Journal of Knowledge Management

Emerald Article: A critical review of knowledge management as a management

tool
Maria Mårtensson

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To cite this document: Maria Mårtensson, (2000),"A critical review of knowledge management as a management tool", Journal of
Knowledge Management, Vol. 4 Iss: 3 pp. 204 - 216
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 Introduction
A critical review of Over the past several years there have been
knowledge intensive discussions about the importance of
management as a knowledge management (KM) within our
society. Scholars and observers from
management tool disciplines as disparate as sociology,
economics, and management science agree
Maria MaÊrtensson that a transformation has occurred ±
``knowledge'' is at centre stage (Davenport et
al., 1998). KM and related strategy concepts
are promoted as important and necessary
components for organisations to survive and
maintain their competitive keenness. It has
become necessary for managers and
executives to address ``KM'' (Goodman and
The author Chinowsky, 1997). KM is considered a
prerequisite for higher productivity and
Maria MaÊrtensson is a PhD student in the Stockholm
flexibility in both the private and the public
University School of Business, Stockholm, Sweden.
sectors.
McKern (1996) argues that powerful forces
Keywords are reshaping the economic and business
Knowledge management, Knowledge, Strategy world and many call for a fundamental shift in
organisation processes and human resources
Abstract strategy. The prime forces of change include
globalisation, higher degrees of complexity,
Over the past several years there have been intensive
new technology, increased competition,
discussions about the importance of knowledge
changing client demands, and changing
management within our society. The management of
economic and political structures.
knowledge is promoted as an important and necessary
Organisations are beginning to recognise that
factor for organisational survival and maintenance of
technology-based competitive advantages are
competitive strength. To remain at the forefront
transient and that the only sustainable
organisations need a good capacity to retain, develop,
competitive advantages they have are their
organise, and utilise their employees' capabilities.
employees (Black and Synan, 1997). This
Knowledge and the management of knowledge appear to
development has forced steep learning curves
be regarded as increasingly important features for
as organisations struggle to adapt quickly,
organisational survival. Explores knowledge management
respond faster, and proactively shape their
with respect to its content, its definition and domain in
industries (Allee, 1996).
theory and practice, its use and implications, and to point
To remain at the forefront and maintain a
out some problems inherent in the concept. The main
competitive edge organisations must have a
contribution of this paper is an extensive literature survey
good capacity to retain, develop, organise,
on knowledge management.
and utilise their employee competencies
(GroÈnhaug and Nordhaug, 1992).
Electronic access
The commonality of the above studies is
The current issue and full text archive of this journal is that they all regard knowledge as a critical
available at factor for an organisation's survival. However,
http://www.emerald-library.com knowledge has always been a valuable asset
(Chase, 2000) and an important production
component, but what is KM? Is it a new way
to understand organising and organisations, is
it a tool for exploiting knowledge, or is it just

This study was supported by the European

Commission, the OECD, the Swedish Council for
Journal of Knowledge Management Work Life Research, Nutek, the Swedish Ministry
Volume 4 . Number 3 . 2000 . pp. 204±216 of Trade and Industry, and the Swedish Public
# MCB University Press . ISSN 1367-3270 Relations Association.
204
A critical review of knowledge management as a management tool Journal of Knowledge Management
Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

another relabelling in the ceaseless flow of make is the following distinction between KM
fashionable management concepts? and ``intellectual capital'' ± KM is about the
The purpose of this paper is to map the management of the ``intellectual capital''
contents given to KM, its definition and controlled by the company. However, too
domain in theory and practice, its use and often the delineation between the two terms is
implications, and to point out some problems unclear and seldom adequately addressed
inherent in the concept. (Guthrie, 2000). The problem of the
To determine what KM is, a review of the management of knowledge is not new
literature is necessary. Since it is not feasible according to Roos et al. (1997). The authors
to cover all the literature, the aim of the use the concept ``intellectual capital'' as an
survey is not so much to summarise but to umbrella term. ``Intellectual capital'' in
draw some conclusions about KM. The first Skandia, a major insurance company, is
step was to search for articles in databases defined as ``the possession of knowledge,
using the keyword ``knowledge management'' applied experience, organisational
and the combination ``knowledge technology, customer relationships, and
management'' and ``strategy''. The literature professional skills that provide Skandia with a
review is narrow in the sense that only studies competitive edge in the market'' (Edvinsson,
using these keywords were included. Most of 1997). Within this descriptive framework,
the literature in this review is of practical Skandia, Dow Chemical (Petrash, 1996), and
nature rather than theoretical (i.e. knowledge- many other companies (e.g. Stewart, 1997)
based theory and competence-based theory). prefer to make an operational distinction
The emergence of KM seems to a great extent between human, organisational, and
to be business driven (Carrillo, 2000). The customer capital.
limited number of keywords probably Roos et al. (1997) suggest that ``intellectual
accounts for the skewed distribution of capital'' can be traced to two streams of
articles in favour of the practical-oriented thought, strategy and measurement. Within
articles. Another limitation is related to how the strategic area, the focus is on studying the
the concept of knowledge is regarded. What is creation and use of knowledge and the
found in the literature survey is of course just relationship between knowledge and success
a fraction of what is written about knowledge; or value creation. Measurement focuses on
however, these are still the things that are the need to develop new information systems,
pointed out in the literature. In describing measuring non-financial data alongside the
knowledge, it is not my intention to give a traditional financial ones. The conceptual
complete overview of the concept; rather, the roots of intellectual capital are depicted in
description of knowledge is used as a tool for Figure 1.
describing the concept KM. With respect to this study, strategic
The paper is organised into three sections. planning and (operational) management of
The first section is devoted to the origins and knowledge are important topics. The paper
domain of KM. The second describes KM as attempts to explore the creation and use of
a tool for management, as an information- knowledge and the way it is leveraged into
handling tool, and as a strategic tool. In the value. Key questions addressed include how is
final section, a critical examination of the the use of knowledge translated into value?
concept and its implications is presented. I try How can it be implemented? What important
to determine whether the concept of KM is a factors are needed for strategic management
necessary tool for more efficient management, planning and implementation?
or if it is just ``the emperor in new clothes''. A firm's tangible and intangible resources,
which are under the control of the firm's
administrative organ (referred to as an
organisation's condition in Rutihinda, 1996),
Origins and domain of knowledge
may be grouped into two main categories:
management
firm resources and firm capabilities (Grant,
Theoretical origins to knowledge 1991). According to Grant (1991), this
management designation implies that resources are inputs
The field of KM can be seen as an integral into the production process and the capability
part of the broader concept ``intellectual of a firm is the capacity, what it can do, as a
capital'' (Roos et al., 1997). Guthrie (2000) result of teams of resources working together.
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

Figure 1 Conceptual roots of intellectual capital

A differentiation between intangible and . physical, human, and monetary resources

tangible resources, or an equivalent that are needed for business operations to
distinction, appears to be logically required. eventuate; and
In a study by Johanson et al. (1998), the . information-based resources, such as
question of what is meant by intangibles was management skills, technology, consumer
raised. The authors concluded that there is no information, brand name, reputation, and
generally accepted definition of intangibles. corporate culture.
Intangibles can be studied from at least three After further elaboration on the concepts of
perspectives (e.g. accounting, statistics, and intangible resources, intangible assets,
managerial). The present paper defines capabilities, and competencies, Haanes and
intangibles from the perspective of managerial Lùwendahl categorise intangible resources
purposes, i.e. management on both the into competence and relational resources.
strategic and operational level. The latter term refers to such intangibles as
To summarise, whereas a classification of reputation, relations, and client loyalty, which
intangibles in terms of R&D, software, are conceived of as being fundamental to the
marketing, and training appears to have been performance of the firm. Competence is
the dominant mode ten years ago, today's defined as the ability to perform a given task
classification schemes are oriented towards and exists at both the individual and
distinguishing between external (customer- organisational level. Within the individual
related) and internal structures, on the one sphere, it includes knowledge, skills, and
aptitudes; within the organisational sphere, it
hand, and human capital, on the other (e.g.
includes client-specific databases, technology,
Sveiby, 1997; Roos and Roos, 1997; Petrash,
routines, methods, procedures, and
1996; Skandia, 1995).
organisational culture. The basic scheme is
Influenced by the resource-based theory of
shown in Figure 2.
the firm (e.g. Penrose), Lùwendahl (1997)
Lùwendahl (1997) takes the division one
and Haanes and Lùwendahl (1997) have
step further, since he divides competence and
classified a number of intangible resources
relational categories into the subgroups
from a strategic management perspective. individual and collective, depending on
Because there appears to be little consensus whether the employee or the organisation is
on the definition of ``resources'', Haanes and accentuated:
Lùwendahl refer to Itami (1987). Resources Scholars of the ``theory of the firm'' have begun
consist of: to emphasize the sources and conditions of what
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

Figure 2 Intangible resources

have been described as ``the organizational in knowledge creation, storage, and deployment
advantages'', rather than focus on the causes (Roberts, 1998; see also Grant, 1991).
and consequences of market failure. Typically,
researchers see such organizational advantage Empirical origins to knowledge
as acquiring from the particular capabilities
management
organizations have for creating and
sharing knowledge (Nahapiet and Ghoshal, DiMattia and Oder (1997) argue that the
1998). growth of ``knowledge management'' has
emerged from two fundamental shifts:
A firm's distinctive competence is based on downsizing and technological development.
the specialised resources, assets, and skills it
possesses, and focuses attention on their Downsizing
optimum utilisation to build competitive During the 1980s, downsizing was the
advantage and economic wealth (Penrose in popular strategy to reduce overhead and
Rutihinda, 1996). increase profits; however, the downside to
From the theory of the firm, two basic being ``lean and mean'' soon became evident
theories have emerged: resource-based theory (Forbes, 1997). The downsizing strategy
and knowledge-based theory. Knowledge- resulted in a loss of important knowledge, as
based theory of the firm employees left and took the knowledge that
postulates that knowledge is the only resource they had accumulated over the years with
that provides sustainable competitive advantage, them (Piggott, 1997). With time,
and, therefore, the firm's attention and decision organisations had come to recognise that they
making should focus primarily on knowledge had lost years of valuable information and
and the competitive capabilities derived from it expertise and were now determined to protect
(Roberts, 1998).
themselves against a recurrence (DiMattia
The firm is considered being a knowledge
and Oder, 1997).
integrating institution. Its role is neither the
acquisition nor the creation of organisational This led management to undertake a
knowledge; this is the role and prerequisite of ``knowledge management'' strategy in an
the individual. Knowledge resides in and with effort to store and retain employee knowledge
individual people, the firm merely integrates for the future benefit of the company (Forbes,
the individually owned knowledge by providing 1997). Organisations are now trying to use
structural arrangements of co-ordination and co-
technology and systems to capture the
operation of specialised knowledge workers.
That is, the firm focuses on the organisational knowledge residing in the minds of their
processes flowing through these structural employees, so it can be easily shared within
arrangements, through which individuals engage the organisation. When stored, it becomes a
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

reusable resource that can provide a wealth of minds rather than in computers (The
competitive advantages, including enhanced Banker, 1997). Unlike raw material,
organisational capacities, facilitating output, knowledge usually is not coded, audited,
and lowering costs (Forbes, 1997). inventoried, and stacked in a warehouse
for employees to use as needed. It is
Technological development
scattered, messy, and easy to lose
The technological development has
(Galagan, 1997). Furthermore, Allee
heightened the interest in ``knowledge
(1997a) has defined knowledge in terms
management'' through two main sources: the
of 12 qualities: knowledge is messy; it is
explosive growth of information resources
self-organising; it seeks community; it
such as the Internet and the accelerating pace
travels on language; it is slippery; it likes
of technological change (Hibbard, 1997;
looseness; it experiments; it does not
Mayo, 1998). The recent IT development has
grow forever; it is a social phenomenon; it
affected both the lives of people and
evolves organically; it is multi-modal; and
organisations (Mayo, 1998). The continual
it is multi-dimensional.
flow of information leaves us feeling
To use the flow of data/information we
overwhelmed and in a general state of
must develop effective ways to make the
disquietude (e.g. that we are missing
input of and access to information easy
important details) (Hibbard, 1997). DiMattia
(Mayo, 1998) and to sort the useful from
and Oder (1997) postulate that ``knowledge
the useless (Schaefer, 1998). We must
management'' is an attempt to cope with the
develop systems where people are able to
explosion of information and to capitalise on
``navigate'' effectively. This can be made
increased knowledge in the workplace.
by storing the information in different
The emerging technological development
databases and make it possible for people
enables global sharing of information across
to cross-reference and link documents
platforms and continents (DiMattia and
speedily and easily (Mayo, 1998).
Oder, 1997) and can serve as a tool within an . Information has little value and will not
organisation to use knowledge more
become knowledge until it is processed by
effectively. Capturing a company's collective
the human mind (Ash, 1998). Knowledge
expertise in databases can help organisations
involves the processing, creation, or use
to ``know what they actually know'', and then
of information in the mind of the
marshal and exploit this knowledge in a
individual (Kirchner, 1997). Although
systematic way (Blake, 1998).
information is not knowledge, it is an
important aspect of knowledge. The
The domain of knowledge management
process begins with facts and data, which
An essential part of KM is, of course,
are organised and structured to produce
knowledge. To map the domains of
general information. The next stage
knowledge, traits of the concept knowledge
involves organising and filtering this
have been put forward based on the stream of
information to meet the requirements of a
research reviewed.
specific community of users, producing
The question of the nature of knowledge is
contextual information. Next, individuals
extremely challenging. Although philosophers
assimilate the contextual information and
have been discussing the issue for several
transform it into knowledge. This
hundred years, the search for a formal
transformation process is affected by
definition continues (Emery, 1997). The
individuals' experiences, attitudes, and
definitions appearing in the literature range
the context in which they work. The final
from studying knowledge from a broad
stage of the continuum is behaviour;
perspective to more sophisticated definitions.
unless information and knowledge lead to
The present review has resulted in two
an informed decision or action, the whole
definitions of knowledge.
process becomes invalidated (Infield,
Characteristics of knowledge 1997).
The following taxonomy of knowledge has . Knowledge should be studied in context.
been expressed in the KM literature: Knowledge is information combined with
. Knowledge cannot easily be stored experience, context, interpretation,
(Gopal and Gagnon, 1995). Knowledge reflection, and perspective (Davenport et
is something that resides in people's al., 1998; Kirchner, 1997; Frappaolo,
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

1997) that adds a new level of insight Knowledge management as a

(Frappaolo, 1997). Allee (1997b) management tool
suggests that knowledge becomes
KM is often described as a management tool.
meaningful when it is seen in the larger
More precisely, it is described either as an
context of our culture, which evolves out
operational tool or as a strategically focused
of our beliefs and philosophy.
. The final characteristic is that knowledge management tool.
is ineffectual if it is not used. Knowledge
Knowledge management as an
is a high-value form of information that is
information handling tool
ready to be applied to decisions and
Within the field of KM (Figure 3), knowledge
actions (Davenport et al., 1998). Sveiby
is often regarded as an information handling
(1997) has defined it as the capacity to
problem. It deals with the creation,
act on information and thereby make it
management and exploitation of knowledge.
valuable.
Some of the literature fits into a definition of
Tacit and explicit knowledge KM that consists of separate but related
Another way of defining knowledge is to make stages.
a distinction between ``tacit'' and ``explicit'' The first two stages are invariably linked,
knowledge (Polyani, 1966). Nonaka and both on abstract theoretical grounds and in
Takeuchi (1995) make the same point in practice. As the first step in the process, there
more precise terms: is acquisition of information. In the second
. Explicit knowledge is documented and stage, the information is entered into a storage
public; structured, fixed-content, system and organised logically. Almost every
externalised, and conscious (Duffy, definition of knowledge management includes
2000). Explicit knowledge is what can be the storage of knowledge (e.g. Yeh et al.,
captured and shared through information 2000; Blake, 1998, 2000; Mayo, 1998;
technology. Anthes, 1998; Cole-Gomolski, 1997a, 1997b,
. Tacit knowledge resides in the human 1998; Symoens, 1998; Laberis, 1998;
mind, behaviour, and perception (Duffy, Nerney, 1997; Ostro, 1997; InfoWorld, 1997;
2000). Tacit knowledge evolves from Watson, 1998; LaPlante, 1997; Ash, 1998;
people's interactions and requires skill DiMattia and Oder, 1997; Hibbard, 1997;
and practice. Finerty, 1997; Bassi, 1997). KM is about
Nonaka and Takeuchi suggest that tacit acquisition and storage of workers' knowledge
knowledge is hidden and thus cannot be easily and making information accessible to other
represented via electronics. Tacit refers to employees within the organisation. This is
hunches, intuitions and insights (Guth, often achieved by using various technologies
1996), it is personal, undocumented, context- such as Internet and databases, and is a
sensitive, dynamically created and derived, conversion of tacit knowledge to explicit
internalised and experience-based (Duffy, knowledge (Papows, 1998). Once the
2000). Nonaka and Takeuchi mean that information is stored in the various databases,
knowledge is the product of the interaction of the third stage is initiated. In this stage, the
explicit and tacit knowledge. The process of stored information is made accessible to as
creating knowledge results in a spiralling of many employees as possible within the
knowledge acquisition. It starts with people organisation (LaPlante, 1997). It is about
sharing their internal tacit knowledge by distributing it into the hands of the right end
socialising with others or by capturing it in users at the right time (Ostro, 1997) and
digital or analogue form. Other people then where it can be of best use (Nerney, 1997).
internalise the shared knowledge, and that The final stage is about utilisation of
process creates new knowledge. These information. This process begins with people
people, with the newly created knowledge, sharing knowledge by talking and socialising
then share this knowledge with others, and with one another or by exchanging
the process begins again. Hibbard (1997) information in digital or analogue form
articulated this process as innovation. (Laberis, 1998).
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

Figure 3 The stages of knowledge management

Knowledge management as a strategic to become a more innovative organisation

management tool (People Management, 1998; Hibbard, 1997).
KM and its implications are frequently A study by the American Productivity and
discussed at seminars and conferences. The Quality Center shows that 89 per cent of the
number of companies claiming to work with participants in the study said that the core
knowledge management is growing steadily. goal for knowledge management is to capture
Several surveys have been conducted to and transfer knowledge and best practices
determine how many organisations are (Allerton, 1998).
working or planning to work with KM People Management (1998) reports on a
(Nerney, 1997; Hibbard and Carrillo, 1998; survey in which individuals responsible for
Cole-Gomolski, 1998). A recurrent problem implementing KM strategy were interviewed.
with these studies is that the concepts (e.g. The results indicated that the main obstacles
the use of KM) are seldom defined. This to implementation were lack of ownership of
uncertainty has made it difficult to draw the the problem (64 per cent), lack of time (60
desired inferences from the results of these per cent), organisational structure (54 per
studies. The surveys are attempts to either cent), senior management commitment (46
implement KM strategies or implement per cent), rewards and recognition (46 per
measurement systems on how to measure cent), and an emphasis on individuals rather
different intangible assets, or a combination than on teamwork (45 per cent). Among
of both. ``Fortune 1000'' companies the main
The central idea underlying a strategy is problems with KM projects are a lack of focus
that organisations must adjust their and a lot of reinventing the wheel (Coleman,
capabilities (i.e. their resources and skills) to a 1998).
Based on an extensive multi-firm study by
constantly changing complex external
the American Productivity and Quality
environment (Teece, in GroÈnhaug and
Center, hurdles to KM include the lack of a
Nordhaug, 1992). Gopal and Gagnon (1995)
commonly held model for knowledge creation
put it succinctly when they maintain that
and dissemination and the absence of systems
effective KM starts with a strategy. Within a
or processes designed to support and evaluate
KM strategy, knowledge is recognised as an
the effectiveness of KM (Ostro, 1997). Most
organisation's most valuable and under-used
firms with a KM system based purely on a
resource and places the intellectual capital at
technology solution have found that such an
the centre of what an organisation does (Ash,
approach fails. Though technology may be
1998). To start to create a KM strategy, an
necessary for KM, it appears never to be
organisation needs to build systems for
sufficient (Warren, 1999; Bassi, 1997).
capturing and transferring internal knowledge To successfully create and implement a
and best practices (Allerton, 1998). knowledge management strategy, authors
The purpose, goal and expected outcomes have suggested that certain critical elements
of an organisation's work with KM are many. must be included. The elements I have found
For instance, KM can be seen as a way to to be of particular importance are the
improve performance (Ostro, 1997; Bassi, following:
1997), productivity and competitiveness . the ``so what?'' question;
(Maglitta, 1995), a way to improve effective . support from top management;
acquisition, sharing and usage of information . communication;
within organisations (Maglitta, 1995), a tool . creativity;
for improved decision making (People . culture and people;
Management, 1998; Cole-Gomolski, 1997a, . sharing knowledge;
1997b), a way to capture best practices (Cole- . incentives;
Gomolski, 1998), a way to reduce research . time;
costs and delays (Maglitta, 1995), and a way . evaluation.
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

The importance of the ``so what?'' questions 70 per cent reported that employees are the
A KM strategy should be linked to what the most important factor and 75 per cent
organisation is attempting to achieve. It is also reported that there should be an even greater
important to articulate the purpose of the KM emphasis on people (People Management,
strategy. What benefits does the organisation 1998). In the view of the best-practice
expect to gain from their work with KM? How organisations, people and culture are at the
will it affect the employees' work? (Klaila, heart of creating a successful knowledge-
2000) based organisation. Several studies have
The importance of support from top management shown that people and cultural issues are the
The personnel function should focus on top most difficult problems to resolve, but
management to encourage processes that will produce the greatest benefits (People
promote cross-boundary learning and Management, 1998).
sharing. This includes helping to set up and, The biggest challenge for KM is not a
possibly, fund knowledge networks, as well as technical one ± it can be integrated into any
defining and developing the skills of learning number of IT systems ± but a cultural one
from other people (Mayo, 1998). (Forbes, 1997; Koudsi, 2000). It is the
Organisations that have achieved the greatest difficult task of overcoming cultural barriers,
success in KM are those that have appointed especially the sentiment that holding
a senior-level executive to assume the mantle information is more valuable than sharing it
of full-time chief knowledge officer (Gopal (Warren, 1999; Anthes, 1998). This is
and Gagnon, 1995). supported by Hadley Reynolds, at Delphi
Group, in Boston who released a study
The importance of communication demonstrating that corporate culture was
Saunders (in Ash, 1998) found that the cited by 53 per cent of the respondents as
missing factor in strategic management texts being the biggest obstacle to deploying KM
was communication. According to the applications (Cole-Gomolski, 1997b). In
consultants, a large proportion of the another study (People Management, 1998),
organisations failed to implement the culture was seen by 80 per cent of those
strategies because of a lack of surveyed as the biggest obstacle in creating a
communication. Only a few companies knowledge-based organisation.
designed a ``good'' communication plan to
follow through on business strategies. The importance of sharing knowledge
After reviewing nearly 200 articles and The ability to share knowledge and
conference proceedings on data warehousing, collaborate are all too often missing in our
Keen (1997) was struck by how little is said organisations (Mayo, 1998). Efforts to deploy
about action ± ``real'' people making ``real'' KM group-ware are frequently met with
decisions to have a ``real'' impact. They do employee reluctance to share their expertise
not look at how those real people become (Cole-Gomolski, 1997b). The likely reason
informed. for this is that employees are competitive by
nature and may be more inclined to hoard
The importance of creativity than share the knowledge they possess
As Kao (1997) notes, a good strategy to work (Forbes, 1997). On the other hand, a better
with KM issues is not enough. The author
process of sharing knowledge benefits the
describes the link between strategy and
firm. This is shown in a study of 33
creativity. A connection between these two
organisations conducted by the American
allows organisations to survive in the future.
Productivity and Quality Center (Alter,
The implications of business creativity will
1997).
depend upon the type of fusion created
Ostro (1997) reports the results of an
between KM and the basic skills of creativity
extensive multi-firm study by the American
management (Kao, 1997).
Productivity and Quality Center. He found
The importance of culture and people that the main reason why knowledge was not
Successful implementation of KM is linked to being shared was that employees did not
such entities as culture and people. In a recent realise their experiences would be valuable to
study where the importance of people, as others.
opposed to technology and processes, was Mayo (1998) feels that recruiters should
examined when implementing a KM strategy, look for capabilities to share knowledge with
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

new employees, as well as assessing what new end that the pivotal role is played by culture;
knowledge they can bring to an organisation. by an unquestioned, even unconscious, code
Part of the introduction process for recruits that encourages knowledge sharing and co-
should involve ``capturing'' their knowledge operative behaviour (The Banker, 1997).
and experience. Although most new
The importance of time
employees bring useful specialist experience
It is important to create time and
with them, few people tap this rich reservoir
opportunities for people to learn. One
of information. Meanwhile, the introduction successful approach is to create formal
should also be about passing on the learning networks so that the identification
experience of predecessors to new employees. and transfer of effective practices become part
Mayo states that: of the job (Galagan, 1997). The greatest
When people leave, the HR department asks for
enemies of knowledge sharing are the time
their company car keys and so on. Why not
conduct a recruitment interview in reverse to
that is required to input and access
retrieve information? information and the lack of motivation among
potential users (Mayo, 1998).
He also points out that there is an
unwillingness to trust employees with The importance of evaluation
information. A favourite excuse given by It is important to create a system for
organisations that withhold information is one evaluating the attempts that are made to use
of ``commercial sensitivity'', which reflects an KM. The evaluation system can range from
unwillingness to trust employees with informal attempts, such as talking to people
information. Salary surveys are a good about how ``best practice'' is shared within the
example of this. In how many organisations firm, or to the use of far more sophisticated
are such data freely available to all interested tools to measure the outcomes.
employees? To summarise, to implement a KM strategy
successfully both the creation and the leverage
The importance of incentives of knowledge must be taken into account.
One of the most important issues when
working on a KM strategy is to create the
right incentives for people to share and apply
Discussion
knowledge (The Banker, 1997). The personal
reward systems must support the culture of The literature and theories concerning the
sharing knowledge (Keeler, 2000; Mayo, management of knowledge have grown
1998). To improve this process it is crucial to remarkably during the past couple of years.
reward employees that contribute their Nevertheless, what is the contribution from
expertise and to make sure employees KM? Is it business salvation or the ``emperor's
understand the benefits of KM (Cole- new clothes''?
Gomolski, 1997b). The organisations should Because of downsizing, organisations have
ask themselves the following questions: Are been forced to create systems and processes
the employees receiving signals that that decrease the dependencies on the
encourage the process of sharing knowledge? knowledge residing within the individuals. To
What criterion is used for promoting staff? exploit knowledge more efficiently
Are instances in which the business has organisations are now trying to codify and
benefited from sharing learning publicly store the individual's knowledge, i.e. making
celebrated? Are mistakes made that could tacit knowledge explicit and transposing
have been avoided if it had been known that individual knowledge into organisational
similar errors had happened in the past knowledge. Those transformation processes
(Mayo, 1998)? have been made possible through the recent
A problem with many reward systems and and fast development within IT.
incentives for sharing knowledge is that useful Because knowledge is largely tacit and
knowledge comes from relatively low down in individually owned, it is difficult to have
the organisation, from people who are not on charge of and control over the course of
incentive systems and probably respond much knowledge. The literature review suggests
more readily to the feeling that they belong to that the major contribution from KM
highly motivated, leading edge, innovative concerns the effort to transpose tacit
groups of people. This probably means in the knowledge into explicit information, which
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

will lead to greater possibilities to manage and source, but too often it is not. Because of the
control knowledge effectively. One major nature of knowledge, the attainment of a
issue that has hardly been dealt with and, formal definition is unlikely. There is thus a
therefore, in need of further inquiry concerns need for clarification of what we are talking
how this process of translating tacit into about whenever the word ``knowledge'' is
explicit knowledge works. used.
The management of knowledge may be A large bulk of the present review is based
examined from two theoretical perspectives. on an IT perspective. The focus here is more
One perspective involves theories where the on creating databases for storing information
focus is on the individual's knowledge; the and making the information available, and
second comprises theories wherein the thus the literature review focuses mainly on
knowledge itself is the centre of interest. explicit knowledge (Warren, 1999). The first
Human capital is defined by Flamholtz part of KM, the storage of information, is the
(1985) as ``the knowledge, skills and one most often described. This is probably
experience of people''. Within human capital because the storage of information is the first
theories, the employee is regarded as the and perhaps the easiest phase of KM.
bearer of knowledge. However, what is missing is how this
Another perspective, in which knowledge is information can be used and translated into
the centre of interest, is the knowledge-based knowledge and become a part of the
theory of the firm. In such theories, the organisation's knowledge base.
individual exists but the focus is more on The ambiguity of the distinction between
knowledge than the individual. The two information and knowledge has been a major
perspectives could be described as being source of difficulty and, in many articles, the
either individualistic or holistic. From a distinction between information and
holistic view the sum of an organisation is knowledge is not clearly articulated. Duffy
more than the sum of the individuals, whereas (2000) argues that technology vendors have
from an individualistic view, the sum of an contributed to this confusion. Every
organisation is the sum of the individuals technology that ever had anything to do with
(Hollis, 1994). Within the recent theoretical digitised information is now a KM product,
development (i.e. knowledge-based theories or even a complete KM solution. Knowledge
of the firm), the focus has shifted from an is often used as something similar to
individual perspective to an emphasis on information, but information and knowledge
knowledge residing in the organisation as a are far from synonymous. Tacit knowledge
whole, i.e. a holistic approach. might have begun as information, but because
Mayo (1998) noted that many companies it is processed by the human mind, it can be
have been managing knowledge for decades translated into explicit knowledge. Explicit
but that few companies, whether global or knowledge is identical to information; it can
national, use these disciplines on a regular be easily stored outside the human mind (e.g.
basis. One problem regarding knowledge and in databases), but nonetheless it cannot be
KM is to outline its content and domain. described as knowledge until it has been
This literature review highlights the need to processed.
better clarify what we mean when we are The impact of KM is a complex field. If
using concepts such as ``knowledge'' and KM is used as a strategic tool the outcome is
``KM''. Carrillo (2000) argues that one can difficult to estimate. The problem to estimate
often find the most diverse labels applied to the value of KM remains even if it is used as
KM. There are also those who believe that an operational tool. However, the operative
term to be inconsistent because knowledge as perspective could be considered estimated by
such cannot be managed (Carrillo, 2000). the organisation if the tool is used. If it had no
The lack of clearly defined concepts has been value the organisations would not use it.
explored in closely related areas (Johanson et Theoretically, it is easier to determine the
al., 1998; GroÈjer and Johanson, 1998; Power, value of KM. This is because knowledge,
1997). Also the boundaries of KM are fuzzy. through downsizing, is a scarce resource.
To illustrate, what are the differences between Another pertinent topic missing when the
``competitive intelligence'' (Fleicher, 1998), value of KM is described in the literature is
``intellectual capital'' and KM? Sometimes costs. None of the articles reviewed discussed
knowledge is clearly defined in the original the connection between the costs in the
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Maria MaÊrtensson Volume 4 . Number 3 . 2000 . 204±216

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