explicit knowledge that has been codified and
organizationally embedded. To make this process effective and achievable, various types of
knowledge transfers were discussed in the chapter—serial, near, far, strategic, and expert.
However, tacit knowledge can be misleading and this perspective is poorly understood and
considered in the literature. This chapter provides a section on this issue, considering it as
hidden or ‘dark’ side of tacit knowledge. Factors that eventually govern human decision-
making that influence tacit knowledge construction, use and reuse were discussed from a
cognitive and psychological perspective. These include: perceptions and recognition;
cognitive styles; biases and heuristics in judgment; functional fixedness and mental set;
mental models; and variations in learning styles. These factors are associated with gut feeling
and intuition. A vital KM implication of this is that to ensure that tacit knowledge is bias free
and effective, the context in which the knowledge gets constructed in the human mind should
also be captured and this capturing should be done as soon as possible.

The chapter mapped three KM dimensions to help us better understand the essence of KM:
Categorical Dimensions; IC Dimension; and Socially Constructed Dimension. Categorical
Dimension considers knowledge as an entity that can be categorized and is usually criticised
for being so linear and mechanistic. IC Dimension views KM as something related to the
management of IC that comprises of human capital and structure capital (customer capital and

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organisation capital). The third dimension Socially Constructed Dimension is usually
considered more probably a true representation of what KM is and should be. This dimension
identify that KM is a social issue and knowledge construction and transfer is more effective
through building social network ties, and COPs. This inturn provide a mechanism for the
development of ‘Social Capital’ that could eventually be converted into ‘IC’. Issues of ‘Trust’
and ‘Commitment’ are central to this dimension. Thus the intangible value of KM was
established.

While this chapter established the potential value of KM it noted that KM practice has
resulted in numerous failures. KM took off in 80s as a technological initiative with a view of
transferring knowledge of humans to machines. Consistent failure of such initiatives forced
KM researchers view the philosophy through a different lens and learn from experience of
failed initiatives. This produced a total shift in current KM research to now being considered
as much as 90% human activities and only 10% technology. The human factor is now
becoming dominant and with it issues such as culture, leadership, rewards systems and
change management programs becoming the major part of any KM initiative. So it was
important to stress the limitations of a technology-centric view of KM.

The major thrust of this thesis is that organisational learning and KM are linked. The
underlying philosophies of both streams of research are in agreement with each other. Both
strive to reduce mistakes and learn from the past, both focuses on organisational factors to
deliver the best outcome. It has been argued in this chapter that KM initiatives can cause
organisations to learn and eventually help to achieve their vision and status as being a
“Learning Organisation”. KM has a strong and definitive role to play, especially in the
project based construction industry where project based learning poses big problems. This
may be achieved through one such integrated KM initiative—by efficiently capturing
knowledge from past projects, developing project repositories and establishing a culture of
knowledge sharing.

KM also supports the innovation stream of research in many different ways. Innovation may
occur whenever tacit knowledge is converted into explicit knowledge resulting in process or
product improvement. A further essential KM initiative discussed in this chapter involves
adoption of innovation and its diffusion within an organisation. KM provides a solid platform
for this sort of activities because sound KM initiatives rely upon establishing a basic
atmosphere of collaboration, trust and sharing within the organisation. Hence KM has a role

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to play in deciding what sort of innovation is to be adopted and then diffusing it with in the
organisation to produce productive innovation.

Two emerging directions of KM research were also identified where KM has a strong role to
play. First, this chapter highlighted how the philosophy of SCM and KM is enmeshed through
fundamental factors of ‘trust’ and ‘commitment’. The argument advanced is that both
information and knowledge move upstream and downstream in the supply chain. A second
direction of KM research is linked to HRM and how HRM practices can be re-evaluated. Two
specific aspects were highlighted in this chapter: first, to provide a more active and strategic
enabler of building organisational competencies; and second, to develop reward systems to
more effectively facilitate knowledge exchange and embedding knowledge and competence
within organisations.

Finally, this chapter demonstrated the link between KM, organisational learning and
innovation. This forms the basis for discussing the conceptual model developed in the next
chapter to explain how KM initiatives may trigger innovation.

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 Chapter 3
Research Method and Design

The aim of this chapter is to describe the research method and design that is used in executing
this research project. The chapter starts by explaining the philosophy of the research and then
provides an understanding of the two competing research paradigms i.-e. Positivism and
Social Constructivism. This is followed by a discussion on research approaches and strategies
in these two paradigms. A case for adopting interpretative paradigm for this research is then
made through reasoning that dominant positivistic paradigm of research in the construction
industry is still yet to produce any noticeable changes in the construction industry and its
culture, it is therefore becoming incumbent to use an alternative paradigm of research. The
argument is supported by Seymour and Rooke (1995) paper on the culture of the research and
the culture of the industry. The next sections provide the understanding and the working
details of the two qualitative research methodologies chosen for this research (the Grounded
Theory Methodology and Soft Systems Methodology (SSM)). The last section describes the
Research Design for this research which is divided into two phases with grounded theory
employment constituting the phase 1 of the research and SSM utilisation forms the phase 2 of
the research.

3.1 Understanding the Philosophy of Research

Fellows and Liu (2003, p4) describe research as a careful search and investigation and term it
as a ‘voyage of discovery’. The purpose of research is to contribute to the existing body of
knowledge and to facilitate the learning process. It is an organised, data-based, critical
investigation into a specific problem (Sekaran 2000).

Research is always based on assumptions that are philosophically grounded and relate to a
researcher’s view or perception of ‘reality’. The aim of research is to discover truth and
construct reality. Two terms ‘ontology’ and ‘epistemology’ are extensively used in research to
describe the nature and characteristics of philosophical assumptions. Ontology is the science
of being and existence (Easterby-Smith et al. 2002). It is the way researchers perceive and
understand the nature of ‘real world’. This could be from the perspective of an individual, an
organisation or an industry. Epistemology is the theory of knowledge and a critical
examination of assumptions of what is valid and what is the scope of that validity (Easterby-

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Smith et al. 2002; Holden 2002). Research undertaken in the natural science context has a
different perspective and position on the nature of research philosophy from that of the social
science context. These different perspectives have given rise to two different streams of
research with different notions, priorities and modus-operandi- the ‘positivism’ and ‘social
constructivism’. These are discussed in the next section.

3.2 Positivism and Social Constructivism Paradigms

A paradigm is a theoretical framework which includes a system by which people view events
(Fellows and Liu 2003). It provides an approach to questioning and discovery. In the domain
of the research, ‘positivism’ and ‘social constructivism’ can be safely termed as paradigms.
The research methods literature also provides different labels to these paradigms. Rationalist,
Normative and Quantitative terms are often used to describe the ‘Positivism Paradigm’ and
the Social Constructivism paradigm is often termed as being Interpretivism and Qualitative
paradigms.

The Positivism Paradigm’s main principle is separation of the researcher (subject) and the
research object. This strict separation is intended as necessary to get impartial results.
Positivists believe that the world is concrete and external. Therefore, exploration can only be
based upon observed and captured facts using direct data or information (Easterby-Smith et
al. 2002). Any subjective influence exerted by the researcher is regarded as a disturbance that
must be minimized through standardization of the elicitation process. The premise of this
separation is that it facilitates coherence of the research process through hypotheses testing.
Hypotheses are the means of connecting two disjunct parts of the research process and the
research activity involves attempting to refute them (Fensel 1991).

The main underlying theme of the ‘Social constructionist’ Paradigm is that the world is not
objective and exterior and the real world is determined by people rather than by objective and
external observable facts (Easterby-Smith et al. 2002). Truth and reality are social constructs
rather than existing independently ‘out there’ (Fellows and Liu 2003). Miles and Huberman
(1994) while explaining the main purpose of ‘Social constructivist’ or the Interpretivism
paradigm, state that in this paradigm, the researcher’s primary role is to gain an holistic
overview of the context under study. The main task of this sort of research is to explicate the
ways people in particular settings come to understand account for, take action and otherwise
manage their day to day situations. Researchers belonging to this school of thought posit that

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human discourse and actions cannot be analysed using natural and physical science methods.
Human activity could be seen as “text”, as a collection of symbols expressing layers of
meaning. The unveiling of these layers to get a deep understanding of a certain process is the
objective of the Interpretative Paradigm. However, researchers are not detached from their
objects of study because they have their own understandings, convictions, and conceptual
orientations. They are affected by what they hear or what they observe in the field in
noticeable ways. An interview, which is common research instrument, does not simply
involve gathering information by one party. It is a “co-elaborated act” on part of both the
parties (Fensel 1991). Most analysis is done with words in this sort of research. Words can be
assembled, sub-clustered, or broken into semiotic segments and organized to permit
researchers to contrast, compare, analyse and bestow patterns upon them (Patton 1990). In
contrast to normative methods (that requires a representative sample to verify the significance
of the hypothesis statistically) qualitative researchers don’t intend to explore representative
samples. Rather they claim that the human-related things they wish to explore are present in
one form or other in every individual (Fensel 1991).

There are many arguments among the followers of these paradigms. Rationalists claim that
there is no such thing as qualitative data. Everything is distinctively measurable, either 1 or 0,
black or white. Interpretive paradigm researchers counter this view by arguing that all data are
basically qualitative and so they attach meaning to raw experience, words or numbers (Miles
and Huberman 1994). The normative paradigm relies mostly on testing an hypothesis. Fensel
(1991) argues that no definitive answer is given when confirming hypotheses and that theory
is built from refuting the negative or alternative hypothesis—thus limiting conditions that
constrain the hypothesis. Such arguments and counter arguments between researchers
supporting these paradigms are quite common and have been continuing for a long time. The
purpose of these arguments is to justify dominance of one paradigm over another in a struggle
for supremacy of ‘strong’ or well-supported theories over weakly supported ones. To resolve
the issue, Patton (1990) proposes two paradigms may become integrated through an approach
of ‘Triangulation’. This is to ensure that a certain paradigm is being used for the purpose it is
best suited to. Most often qualitative research is exploratory and comes up with various
deeper and often unexpected insights. This may help in the development and refinement of a
hypothesis that can be verified by a positivist approach to develop its significance or cause
effect relationship (Miles and Huberman 1994).

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3.3 Research Approach and Strategies

A general model of the research process for basic and applied research with positivistic
influence is provided by Sekaran (2000) as shown in Figure 3.1. This is represented as an
eight-stage process that is iterative in nature. The model is based upon the hypothetico-
deductive mode of research, which depends upon the development of hypotheses for testing
(Stage 5). If the subsequent investigation and analysis substantiates all the hypotheses, then
the research questions will be fully answered. If the hypotheses are not fully substantiated, the
further studies can be undertaken to investigate the reasons.

Data

Figure 3.1: The research process for basic and applied research in Positivism paradigm
(Adapted from Sekaran, (2000, p54) and Finegan (2001))

Various research approaches or strategies that are more commonly used in Positivistic
Paradigm are shown in Table 3.1 as follows:

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Table 3.1 Various research approaches and strategies (Adapted from Galliers (1992, p144-
59) and Yin (1994, p3-9))

Research Approach Research Key Features

Questions
1. Laboratory How, why Identification of the precise relationships between chosen
Experiments variables in a designed laboratory situation. Uses quantitative
analysis and allows intensive study of a small number of variables.

2. Field Experiments How, why Extension of laboratory experiments into real-life situations.
However, it is often difficult to find organisations prepared to be
experimented upon.

3. Archival Analysis Who, what, Based upon the quantitative and qualitative analysis of archival
where, how records to describe the incidence or prevalence of a phenomenon,
many / or to be predictive about certain outcomes.
much

4. Forecasting Future What, how Providing insights into likely future events or impacts, these
Research much studies use techniques that include regression analysis, time series
analysis, or the delphi method and change analysis. They attempt
to deal with the impact of change, but must deal with complexity
and changing relationships between variables under study.

5. Simulation, game/role What, how Used to study situations that are otherwise difficult to analyse by
playing simulating the behaviour of the system by the generation or
introduction of random variables.

6. Surveys Who, what, Questionnaires, interviews and observation are used to obtain data
where, how on the practices, situations or views of a sample of a particular
many, how population. Surveys allow large numbers of variables to be
much analysed quantitatively, but do not provide insight into underlying
causes.

The social constructivism or interpretive approach is inductive, and is not consistent with
hypothesis development, testing and deductive reasoning. The theory building is at the heart
of the process as shown in Figure 3.2.

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 Figure 3.2: The research process-interpretive approach
(Adapted from Sekaran (2000, p54) and Galliers (1992, p61) and Finegan (2001))

Various approaches or strategies that usually fall in this interpretive paradigm are collated
below in Table 3.2.

Table 3.2: Various approaches in Interpretive Paradigm (Adapted from Galliers (1992,
p144-59) and Yin (1994, p3-9))

Research Approach Research Key Features

Questions
Case Study How, why Case studies can either be explanatory, exploratory, or descriptive, in
all cases focusing on contemporary phenomenon in real-life settings.
They allow the capture and analysis of many variables, but are
generally restricted to a defined event or organisation, making
generalisation difficult.

Archival Analysis Who, what, Based upon the quantitative and qualitative analysis of archival
where, how records to describe the incidence or prevalence of a phenomenon, or
many / much to be predictive about certain outcomes.

History How, why Explanatory studies that deal with operational links over time.

Subjective What A creative, free-flowing, unstructured approach to theory building

Argumentative that is based upon opinion and speculation. A subjective approach
that places considerable emphasis upon the perspective of the
researcher, its objective is the creation of new ideas and insights

Action Research What to do, This is applied research where there is an attempt to obtain results
how, why and benefits of practical value to groups with whom the researcher is
allied, while at the same time maintaining a holistic perspective and
adding to theoretical knowledge. The underlying philosophy is that
the presence of the researcher will change the situation under
investigation.

Grounded Theory What A structured approach to forming and eliciting theory grounded in
data.

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 Descriptive, What, how, Based upon the philosophy that phenomena are the essence of
Interpretive why experience, this form of research seeks to represent reality using an
in-depth self-validating process in which presuppositions are
continually questioned, and the understanding of the phenomena
under study is refined. The approach allows the development of
cumulative knowledge by incorporating the thorough review of the
literature and past research as well as the current investigation. This
encourages additional insight, and well as ensuring that subsequent
research builds on past endeavours.

Patton (1990) and Miles and Huberman (1994) provide another classification of qualitative
research approaches based on what is the purpose of the study. These are show in Table 3.3.

Table 3.3: Classification based on the purpose of the study (Source: Patton (1990) and Miles
and Huberman (1994))
Ethnography deals with the culture of a group of people
Phenomenology deals with what is the structure and essence of experience of this
phenomenon for these people
Heuristics deals with what is my experience of this phenomenon and the essential
experience of, to others who also experience this phenomenon intensely
Ethnomethodology deals with how people make sense of their everyday activities so as to
behave in socially acceptable ways
Symbolic Interactionism deals with what common set of symbols and understandings have emerged
to give meaning to people’s interactions.
Ecological psychology deals with how do individuals attempt to accomplish their goals through
specific behaviours in specific environments
Systems theory deals with how and why does this system function as a whole?
Chaos theory deals with what is the underlying order, if any, of disorderly phenomenon
Hermeneutics deals with what are conditions under which a human act took place or a
product was produced that makes it possible to interpret its meaning.

It is possible to combine the research approaches mentioned in Table 3.2 and Table 3.3. For
example, it is possible to conduct a case study approach to study the culture of some group of
people or culture of the organisation which is referred to as ‘ethnography’. The grounded
theory approach can be combined with ‘Ethnomethodology’ to form a theory that would
explain how people make sense of their everyday activities so as to behave in socially
acceptable ways.

3.4 Culture of the Construction Industry and Culture of the Research

Construction research witnessed a heated debate about a decade ago covered by Construction
Management and Economics Journal in 1995 and Journal of Construction Procurement in
1997. This started with a landmark paper by Seymour and Rook titled as ‘Culture of the
Industry and Culture of the Research’ in 1995.

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Seymour and Rooke (1995) argue that the rationalist approach is dominant in the industry and
a lot of research in this normative paradigm has been conducted but noticeable improvement
has not been felt yet. Seymour and Rooke (1995) also attribute this to the culture of the
industry consisting of various participants collaborating in different capacities to overcome
the fragmented nature of the industry. This leads them to explore and understand human
related factors involved in better collaboration and improvement of the project delivery
process and to also develop an understanding of various phenomena (such as when some
things that are expected to work do not). Quantitative research offers procedures and
mechanisms in the form of models, tools and techniques to improve predictability and
analytical process improvement but why any construction project procedure is not applicable
or not able to produce promised benefits can only be explored by ‘understanding’ the
phenomenon following an ‘interpretative approach’. Seymour and Rooke (1995) state that ‘‘If
the researchers have to play a role in changing the culture of industry, then the culture of
research must change also”. Ofori (1993) endorses this idea by arguing that key research
approach changes are necessary for bridging the gap between research and practice.

Harriss (1998) counter argues that adopting the interpretative paradigm approach may involve
rejecting theory and generalization. However, one can argue that the nature of the
construction industry (with huge variability and diversity) doesn’t demand generalisation and
a ‘one size fits all’ approach. This suggests that there is a need to seek different explanations
for each individual organisation depending on its position in the supply chain and role in the
industry. Perhaps a good approach is to aim for generating best practice as it emerges out of
‘best in class’ organisations and leave other organisations in the industry to follow this
practice after modifying it according to their own circumstances.

From the research point of view, Wing et al.(1998) provide a balanced argument by stating
that whatever choice of approach is adopted, it is important that the problem and associated
key concepts are clearly defined and that the methods used, underlying assumptions and
limitations are transparent and defensible. This points out to the fact that the problem should
be appropriately identified to select the corresponding paradigm for its solution.

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3.5 Selecting the Interpretive Paradigm for this study

The discussion and research direction provided by Seymour and Rooke (1995) becomes the
principal basis for this research. The objectives of the study are consistent with the
approaches expressed in Table 3.2 & 3.3 and position this research firmly in the Interpretive
Paradigm. This research has not aimed for generalization at this point in time, as ICT
innovation and KM initiative is not being under taken industry-wide. Instead of embarking
upon the quantitative investigations of factors (or success factors) and determinants for the
whole industry through a quantitative analysis (using predominantly survey techniques), it is
considered more prudent to focus on the best-in-class organisations (obviously less in
number) that are undertaking these initiatives and carry out in-depth exploration with an aim
of generating best practice for other organisations in the construction industry to follow.

The problem of low response rate in returning questionnaires (a popular means of conducting
quantitative research) in the construction industry is becoming of real concern to construction
researchers. Liu and Fellows (2003) note that most postal questionnaires yield a low response
rate of 25-35% and with this rate it is not always possible to test hypotheses statistically or
provide conclusive results. This deficiency in quantitative research also reduces enthusiasm in
carrying out research with positivistic undertones and reinforces the decision of undertaking
an interpretative research approach.

Creswell (1994) identifies a qualitative approach to research as the most appropriate when the
objective of the research is to develop new theory, technique or process. The aim of the
research reported upon in this PhD study is to investigate the role of KM in enhancing
learning and innovation. This research objective makes this research predominantly
‘demonstrative’, where demonstrating that KM produces learning and innovation is the
primary objective. Action research then becomes the most appropriate choice in this scenario.
The first step in this study is to map the present circumstances of the organisation. Grounded
theory provides an efficient means of generating theory (grounded in data) eliciting the
present situation as it occurs ‘out there’ in reality. For this reason grounded theory becomes
the natural choice as a means of carrying out the research. As a next step, a stimulus (or
intervention) needs to be employed in line with the action research philosophy to improve the
present situations. This research has made the case that a KM initiative or tool, if effectively
employed can act as such a stimulus and would cause this improvement. The Soft Systems
Methodology (SSM) is chosen for this purpose as it exhibits all the qualities and

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characteristics that one may expect from a KM tool as detailed later in this section. SSM
encompasses a dual nature, it facilitates a KM activity as perceived, plus it carries out a
research process to satisfy the research thesis by acting as meta-action research technique.

Another factor providing impetus to selecting grounded theory approach and SSM is that both
of these have a history of successful and meaningful use of more than 30 years in other fields
of research even though construction industry researchers have rarely explored this approach.
These research methods, however, specifically suit the purpose of this research and their
employment also contributes towards body of knowledge related to their use and significance
in the construction context. The next section provides a basic understanding of grounded
theory and SSM.

3.6 Understanding Grounded Theory

The grounded theory approach was first presented by two sociologists, Barney G. Glaser and
Anslem L. Strauss in 1967 when they were researching in the field of ‘nursing’ (Glaser and
Strauss 1967). Later on, the founders of this approach worked independently to form two
different approaches which are termed as the Straussian Approach and the Glaserian
Approach (Hunter et al. 2005). The Glaserian approach is detailed in Glaser and Strauss
(1967), Glaser (1978) and Glaser (1992) where as the Straussian approach can be found in
Strauss (1987) and, Strauss and Corbin (1990). Both approaches advocate that theory derived
should be grounded in data. Instead of trying to deliberately finding out something, the theory
should just emerge by itself from the data.

The debate over various differences among these approaches has become a part of the
literature. It is therefore necessary for any one aiming to use grounded theory to first
understand the two approaches and then clearly state what approach they want to adopt.
Differences lie in the process of theory generation with different emphasis on induction,
deduction and verification, the form the theory should take, and use of the literature (Heath
and Cowley 2004; Hunter et al. 2005). Glaser (1992) is cited by Heath and Cowley (2004) as
considering Straussian approach as being no longer grounded theory but ‘full conceptual
description’.

Heath and Cowley (2004) illustrate the differences between two approaches in Figure 3.3 &
3.4. Induction is a key process in Glaserian Approach, with a researcher moving from the data

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to empirical generalisation and on to theory. Glaser considers deduction and verification as
the servants of the emergence (Glaser and Strauss 1967). However, the Straussian Approach
claims that in the original development of grounded theory, inductive aspects were overplayed
(Strauss and Corbin 1990) and deduction and verifications must be made before a new data
set is considered. Glaser (1992) has criticised the Straussian approach because the deductive
emphasises asking various questions and speculations about what might be rather than what
exists in the data (Heath and Cowley 2004). Another difference is that Glaser has argued
against hypothesising while Straussian approach considers it acceptable to form the
hypothesis before the start of the research. This leads to the debate on position of the
‘literature’ in the grounded theory. Glaser and Strauss both acknowledged that the researcher
cannot enter the field free from ideas but differs considerably the role they see for the
literature (Heath and Cowley 2004).

Data
Data
Data Data

Induction

emerging questions and patterns

deduction/verification deduction/verification
deduction/verification deduction/verification

Data
Data
Data Data

Figure 3.3: Glaser (1978, 1992) place of induction, deduction and verification in grounded
theory analysis (Source: Heath and Cowley (2004))
Data Data Data Data

Deduction Deduction Deduction Deduction

Theory
Paradigm Model

Verification Verification Verification Verification

Induction

Figure 3.4: Strauss (1987), Strauss and Corbin (1990) place of induction, deduction and
verification in grounded theory analysis.

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Glaser (1978) and Locke (2001) argue that a researcher should approach the research problem
with minimal or almost no prior models or constructs in mind. The literature should be
considered and incorporated only when it becomes relevant to the course of the research as it
unfolds. If there is a prior understanding, it should only be based on the general problem area.
More focussed reading should be done when theory is sufficiently developed (Heath and
Cowley 2004). At that stage the literature can also be used as additional data (Dick 2005).
Glaser’s belief is to use the literature to gain an overall picture of the research problem and to
subsequently confirm any developed theory (Hunter et al. 2005). Strauss (1987) strikes a
different note by mentioning that both past experiences and understandings may be used to
stimulate theoretical sensitively and generate hypotheses and a research question can be
established to identify the phenomenon to be studied and what is known about the subject
(Heath and Cowley 2004; Hunter et al. 2005).

Locke (2001) notes that grounded theory has undergone adaptations, one being to approach
the problem with existing theory in mind to narrow and direct the analysis. This adaptation
occurs because researchers using a grounded theory methodology encountered an enormous
amount of data that was very hard to sift through and make any sense of without due reference
to the literature. Locke (2001) quoted the research of Harris and Sutton (1986) and Eisenhardt
and Bourgeois (1988) who started their research activity with several different constructs in
minds that emerged from the literature. Martin and Turner (1986) also indicated that
“Preconceptions” cannot be totally abandoned, and they stressed the need to approach the data
with a fair mind rather than locked into data in already established categories.

The distinctive differences between the two approaches present an extremely intellectual
challenge for the researcher while selecting a research approach. Hunter et al, (2005) while
acknowledging this complexity state that grounded theory is very diverse in its application
and can be modified and applied to suit the nature of the research problem and the particular
style of the investigator. On a similar note, Heath and Cowley (2004) quote Glaser (1998)
who suggests that researchers should stop talking about grounded theory and get on doing
with it. Qualitative analysis is a cognitive process and each individual has a different
cognitive style and this in turn profoundly effects how the research is carried out (Heath and
Cowley 2004).

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3.6.1 Selecting Grounded Theory Approach for This Research

The doctoral research program reported upon in this thesis emanated from a research project
with varying objectives. The researcher entered the project stage with his aim of carrying out
a doctoral study while data collection was already proceeding on a related research project
(CRC CI funded research project on improving KM and ICT diffusion). Having been familiar
with the CRC CI project’s area of research and with the basic objectives of that research in
mind, this researcher embarked on a data collection procedure that linked into that CRC CI
research project. In this way, this PhD research project’s data collection stage was
synchronised with the CRC CI research project to deliver synergy between the two research
projects. At the first phase of the doctoral research, the aim was to understand the present
circumstances regarding the use of an innovation (i.e. ICT) in two partner organizations that
are leading best- in-class Australian Construction Contractors companies. The second aim
was to demonstrate the use of KM in establishing a path from a present position to an
improved position. Hence, the Glaserian approach became the preferred choice for this
research for the first phase of the research as this approach advocates minimum reading of the
literature. The researcher then read the literature only as theory emerged and the literature was
helpful in making sense of what was being observed to generate theory.

Two key literature resources Locke (2001) and Dick (2005) were used to guide the adopted
research approach along with the original monograph of Glaser and Strauss (1967). Locke
(2001) summarises the main steps involved in grounded theory as follows:

1. Comparing incidents applicable to each category

2. Integrating categories and their properties
3. Delimiting the theory
4. Writing the Theory

In Step 1, the aim of the researcher is to assign a common meaning to multiple data
observations. Data incidents that have been collected from observations, interviews and/or
archival material for this purpose, are analysed and categorised with a view to understanding a
particular substantiative problem. Naming, Comparing and Memoing are research activities
that take place in this step. Through Naming researchers attempt to conceptualize and develop
abstract meaning from the observations or incidents in their data sets. Comparing, as Locke
(2001) observes, occurs in ‘tandem’ with naming and aids the act of creating conceptual

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categories in two ways; firstly by helping to develop a common name of category for multiple
observations or incidents in the data set and secondly by supporting the act of naming
conceptual categories by helping researchers to sharpen and clarify what is in the data.
Memoing is an act of writing field notes on an idea that has come in the mind of the
researcher while he is engaged in the process of data collection. This helps researcher efforts
to name what is expressed in the data incidents, helping to articulate and draft conceptual
categories.

In Step 2, that Locke (2001) considers a second form of analytic activity; the researcher shifts
attention and aims to fully develop and provide an organisation framework for the drafted
conceptual categories. This is done in order to arrange the categories so that they begin to add
up to a conceptual ‘whole’ and be turned into a complete picture so that a theoretical
framework emerges. Various earlier forms of conceptual elements are compared in order to
clarify the relationships between the categories and their properties.

Step 3 involves ‘delimiting the theory’ and entails bringing the analysis elements together
with the aim to settle on the theoretical component frameworks and to clarify the story that
this framework is telling about the phenomenon or social situation under study. The
‘Theoretical Saturation’ is achieved in this step when a state occurs where any subsequent
data incidents do not provide any significant new information to inform the emerging theory.

Step 4 is aimed at writing a theory by collating all the categories that have been formed with
the conceptual framework (or model) to explain and facilitate readers’ understanding of the
studied phenomenon.

Dick (1995) described a very useful framework, as illustrated in Figure 3.5, for gathering the
data while conducting the grounded theory mode of research that was adopted for data
collection in this PhD research.

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 Data Set 1

Overlap

Data Set 1

Agreement Disagreement

This generates

Seeks exceptions Seeks explanations

Better Understanding

Better Action

Figure 3.5: Underpinning framework of Grounded theory used in this research

(Adapted from: Dick (2005))

3.7 Understanding Soft Systems Methodology (SSM)

Action Research is considered as being research carried out with a view to improve a certain
situation or process by a team of professional action researchers and the members of
organisation or community seeking that improvement (Greenwood and Levin 1998). Action
research is building/testing theory within the context of solving an immediate practical
problem in a real setting. It thus combines theory and practice, researchers and practitioners,
and intervention and reflection. Collaboration with practitioners and their learning is vital.
Both, the researcher and the practitioner emerge with enhanced learning.

It is possible to conduct action research from a systems perspective—considering a situation

or process as a system that provides some form of transformation. By taking this perspective
it becomes possible to incorporate all possible influencing variables and conditions that may
have an effect in one way or other on the situation under study.

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The traditional systems approach to problem solving is generally based on a reductionism
technique in which problems are solved through fragmentation—one stage at a time. This
technique is appropriate in complex and highly structured situations that can be well defined,
particularly in terms of inputs and outputs. However, complex and poorly defined systems
often conceal interesting hidden sub-text issues that are difficult to readily unearth.
Understanding these contextual issues requires a pathway by which a joint exercise of
sensemaking is embarked upon to fully understand the situation, environment and dynamics.
The term ‘wicked problems’ is generally used to describe complex and poorly structured
systems. The concept of wicked problems originated in the work of Rittel and Webber (1984)
that examined societal problems that planners face. Becker (2002) defines problems as being
wicked in the sense that they are very difficult to solve. Wicked problems typically have a
dense web of inter-related factors, making it very difficult to understand how one decision
will impact decisions in other areas. This class of problem often exists in dynamic and
uncertain environments that generate significant risk. Furthermore, Becker (2002) observes
that conflict arises from wicked problems where there are competing claims, especially where
‘good outcomes’ are traded off against ‘bad outcomes’ within the same value system. Figure
3.6 provides an overview of the nature of wicked problems.
Requires No clear
complex stopping
judgment rules
Stakeholders
cannot agree

No right or
wrong solutions

Only better or
worse solutions No objective
measures of success

Strong moral,
political or Alternatives must
professional dimension be discovered

Figure 3.6: The Nature of Wicked Problems

(Adapted from Rittel and Webber (1984) and Maqsood et al. (2003b))

Wicked problems can take many forms and exist in a wide variety of settings. Gustafsson
(2002) describes the design and management of the physical setting for organisational change
as a complex process that is a wicked problem. Similarly, Savage et al. (1991) give as an
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example the challenge of establishing a socially responsible and effective organisation within
a turbulent global economy. Lang (2001b) states that knowledge work deals with wicked
problems, especially where the ‘problem space’ is continually changing and complex
judgments are required. Other wicked problems are the typical challenges commonly faced in
software design, government and social policy formulation, and strategic planning in
organisations (Buckingham Shum 1997). Furthermore, the presence of multiple stakeholders
complicates situations and exacerbates the wicked problems. The response to wicked
problems, suggested by Gustafsson (2002) is to adopt a holist open systems approach that
recognises that all the parts are inter-related and can affect each other. Lang (2001a)
recommends that wicked problems should be addressed through a process of discussion,
debate and deliberation among team members, leading to compromise and the reconciliation
of different viewpoints and perspectives. Bryson et al. (2002) recommend that stakeholder
analysis is particularly useful for turning wicked problems into problems that can be solved,
and are worth considering.

Barry and Fourie McIntosh (2001) recommend that Soft Systems Methodology (SSM), which
incorporates systems thinking and systems concepts, is an approach that provides the
opportunity for incremental improvement that is needed to address wicked problems. In
particular, SSM offers a framework to involve all the stakeholders in a continual learning
cycle. It offers an empirically based theoretical foundation for thinking about, analysing, and
responding to wicked problems.

Soft systems thinking seeks to explore the ‘wicked’ and ‘messy’ problematic situations that
arise in human activity. However, rather than reducing the complexity of the ‘mess’ so that it
can be modelled mathematically (hard systems), soft systems strive to learn from different
perceptions that exist in the minds of different people involved in the situation (Andrews
2000). This interpretive approach is strongly influenced by Vickers’ (1968 ,p59,176)
description of the importance of appreciative systems in dealing with human complexity.
Checkland (1999) and Checkland and Scholes (1990) have attempted to transform these ideas
from systems theory into a practical methodology that is called Soft Systems Methodology
(SSM). Checkland’s premise is that systems analysts need to apply their craft to problems of
complexity that are not well defined, and that SSM attempts to understand the wicked and
fuzzy world of complex organisations. This is achieved with the core paradigm of learning
(Checkland 1999, p258).

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Soft Systems Methodology (SSM) may be used to analyse any problem or situation, but it is
most appropriate where the problem “cannot be formulated as a search for an efficient means
of achieving a defined end; a problem in which ends, goals, purposes are themselves
problematic” (Checkland 1999, p316) Soft Systems Methodology, in its idealised form, is
described as a logical sequence of seven steps (Checkland 1999 ,p162-183). These are
illustrated in Figure 3.7.

It is most important to note that the sequence is not imposed upon the practitioner; a study can
commence at any stage, with iteration and backtracking as essential components. SSM
encourages investigators to view organisations from a cultural perspective. Therefore the
component parts that are human beings determine the essential characteristics of
organisations. These “people-components” can attribute meaning to their situation and define
their own purpose for the organisation.

1. The problem situation

7. Action to improve the
in its unstructured form
 start again? problem situation.

Real World – the 6. Identification of the

“wicked feasible, desirable changes
problem”.

5. Comparison of models (4.)

2. The problem situation with the real world (1. & 2.)
expressed as a rich picture

Systems
3. Root definitions of relevant,
purposeful activity systems.
4. Conceptual models of Thinking about
the systems named in
the root definition the Real World

Figure 3.7: Summary of SSM as a seven-stage process

(Adapted from Checkland (1999, p163) and Checkland & Scholes (1990, p28))

In Stage 1 the situation or problem is identified in an unstructured form as a problematic

situation. In Stage 2 the problem is expressed where knowledge must be unearthed. In SSM
the usual techniques used to interview as many participants in the situation as is practicable
who can explicate their tacit knowledge about the situation. This is made explicit through rich
pictures. These are interesting and at first sight deceivingly child-like because of their

108
interpretation of a situation. This format however, conceals a sophisticated attempt to
inclusively garner impressions and interpretations of experiences, feelings, and manifestations
of driving and inhibiting forces that create the situation dynamic. These are the illustration of
stories that help in the sensemaking process (Weick 1995).

Rich picture represents a connective human communication channel that expresses the
situation through an elicitation process from interviews and possible surveys where
respondents are encouraged to express their unease in graphic means. The idea is to unearth
sub-textual information and knowledge rather than to stick to factual or ‘hard’ data because
those interviewed generally have valid tacit knowledge to offer that is difficult to explicate in
more conventional means. The underlying simplicity and human connection provides a
powerful voice in explaining the situation.

Stage 3 comprises the interpretation of the rich picture into a root definition to take the rich
picture and offer a more systemic and formulaic summary. A Root Definition is tested in
Stage 4 against a group of elements known by the mnemonic CATWOE that defines a
checklist for:
• Customer (beneficiary or victims of the situation),
• Actors (those directly affecting the situation),
• Transformation process (what is happening in terms of inputs being transformed into
outcomes in this situation),
• Weltanschauung (worldview of participants – the underlying narrative that addresses
the question “why bother with this situation of endeavour?”),
• Owner (the entity most affected by the particular situation), and
• Environment (what lies outside the situation).

The Root Definition is the chosen system expressed in statements, which incorporate the
points of view that make the activities and performance of the systems meaningful, so the
CATWOE provides the analyst with a framework for ensuring that all points of view and
interest are considered in the knowledge elicitation process. It should be a concise description
of a human activity system that captures a particular view of it as a transformation process
Stage 4 involves developing an account of what must be done to achieve the transformation
described in the Root Definition. This is generally illustrated as an activity model and uses
whatever techniques may be available. ‘Hard’ system tools may include flow charts,
simulations, animation, and statistical or mathematical models. Stage 5 can reveal many

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interesting questions to be addressed, assumptions to be re-visited and dysfunctional
behaviours/actions to be remedied by comparing what is perceived to be the way things
happen including subtext and the full picture with the conceptual model. This stage provides
the reality check for Stage 4 and challenges owners of the situation, to rethink and re-analyse
underlying assumptions to reach a more creative and fulfilling outcome.

Stage 6 involves formulating specific recommendations and implementation plans. This may
trigger organisational structural changes, procedures changes and/or organisational culture
change. Action is taken in Stage 7 to make changes and/or restart the process using feedback
loops to test and monitor changes. SSM is both a reflective learning process and an action
learning approach to problem resolution (Schön 1983; Argyris and Schön 1996).

Studies in knowledge elicitation have focussed upon the need to use systemic and
psychological foundations to develop models of human knowledge representation, acquisition
and processing (Gaines and Shaw 1984, 1985; Shaw 1985; Shaw and Gaines 1986; 1999) .
This research supports the argument offered by Checkland (1999) that the standard formal
logic of the accepted reductionist or mathematical systems theory may be inappropriate for
knowledge elicitation, and that SSM provides a more suitable theoretical framework. While
builders of expert systems in the late 1980s and early 1990s generally adopted prototyping as
the preferred model of system development, there was strong evidence of limited success in
adopting this approach because human factors and poorly defined complexity issues
confounded acceptable definition of how knowledge experts actually address problems
(Stowell and West 1989).

The principal failing of previous attempts to capture knowledge in expert systems (an early
manifestation of the study of KM) was the appreciation of context, the validity of a wide
range of perspectives of the described situation and the whole concept of reality as
independent truth. SSM addresses these problems through its inherent acceptance of multiple
realities experiences by different people with different worldviews and experiences that have
formed the lens in which they perceive any given situation. SSM is claimed to be a more
holistic and valid approach to viewing problematic situations that need addressing because it
has the potential to unearth causal issues through its rigorous pursuit of a range of views of
the situation.

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3.7.1 Use of SSM in the Construction Industry

Industries with entrenched traditional structures, including the building, construction and
engineering industries, are under particular pressure to review their working practices. In this
context, Elliman and Orange (2000) recommend SSM as an approach to facilitate effective
change and to improve work practice. In particular, SSM is able to stimulate debate and
capture the vision for the future of participants. They observe that a soft systems approach
allows the exploitation of individual and socially constructed group knowledge and
experience. Green (1999) also identifies wicked problems in the building and construction
industries and suggests that the potential of SSM lies in the early stages of a project to assist
stakeholders to achieve a common understanding of the problem situation. Cushman et al.
(2002, p3) observe that “Construction is ultimately a very complex, multi-disciplinary activity
and there is a need to integrate the kind of design and management processes in terms of skill
and the knowledge that people bring.” To achieve this, Cushman et al. (2002) have used
SSM’s rich pictures and root definitions to identify responsible actors, key transformations,
and the knowledge resources that are appropriate to the needs of a construction company.
Venters et al. (2002) further describes how SSM can be used to develop conceptual models
that identify patterns in knowledge activities. Such patterns can be used to provide a basis for
technical design and organisational and social intervention. SSM has been also usefully
employed in conducting value analysis exercises in the construction industry (Green 1996).

3.8 Research Design

The research was divided into two phases in line with the objectives of the study (see section
1.3) as shown in Figure 3.8. The first phase strove to understand the present circumstances of
the organisations in which they attempted to adopt and diffuse an innovation such as ICT
(specific knowledge chosen as an example in this research) and made use of knowledge that is
available within its boundaries or elsewhere. A grounded theory method of research was used
in this phase to elicit the theory and build a construct. This phase of the research is discussed
in detail in Chapter 4. An improvement in the scenario obtained through the construct was the
next objective of the research and hence Phase 2 of the research addressed this aspect and is
described in Chapter 5. In this phase SSM, was used as a KM tool for improving a process
recommended by the case study organisation which considered this process as complex and
extremely important. This allowed a particularly challenging process to be studied to propose
useful and vital improvements. The next step was to integrate and collate all the findings to
produce discussion and hence conclusion.

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 Phase 1

Identify Research Area

General Literature Review

Set
Objectives/Res
earch Questions

Generating Theory using Grounded Theory

Approach

Conduct Extensive/Critical Literature Review

Model Formulation

Phase II
Soft Systems Methodology

Selection of Organizational
Process (Pre-tendering)

Development of Case Studies (4)

Analysis & Integration of Case

Studies

Conclusions

Future Recommendations

Figure 3.8: Research methodology adopted for this research

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3.9 Research Participants

Research Participants are classified on the basis of the Phases. While using grounded theory
in Phase 1, the aim is to achieve the state of theoretical saturation after which no further data
adds any important information. It was ascertained by interviewing sixteen personnel from the
two leading Australian Construction Organisations (eight each). This study was carried out
from October 2002 to May 2003. As this doctoral study forms part of the research project,
most of the interviews in this phase was conducted by a team of three researchers, where one
took the notes and other two engaged the participants in the interview. Table 3.4 explains the
number of participants involved in each phase, their roles in the organisation and the number
of the interviews done.

Table 3.4: Number of the participants and their role along with the number of the interviews
conducted in Phase 1 (Grounded Theory)

Participants and their

No. of Organisations No of Interviews
No. of Participants role in the
Involved Conducted
Organisation
Senior managers (4)
16
Project Managers (4)
2 (8 from each 16
Site Engineers (4)
organisation)
Foremen (4)

In Phase 2, only one organisation was selected in order to demonstrate the use of SSM as a
KM tool on a specific chosen business process of the organisation. Eight participants were
involved in this phase and were interviewed several times depending upon the iterations of the
SSM. Details on these iterations are presented in chapter 5. This part of the study was carried
out from August 2003 to July 2005. In this phase a team of two researchers, one with
extensive experience in applying SSM, conducted interviews. Again, one researcher took
notes and the other engaged the participants in the interview. The number of participants
involved in each phase, their roles in the organisation and the number of the interviews done
are illustrated in Table 3.5

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Table 3.5: Number of the participants and their role along with the number of the interviews
conducted in Phase 2 (SSM)

No of
SSM No. of Mode of Participants and their role
Interviews
Iteration Participants Interview in the Organisation
Conducted
Business Manager,
Estimating Manager,
1 6 6 Face to Face
Engineering Manager,
Design Managers (3)
Business Manager, Engineering
2 3 1 Focus Group
Manager, Design Manager
Engineering Manager, Design
3 3 3 Face to Face
Manager (2)
Estimating Manager, Operations
4 4 4 Face to Face
Manager, Engineering Manager,
5 2 2 Face to Face Design Managers (2)
* Only one organisation was involved in Phase 2

In Phase 2, the Knowledge Manager of the organisation was extensively involved in each and
every cycle of the research. This is because the Knowledge Manager was carrying out a very
prominent role in the execution of this research as a key industry representative in the CRC in
Construction Innovation (as explained in Chapter 1) and was also acting as the facilitator and
advisor for this research and research candidate.

3.10 Summary

This chapter has highlighted the research method and design that is employed in conducting
this research. It begins with describing the basic philosophy of research that is in terms of
‘ontology’ and ‘epistemology’ and a critical examination of assumptions of what is valid and
what is the scope of that validity.

Positivism and Social Constructivism which are the two competing research paradigms are
discussed followed by a discussion on the research approaches and strategies in these two
paradigms. It is argued, supported by the work of (Seymour and Rooke 1995), that using
positivistic undertones to undertake construction research has not resulted in many noticeable
benefits for the construction industry or its culture. Therefore, it is important to test and try
alternative research paradigms provided that it meets the study’s objectives.

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The predominant nature and main objective of the research undertaken in this PhD study is
demonstrative through highlighting the role of KM in producing innovation and learning. This
research objective sits comfortably within a Social Constructivism Paradigm and hence is
adopted for the present research. The most suitable research approaches from within this
paradigm are found to be the Grounded theory methodology and SSM. The use of these
approaches then divides the research in two different phases. Phase 1 entails the use of the
grounded theory methodology to map the present circumstances of the two organisations
when they adopt and diffuse ICT innovation and deal with both internal and external
knowledge. Phase 2 seeks improvement in the situation modelled in Phase 1 through the use
of SSM. Only one organisation is selected for this demonstrative purpose. The detail
employment of the grounded theory methodology is presented in chapter 4 whereas the
utilisation of SSM is discussed further in chapter 5.

Finally, this chapter justifies the selection and rationale of the appropriate research paradigm
for the study.

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 Chapter 4
Use of Grounded Theory

This chapter presents the details on the use of grounded theory in the Phase 1 of the research
that involved two best-in-class Australian Construction Contractor Organisations. It begins
with the overview of these organisations and what sort of ICT they employ. It then explains
the selection of the research participants and phenomenon that is studied using grounded
theory. After this, the next section highlights the nature of interview questions that were used
for probing purpose to instigate the discussion.

The next section deals with the actual conduct of the grounded theory process. It describes,
through using an example, how interviews were coded into the various categories that formed
collectively a grounded theory of ICT innovation adoption and diffusion and the use of the
knowledge with in the organisations. The last section visually presents this theory in a form of
a model for easy understanding and visualisation of the theory elicited. This model is then
extended to include two more stages exhibiting improvement. The perceived transformation
from one stage to other is then demonstrated by the use of SSM in the next chapter.

4.1 Grounded Theory Application

It is important to make important decisions about the selection of the organisations and their
numbers, nature and number of participants to be interviewed, phenomenon to be studied and
questions that are to be used for probing the participants, before actually embarking on the use
of grounded theory approach. These are discussed below.

4.1.1. Organisations Selection and their Background

Two best-in-class Australian construction contracting organisations were selected. The

qualitative nature of this research permits fewer organisations to be studied where the
objective is to develop an understanding of how these leading organisations operate and
handle issues so that a best practice process can be drafted. Both of these organisations are
collaborating with the CRC CI as industry partners and are devoting resources to help carry
out the research with a view of benefiting from the findings.

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Overview of the Organisation A

Organisation A has experience in various types of construction projects such as buildings,

civil infrastructure and telecommunication projects. The head office is located in Victoria,
Australia from where it interacts with several regional offices. This organisation has adopted
an electronic document management system as their ICT system. It is basically an Intranet
application based on a Lotus Notes environment, which has databases and communication
modules and the system was implemented over a 5-6 years span. This part of the ICT system
features three main modules, a tender pack, a project pack and a project history facility. The
purpose of the tender pack is to create tender specification documents with only authorized
staff and clients having access to the tender pack. The project pack assists in managing project
documents and correspondence during project construction phase. The last module, project
history, is aimed to store completed construction information for future use. This ICT system
runs on a central database server, in which all the information is created, accessed and stored
through each module’s user-interface. Users are connected through three different types of
connections: local area network (LAN), which is used in the main office; a wide area network
(WAN), which is used in regional offices and some construction sites; and a dialup
connection for remote construction sites. Staff from all levels (senior level to foremen level)
in the organisation are required to use this system for correspondence.

Overview of the Organisation B

Organisation B is a major international construction contractor with a strong global presence

and in Australia and is considered as one of the largest construction contractors. It has several
business units, which are engaged in various construction related activities such as design
engineering, construction and project management. The present research focussed on the
regional office based in Victoria, Australia. This organisation has adopted Web-based
document management systems as their ICT system. The main objective is to enhance
communication and coordination among construction project teams. The company liaises with
number of trading partners (client, architects, consultants) to use this ICT system to assist
them to work productively with their trading partners by rapidly exchanging information. The
ICT system has various modules maintaining data bases such as a to-do list, a calendar, a
document control register, multimedia/images, correspondence, RFI, general file transfer and
contact details. All the information is stored in a central database server that is then accessed
through an Internet connection. For this reason Internet Service Providers (ISPs) play a very

117
important role in linking users to the ICT system that can then access the World Wide Web
(WWW). Workstations are linked to the network through a rental wide area network (WAN)
in the main office, whereas on construction sites different types of connections like
Asymmetric Digital Subscriber Line (ADSL), Internet service digital network (ISDN) or
modem are used to connect the organisation via the ISP. The use of ICT is mandatory and
employees from senior level to field level are required to use the system.

4.1.2 Participants Selection

Grounded theory doesn’t impose any limit on the number of people to be interviewed in the
research process. Rather, it aims to achieve theoretical saturation—a state after which no more
data makes any useful contribution. The use of ICT is mandatory in both the organisations at
all levels ranging from senior level down to foreman. Hence, the research design involved
interviewing people from all levels to generating the theory. The detail of the participants is
illustrated in Table 3.4.

4.1.3 Phenomenon Explored in the Study Using the Grounded theory Approach

The main objective of this part of the research is to map out a current scenario in a leading
construction organisation that can highlight how a particular innovation is adopted and
knowledge related to it is diffused with in the organisation. This exposes the issues involved
and the nature of the knowledge link between the organisation and the external world (mainly
knowledge sources). ICT as an innovation is selected for the purpose of the study for two
main reasons:
1. ICT is a modem technology and is being adopted as an innovation by all industries for
improving their work processes.
2. ICT is a KM enabler.

The term ICT refers to the electronic document management system in organisation A
which is based on Lotus Notes and Web-based document management systems that used
HTTP protocol for organisation B.

4.1.4 Pre-conceptualisation Propositions

It was explained in chapter 3, while discussing the grounded theory approach, that pre-
conceptualisation cannot totally be abandoned. Following the Glaserian approach, a minimal
reading of the literature was conducted to develop an initial basic and broad understanding of

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the research area. This provided the researcher with core KM concepts and the role of ICT as
a KM enabler. This was found to be of help when the interviews were started and as the
process of theory building gained pace. Pre-conceptualisation propositions took the following
form:
1. Construction organisations have issues with their ICT adoption and use.
2. The purpose of ICT is to help with communications in their day-to-day processes.
3. Organisations don’t have KM initiatives up and running and ICT is not being
effectively used as a KM enabler.
4. The culture of the organisation and industry as a whole has some role in restricting the
organisation-wide use of ICT.
5. Organisations don’t have good interaction with external knowledge sources.

The researcher embarked on the process of developing a theory from data obtained from
the organisations based upon the above mentioned raw propositions. These pre-
conceptualisations also help the researcher develop the interview questions to be asked for
the purpose of initiating and probing discussion points.

4.1.5 Interview Questions

Using grounded theory, a researcher has to initially ‘go with the flow’. This means that
specific questions are avoided in the initial interviews, instead favouring asking general open-
ended questions. The researcher is seeking to understand what is going on there in the
organisation, what is the situation, and how is the person managing that situation (Dick,
2005). The purpose is to let the participants speak as much as they can without breaking their
momentum. Intervention is only made if they digress too far from the situation they are
discussing. An example of the notes taken in the phase 1 of the study is presented in
Appendix. In this research, the following questions were asked (in random order depending
upon the situation and ongoing discussion) in initial interviews:

1. What is your experience of using ICT?

2. Why ICT is necessary? What is it used for?
3. What are the advantages and disadvantages of using ICT?
4. How the knowledge about ICT is usually shared in the organisation?
5. Apart from ICT, generally how is knowledge usually accessed or shared in the
organisation?

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As it will be explained later, the first six interviews (out of total sixteen) set the basis for
developing emergent categories and the outline of the theory. The rest of the ten
interviews then authenticated the categories already emerged and assisted in
developed the theory. In the later ten interviews, grounded theory then allowed the use
of specific questions so as to strengthen the emerging categories (Dick, 2005). The
following questions were additionally asked, when it was deemed feasible, in the later
ten interviews.

1. Do you think culture of the organisation has an effect on the adoption of any new
innovation or technology like ICT and its use?
2. Do you feel the need for any internal knowledge bank?
3. Do you write down your experiences for your own use?
4. Any advantage of bringing academia and practice closer?
5. Do you think sharing knowledge is a useful endeavour?
6. Do you feel there is knowledge loss/leak is happening in the organisation?

4.1.6 Building Grounded Theory

It was explained in Chapter 3 that carrying out grounded theory entails, as stated by Locke
(2001) and Glaser and Strauss (1967), the following:

1. Comparing incidents applicable to each category

2. Integrating categories and their properties
3. Delimiting the theory
4. Writing the Theory

The first step in undertaking grounded theory relies on coding the interview data set,
comparing the data sets as they are coded and writing memos. For coding, each sentence
recorded in the interview notes is examined and given a representative name for easy
understanding and subsequent categorising. After the first interview is coded, the second
interview is coded with the first interview in mind (Dick, 2005). Subsequently, the remaining
interviews are coded with emerging theory in mind. This is the basic notion of the concept of
‘constant comparison’ highlighted in Glaser and Strauss (1967). Initially a data set is
compared against the data set; later data set is compared to the theory. As this research
progressed, it was found that the first six interviews set the basis for an emergent theory so the
rest of the ten interviews were coded with the theory in mind. Also at this stage, specific

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questions were asked to clarify the issues that were helpful in forming the theory. Memos
were made throughout the interviews about any theoretical ideas that came in the mind of the
researcher and helped develop relationship between the categories. Table 4.1 a and Table 4.1
b provide an example of coded interview with memos written during this interview and this is
followed by Table 4.2 that shows the emerging categories as various coded data sets were put
together after the first six interviews.

Table 4.1a: An example of a coded interview, participant is a Project Manager with

Organisation A
Interview Notes Coding

Databases created in lotus Notes ICT Type

Good for having statistics of the project. Advantage of ICT

Help Desk is responsive and good. Helpdesk Response

Developed a Mentoring program but not really Failed Initiative

kicked off. It didn’t work.

Great tool for communication but doesn’t help Limitation in ICT

really in decision-making.

He is teaching new guys by himself showing them Knowledge Sharing

real use.

Personal contact is important when getting the help, Personal Contact in Help
whether coming through help desk or colleague,
peer or mentor.

This is just tool, if its not working you should not Feeling about ICT
think that my work is finished or hampered and I
cannot do anything.

It is hard to make it together so if they can find Nature of the

common place and time to meet, they can share the Job/industry
experience

It would be good if subcontractor use the same Same system to be used

system. No question can be asked about the training by all
and long-term commitment thing.

There is general training not specific to work. You Training Style

get general training and then you figure out what
suites your needs.

Positive feelings are important to use. Systems

must be so that it gives u positive feelings so that it Positive Feelings about

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 can be used. the System

His team is the only where supervisor/foreman use Reward

this tool and his appreciation is a sort of reward for
them.

When project is finished the knowledge is not Loss of knowledge

captured.

He keeps personal diaries, have an option in lotus Use of Personal Diaries

notes where he can put the experiences. No point in
making the mistake again as done in the past.

Have Vision. Young Manager. Wants to know Learning Desire

more of leadership stuff.

Table 4.1 b: Memos regarding the above Interview

Memo 1: A failed initiative in starting a mentoring approach could be because of the

culture of the organisation. Even if it is failed he is still taking approach himself by
teaching new guys about the ICT system and hence transferring his knowledge of ICT
use to them

Memo 2: There is no capturing of knowledge at the end of the project which may
indicate that organisational knowledge repositories are not being developed

Memo 3: He believes that there is no point in making the mistake again as it was done
in the past so he keeps his personal diaries using an option in the ICT system

Memo 4: The young manager has a lot of energy and enthusiasm for becoming a good
project manager by exercising strong leadership and is very willing to know more
theory about it which indicates his desire to be in touch with academia or external
knowledge source to obtain more knowledge regarding leadership.

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Table 4.2: Emerging categories forming a theory from first six interviews

Categories Coded Data Sets

Segregation Advantages of ICT, Helpdesk Response, Limitations in ICT, Same

between People, system to be used by all subcontractors, Feelings about ICT,
Process and Training Style, Reward, Reliability of ICT, Functionality of ICT,
Technology Double Work with ICT, Lack of Basic IT knowledge, Self
motivation,

Culture Failed Initiative, Knowledge Sharing, Personal Contact in Help,

Nature of the Job/industry, Resisting Change, Generation Gap

Link with Learning Desire, Use of Internet for searching info/knowledge,

External Academia for Basic Concepts, Complex Research
Knowledge
Sources (Push
Vs Pull)

External Competition, Industry wide adoption, Productivity

environment

A gap between
research and Difference between research and practice, Research implementation
practice in practice

Feedback to Participation in Research Projects

external sources
of innovation

Existing
Using ICT in improving work processes, Work methods, Explicit
Knowledge in the
organisation & Knowledge, Knowledge in Heads, Loss of knowledge, Use of
Internal Personal Diaries,
Knowledge
Bank

Once the categories shown in Table 4.2 are formed the rest of the ten interviews then
authenticated these categories. At this stage, along with open-ended questions, specific
questions mentioned in the section 4.1.5 were also asked to develop further understanding of
the emerging categories and hence forming the theory. This is in accordance with step 3 of the
grounded theory procedure ‘delimiting the theory’.

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4.1.7 The Grounded Theory of ICT Innovation and Knowledge Use

The last step of the grounded theory process is to present the theory. Dick (2005) explains that
theory is basically the presentation of the categories and memos in a structured way
highlighting a relationship among them in order to produce a coherent argument.

The basic objective of presenting this theory is to study the innovation from a KM point of
view in order to understand how and why a certain new knowledge (innovation) is adopted by
the organisation and what are the steps taken to diffuse this new knowledge within the
organisation. The innovation studied in this research is ICT innovation and the theory below
highlights various important issues helpful in understanding the adoption and diffusion of it
from KM point of view.

Existing Knowledge in the Organisation & Internal Knowledge Bank

Both organisations have a body of existing knowledge, based on what the role of the
organisation is in the whole construction delivery process and the position of these
organisations in their supply chain. In this case, the organisations studied were the
construction contracting organisations, so most of their knowledge was related to processes,
tools and techniques involved in procuring the project, constructing it and then delivering it—
using appropriate project management knowledge to fulfill project objectives of cost, time,
quality and safety. The ICT innovation is adopted to support the business processes by
enhancing the communications among project team participants both within the organisation
and outside it. It also acts as the repositories of data and information that can be accessed by
the team members promptly to help make decisions efficiently. Overall, the use of ICT is
being seen to increase the productivity of the organisation and making it more competitive
and sustainable.

Explicit knowledge forms the main part of the internal knowledge bank which contains work
methods, policies and procedures and access is available to all the people based on their
responsibilities. Most people mentioned that they have their knowledge in their heads, only a
few mentioned that they use diaries to write down their own experience to help them in future.
Sharing this tacit knowledge is not an issue for some interviewees as they believe when they
share their knowledge, they will also get some knowledge back in exchange, however for
others, it is the matter of loosing their individual competitive edge. Most knowledge

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accumulating from a particular project is tacit and remains restricted to those people involved
in that project. No strong efforts are being made to make this tacit knowledge explicit for
others to use and share. This causes knowledge loss when an employee leaves the
organisation and takes all the knowledge with him/her.

External Environment

The adoption of any innovation is dependent on the external environment, conditions and
constraints. Any new innovation is adopted to enable an organisation to remain competitive or
sustainable. ICT innovation is also adopted for the same reasons, as indicated by several
participants. The time for its adoption is ripe, in both private and public sectors as most
industries in Australia are embracing this technology. However, ICT is not being adopted or
used primarily as a KM enabler. Many industries are undertaking KM initiatives but the
construction industry is still considering its move to employ this philosophy. However, the
organisations under study have KM related activities going on in their organisations yet there
is still a dearth of understanding of real and clear KM philosophies.

Segregation between People, Process and Technology

Organisational activities were dependent on the interaction of three elements—people,

process and technology. People use various processes and technologies to carry out their
organisational duties. Among the many processes and technologies used, this research was
focused upon newly adopted ICT technology which could serve as a common platform to
strengthen the effective delivery of these processes. It was discovered that ICT was not
effectively integrated with people for carrying out their routine processes and the data
suggested that there appeared to be a high level of segregation existing between people,
technology itself and the processes in which it is used. Because of this segregation, each
element has its own individual area of influence which means that each part is acting
independently of other related parts—that is people doing things manually when ICT could
have served them more effectively, or not following/having guidelines and procedures to
undertake a process or group of tasks. Participants provided various reasons for this
segregation and these are explained as follows:

Training provided for ICT use is not very effective. Training provided is very general
and not specific to any particular management role. People later learn how to use ICT
when they practice it through ‘hit and miss’ this, according to one participant, should

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 never be the case. He advocated the proper training covering both general and specific
aspects of introduced ICT applications.

The Help Desk facility is responsive when it is located in the same building but on
construction sites this is often not efficient.

ICT has limitations for some of the staff and doesn’t have enough functionality that
gave rise to negative perceptions about the technology resulting in its under-use.

Some staff (e.g. foremen) lack basic IT skills so if they are not given basic IT training
they are unable to full realise the advantages of ICT.

Reliability of ICT is a big issue. There is a low level of trust in system so people have
to duplicate (‘double dipping’) their efforts, which means they use ICT to send the
communication but later on, also fax the document to ensure its safe and confirmed
delivery. This has increased the workload of the staff.

For some staff such as foreman, filling information first on paper and then
transforming it in electronic format using ICT doesn’t make any sense as it has
increased their workload, so their tendency is to just do the paperwork and leave out
the ICT use.

People are not self motivated to keep using the ICT. The motivation level has dropped
after ICT is not able to come up to the expectations.

Culture of the Organisations

The culture of the organisation is reported to affect in a way that it restricts the flow of
innovative knowledge from the external world to within the organisation (Peansupap, 2004).
The same is the case with the adoption of ICT and its diffusion. Among the factors mentioned
that cause non-use of ICT, the culture of the organisation also has a very important role in
causing the non-use of ICT. Resistance to change appears to be the biggest factor influencing
this. Some participants mentioned that they didn’t grow up with the computers so it is very
hard for them to start adopting the use of ICT. There is no leadership and reward strategy to
resolve this problem. Many participants blame the nature of their tough job (lengthy work
hours) and nature of the industry as a whole, that bar them from spending time in learning
new technology. It is this cultural barrier that the academic world has to overcome when
trying to push new knowledge into organisations such as these.

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Link with External Knowledge Sources (Push Vs Pull)

There is a weak link between both organisations with their external world so that seeking
knowledge from outside the organisation was found to be vague. There are no specific
mechanisms inside both organisations that would pull the knowledge from outside and bring
it inside the organisation. External knowledge potential sources (such as research centers and
universities) could push knowledge within the boundaries of the organisations as well as
provide a mechanism to transfer knowledge from outside the organisation to within its
boundaries and from within the boundaries to the external environment. These organisations
seem to realize this fact and have started participating in various research projects with
academia through CRC CI initiatives by becoming industry partners and extending all the
support and interaction with the CRC CI that may be necessary to carry out the productive
research.

A Gap between Research and Practice

Various participants consider research doesn’t have any significant immediate

implementation. According to them, research mostly produces complex and hard to formalize
solutions instead of producing easy succinct solutions. For this reason many participants
consider research and practice move in opposite unconnected directions. This indicates a gap
that currently exists between research and its actual practice (application).

Feedback to External Sources of Innovation

There remains very weak feedback on organisational practices reported to researchers at

universities. This indicates minimal interaction between the industry and researchers ‘worlds’.
Such feedback is considered an important part of the research process as it provides details of
the effect of innovation for further refinement and new developments. This feedback happens
only when researchers, while carrying out research, approach practitioners and take their
feedback through questionnaires or interviews. There is less tendency on the part of the
practitioners themselves to provide feedback to the researchers about the work processes they
carry out and improvements that they think are required to produce improved productivity.

4.1.8 The use of Literature

The Glaser’s approach is to restrict the detailed reading of the literature until a theory starts to
emerge. In this research, a detailed literature review was also carried out once the theory

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started to take shape. The review of literature is presented in detail in Chapter 2. While
literature supports the elicited theory in all aspects, in grounded theory the position of
literature holds the same status as data with no special privilege being accorded to it.
Literature is used to add further categories to those that emerge from the data in extending the
theory. In this part of the research, it is found that the literature doesn’t add any new category
and facilitates only increased understandings of existing categories; hence no modification to
the theory is required after considering the literature. Table 4.3 presents selected literature (as
an example) supporting the emerged categories.

Table 4.3: Literature supporting the emerged categories

Categories Supporting Literature

Segregation between People, (Davis et al. 1989; Murphy et al. 1989; Igbaria
Process and Technology
et al. 1996; Newman and Sabherwal 1996;
Akins and Griffin 1999; Lederer et al. 2000)
Culture As discussed in section 2.6.2
Link with External Knowledge (Cohen and Levinthal 1990; Bresnen and
Sources (Push Vs Pull)
Marshall 2001; Gann 2001; dos Santos et al.
2002)
A gap between research and practice (Cohen and Levinthal 1990; Bresnen and
Marshall 2001; Gann 2001; dos Santos et al.
2002)
Feedback to external sources of (Cohen and Levinthal 1990; Bresnen and
innovation
Marshall 2001; Gann 2001; dos Santos et al.
2002)

4.1.9 Achieving the State of Theoretical Saturation in Grounded Theory

In grounded theory, the size of the sample is not decided before the study begins. The process
of data collections continues unless no new data emerges (Locke, 2001; Glaser and Strauss,
1967). Morse (1995) notes that there are no published guidelines or tests of adequacy for
estimating the sample size required to reach saturation. Morse (1994) produces a ‘rule of
thumb' recommending approximately thirty to fifty interviews for grounded theory studies.
However, Morse (2000) cited in Robson (2002) argues that to reach the saturation state, the

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sample size depends on several factors; the scope of the study, the nature of the topic, quality
of the data, study design and research technique. Most recently, Guest et al. (2006) has carried
out an interesting study to determine the number of interviews that would be required to reach
a saturation state. Their study involves sixty in-depth interviews with women in two West
African countries. During their analysis of data, the authors systematically document the
degree of data saturation over the course of thematic analysis. They found that within the first
twelve interviews saturation occurred and main themes were present in as early as six
interviews.

The phenomenon noted in this doctoral research was no different than Guest et al. (2006)
study. The categories emerged completely in the first six interviews. The rest of the ten
interviews only added to the existing categories and did not contribute to the development of
any new category. In fact, the last two interviews basically mirrored what was already known
and documented. At this stage, it was felt that saturation state had occurred and author
decided to stop the process of data collection. It can be argued that the early occurrence of the
saturation state might be because of the nature of the research and phenomenon under study.
This research was trying to map the current circumstances in the organisation regarding ICT
and Knowledge use. The adoption of ICT technology by the organisations was just recent and
riddled with various issues. The perception of the respondents about these issues was not
highly variable and this might have led to the emergence of all the categories in relatively
shorter number of interviews.

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4.1.10 Formulating the Model

The above theory highlighted various categories that are interrelated. This relationship
becomes more clear and vivid when presented in graphical form. Figure 4.1 shows the theory
in form of model for easy understanding and visualisation.

External Sources of Knowledge

Gap b/w Research &

practice Pull
Push Feedback
External Environment: Competition and threats

Culture
Existing Knowledge in the Organisation

Internal Knowledge
Bank

People

Process Technology

Figure 4.1: Construct developed from the theory

The core category of the theory ‘segregation between people, process and technology’ is
shown dotted, and linked in triangular fashion. Dotted links shows segregation. These three
components always exist in the form of a triangle where one is dependent on two others.
Small circles around these components represent the ‘area of influences’, which intends to
show for example, people don’t follow the proper process and technology to carry out the
work, hence they bypass both of these. The triangle of people, process and technology is set in
the existing knowledge of the organisation under which it operates and it contains an
inadequate internal knowledge bank. Culture is depicted by a thick boundary line indicating
the resistance it offers to the flow of knowledge from the external world into the organisation.
The interface with external sources of innovations such as the ‘academic world’ or a research
centre is visualised as operating under two forces; push forces depicted by thick arrows and
pull forces arising from the organisation by dotted arrows. These show either virtually none,
or a weak pull force from the organisation relating to a desire for obtaining knowledge
external to it. Weak ‘Feedback’ from the organisation to the external sources of knowledge is

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shown as a dotted arrow. The distance between organisation and external knowledge sources
(research) highlights the gap that exists between research and its practical implementation.

4.1.11 Validity and Reliability of the Proposed Theory and Model

The term 'validity' in qualitative research is potentially confusing and issues that surround it
are controversial and many (Weber 1990; Winter 2000). It is not a single, fixed or universal
concept, but rather a contingent construct, inescapably grounded in the processes and
intentions of particular research methodologies and projects (Winter 2000). In quantitative
research there are standardised or accepted tests that would decide the research is valid or not.
In qualitative research there are no such standardised tests and often the nature of the
investigation is determined and adapted by the research itself (Winter 2000). Validity relates
to the ‘accuracy’. It is affected by the researcher’s perception of validity in the study and
his/her choice of paradigm assumption (Creswell and Miller 2000). The generalisability of the
qualitative research is limited but it does provide an indication about the quality of a research
increasing the validity or trustworthiness of the research (Golafshani 2003). In quantitative
research generalisability is achieved through large sample sizes but in qualitative research the
notion of generalisability presents that research has the potential of application in diverse
situations.

Reliability or consistency mirrors replicability and ensures that researchers are measuring
what they intend to measure (Winter 2000). The basic reliability issue concerns a
measurement method’s ability to produce the same research result over and over again. In
qualitative research, this shows reliability has no relevance, as it is impossible to differentiate
between researcher and the method (Stenbacka 2001). This makes the concept of reliability
even misleading in qualitative research. If a qualitative study is discussed with reliability as
criterion, the consequence is rather that that study is no good (Stenbacka 2001).

Stenbacka (2001) indicates that a good quality in qualitative research is achieved through
description of the whole process and enabling conditional intersubjectivity. In grounded
theory, the process of the conducting the grounded theory is a validations in itself. It doesn’t
require any additional validation approach. However, Glaser and Strauss (1967) indicate that
a good theory should satisfy four highly interdependent properties. There are listed below:

1. It should closely ‘fit’ the area in which it will be used.

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 2. It must be readily ‘understandable’ by laymen working with this area so they can
make sense of it and apply the theory themselves when required.
3. It must be sufficiently ‘general’ to be applicable to a multitude of diverse situations
with in the area studied.
4. It must allow the user ‘control’ so that the application of the grounded theory becomes
the worth trying.

The theory discussed in this chapter complies with these four points as discussed below:

1. Fit: The theory is closely related with the area of innovation adoption and diffusion
from KM point of view and this is the area in which it can be efficiently used.
2. Understanding: The theory is readily understandable. It has been tested at various
occasions by showing the model and explaining the theory to the participants in the
phase 2 of the research. This was done to ensure that participants understand phase 1
of the research and why they should be involved in phase 2 of the research. The
participants indicated many times that the model and theory was very useful in helping
them understand the whole research situation.
3. General: The theory takes into account ICT innovation but it is argued to still be valid
for innovation in general. Even though, this theory emerged from two leading
Australian construction organisations, it presents a strong case for the whole industry
to consider its present ICT diffusion state being not very different to generic
innovation adoption and its diffusion. Hence this theory may be useful across a wide
range of organisations in a construction industry supply chain.
4. Control: The theory provides sufficient control to the one who wants to apply it and
makes sense of the situation regarding adoption and diffusion issues of innovation
from a KM point of view. The users can readily apply the model to the situation in
their organisations and develop good sense of understanding. They don’t even have to
apply the full theory to the situation. In fact they can select certain part of this theory
and apply it on the situation/circumstances they are faced with hence giving them
control over the theoretical components of the theory presented.

4.2 Extending the Model

The first phase of this research dealt with the mapping of the present situation in the studied
construction organisations. This is achieved as discussed above by the use of grounded theory
methodology that was manifested through forming theory and building a construct from this

132
theory. The second phase of this research is related to improvements that can be triggered in
the present situation by using a KM initiative. The model in Figure 4.1 highlights various
areas that can be further improved upon. This led to the extension of this model in Figure 4.2
to incorporate two other stages showing transformation of the organisation over time as KM
initiatives assist in more closely linking people, processes and technology. It is postulated that
organisational KM initiatives have the capacity to improve innovation. Such improvement
will produce changes that would be reflected in improved organisational practices conforming
to the Senge (1990) vision of a learning organisation i.e. organisations that are continually
expanding their capacity to create their future through knowledge of how to improve their
performance and processes.

Figure 4.2 indicates how a weak integration between people, process and technology
transforms over time into stronger and more meaningful integration. Organisation’s culture
becomes less of a barrier to this integration. Stronger integration indicates effective utilisation
of knowledge and increased absorptive capacity of the organisation (Cohen and Levinthal
1990). This would facilitate and give birth to pulling forces within the organisation that could
be exerted over external sources of innovations to bring knowledge inside the organisation
and immediately absorb it, thus making it a routine process for the organisational. As this
transformation gathers pace, external sources of innovation such as academic institutions and
research centres tend not to push so much of the new knowledge inside organisation
boundaries at this stage, rather there is a greater flow of knowledge back and forth between
the external knowledge sources and the organisation. The organisation improves and
streamlines its processes and routines after it has undergone change and experienced learning.
People change their attitudes and become motivated under strong leadership to learn, adopt
and utilise the knowledge available. The area of influence grows as shown by growing
circular rings and segregation of these reduces as shown by thinner cultural boundary lines.
This is the state where people are learning and trying to adopt whatever knowledge is
officially deemed to be useful. KM initiatives extensively include development of an internal
knowledge bank or more commonly know as “Organisational Memory”. In the construction
industry “Project histories” are considered an appropriate word to use to reflect this concept
because of the project nature of construction industry. Weak existence of an internal
knowledge bank is then rectified through KM transforming these into more useful and user-
friendly knowledge repositories. The purpose of the knowledge bank is to contain useful
knowledge obtained from previous projects that would allow the organisation to not reinvent

133
the wheel thus saving time and costs as well as enhancing productivity. The knowledge bank
would also contain the results of utilizing new knowledge that external innovation sources can
tap into to get feedback. The stronger feedback mechanisms enable research communities to
see the effect of innovation, refine it and produce more innovations. The gap that appears to
exist between academia and practice can then be considered bridged.

External Sources of Innovations Contributing to External Knowledge Bank

Increasing with the time
A CK
GA P b/w GA P Pull Push FEED B
research and Pull
K
A C GA P
Pull Push CK e
Push DB D BA led g
FEE e now
practice FEE o wled g Culture t e rn al K h e r
Kn ED In fu rt
rn al P RO V Bank O VED
In te Knowle dge in the R
k IM IMP
External Environment: Competition, Threats

rnal Culture a n
Int e led ge Knowle dge after certain
B organiz ation after further
Culture w
Kn o n k learning
learning
Existing Knowle dge in Ba People
People
People
Cycle repeats
and refines

Process Technology
Process Technology
Process Technology
Knowledge Management initiat ive Innovation
Knowledge Management initiat ive
Innovation
Knowledge Management initiat ive
Innovation
Stage 1: Before Transformation Stage 2: Transformation in Process Stage 3: Ideal Transformed State
ATION
G ORGANIZ TIME LIN E
LEARNIN

Figure 4.2: Organisational learning and transformation through KM

Chapter 5 illustrates how this transformation may be achieved.

4.3 Summary

This chapter has presented details on the use of grounded theory in the Phase 1 of the
research. It starts by providing provides an overview of the two best-in-class Australian
Construction Contractor Organisations that were involved in the study. The basic objective of
this part of the research is to: (1) map out the present scenario in leading construction
organisations that can shed light on how a particular innovation is adopted; (2) understand
how knowledge related to that innovation is diffused within those organisations; (3)
understand what are the issues involved and what sort of the knowledge link exists between
the organisation and the external world (mainly knowledge sources). ICT as an innovation is
selected for the purpose of the study. According to the guidelines of conducting grounded
theory, the literature was only broadly read initially to develop a general understanding of the
research area. The interviews comprised the main source of data for developing the grounded

134
theory. It was found out that first six interviews set the basis for emerging categories and the
later ten interviews only authenticated and supported the emerged categories. The main
categories that emerged from the interview data are:

Existing Knowledge in the Organisation & Internal Knowledge Bank

External Environment

Segregation between People, Process and Technology

Culture of the Organisation

Link with External Knowledge Sources (Push Vs Pull)

A Gap between Research and Practice

Feedback to External Sources of Innovation

These categories are presented both in the form of the theory and the model. The theory is
considered both reliable and credible as it complies with Glaser and Strauss (1967) criteria of
Fit, Understanding, Generality and Control.

It is postulated that KM initiatives help transform the organisations towards being learning
innovative organisations as shown in the model. This is depicted by the extension of the
Figure 4.1 model to incorporate two other stages. The aim of Chapter 5 is to discuss how this
transformation can take place through KM initiatives and demonstrates this using a soft
systems methodology approach.

Finally, this chapter has endeavoured to provide details of Phase 1 of the research design that
was manifested by the formation of a theory and developing a model as well as building a
construct through the use of grounded theory.

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 Chapter 5
Using SSM as a KM tool

The aim of this chapter is to describe phase 2 of the research in detail. The chapter begins
with providing a case for using SSM as a KM tool to achieve the transformation mentioned in
Chapter 4. It then provides details on how the organisation and the business process, which is
used in the study, was selected. The next section describes the use of SSM in investigating
this business process. In line with the model envisioned in Chapter 4, the rest of the chapter
describes four additional cases carried out again by using SSM to study the people and
technology components of the selected business process.

5.1 SSM as a KM Tool

A basic understanding of SSM is provided in Chapter 3. Capitalising on that, it can be

concluded that SSM helps:

• Achieve the systems and holistic view of the situation under consideration;

• Obtain the worldviews of various participants involved in the situation;

• Know the conflicting perspectives and issues within the system;

• Involve the participants when looking for the solution to the issues raised thus giving
them the control over the situation;

• Involve all participants in cycle of action and learning; and

• Develop relevant system rather than a right system.

The above-mentioned characteristics of SSM share similarities with basic KM process

components, such as knowledge elicitation & capture, creation, sharing, dissemination, etc.
This forms the basis of establishing a plausible claim of treating and considering SSM as a
KM tool. The next sections shed more light on the validity of this claim by results from a
series of experiments demonstrating how SSM was used as a KM tool on a selected business
process to achieve integration of people, technology and process that otherwise remains
highly segregated.

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5.2 Selection of the Organisation and Business Process

Organisation A was selected for carrying out this experimental part of the research primarily
because of its willingness to be involved in this project through the help of its knowledge
manager, who greatly assisted in organising the necessary resources and staff involved in this
research. He collaborated with the researcher to decide upon an appropriate process to study
and arrange likely participant willing and keen to participate.

The decision of selecting a business process was based on the following guiding factors in
line with SSM philosophy:
1. It should be an important process, crucial for the business;
2. It should be a tacit-rich process that relies heavily on the experience of the people
involved; and
3. It should at present be a poorly structured, poorly defined, and complex informal
process.

The process of “Pre-tendering” fits the above-mentioned specification. It is the process by

which this organisation makes an early decision to continue, or not, to further pursue an
interest in a specific project. The pre-tendering process is not documented in any explicit
form; rather it depends on the team that informally undertakes it to follow an ad hoc approach
to doing what needs to be done to gather sufficient knowledge about the project to make the
appropriate proceed-to-tender decision. It is a process that is embedded in the organisation’s
customary routine. Knowledge for carrying out this process resides mainly in a tacit form in
the heads of the people. It involves making a decision whether or not to make a large financial
commitment (frequently in excess of $100,000) to tender for major projects that could vary
from several tens of $million to $billion plus in project value. With typical tender competition
of 3-5 companies for such projects, this process is strategic and operationally important for
the profitability and sustainability of the organisation. Any improvement in deployment of
knowledge in this process may make a significant difference in winning tenders at acceptable
profit margins. It also could conserve management energy to concentrate on the most
‘winnable’ or strategic projects thus enabling the organisation to make the most of its
opportunity cost of its skilled staff engaged in this business process.

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 Project Planning by Bids Bids TENDER
Client Open Close IS LET
Evaluation
Up to 3 years   
  Negotiation
Identify prospect Bid
Made

Pre-tender Tender

Up to 12 months 10 Weeks 12 Weeks

Figure 5.1: Pre-tendering process illustrated

The pre-tendering process in Organisation A is illustrated in Figure 5.1. The pre-tendering

process may be initiated up to 12 months in advance from the date when bids are invited. This
depends upon how early a particular prospect can be identified. Public sector clients normally
start planning a project much in advance—in some cases this could be up to 3 years. A good
networking and relation with clients may help organisations to identify a prospect early and
provide ample time for the organisation to consider committing resources to it once tenders
are invited.

5.3 Investigating Pre-tendering Process Using SSM

The employment of SSM on the process of pre-tendering entail the seven-stage process
illustrated in Figure 3.7-(See section 3.7).

Stage 1: Unstructured Interviews

In the first stage SSM requires conducting unstructured interviews with people involved in the
process. Six people, as illustrated in Table 3.5, were involved at this stage. The interviewees
were asked informal, unstructured questions about their involvement in the pre-tendering
process based upon their experience and expectations. They were asked to talk about their role
and the important tasks that they have performed in the past. It was observed that some
participants found it difficult to focus on the answers. This difficulty is normal and can occur
when people try to verbalise their tacit thoughts. Therefore an important task of the
interviewer was to keep the discussion within the topic and context of the study. Two
researchers, of whom one was experienced in the deployment of SSM, were involved in this
stage. Interview notes were taken by one of the researchers and other kept the participants
engaged in the interview.

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Stage 2: Developing a Rich Picture

The next stage requires giving a structure to the problematic situation through the use of rich
pictures. The objective of this was to learn about the structures, processes, perceptions and
beliefs associated with the case study situation. Iterations are very common in the
development of a rich picture, where analysts draw the rich picture and show it to the
participants for comments and corrections. This is iterated until consensus of the participants
is achieved on the true representation of the situation portrayed in the rich picture. The rich
picture for this case was developed in two iterations. In the first iteration, two researchers
worked together on the interview notes (see sample presented in Appendix) and categorized
the notes based on the structures, processes, perceptions and beliefs as shown in the Table 5.1.
This categorization helps the development of the rich picture. The purpose of the rich picture
is to portray all the key players involved in the process and present a structured view by
putting the factors affecting the process into context. Drawing rich pictures is a creative skill
conventionally done on a big chart sheet moving from left to the right. Stick-like figures
represents the people involved and other drawings symbols are used to depict the resources
(e.g. computers). The dialogues and perceptions are attached to these stick figures as obtained
from the interview notes. Arrows depict relationships developed between people, resources
and processes. Where there is an issue or conflict, it is shown by a storm cloud.

Once an initial version of the rich picture was developed, it was shown to the participants in a
focus group setting and their opinions were sought on the accuracy of the situation depicted in
the rich picture. A second version was then developed after taking into account all feedback
obtained through the focus group. The rich picture was then developed using MS Power Point
to serve as a basis for the further study.

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Table 5.1: Structures, Processes, Perceptions and Beliefs elicited in interviews
Processes/Procedures

• Networking with industry

• Attending Seminars
• Talking to colleagues
• Working with consultants
• Using the IMS to manage correspondence
• Make approximate estimates
• Produce Preliminary design
• Use personal expert knowledge
• Find things on internet
• Validate using past experiences
• Gather intelligence from suppliers
• Pursue and compare other options
Beliefs/ Values/ Perceptions

• Specific consultants have skills to help ensure project success

• Must be able to use conceptual knowledge to find ways to improve
productivity
• Always need a signed hard copy of drawings
• IMS is just means to an ends
• IMS can be very beneficial and provides a controlled way of organising
data. It is a good way of keeping track of consultants
• Client is not replacing engineering knowledge-big skill gap developing
• Cannot get constructive feedback from Client
• IMS helps to fight contractor claims
• Soft copy and signed hardcopy must be same versions
• I need more opportunities to attend knowledge gathering activities
• Trying to get consultants to change the way they think is waste of time.
Better to completely change the system
• Need to know the key person in the consultant company who can
produce winning designs
• What wins the project is “how good the design is”
• We need more time
• I hate novated consultants, they are very difficult to manage
• On big projects, design managers should be on site but this never
happens
• Design manager should flag design issues
• Construction foreman often the key to successful project, they can spot a
problem before it becomes a critical
• A minor design detail can make a major contribution to productivity
• Documentation coming from building developers is often poor, they
expect the builders to do it
• Initially IMS is difficult to understand but when the benefits are
understood then systems becomes attractive and beneficial to use fully.

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 Structure Operations Manager

Engineering Manager
Regional Manager

Project Managers

Design Managers

Project Engineers

Clients
Organisation A

Consultants

Subcontractors
& Suppliers

IMS

D I V I S IO N S

Organisation A

Suppliers/Subcontractors/consultants/Clients

In the SSM investigation undertaken upon the process of pre-tendering, producing a rich
picture provided a structure to an informal process. This made it possible to target knowledge
assets involved in the process, which were subsequently investigated in line with the ‘people’
component of the model presented in the Chapter 4. Participants involved in the study highly
regarded the use of rich pictures as these allowed them to make sense through use of this
explicit knowledge about the process where previously only tacit knowledge existed in their
heads. Once they saw themselves represented, sitting in the rich picture and performing
various roles, they immediately started giving feedback as to what extent their roles were truly
portrayed. This illustrates the power of rich pictures in making implicit knowledge explicit
and codifying and socialising it. The rich picture is shown in Figure 5.2.
141
 I need to know the cost and timeline
This project BID DECISION!
seems
reasonable
“Yes” (Greenlight) or “No”.
TACIT
KNOWLEDGE of
criteria for Business Suppliers
“spotting projects” Manager Regional ENVIRONMENT:
and of pre- Manager Proactive, open discussion,
tendering for teamwork, lots of paper…
construction
projects. Preliminary
Design Concept
and Costing
CYCLE

of Feedback
& Refinement Good for
3rd Party error
Intelligence checking
My role is developing
project prospects –
25% of my time. Chief
Estimator

Early Engineering We must be able to

Warning of Manager draw on the
experience and
potential projects
knowledge of Developer
consultants

IMS Design
Allegiance

Networking Managers
with Project Histories
government, are missing!
other clients,
and
shareholders • IMS is good at managing Novated
procedures. Consultants
COMMERCIAL Any “external” • Need to protect access to Need more time – are too hard
PROJECTS project prevent corruption. I’m already to manage
histories? • Project History takes working 60 hours a
GOVERNMENT
time and effort – who is week
DEPARTMENTS
prepared to pay for it?
• Every piece of
INFRASTRUCTURE
correspondence should be
PROJECTS in IMS.
CONCEPTUAL
KNOWLEDGE
From: Journals, seminars,
Some clients are professional associations,
Yes to Bid… networks, Internet and project
losing engineering histories.
knowledge Set up a Tender Pack, and set
Providing:
up an Administration Pack. • New directions Consultants
• New products
What is in IMS before • New methods
(Competition) “YES to bid”? • New applications
• New ways of
thinking

THE MARKETPLACE Shareholders

Figure 5.2: Rich picture of pre-tendering process

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Stage 3&4: Developing Root Definition, CATWOE and Conceptual Model

In this part the SSM analyst develops the ideal solution to the problem under study by clearly
defining the purpose of the system by establishing a precise wording for the system defined
by the Root Definition. It is then tested against the CATWOE (Customer, Actors,
Transformation, Weltanschauung, Owner, Environment). This ensures that the Root
Definition is complete, precise and concise. Using the understanding gained from the
definition of the situation in this form, the analyst then becomes confident in proposing a
conceptual model that details an ideal situation.
Figure 5.3 illustrates a Root Definition, CATWOE and conceptual model.

ROOT DEFINITION – Customer: Regional Manager (RM)

Actors: Engineering Manager, Chief Estimator,
Pre-Tendering
Design Manager, Pre-Contracts team, Business
A system owned by the pre-contracts team, who
Manager.
together with the Chief Estimator and the Design
Transformation: Knowledge, processes and
Managers, takes prospective projects from the
technology together with details of prospective
Business Manager, together with knowledge,
projects, are used to prepare an understanding of the
processes and technology, and prepares preliminary
project and a cost estimate for assessing the
understanding of the project and cost estimates.
feasibility of a tender bid.
This is used to assist the Regional Manager in
Weltanschauung (why Bother?): To assess the
assessing the feasibility of making a tender bid. This
feasibility of making a tender bid, we (RM) need a
must be undertaken within short timeframes and
good understanding of the project – does it fit our
with expert assistance from consultants. This is
corporate objectives - and cost and timeline details.
taking place in a very competitive environment
Owner: Pre-Contracts Team
where the “fit” to business objectives and corporate
Environment: Competitive, quality, cost and time
goals, cost and the timeline are all important.
critical, community and corporate goals.

CONCEPTUAL MODEL – Pre-tendering

Technology
Business Manager Industry Potential Clients Suppliers
(Int.& Ext.)

Get Details of, Develop and Develop and Acquire and

and Select the Maintain understand the Implement
Prospective required processes Technology
Projects Knowledge

Set the criteria

needed to
assess the
feasibility of
making a bid

Develop the Monitor and Develop a

Project Control the Preliminary
Concept Concept and Estimate
Estimate Details

Cost
Project Concept & Timeline

Figure 5.3: Root Definition, CATWOE and Conceptual Model of Pre-tendering Process.

143
Stage 5
In Stage 5, participants were interviewed with the structured questions that have emerged
from the key activities described in the conceptual model in Figure 5.3. Participants were
asked the following questions for each activity highlighted in the conceptual model:
a) Do you undertake the described activity?
b) How is this activity accomplished?
c) Define your measure of performance for undertaking this activity.
d) Describe any improvements that could be made to the way this activity is undertaken.
e) How are you likely to undertake this activity in the future?
f) Do you think this is an important activity?

The discussion that was generated in this stage is presented in Table 5.2

Table 5.2: Discussion on the activities of the conceptual model-Pre-tendering process

Activity Discussion

Current Projects: Get details of This activity is being undertaken within the organisation and
and select prospective projects business manager is mainly responsible for it. However, there is
a need to improve the process through which early spotting of
the projects become possible.

Develop and maintain required This activity is not formally done but is considered very
knowledge about the Industry and important because knowledge about the structure of the industry,
its projects and what sort of projects have been done, or what may be done
in future, gives the organisation an ability to upgrade its
knowledge in order to compete for the projects.

Develop the process for This activity is not formally done in the organisation. It was
understanding and networking considered important because it is believed in the industry most
with clients of the work comes through networking and contacts. An early
knowledge of a particular prospect means better preparation and
decision making for its selection. Therefore a formalized process
that dictates how to network with a particular client is very
important and should be developed.

Acquire and implement Certain projects would demand the use of new technology or
technology from technology technology that the organisation is not familiar with or has used
suppliers when the project before. This activity is therefore important to be able to acquire
demands that. and implement technology from technology suppliers whenever
there is a need. This would require a good knowledge of
technology suppliers and existing technologies they provide.

Set the criteria needed to assess This activity is considered very important as there is no specific
the feasibility of making a bid criteria in the organisation used to judge the strategic aim of
winning a potential project, or whether it is feasible or not to
tender for it. This activity is mostly taken using tacit knowledge
about criteria (such as profitability, competition, risk,
availability of resource, financial capacity) but not being able to
explicitly quantify knowledge about determining the suitability
of the business prospect.

Develop Preliminary Estimate to These activities are undertaken in the organisation, mainly with
obtain the cost of the project, the help of consultants, suppliers and subcontractors that the
Develop the Project Concept, organisation has previously worked with before and who they
Monitor and Control the Project have trust and confidence in. These third parties play a great role

144
 Concept and Estimate Details in the pre-tendering process and hence it is very important to
build good relations with trusted trading partners.

Stage 6

Stage 6 deals with the development of list of actions based on the discussion generated in
Stage 5 that should be taken in order to improve the situation or process under study. The list
of actions compiled below are considered by the analysts as being promising to improve the
process when acted upon, is provided below:
1. Improve the understanding about clients, their businesses, roles and projects they may
invite tenders for;
2. Enhance networking skills of the staff liaising with clients and to develop a guideline
to undertake successful networking through socialising with them;
3. Establish decision criteria that quantitatively assesses a particular prospect in order to
assess its feasibility of converting that prospect into a tender bid; and
4. Maintain and enhance relations with trading partners such as consultants, suppliers
and subcontractors to obtain the best quoted prices and develop a quick and reliable
preliminary estimate of the project expected time and cost.

Stage 7
This is concerned with implementing actions and monitoring changes (improvements and
unintended problems). This requires a considerable amount of time, well beyond the time
limit available for completing the doctoral study. It was also beyond the scope of the research
to actually implement the actions and study any changes.

The next two sections of this chapter investigate the technology and people components
respectively using same methodology (SSM) following same stage-by-stage process.
However, it should be noted, they are presented in an abbreviated and more readable
descriptive form to maintain the readers’ interest and avoid monotony.

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5.4 Investigating the Technology Component Associated with Pre-tendering
Process Using SSM- Project Histories

From the study of the process of “pre-tendering”, it distinctly emerges that the pre-tendering
team places a very high value on the use of an ICT component referred to as “Project
histories”. Nevertheless, the effective use of project histories has been plagued by various
issues that restrict the team’s effective use of them. This led to further investigation of the
issues associated with the utilisation of these project histories. The research team conducted
an in-depth interview with one of the initial participants (the Engineering Manager, who
possessed an avid interest in the development and use of the project histories). Interview
results are represented in the rich picture illustrated in Figure 5.4. This rich picture forms the
basis for developing the Root Definition, CATWOE, and Conceptual Model shown in Figure
5.5.

Reports
People Data
Data Base Client Data
Vendors Productivity Info
Project Team
Cost
Previous Projects
IMS We are completing this
Design/ project and too busy to
complete the history
Tendering Team

Existing Structure Project Histories

We want to use Project Manager are not of much
project histories for Project Histories benefit to us
new projects are Useful Forms
Procedures No Implementation
Database Strategy for
Design Managers Reports Completing the
Project Histories Construction Team

Must fully
implement Project Project Histories can
Collect
Histories ASAP provide us with
Collect Senior Management
competitive advantage
Our priority is
Control Tim e is Money project
completion
Engineering Manager

omic
Econ ions Senior Management
o ndit Different
C
Priorities
KM can help
rs implement&
petito
C om Manage project
histories

Figure 5.4: Rich Picture for project histories

In this organisation the project histories are intended to be the repositories/data bases that
contain useful information and knowledge from previous projects. These should include
information such as productivity rates on previous projects, cost and timelines, and client

146
details. These project histories are operated through a corporate ICT system referred to as
IMS (Information Management System). As one of the leading contracting companies in
Australia, this organisation’s use of ICT has proliferated from the mid 1990’s as part of its
commitment to become a best-in-class organisation. IMS - as a communication tool - has
become the general and most usual form of communication throughout the organisation.
Organisation A has made significant efforts to successfully diffuse it within the organisation
to the foreman level. As such, IMS is effectively utilized while the project is in progress, but
it is rarely used to successfully and efficiently to develop and maintain a project history.

Developing a project history requires the management of a large volume of information

generated while the project is being executed, and identification and classification of
information that may be of use on future projects. It is often recommended that this kind of
information should be gathered as part of a project debriefing process; however, experience
shows that this is often not sufficient to provide and record useful information for future use.
However, the lack of interest of the project team in participating in project debriefings further
aggravates the problem of knowledge gathering and transfer. This results in very little
knowledge being carried forward from current projects to be used in future projects. In
practice, most knowledge transferred from one project to other remains tacit—often
unspoken, and certainly not documented. As shown in the above rich picture (Figure 5.4), the
success of project histories proliferation is very limited. A key factor in this is the support of
senior management, and this PhD study emphasises that project histories need to be
strategically aligned with a business process like KM.

The benefits of project histories were articulated as significant, and are very clear in the minds
of the people who want to use them. However, users of project history have little influence
over the project team members who are essentially responsible for the creation of project
history information and knowledge, but have very different priorities. The value of adopting a
KM philosophy is that it provides senior management with a rationale to support the creation
and maintenance of repositories of project histories. These repositories will contain the
lessons learnt and a rich contextual description of unique problem handling techniques
devised by the project team. Future projects can then avoid re-inventing the wheel, thus
saving time and resources. Highlighting a project history KM focus could provide a vigorous
and convincing rationale for both senior management and project team to accept its value.

147
Root Definition – Project Customer: Senior Management, Future Design Managers, Project
Histories Managers
Actors: Engineering Manager, Design Managers, Project Managers,
A system owned by the
Construction Team
Engineering Manager, who
Transformation: Knowledge, processes and technology together with
together with the Design
details of past projects, are used to create and maintain a repository of
Managers, seek data,
a project histories that can be used when preparing a tender bid for a
information and knowledge
new project.
from previous projects stored
Weltanschauung (why bother?): To assess the feasibility of making a
in project histories in order to
tender bid, a good understanding of the project is required based upon
prepare realistic preliminary
previous organisation experience and knowledge.
understanding of the project
Owner: Engineering Manager
and cost estimates for pre-
tendering process and then Environment: Competitive, Quality, Cost and time critical,
for preparing the project bids. Community and Corporate Goals.

Conceptual Model – Project Histories

Potential Projects Technology Suppliers

Project Managers - Industry
Current Projects Advancements (Int.& Ext)

Develop and Acquire and

Get details of Develop and
understand the Implement
specific project maintain required
process for Technology for
for developing Knowledge
early spotting Developing
histories Project Histories

Set the criteria needed to assess

the implementation of the
project histories and its
management

Monitor and
Apply Project Create Project
Control Project
Histories Histories
Histories

Bids for New Projects Project Histories

Figure 5.5: The Root Definition, CATWOE and Conceptual Model of Project Histories

In the next stage of this part of the research, participants were interviewed with a similar
set of structured questions (previously described in Stage 5) that emerged from key
activities described in the conceptual model. Table 5.3 summarises discussion that took
place over activities conceptualised in the conceptual model.

148
Table 5.3: Discussion on the activities of the conceptual model

Activity Discussion

Current Projects: Get details of This activity is not formally done. However it is considered a
specific projects for developing very important activity. A framework needs to be developed to
histories decide what important information and knowledge needs to be
captured from current projects. This would enable the
organisation to utilize its resources in an optimal and efficient
manner and use knowledge gained on subsequent projects.
Ideally it needs to be done by the project managers but, due to
various constraints as discussed earlier, it is more feasible to
recruit staff in the KM department and let them liaise and work
closely with project managers to gather knowledge and
important information.

Industry Advancement: Develop This activity is not formally done in the organisation. It is an
and maintain required knowledge important activity, as it would help benchmark the organisation
against the current industry best practices. If industry as a whole
is embracing new modus operandi for its advancement, the
organisation must be able to acquire, develop and maintain the
required knowledge to remain competitive.

Potential Projects: Develop and This activity is not considered an important activity when
understand the processes of early dealing with the issue of project histories. So it can be safely
spotting of viable projects ignored.

Technology Suppliers: Acquire This activity is not being done in the organisation at all.
and implement technology However it is considered an important activity as it becomes
required for developing project very crucial to decide with technology to use for developing and
histories maintaining project histories in the organisation. It will involve
both hardware and software aspects of the technology. A proven
technology should be sought. The organisation has developed a
technology at its own to develop project histories but its
efficiency is to be benchmarked against other technologies
available in the market.

Implement project histories At the heart of all the activities lies this most important activity
organisation-wide and set the that demands the commitment from senior management.
criteria for assessing the Currently there is no implementation strategy from the
implementation of project histories organisation at the corporate level. Along with this
and its management implementation commitment there is a need to develop a criteria
that would assess the implementation strategy of project
histories and its efficiency.

Monitor and control project This is also considered to be a very important activity as once
histories the process of developing and maintaining project histories is
underway, it becomes essential to constantly monitor its
performance and deals with the issue causing obstruction to its
creation and efficient use. The KM function of the organisation
should be able to take up this responsibility.

This information forms the basis of the comparison between the realities of the real world of
developing and using project histories, and the “ideal” expressed by the conceptual model.
This comparison – or gap analysis – provides the framework to focus on the issues and
opportunities, examine assumptions, and better understand the dysfunctional
behaviours/actions that need to be remedied. Stage 6 strives to identify the desirable and
149
feasible options for change and improvement in the process of creating and using project
histories. Based on the previous discussion and insights gained from the previous stages, it is
possible to assemble various options for improving the process of creating and using project
histories. These options can be summarised as follows:
1. Senior management buy-in and development of a corporate-level implementation
strategy at for the creation and use of project histories—appropriate leadership is
required to bring this change;
2. Deciding on a framework to signify what is the important information and
knowledge that should be captured or preserved from the current projects;
3. Deciding upon a user friendly and effective format of the project histories;
4. Deciding upon who should be gathering the required information and knowledge
and who should be creating and developing project histories—this would involve
investigating an option for staffing an organisational KM function to implement
such responsibilities;
5. Investigating current technology available in the market to create and develop
project histories and how their efficiencies could be compared with technology
currently being used within the organisation; and
6. Once project histories become operational, monitoring and controlling their
operation should become an embedded process. A KM organisational function
should take up this responsibility.

5.5 Investigating People Component Associated With Pre-tendering Process

The investigation of the pre-tendering process highlighted various key personnel who were an
integral part of the process. Three of these people agreed to take part in further research
(owing to their eagerness, willingness and time availability). They were asked to provide
examples from their previous work experience in order to elicit tacit knowledge residing in
their heads that may have the potential to contribute towards the improvement of the pre-
tendering process. Among various examples provided and quoted, are three that were selected
(based on how well they can contribute towards the improvement of the pre-tendering
process).

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5.5.1 Participant 1: An Example of a Bridge Project

This case examines a commonly observed scenario while tendering, where multiple parties
compete to bid on a specific project and the contract is awarded to the lowest bidder. It
documents a tendering process on a bridge project where the bidder lost their bid by a very
small margin. The unsuccessful bidder claimed that with a little more expense, the client
would get a lot more value out of the design. The unsuccessful bidder claimed the bid with
the lowest price was selected (but with inferior value) because the client disregarding best-
value and hence adhering to competitive low-cost bidding.

Figure 5.6: Rich Picture of the Bridge Project

The Rich Picture shown in Figure 5.6 illustrates the difficulty that the tendering team
experienced throughout the tendering process due to the very short time available for bid
preparing. The organisation then discovers that it had failed to be successful by a very small
margin. In this case, the client had undertaken an investigation of the site in the previous 3 to
4 years, but had not completed a final design. It then became a task of the bidder to develop a
realistic design in addition to the cost and time estimate that would form a bid—all within the
short time span of 12 weeks. The routine method of bridge design and the routine typical
construction method could not be used because of the nature of soil (clay) that was very

151
difficult to compact. Also, the presence of a wild life sanctuary in the vicinity of the bridge
made the design and construction environmentally sensitive and subject to community
interest. To achieve a suitable solution all the team worked strenuously to develop and submit
a realistic design, cost and timeline bid. Much to the disgust of the bidding team and
especially the design manager who led the team and was Participant 1, the bid was eventually
lost. The case study also documents a changed worldview and a negative impact on the
design manager who worked very hard on this project, failing to win the bid. He then
promised himself not to work so hard to provide value while making a bid for future projects.
His own words reflect a changed worldview - “Next time I will give them what they want”.
This illustrates a negative transformation—that he would not be performing innovatively on
future projects and would rather stick to a conventional approach. This reality goes against
the wider worldview shared by other parts of the construction industry that looks forward to
becoming innovative and modernised and to eliminate or substantially reduce notoriously low
productivity levels.

The Root Definition, CATWOE and Conceptual Model is presented in Figure 5.7 as a case
study of this problematic situation that uses SSM to generate a solution.

152
ROOT DEFINITION – Bridge Project Customer: The client and the community
A system owned by the Bidding Contractor, who Actors: Bidding contractor, competitors, design
together with the Design Engineer, use engineer, design team, client.
knowledge, skills and experience to prepare Transformation: To use knowledge, skills and
competitive bids for the design and construction experience to prepare competitive bids for the design
of bridge projects. This is undertaken with the and construction of bridge projects.
understanding that while the client wants a low Weltanschauung (why Bother?): While the client
price, there is also a desire to obtain the best wants a low price, there is also a desire to obtain the
value in a bid. These bids must also take into best value in a bid.
consideration the competitive market and Owner: Bidding Contractor
community expectations for the design and Environment: Competitive, quality, cost and time
construction of a major project. critical, and community expectations.
CONCEPTUAL MODEL – THE BRIDGE PROJECT

Client
Community Competition

Acquire details Understand Understand

client’s Know how
of the client’s community’s to be
technical expectations for expectation for
price and value competitive
requirements major project

Set the criteria

needed to define
what will be a
competitive bid.

Develop a
Monitor and Competitive
Control the
Bid
Bid

Figure 5.7: Root Definition, CATWOE and Conceptual Model of the Bridge Project.

Table 5.4: Discussion on the activities of the conceptual model

Activity Discussion

Acquire details of the clients This activity is undertaken in the organisation and mainly relies
technical requirements on the technical requirements stated in the specifications but
only when tenders are invited.

Understand clients expectations This activity is not formally undertaken in the organisation and
for price and value depends mainly on the person undertaking it. It is however a
very important activity as it would ultimately decide the fate of
tender. If the clients’ expectation is only price then it is worth
focussing only on price and not giving much attention to the
value.

Understand community’s This activity is considered important as some projects may affect
expectations for major project the community and their expectations and it is important to

153
 involve their representative during the construction process. It is
therefore important to develop good liaising skills with the
community.

Know how to be competitive This activity is not formally done and is usually measured by
noticing how many projects are being won. However there is
need for explicit criteria that could define the competitiveness of
the organisation and a way of understanding the organisation’s
competitive advantage.

Set the criteria needed to define This activity is considered very important, as it will decide
what will be a competitive bid winning or losing the bid. It is therefore considered important to
develop criteria that can quantitatively rank chances of success
of a particular bid. There are no such criteria so far, and so staff
tacitly takes most of the decisions.

Develop a competitive Bid Once criteria for a competitive bid is developed, a bid can be
& Monitor and Control the Bid prepared based on that, which will stand more chance of success
as compared to the other bids.

The above-mentioned scenario is primarily concerned with a tendering process but contains
various implications for a pre-tendering process. The list of actions below would suggest that
it is best to:
1. Know the clients expectations clearly, is it price or value?
2. Ascertain to what extent, community will be a part of the project and what could be
the possible ensuing difficulties; and
3. Devise the criteria that will define the competitiveness for the organisation.

5.5.2 Participant 2: An Example of a Road Project

This case documents the process of tendering/bidding on a road project where it was required
to construct the culverts to manage the flow of water. The rich picture in Figure 5.8 describes
the problematic situation. Flood modelling was the basis for the selection of size and spacing
of the culverts and this aspect was mostly covered in this case study. The design and
construction method itself were routine in nature and was not investigated.

154
 Figure 5.8: Rich Picture of the Road Project

In this case, the client carried out the hydrological study of the area almost five years ago,
based on their subsequent flood modelling they allocated the space and sizing of the culverts
and hence initiated a bid process. The organization under study was one of the bidders and
didn’t agree with the sizing and spacing of the culverts as specified by the client. The bidding
organization carried out their own flood modelling and challenged the client’s specification
for culverts, based on the new model and the design properties derived from it. They
completed their study under severe time pressure and were able to convince the client that
their sizing and spacing was preferable and eventually produced significant cost savings on
the whole project.

If this is modelled as a problematic situation, then proposing the solution using SSM requires
developing Root Definition, CATWOE and Conceptual model as illustrated in Figure 5.9.

155
ROOT DEFINITION – ROAD PROJECT Customer: The client and the community
A system owned by the Construction Company, who Actors: Construction company, design engineer,
together with the Design Engineer, use knowledge, client, client’s consultants.
skills and experience to prepare competitive designs Transformation: To use knowledge, skills and
that delivers the most appropriate solution for the experience to prepare competitive designs that
project. This is undertaken where the client may be delivers the most appropriate solution for the project.
loosing engineering knowledge and the client’s Weltanschauung (why Bother?): the client may be
consultants have not provided the optimal design loosing engineering knowledge and the client’s
parameters. These bids must also take into consultants have not provided the optimal design
consideration the competitive market and community parameters.
expectations for the design and construction of a Owner: Construction Company
major project. Environment: Competitive, quality, cost and time
critical, and community expectations.
Engineering
Client Profession
Community Competition

Get details of Know the Understand

appropriate Know how
the client’s community’s to be
technical models for the expectation for
design process competitive
requirements major project

Set the criteria

needed to define
what will be a
successful
design

Develop an
Monitor and appropriate
Control the
design solution
Design

Figure 5.9: Root Definition, CATWOE and Conceptual Model of the Road Project.

156
Table 5.5: Discussion on the activities of the conceptual model

Activity Discussion

Get details of the clients technical This activity is done in the organisation and mainly relies on the
requirements technical requirements stated in the specifications when tenders
are invited. It is also important to question their technical
requirements, as they may not be always correct, especially
when clients are losing the engineering knowledge skills.

From the engineering profession, This activity is mostly taken in conjunction with consultants
know the appropriate models for specialised in the field and have appropriate knowledge of the
the design process design process (hydrologic modelling).

Understand community’s This activity is considered important as some projects may affect
expectations for major project the community and their expectations and it is important to
involve their representative during the construction process. It is
therefore important to develop good liaising skills with the
community.

Know how to be competitive This activity is not formally done and is usually measured by
noticing how many projects are being won. However there is
need for explicit criteria that could define the competitiveness of
the organisation.

Set the criteria needed to define This activity is considered very important, as it will decide the
what will be a successful design winning or lost of the bid. It is therefore considered important to
develop criteria that can quantitatively rank chances of success
of a certain design.

Develop an appropriate design Once criteria for a successful design is developed, a design can
solution & Monitor and control the be prepared based on that, which will stand more chance of
design acceptance as compared to the other bids.

The above-mentioned scenario is primarily concerned with a tendering process but contains
various implications for a pre-tendering process. The list of actions below would suggest:
1. Learning to question the clients’ technical requirements and always look for
alternatives;
2. Ascertaining to what extent, the community will be a part of the project and what
could be the possible difficulties; and
3. Devising through modelling, criteria that will define the successful design in case of
flood.

5.5.3 Participant 3: Use of an Innovative Product in a Project

This case specifically describes the adoption and diffusion process of an innovative product
called “BAMTEC” in the organisation under study (Visit
http://www.bamtec.co.uk/startuk.html?index.html~main accessed 5 May, 2005). The
technical nature of the product is immaterial to the execution of this case study. The most

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important issue highlighted, is to know how the process behind the diffusion and adoption of
such an innovation in the organisation actually happened, so that a better understanding of
how it was adopted and diffused can be developed. Issues such as adoption of innovation and
its diffusion are central to the core of KM. KM helps people identify innovations that have the
potential to improve their productivity and it also provides a framework to adopt and diffuse
that innovation throughout the organisation in order to reap benefits. The rich picture in
Figure 5.10 illustrates the related processes.

Figure 5.10: Rich Picture of the Bamtec Study

The innovative product under study was displayed at a European construction conference.
This conference was attended by one of the design managers from the organisation. The rich
picture documents the values and beliefs usually existing in the organisation. For some
people, attending conferences is not particularly important but others take this seriously and
expect that their organisation should fund them to attend such events on a regular basis. In
this case, the design manager implemented the use of the BAMTEC product in a project that
previously had been declared as a “dead duck”. It was the sort of the project that was not only
running over budget but also not returning any profit to the organisation. Implementing the
BAMTEC product on the project - in the words of the design managers - “literally saved the
project and pushed it towards a profitable outcome”. The root definition, CATWOE and
conceptual model shown in Figure 5.11 gives an explicit description of how a specific

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innovation can be adopted and diffused and how it can be effectively utilized for the benefit
of the organisation. This is in accordance with SSM stages 1-4.

Customer: The building company, project

ROOT DEFINITION – BAMTEC
managers, the clients and the community.
A system owned by the Design Engineers, who
with the support of Senior Management are able Actors: Design engineer, senior management.
to achieve professional development and learn
Transformation: To achieve professional
new ideas and techniques by attending major,
development and learn new ideas and techniques by
international conferences. This adoption of
attending major, international conferences.
innovative building techniques can be the key to
project success. However, Senior Management Weltanschauung (why Bother?): This adoption of
need to be convinced of the value of conference innovative building techniques can be the key to
attendance, and many design engineers consider project success.
themselves to be too busy to attend conferences.
Owner: Design engineer
Environment: Work pressure, cost and time critical,
and community expectations.

Project
Available Conferences Senior Management
Client Managers

Know the Know which Involve Senior Know the

client’s conferences are Management in opportunities
technical worth attending the process for applying
requirements innovations to
projects
Set the criteria
needed to define
what will be the
important ideas and
techniques to learn

Adopt Monitor and Deliver

Innovation and Control the innovative
diffuse it adoption of solutions
innovation

Organisational Benefit

Figure 5.11: Root Definition, CATWOE & Conceptual Model of the BAMTEC study

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Table 5.6: Discussion on the activities of the conceptual model
Activity Discussion

Know the Client’s technical This activity is not formally undertaken. However it is
Requirement considered a very important activity because this organisation is
able to know how to do to better know the client’s technical
requirements—it must enhance its capabilities in terms of
technology and skills. This sort of activity is done during the
pre-tendering or tendering stage but deficiencies in the
organisation are only resolved on a temporary basis and not on a
permanent basis.

Know which conferences are This activity is not being undertaken in the organisation at all.
worth attending There are no resources dedicated to conduct this activity.
However it is considered an important activity as it becomes
crucial to decide which among many conferences are the ones
that are promising and deliver good value to participants.

Involve Senior Management in the It is an important part of the whole process. Nothing can happen
process without senior management getting involved and recognising the
importance of employees participating in conferences and also
appreciating benefits that this knowledge may bring to the
organisation. This would ensure that conference participation
expenditure would be budgeted for employees.

Know the opportunities for This activity is not formally undertaken at all. However it is very
applying innovations to projects important as project managers are in better position to look for
opportunities where any innovation can be applied. If this were
systematically undertaken, it would ensure that innovation
opportunities don’t go unnoticed. Instead, organisations can
develop an approach to procure skills and technologies related
with that innovation and applying it to a project.

Set the criteria needed to define At the heart of all the activities lies this most important activity
what will be the important ideas that would require the input from all the above-mentioned
and techniques to learn activities. A criteria is needed to be developed that could take
into account the company’s strategy and overall vision and then
establish a plan incorporating important innovative ideas and
techniques to be learnt and applied in the projects.

Adopt Innovation and Diffuse it This activity is not formally undertaken but it is an important
with in the organisation one because, once a new idea or technique is acquired by the
organisation it is important to adopt that innovation and diffuse
it organisation-wide. Organisation-wide commitment is needed
to carryout this activity.

Monitor and Control the adoption This is also considered a very important activity, as once the
and diffusion of innovation innovation becomes the part of work process; there is need for a
process and look for new process that may monitor and control the adoption and diffusion
innovations. process to ensure best results are delivered.

Deliver innovative solutions As a part of carrying out above-mentioned activities,

organisation would be in a better position to deliver innovative
solutions.

Decide who would be attending This activity is also a important as it will decide who will be
what conference able to attend the conference. It should match area of interests of
the employees with available conferences. Senior management
can use it as a reward to motivate employees. The organisation
can then make sure that the person attending the conference
effectively disseminates knowledge brought back to the

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 organisation either through socialising with other employees or
via other formal methods such as reporting on the conference.
This activity was not initially considered in the conceptual
model but participants mentioned the importance of this aspect.

Based on the discussion and insights gained from the previous SSM stages it is possible to
assemble various options for improving the access to knowledge from external sources such
as conferences. These can be summarised as follows:

1. Involve senior management and make them aware of the benefits that external
knowledge may bring to the organisation in order for them to budget for people to
attend conferences;
2. Decide a framework to decide what are the important ideas and techniques to learn
from a client’s point of view and also from an organisational point view that
matches organisational strategy and vision;
3. Identify conferences or other external events that could be useful for disseminating
knowledge considered helpful for the organisation;
4. Ask project managers to identify and report on innovation opportunities that may be
able to be used while executing projects;
5. Devise selection criteria for rewarding employees by selecting deserving candidates
for attending conferences; and
6. Arrange a seminar or socialising event where employees returning from a
conference with particular knowledge could share and transfer it to other employees
in the organisation. Also publish how new knowledge has contributed to improved
performance at the personal and/or organisational level so that there is an explicit
cause-and-effect link between being open to knowledge-pull and adopting an
innovation.

5.6 Summary

This chapter described the fieldwork done in phase 2 of the research. The use of SSM is
demonstrated as a KM tool to achieve the transformation mentioned in Chapter 4. A business
process termed as pre-tendering in the Organisation A was selected for the study. It was
selected because it was an informally executed process but had great strategic value for the
organisation. SSM is highly suitable tool of analysis for such complex and poorly defined

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processes. A complete SSM framework was applied on this process that resulted in various
list of actions having the potential of improving the process.

In line with the model developed in Chapter 4, people and technology components of this
process were also investigated. Again, SSM was utilised to carry out the investigation. The
investigation of the technology component gave rise to carrying out a case study dealing with
a very important component of ICT termed as ‘project histories’. The people‘s component
investigation gave birth to three case studies provided by three participants involved in the
study. These case studies focussed on a bridge project, a road project and the use of an
innovation in a construction project.

A list of actions is formed as a part of each case study carried out through SSM. This list of
actions has the capability of dealing with issues hampering the effective integration of the
three components, process, people and technology providing effective integration as was
emphasised in the model presented in Chapter 4. The implications of carrying out the SSM
studies are explained in detail in Chapter 6.

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 Chapter 6
Integrating People, Process and Technology

The objective of this chapter is to discuss how the use of SSM has contributed towards the
integration of People, Process and Technology. The main contribution of SSM can be seen as
achieving three components of KM. These are knowledge capture/elicitation, knowledge
creation and knowledge sharing.

The first section describes various types of knowledge that was elicited when SSM was
undertaken and how it is beneficial to the pre-tendering process. The next section describes
various knowledge creating activities through carrying out a SSM study resulting in a list of
KM actions. This section also discusses what strategy needs to be adopted in order to execute
these actions. After this, the role of SSM as a KM tool in enhancing learning and facilitating a
move towards becoming a learning organisation is discussed.

6.1 SSM Contribution towards Knowledge Capture and Elicitation

A large amount of knowledge in an organisation remains unnoticed and hidden in the form of
organisational routines, processes and in the employees’ heads. The SSM investigation
presented in Chapter 5 demonstrates an example of knowledge capture and elicitation within a
pre-tendering process. As a result of the investigation, many hidden facets of the pre-
tendering process was unearthed causing the knowledge involved in a tacit rich process to
become explicit and available to be effectively shared and used by others. Additionally,
knowledge assets that are part of the process became noticeable and this made knowledge
capture easy and robust.

The main contribution of adopting a SSM approach can be recognised as giving structure to
an otherwise informal and unstructured pre-tendering process. It highlights the strategic
importance of this process and presents it as a mission-critical business process that has great
implications on organisations interests. This is delivered through developing ‘rich pictures’
which is an important element of the SSM approach. A rich picture of the pre-tendering
process (validated by the participants) presents rich explicit pictorial knowledge of the
structure of the process, together with values and beliefs of involved participants that
highlights underlying issues involved. ‘A picture is worth a thousands words’, and a picture

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such as a rich picture, assiduously drawn to provide a snap shot of the situation involving
issues, beliefs, perceptions is worth more than a ‘thousands words’. It is best understood and
assimilated only when looked at. A conventional flow chart fails to provide the context and
hence falls short of delivering the promise that a rich picture can deliver. The development of
rich pictures strongly facilitated the research work. The participants, when they saw
themselves represented in a situation portrayed through a rich picture, were in a far better
position to discuss the issues and discuss their ideas than by example providing a narrative
textual ‘history’.

The knowledge elicitation stage of SSM (i.e. developing rich pictures) made it clear that the
process of pre-tendering is not a simple one. It is a complex process that involves the vigorous
interaction of people and technology. This led to the exploration of the ‘People and
Technology’ interactive component of the pre-tendering process. It is in accordance with
Process, People and Technology Triangle of the model presented in Chapter 4 showing
interdependency and interrelation of these three components.

It is argued above that better understanding of the process is established when a rich picture is
looked at and assimilated by the person (reader) based on his/her cognitive properties and
worldview. Table 6.1 summarises the SSM investigations based on the model presented in
Chapter 4 to demonstrate and illustrate how knowledge elicitation has increased
understanding and is beneficial to the pre-tendering process.

Table 6.1: Knowledge elicited in SSM investigation

Model
Component
Elicited Knowledge Benefit to Pre-tendering process
investigated
by SSM
Process Networking with clients is extremely Improving the networking process means
(Pre- important. early spotting of prospective projects
tendering) This means there may be more work
Clients are losing engineering knowledge involved than initially thought in the
project so be prepared
Understanding clients and their business is Improving the understanding of the
essential clients will help develop the skills within
the organisation to complete clients
projects in far better way
Relations with supply chain trading partners Improving relations with supply chain
influences the pre-tendering process partners such as consultants, suppliers
and subcontractors will help in obtaining
best quoted prices that will result in a
quick and reliable preliminary estimate of
the project’s expected time and cost.

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 Criteria for selecting or rejecting the prospect By developing the criteria it is possible to
is missing logically select and reject a prospect
hence having a good rationale to support
the decision made.
Technology Senior management support is needed for full It will help in developing a business case
(Project diffusion and adoption of the technology to convince senior management who may
Histories) within the organisation have different priorities for introducing IT
systems and new processes
It is important to have a framework to know It will help in capturing and preserving
what is the important information and required information and knowledge,
knowledge that should be captured or which will then be used in the pre-
preserved from current projects tendering process
It is important to have a user friendly and It will assist in effective use and search of
effective format of the project histories project histories
A continuous monitoring and control of It will help in developing a case for KM
project histories is very important and extra function to take up this responsibility
resources are required for this purpose
People It is important to know client expectations It will help in streamlining the pre-
about price and value. tendering process based on what clients
actually want
The community may play a role in some It will help in developing early strategies
projects. It is important to know what sort of of dealing with the issues when
issues can occur in dealing with the community becomes part of the project
community as an interested stakeholder
It is essential to define competitiveness for the In the pre-tendering process, it will help
organisation and devise the criteria that will in considering what sort of projects may
measure competitiveness for the organisation. add to the competitiveness of the
organisation so that focus is maintained in
winning those of strategic value
It is essential that clients’ technical It will help during the pre-tendering
requirements are questioned and other process to think of the alternatives and
alternatives are sought adopt a more effective alternative when
preparing the bid
It is good to have access to external It will help in the pre-tendering process to
knowledge sources in order to acquire know of innovative products that may
knowledge about new innovations and improve productivity
products
Conferences and external events are important By going to conferences and other
for the dissemination of useful knowledge external knowledge dissemination events
it is possible, while carrying out pre-
tendering process, to know of innovations
that may provide various alternatives

6.2 SSM Contribution towards Knowledge Creation

The main objective of the SSM is to improve the process under study. A list of several
actions is produced which has the potential, when acted upon, of achieving the perceived
improvements in the process. The SSM investigations described in Chapter 5 produced
various lists of actions under the category of Process, Technology and People. Undertaking
these actions would require a particular strategy on the part of the organisation. Some actions
will have an effect on culture (the way things are done) in the organisation and some would
require generation of new knowledge and would require external interaction and collaboration
with knowledge sources. Table 6.2 illustrates these actions and appropriate strategy that needs

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to be considered in order to implement the action. Actions having an impact on the culture of
the organisation would require internal change projects to handle that change. Some actions
would require collaboration with external knowledge sources such as academia or other
industry-academia collaborative initiatives to undertake projects to deliver and create the
required knowledge. Some of the actions would require both internal change projects and
external collaborative research projects.

Table 6.2: Knowledge creation in SSM investigation

Appropriate
Model Impact upon
Strategy
Component Proposed Action as a result of SSM
investigated Investigation External
by SSM Culture Knowledge
Procurement
Process Improve understanding about clients, their Collaboration
businesses, roles and projects they may
with External
invite tenders for. Knowledge
Sources
Enhance networking skills of the staff Collaboration
liaising with clients and develop a

with External
guideline to undertake successful Knowledge
networking and socialising with them Sources &
internal
change project
Establish decision criteria that Collaboration
quantitatively assesses a particular
with External
prospect in order to assess its feasibility of Knowledge
converting that prospect into a tender bid Sources
Maintain and enhance relations with
Internal
trading partners such as consultants, Change
suppliers and subcontractors to obtain the Project
best quoted prices and develop a quick
and reliable preliminary estimate of the
project expected time and cost
Technology Obtain senior management buy-in and
Internal
development of a corporate-level Change
implementation strategy at for the creation Project
and use of project histories—appropriate
leadership is required to bring this change
Deciding on a framework to signify what
Collaboration
is the important information and with External
knowledge that should be captured or Knowledge
preserved from the current projects Sources
Deciding upon a user friendly and
Collaboration
effective format of the project histories with External
Knowledge
Sources
Deciding upon who should be gathering

Collaboration
the required information and knowledge with External
and who should be creating and Knowledge
developing project histories—this would Sources &
involve investigating an option for Internal
staffing an organisational KM function to Change project
implement such responsibilities

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 Investigating current technology available
Collaboration
in the market to create and develop project with External
histories and how their efficiencies could Knowledge
be compared with technology currently Sources
being used within the organisation
Once project histories become

Collaboration
operational, monitoring and controlling with External
their operation should become an Knowledge
embedded process. A KM organisational Sources &
function should take up this responsibility Internal
Change project
People Know the clients expectations clearly, is it
Collaboration
price or value? with External
Knowledge
Sources
Ascertain to what extent, community will
Collaboration
be a part of the project and what could be with External
the possible ensuing difficulties Knowledge
Sources
Devise the criteria that will define the
Collaboration
competitiveness for the organisation with External
Knowledge
Sources
Learning to question the clients’ technical
Internal
requirements and always looking for Change
alternatives Project
Involve senior management and make
Internal
them aware of the benefits that external Change
knowledge may bring to the organisation Project
in order for them to budget for people to
attend conferences
Decide a framework to decide what are
Collaboration
the important ideas and techniques to with External
learn from a client’s point of view and Knowledge
also from an organisational point view Sources
that matches organisational strategy and
vision
Identify conferences or other external
Collaboration
events that could be useful for with External
disseminating knowledge considered Knowledge
helpful for the organisation; Sources
Ask project managers to identify and
Internal
report on innovation opportunities that Change
may be able to be used while executing Project
projects
Devise selection criteria for rewarding

Collaboration
employees by selecting deserving with External
candidates for attending conferences Knowledge
Sources &
Internal
Change project
Arrange a seminar or socialising event
Internal
where employees returning from a Change
conference with particular knowledge Project
could share and transfer it to other
employees in the organisation. Also
publish how new knowledge has
contributed to improved performance at
the personal and/or organisational level so
that there is an explicit cause-and-effect
link between being open to knowledge-
pull and adopting an innovation.

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6.3 SSM Contribution towards Knowledge Sharing

Another aspect where SSM has contributed is the sharing of knowledge among the
participants involved in the research. During the development stage of rich pictures and its
validation, participants understood each others role more clearly. The design managers
appreciated the importance and value of the business manager’s role in efficiently networking
with clients to obtain knowledge of prospective projects. In the same way, business managers
developed an enhanced understanding of the role of engineering managers and design
managers in carrying out the pre-tendering process.

A SSM process, carried out with the pre-tendering team, can provide a knowledge repository
for new team members and provides them with knowledge of how this process has been
carried out by the earlier team. It also has training implications where SSM investigations can
simulate a training module to demonstrate a certain process. A direct utilisation of SSM was
realised during the research process when the pre-tendering team was disbanded. Two of the
six participants moved to different organisations and the remaining four were deployed on
different projects hence taking their knowledge of carrying out the pre-tendering process
along with them. In this scenario, SSM investigation can be efficiently and robustly used to
disseminate the knowledge as new team is formed.

6.4 Learning in the SSM and a Move towards a Learning Organisation

under KM

Senge (1990) envisioned a learning organisation as one that is continually improving its
capacity to learn and change owing to achieved learning. SSM provides a systematic way of
achieving this aim. It is evident in the SSM investigation of the pre-tendering process that
knowledge that is elicited and knowledge that is created in the form of list of actions,
inadvertently causes learning and acts as a change agent for the organisation. Once these
actions are implemented and the change process is on its way, new issues will emerge giving
rise to different situations and problems. A new cycle of SSM investigation can then be
initiated to elicit new knowledge and devising actions to handle the new situations. In this
way, SSM has the capability of becoming an integral part of a continuous learning and change
cycle within the organisation.

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Deploying a SSM initiative in the organisation also delivers an essential KM initiative. It can
be noted in Table 6.2 that actions proposed as a result of a SSM investigation impacts the
culture of the organisation and requires collaboration with external knowledge sources to
generate new knowledge. Its chances of success most likely increase when an organisation is
undertaking a KM initiative. The model presented in Chapter 4 suggests that a KM initiative
reduces the cultural resistivity of the organisation and develops strong ‘pull forces’ within the
organisation under which increases its ability to access external knowledge and collaboration
with external knowledge sources. It is therefore appropriate to consider SSM as a KM tool
and it is suggested that it be used in organisations where KM initiatives are already being
effectively deployed.

6.5 Summary

This chapter discussed the role of SSM in demonstrating integration of Process, People and
Technology within the pre-tendering process. As a result of the SSM investigation, various
types of the knowledge are elicited and captured in each category. The knowledge thus
obtained develops a clearer understanding of the pre-tendering process and establishes it as an
important strategic and mission-critical business process. The other contribution of SSM that
can be realised is the generation of new knowledge in the form of a list of actions.
Organisations need to have an appropriate strategy (or plan) in order to implement these
actions. Some actions impact upon the culture of the organisation and trigger suitable internal
change projects to accomplish the illustrated actions. Some of the other actions suggest that
collaboration with external knowledge sources (e.g. Academia) should be considered to
generate the required knowledge for the sake of the improvement of the pre-tendering
process.

Lastly, it is emphasised, that a KM initiative in the organisation is a pre-requisite for the

seamless and effective use of SSM. For this reason it is appropriate to consider SSM as a KM
tool which has the capacity of providing a mechanism for efficient integration of Process,
People and Technology.

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 Chapter 7
Conclusions and Recommendations

This chapter develops a conclusion to the thesis by discussing findings from Chapter 4,
Chapter 5 and Chapter 6 in order to answer the questions posed and objectives set in Chapter
1. The Chapter starts by summarising the research findings related to the research questions. It
then discusses the potential contribution that this study makes to both construction
management theory and practice. Finally, the chapter ends with a discussion of
recommendations arising from this study and recommendation for future research.

7.1 Main Research Findings

The main research premise was stated in Chapter 1 (Section 1.2) as:
The construction management literature discusses the importance of innovation as a means of
improving productivity but it does not sufficiently describe mechanisms through which
innovation can be embedded into the construction industry’s operating culture. This may
result in failure to innovate and/or tardy adoption and diffusion of innovation thus locking the
industry into a status quo.

The core of this research addresses three main questions:

1. How does KM support innovation?
2. How is KM supported by the learning organisation concept?
3. Can it be demonstrated that KM has a role to play in enhancing innovation and
learning in the construction organisations?

7.1.1 How Does KM Support Innovation?

This research question is predominantly answered through a rigorous cross disciplinary

literature review as presented in Chapter 2 and specifically addressed in Section 2.10.

KM supports innovation in two ways. First, it helps organisations locate innovative

knowledge in the outside world to pave a way to bring that knowledge inside the organisation
and to effectively incorporate it into their work practices/processes. Second, KM supports
innovation by helping organisations perform innovatively. This is done through KM processes

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helping these organisations to initially obtain, assimilate and then use this external innovative
knowledge. KM promotes and regulates the cycle of external innovation adoption and its
diffusion—innovation performance results from this process

Innovative initiatives in project delivery methods such as privatisation, design/build, at-Risk

construction management and seeking collaboration through innovative relationship
management techniques such as joint risk management and partnering have been cited among
several examples of innovations that have the capacity to boost the industry’s productivity
(Kumaraswamy et al. 2002). The related knowledge is developed external to the organisation,
mainly by research centres/academia referred to as knowledge sources in this thesis
sometimes in collaborations with industry but with the involvement of a few organisations.
The whole industry will benefit only when such knowledge is adopted and used industry
wide. KM facilitates this mechanism by helping organisations locate such innovative
knowledge and then help these to diffuse it within themselves in order to benefit from it by
making it part of the regular operation. Innovative initiatives cited above are example of new
knowledge generally developed external to construction organisations by academia and
collaborative research centres. This research has demonstrated the possible advantages that
using KM can provide through collaboration with academic knowledge sources. The use of
SSM in this thesis provided an example of how new knowledge can be generated, shared and
used within an organisation through harvesting its own knowledge from its own experiences.

7.1.2 How is KM supported by the Learning Organisation Concept?

A learning organisation is generally referred to as an organisation that continually enhances

its capacity to learn and adapt (Senge, 1990). The link between KM and the learning
organisation concept is developed, again, through the cross-disciplinary literature review in
Chapter 2, specifically in Section 2.9. Both these philosophies share the same vision of
performance improvement through learning. It is important that relevant knowledge should be
readily made available and used for continuous learning to occur. KM does this best through
the creation/generation of knowledge and providing a mechanism for its effective
dissemination and use to benefit organisations. Hence it becomes difficult to purposely
provide distinctions between the KM and Learning Organisation concepts. They are
invariably linked to each other. For this reason Cavaleri et al (2005) suggested that the
simplest way to achieve the vision of a learning organisation is to integrate organisational
learning processes with KM initiatives.

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7.1.3 Can it be demonstrated that KM has a Role to Play in Enhancing Innovation and
Learning in Construction Organisations?

The investigation of first two research questions predominantly through literature review, led
to the development of theoretical model presented in Section 2.12 and Figure 2.27. This
shows that KM is linked to both innovation and learning. KM initiatives in an organisation
help it transform itself into a learning organisation. Thus, such organisations will always be
far more likely to be more innovative than non-learning organisations.

The investigation of this research question, aimed to demonstrate any link between KM,
innovation and being a learning organisation. This led to the development of the methodology
described in Chapter 4. A grounded theory methodology was used to map the present
circumstances, within two leading Australian Construction Contractor organisations, dealing
with their knowledge and ICT use. The various categories that emerged in this research
process were as follows and provided insights in the innovation behaviour of the
organisations:

1. Segregation between People, Process and Technology

2. Culture
3. Link with External Knowledge Sources (Push Vs Pull)
4. External environment
5. A gap between research and practice
6. Feedback to external sources of innovation
7. Existing Knowledge in the organisation &Internal Knowledge Bank

These categories were represented in the form of the model shown in Figure 4.1 to facilitate
understanding of their relationship with each other and to prompt further research.

The core category that emerged from this research cycle is ‘segregation between People,
Process and Technology’. The implication of this is that people often bypass available
knowledge of processes and technology to do their work, making limited use of knowledge
existing within the organisation in form of explicit knowledge or tacit knowledge residing in
people’s heads about organisational routines (processes). This has led to the development of a
culture within the organisation that resists the flow of new externally generated knowledge
being introduced to the organisation. It is debatable whether segregation between the three

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components of people, process and technology has led to the formation of this culture or
whether it is the culture itself (inherited from the construction industry) that is actually
responsible for this segregation. Non-use of available internal knowledge, because of
segregation and formation of a culture that resists the flow of new knowledge, contributes to a
gap between current research and practice. These could be due to very little feedback
emanating from construction organisations to researchers about knowledge they are using.
Internal knowledge banks of the organisation studied in this research thesis were almost non-
existent due to limited efforts being applied to develop and maintain such internal knowledge
banks.

The second phase of the research assumes that the weaknesses identified in the earlier phase
of the research can be rectified by the use of KM. This has led to the development of the
model illustrated in Figure 4.2 which depicts KM initiatives in the organisations having the
ability to dissolve cultural resistance through appropriately addressing vision, leadership and
related soft factors and provide means for effective integration of the three components of
people, process and technology. This ensures optimum use of the knowledge available with in
the organisation. This optimum use of the knowledge would generate a further quest within
the organisation to pull more externally available new knowledge within the organisation and
readily adjust/change work processes to employ it. This would be reflected in some form of
an innovative output from the organisation. When this cycle of knowledge procurement from
the external world and knowledge deployment within the organisation becomes a regular
phenomenon through deploying KM processes, it would provide the organisation with the
ability to transform itself into a learning organisation (i.e. an organisation that readily changes
its work practices in order to conform with the new knowledge externally obtained with a
vision of continually improving its performance).

Figure 4.2 is reproduced as Figure 7.1 to reinforce the significance of this model as an
important output of the thesis.

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 External Sources of Innovations Contributing to External Knowledge Bank
Increasing with the time
A CK
GA P b/w GA P Pull Push FEED B
research and Pull
K
A C GA P
Pull Push A C K d ge
Push DB DB o wle
FEE FEE dge l Kn
practice
n o wle
D
Culture In t ern a fu rt her
K E
rn al P RO V Bank O VED
In te Knowle dge in the R
k IM IMP
External Environment: Competition, Threats

rnal Culture
Int e led ge Ban organiz ation after further
w Knowle dge after certain
Culture Kn o
learning
learning
k
Existing Knowle dge in Ban People
People
People
Cycle repeats
and refines

Process Technology
Process Technology
Process Technology
Knowledge Management initiat ive Innovation
Knowledge Management initiat ive
Innovation
Knowledge Management initiat ive
Innovation
Stage 1: Before Transformation Stage 2: Transformation in Process Stage 3: Ideal Transformed State
ATION
G ORGANIZ TIME LIN E
LEARNIN

Figure 7.1: Organisational learning and transformation through KM

SSM was selected as a KM tool/technique for carrying out further research to demonstrate or
to provide a ‘proof of concept’. SSM may be viewed as a KM tool because it shares similar
characteristics to that of KM, as highlighted in Section 5.1. One critical business process, pre-
tendering, used by one leading Australian Construction Contractor organisation was selected
to demonstrate how SSM could be used as a KM tool. The aim was to intervene and cause an
improvement in this business process by using SSM as a KM tool. Each component of the
people, process and technology triangle was investigated using a SSM approach. This led to
the development of case studies in the following order:
1. Process: A case study of pre-tendering process identified people and technology being
employed and issues influencing this business process. SSM investigation consists of
developing a rich picture, Root Definition, CATWOE, and list of actions to improve the
situation as discussed in detail in Section 5.3
2. People: It was possible from the pre-tendering case study to identify several knowledge
assets (people) with relevant knowledge tacitly residing in their heads from working on
previous projects. Access to this knowledge is important as this knowledge, in one way or
other, has the capacity to improve the process of pre-tendering. This means that if knowledge
apparently hidden in people’s minds can be made explicit and available for sharing, it is
possible through the use of that knowledge to improve the performance of the pre-tendering
process. In the light of the thesis, this can be referred to as integrating people with the process.
This led to the development of three SSM case studies presented in Section 5.5 and the list of
174
actions that were developed that could integrate people and process components thus
improving the process of pre-tendering.
3. Technology: The case study of pre-tendering also highlighted the technology that was being
used to carry out the process and is also riddled with issues and problems. So a separate case
study was developed using SSM as presented in Section 5.4. The investigation revealed
various problems and issues that inhibited it from being effectively integrated with the other
two components of people and process. Again, a list of actions was developed that had the
capacity of dealing with the problems encountered and could cause effective integration of
technology with process and people.

SSM as a KM tool served three purposes:

1. Knowledge elicitation
2. Knowledge sharing
3. Knowledge creation.

It helped elicit knowledge useful for the improvement of the pre-tendering process as
presented in Table 6.1. It also paved the way for further knowledge creating by facilitating the
development of various lists of actions shown in Table 6.2. Some actions will have an impact
on the culture of the organisation and would require internal change projects to accomodate
that change. Other actions would require collaboration with external knowledge sources such
as academia or other industry-academia collaborative initiatives to undertake projects to
deliver and create the required knowledge. Further actions would require both internal change
projects and external collaborative research projects. SSM also caused knowledge sharing
among the participants as well as any other non-participants who through studying the
investigation would get a good grasp of how this process has been done in the organisation.
This kind of documented study can provide extremely useful information and explicit
knowledge that can be transferred and shared when a team integrates new members as
existing members leave.

7.2 Contribution of the Research

KM research is relatively new in the construction industry. This research has significantly
added to the existing body of knowledge in the domain of KM by effectively linking KM with
innovation and learning. This provides a strong case for employing KM in order to make

175
innovation a regular phenomenon within the construction industry and encouraging
organisations to transform themselves into learning organisations. This case was developed
through an extensive cross-disciplinary literature review and developing a detailed/validated
model that exhibits the effect of KM on developing organisational learning to transforming an
organisation into a learning organisation. This model provides a useful means of
communicating and explaining to construction personnel, how KM can be of service to their
organisation. This effect was confirmed, while undertaking the research, by research
participants who indicated, on numerous occasions, that the model was extremely useful to
them in enhancing their understanding of what KM could offer them.

The research has demonstrated in a practical way how SSM can be used for capturing, sharing
and creating knowledge. Only one process was investigated in this thesis; however
organisations can make use of the same method for other crucial processes. This could result
in the development of knowledge repositories that can be used for training purposes for new
staff and to also make them familiar with existing practices within the organisation.
The research has developed the realisation that people should be effectively integrated with
processes they use and technology they employ to complete their job—KM is a way to
facilitate this integration. This integration can be obtained through cultural change resulting
from the implementation of KM initiatives. The research has endeavoured to bridge an
identified gap between research and practice (academia and industry) by arguing that
organisations need to effectively work in collaboration with knowledge sources (academia)
and has also demonstrated how to further develop knowledge creation using SSM. The
research also demonstrates how this collaboration should provide stronger effective feedback
from industry partners relating to new knowledge they utilize or problems they face. The
resulting collaborative effort could, and should, lead to the development of new knowledge
that industry readily wants.

A PhD thesis is required to demonstrate mastery of research methodologies and selection of

an appropriate approach for PhD research design. From a purely academic point of view, this
research has added value by utilizing the qualitative methodologies of grounded theory and
SSM to make sense of a complex business process. Qualitative research approaches are
becoming increasingly popular in construction research and this research extend the
experience of using these techniques by incorporating two qualitative methodologies that are
proven in other fields and have been successfully used for over thirty years. This has
generated a body of knowledge which other qualitative researches can refer to or capitalise

176
upon. This study, through explicating the research approach and how it was undertaken,
provides other researchers with the benefits gained from this particular research innovation—
using SSM as a KM tool for undertaking research.

Finally, a PhD thesis is expected to generate work of a publishable standard. This thesis work
resulted in the publication of 1 book chapter, 3 journal Papers and 14 conference papers. One
book chapter and one journal paper has been accepted for publication. One journal paper and
a conference paper are currently under review.

7.3 Recommendations

As a result of conducting this research, the following recommendations can be made:

Construction organisations should adopt KM in order to become innovative and improve their
productivity levels. The ‘proof of concept’ presented in this thesis should be able to provide a
sufficient rationale for construction organisations to start adopting KM practices.
1. The construction industry needs to understand the difference between an IT (as a
purely technology) initiative and a KM initiative (that relates more broadly to
integrating technology such as IT as an enabler of KM, business processes and
people), so that knowledge is viewed as a dynamic resource and an asset that can bring
business benefits to organisations. This more fully KM-centred rather than IT-centred
focus will collectively form a sound basis for a successful leap towards a ‘knowledge
economy’.
2. Construction organisations can follow the methodology of Grounded Theory and SSM
as a KM tool as outlined in this thesis to map their business processes and chalk out
paths for further improvements. This exercise will unearth knowledge of immense
value generally hiding in peoples’ heads and organisational routines. Rich pictures
developed as a part of SSM study can be used by construction organisations for
training new team members or for new staff induction purposes in order to give them a
better appreciation of existing organisational processes hence contributing towards
organisational learning.
3. Construction organisations need to realise that strong integration of people with the
processes they work with and the technology they use is important to ensure optimum
utilisation of knowledge available in the organisation. This integration could then
create a further quest for knowledge that triggers organisations to externally procure

177
 knowledge from outside sources. Organisations need to develop a supporting culture
enable this. A KM focus will then inevitably emerge.
4. Construction organisations should leverage the impact of their collaboration with
external knowledge sources such as research centres and universities, to work together
for discovering solutions to practical problems they face. At the same time it is also
immensely important for these organisations to provide increase feedback to the
research bodies about the knowledge they obtain and then use. This will help external
research bodies to further refine and fine-tune developed tools and techniques. KM
needs to be at the heart of this endeavour. This can be further manifested in the
development of COPs where practitioner and researcher will collaboratively work
together forming a community of practice (COP) and feedback from practitioner
would become instant.
5. An organisation’s knowledge assets can be its defining and uniquely differentiating
competitive advantage. It is important for construction organisations to improve the
development and maintenance of their internal knowledge banks. Grounded theory
and SSM unearths a great deal of knowledge. This knowledge should be appropriately
indexed and stored for employees to quickly retrieve and put to use. At the same time,
a mechanism needs to be put in place using KM tools and techniques to capture
knowledge from previous and existing projects. This would lead to the development of
project histories that needs to be made part of the internal knowledge bank and
recognised as an important and valuable asset produced as a by-product of solving
problems, interacting with project participants and experimenting with innovation or
adaptations of well understood processes.
6. Construction organisations can use the techniques adopted in this research to enhance
service, administrative and market innovations.

7.4 Recommendations for Future Research

Undertaking this research has opened many venues for further research initiatives which are
presented below:

1. During this research it became evident that the two leading Australian construction
organisations that participated in this research found it hard to distinguish between a
KM initiative and an IT initiative. Knowledge Managers of the respective
organisation, however, had a good understanding of KM and how it differed from an

178
 IT initiative. But they faced a challenging task in changing the perception of
influential people in the organisation that could champion and sustain KM initiatives.
This forms the basis for a research initiative to investigate the perception of a broader
range of organisations about the need for and value of KM through a quantitative
study in order to devise strategies to improve KM in the industry.

2. The use of SSM as a useful KM tool has been demonstrated in the case studies to
improve the process of pre-tendering. It is suggested that this approach should be
extended towards other processes as well. For example, safety practices of a
construction organisation can be improved through using SSM as a KM tool by
helping people who carry out the safety management process, to integrate this process
and the technology they use and at the same time try to obtain innovative knowledge
of safety practices being generated/created outside its boundaries.
3. The SSM investigations can be put together in an electronic format manifest in the
applications such as the digital dashboard application/ knowledge portal as presented
in Walker et al. (2006). Through using this portal, it is possible for people to: connect
their knowledge with other people; to link to information and knowledge about
business processes; and to access KM support technology. This makes it easier to link
people to improve their knowledge about what (people, processes and technology)
resources are available to help them undertake their work more productively.

4. This research has focussed on two leading Australian construction organisations that
are representative of the largest Australian construction organisations. However, small
and medium size enterprises (SMEs) form the largest part of the supply chain working
with these large organisations. As the supply chain management philosophy has
gained increasing interest in the more recent construction industry literature, this
would give rise to shifting the competitive focus from organisation vs. organisation to
chain vs. chain. Also, from an innovation point of view, it is more productive that a
whole supply chain work together to perform innovatively. This can be achieved when
knowledge not just information is shared both upstream and downstream throughout
the supply chain. There is room for an exciting research initiative regarding KM in
supply chains with a view to creating learning chains.

5. The composition of KM being 90% a human issue and 10% a technical issue
illuminates the fact that KM has a lot more to do with HRM than technology but this

179
 area is relatively under-explored. This an area of research that could bring promising
results by better integrating KM with HRM functions within the construction industry
to develop an improved framework where it may be possible to quantify how people’s
intellect and knowledge is best developed and leveraged to the benefit of the
organisation. Section 2.11.2 has introduced the importance of this.

6. As KM initiatives increase in the construction industry, quantitative studies can be

undertaken to measure the significance (tangible; intangible; economic, environmental
and social significance) of KM on innovation and learning.

7.5 Summary

This chapter provides a summary of research findings and put these together to answer the
research questions identified in Chapter 1. KM links with innovation in two distinct ways.
Firstly by helping organisations obtain external innovative knowledge and helping it absorb
and incorporate this knowledge into the organisation. Secondly by helping organisations to
capitalise on existing knowledge and new knowledge obtained from external sources to
perform innovatively. This output is only possible when an organisation is committed to
become a learning organisation through continually enhancing its capacity to perform
innovatively. This research has put forward a model that shows a path to achieve this vision,
by using SSM as a KM tool. This path is manifested in form of list of actions that demand
internal change projects and increased collaboration with the external knowledge sources.

This chapter has also discussed the contribution of the research from an academic and practice
point of view. The chapter also presents an argument that techniques developed in this thesis
enhance the body of knowledge in the area of KM and provides a convincing case for the
construction organisations to start considering the implementation of the KM initiatives. In
section 7.2, the specific requirements of a PhD thesis, together with a summary of
contributions made by this thesis were presented. Finally, this chapter has presented
recommendations that have arisen from this thesis and also shows future directions of
research emanating from this research.

180
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 Appendix A: Sample Notes Taken in Phase 1

Interview No 4
Organisation Interviewed: A

Expert in IT stuff. Using Lotus 123 in 80s.

If you have basic IT skills learning such system is not problem. (Basic IT Knowledge)

He had driven this application from the start in the organization (Diffusion)

Initially showed a response that shows he didn't like to be questioned as user.

Advantage is electronically keeps everything, filing system (Advantages of ICT)

He knew people more and their capabilities when they have get togethers in one of the
project of which he was a project manager. He underrated few before (Culture/trust)

Would u like to have meeting remote, you cannot see me I cannot see you. We have no
interaction. A lot of body language has to go in communication which doesn't happen in
written words. (Limitations in ICT)

The use of the system should be planned at the start of the project that how this project
is going to be delivered using this system by defining different packs right in the
beginning.

The system saves you the time. Managing Information Ingoing/outgoing/filing system.
(Advantages of ICT)

Need to improve on Estimating while tendering. (Limitations in ICT)

Get together should be started. They have benefits. Time seems to be wasted but it can
be legitimised that persons get the stress off them, know each other capabilities and
know each other more. (Knowledge Sharing & networking)

Should have facility where ever I go I can access. I go out of this office, can’t access my
files hence use is limited. (Limitations in ICT)

Memo: Very high skills in IT therefore he loves using the application and aware of its
all the functions and shortcomings and have meaningful suggestions to improve the
system. Because of high IT skills, he didn't have any training course. He learnt it by
himself and this is possible.

* Text in parenthesis show the coding for this data set during the interview

A-1
 Appendix B: Sample Notes Taken in Phase 2

Interview No 1
Organization Interviewed: A
Main Topic: Pretender Stage Exploration

• IB leads the pre-tendering team and looks after the two main aspects of pre-
tenders, design management and estimation.

• Fairly good user of Lotus Notes (IMS: Information Management System).

• Whenever pretender for a potential project has to be carried out a Tender Pack is
set up on IMS that provides central database for correspondence.

• The biggest problem faced in completing this task is the lack of historical
information of previous projects.

• Historical Information is important while deciding the rates for the project under
consideration.

• Regional Manager makes a decision to go for a tender or not.

• He is of the view that knowledge is lost when history of the projects is not kept.

• There is an awareness required of the significance of project history.

• Organisation used to win 1 in 2 or 3 tenders but now the winning rate is 1 in 5 to

7.

• Division Structure is a problem.

• There is need to protect access to prevent corruption.

• No body is prepared to pay for developing project histories.

• It is project manager's responsibility but often they have no time at the end
of the project and most probably they are assigned a new project.

• There is a need to look into the organization selection procedure of the Project
Managers to figure out who does what well and assign him the job accordingly.

• Pool of PM is not very good. There is need to have a range of project managers
to match with particular clients.

B-1
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