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Knowledge Management and Organizational Learning

CE 726. Knowledge Management and Organizational Learning. Group Members : Handan GÜNDOĞAN Çağdaş MUTLU. OUTLINE. Introduction Definitions Knowledge Management Organizational Learning Drivers Applications in UK, US and TR Barriers Models Developed Conclusion

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Knowledge Management and Organizational Learning

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  1. CE 726 Knowledge Management and Organizational Learning Group Members: Handan GÜNDOĞAN Çağdaş MUTLU

  2. OUTLINE • Introduction • Definitions • Knowledge Management • Organizational Learning • Drivers • Applications in UK, US and TR • Barriers • Models Developed • Conclusion • Further Studies

  3. Wisdom Knowledge Information Data To define the knowledge,

  4. Definitions • DATA represents Facts, Observations, Values of Results, Quantitave, Has not been processed, It is obtainedfrom Observations (input).

  5. Definitions • INFORMATION relates to, structured data meaningful data describe a particular situation or condition It gives us definitions. (what,who,when,where)

  6. Definitions • KNOWLEDGE consists of know-how, truths, perpectives, concepts, judgements, methodologies, It is about action and decision-makingcapability.

  7. Types of Knowledge • Tacit Knowledge (informal or soft)-knowing how • obtained from experience • stored in people’s head • difficult to document • difficult to communicate or share with other people • Explicit Knowledge (formal or hard)-knowing that • explained and recorded • easily documented and transferred • physically stored in either paper or electronic format

  8. Knowledge Management • KM can be defined as a systematic process that creates, captures, shares, and analyzes knowledge in ways that directly improve performance. It is about helping people to communicate and share information. (Parlby, D. 1998) • The aim of Knowledge Management is to support Organizational Learning (Lehner and Maier, 2000)

  9. Central concept of KM • Putting individuals in touch with one another to share their tacit knowledge. • Transforming individuals’ tacit knowledge into explicit knowledge, which can be used by the entire organization. So, Knowledge Management can be interpreted as the ability to get the right information to the right people at the right time, and in the right place.

  10. Four Processes of Knowledge Management • Creating of knowledge • Distributing knowledge • Sharing knowledge • Capturing and Codifying knowledge

  11. Information Technology • IT is the general term that specifies computer-based tools used to gather, code, process, store, transfer and apply data between machines, people and organizations. • Laudon and Laudon (1998) classify information systems for knowledge management into four main categories;

  12. Why Knowledge Management? It creates value,and gain and sustain competitive advantage. Saves money by not reinventing the wheel for each new project. Reduces costs by decreasing and achieving economies of scale in obtaining information from external providers. Increases productivity by making knowledge avaible more quickly and easily. Provides workers with a more democratic place to work by allowing everyone access to knowledge. Learning faster to stay competitive.

  13. Organizational Learning • Dodgson (1993) explains OL as • the way firms build, • supplement, • organize knowledge, • routines around their activities, • within their cultures, • adapt and develop organizational efficiency by improving the use of the broad skills of their workforces.

  14. Organizational Learning • Kullunga (2001) defined OL as encouraging a learning curve within an organization such that employees at all levels, individually and collectively, continually increase their capacity to improve their level of performance. • From these definitions, OL can be summarized as the set of actions to acquire, share and interpret knowledge among the members whose main objective is to increase company performance through improved quality of decision-making in the organization.

  15. Organizational Learning • The most important point is, the existence of a knowledge management infrastructure within the organization whose mandate is to identify, analyze,manage,maintain and disseminate knowledge to appropriate individuals within the organization and externally to others (Liebowitz et al., 1999). This can be only be achieved through the proper combination of relevant systems and skills that are influential in the learning process of an organization.

  16. According to Peter Senge, five learning skills are;

  17. Levels of Learning Jeffries et al. (2003) developed a perspective by defining the levelsof OL as three phases beginning at the individual level by interpreting and reflection, maturing at group level by integration and conceptualization and finally reaching the organization level by institutionalizing and experimentation. Individual Learning Group/Team Learning Organizational Learning

  18. Levels of Learning Individual Learning is the foundation for the existence of organization’s learning and it should be enhanced to lead to more effective OL. Group/Team Learning is an inseparable step of OL since teams provide new approaches to the learning process, cause fundamental organizational changes by functioning as a bridge between the individuals and the organization (Marquardt,1996). Organizational Learning requires the crucial step of the transformation of individual learning into OL.

  19. So, OL necessitates four main events defined by Crossan et al.’s (1990), The preconscious recognition of the possibilities inherent in a personal experience İntepreting, the explanation of an idea to oneself and to others. İntegrating,the developing of a shared understanding and coordinated action among individuals. İnstitutionalizing, the process of ensuring that actions are made routine. 1 2 3 4

  20. Types of Learning • Single-loop learning involves an organization to respond to changes in its environment by detecting errors and correcting them, but maintaning its existing organizational norms. • Double –loop learning, on the other hand, involves the revision of organizational culture, assumptions, guidelines, objectives, strategies and structure of an organization. It is a process of creative renewal and rediscovery of an organization to remain competitive (Senge 1990).

  21. Organizational Transformation • As Huber(1991) states, organizations whose structures, processes and technologies are not well suited to deal with the increasing enironmental complexity and knowledge are unlikely to survive. Around the shared vision and culture, organization should develop new strategies and structures so as to become a learning organization (Marquardt, 1996). For an organization, • Vision • Culture • Structure • Strategy

  22. Organizations • Vision: The vision of the organization is represented by the commitment for a certain goal, direction or hope for the future of the organization. According to Marquardt(1996), the first and the most important step in becoming a learning organization is to build a solid foundation of shared vision about learning. • Culture: Walsh and Ungson (1991) define culture as the conscious patterns of assumptions, values, and beliefs shared by a collective (cited in Berthon et al., 2001). Culture acts as a kind of knowledge filter; it specifies what information is of value,influences the interpretation of information and coordinates collective action taking (Weick, 1994 cited in Berthon et al., 2001).

  23. Organizations Structure: The key charasteristic of the structure of the organization is that, it links the various elements of the organization through the transformation of information. As emphasized by Salaman and Butler (1994), the organizational structures surrounding a project appear to centrally influence a project’s tendency to perform learning activities and to contribute to the knowledge of the permanent organization (cited in Kasvi et al., 2003). Strategy: Identification, capture and transfer of knowledge within the firm are expected to be in alignment with the organization’s strategic objectives. Strategy influences learning by providing a boundary to decision-making and a context for the perception and interpretation of the environment.

  24. Organizational Learning Processes Knowledge Acquisition Information Distribution Information Interpretation Organizational Memory

  25. Organizational Learning ProcessesKnowledge Acquisition External monitoring the environment Internal information systems manage and retrieve information research development education training patent watching

  26. Organizational Learning ProcessesInformation Distribution Informal Tacit know-how Letters Memos Conversations Stories by employees Formal Seminar Reports Information systems

  27. Organizational Learning ProcessesInformation Interpretation Huber (1991) states that individuals and groups have prior belief structures that shape their interpretation of information and thus the formation of meaning. So, to share the information firstly, it should be interpreted.

  28. Organizational Learning ProcessesOrganizational Memory Hard information Data Intranet/internet systems Warehousing Soft information Experiences Tacit know-how List of contacts

  29. Drivers for KM and OL in Construction Industry A learning organization is skilled at creating, acquiring, sharing, and applying knowledge, and embracing (fostering) change and innovation at all levels, resulting in optimum performance and maximum competitive advantage.

  30. Drivers for KM and OL in Construction Industry • To share valuable tacit knowledge • To develop new products • To become more innovative • To increase client satisfaction(faster response etc.) • To eliminate reworks

  31. Drivers for KM and OL in Construction Industry (Cont’d) • To disseminate(spread) best practices • To encourage continuous improvement • To improve business performance (better bid preparation skills etc.) • To enable employees to understand and apply knowledge to different scenarios

  32. Situation in UK in Terms of KM and OL Applications • 40% of construction organizations have KM strategy. • 41% plan to have a strategy within one year. • 90.5% use intranet to support KM activities. • A number of public funded researches investigate how KM could be utilized in construction sector. • Also, universities collaborate, with the industry in numerousother projects. Carrillo,2006

  33. Situation in US in Terms of KM and OL Applications Research on 30 construction organizations; • 50% of the companies utilize an “ad hoc” process to capture lessons learned. • 50% do not employ communities of practice (CoP). • 37% do not have a software to support KM activities. • 67% has a reactive attitude towards KM. Carrillo,2006

  34. Situation in Turkey in Terms of KM and OL Applications Research on 8leading construction companies; • TCA members • 5 of them listed in top 225 ENR list in 2005 • Ages range from 41 to 53 • Total revenues in 2005 range from 135 to 895 M $ Kıvrak, Arslan, Dikmen, Birgönül, 2006

  35. Situation in Turkey in Terms of KM and OL Applications Capturing Knowledge; • 6 companies who do not have a KM strategy consider 41-60% of the knowledge as tacit. • Companies who have a KM strategy considers 20% of knowledge as tacit. • Colleagues, company’s experience, personal experience, documentation and team meetings are seen as the major knowledge sources. • Internet is not considered as a major knowledge source. Kıvrak, Arslan, Dikmen, Birgönül, 2006

  36. Situation in Turkey in Terms of KM and OL Applications Storing Knowledge; • 5 companies evaluate projects after completion. • 2 of them stores these evaluations digitally. • Cost control and bid preperation data are recorded digitally and reused when required. • 6 companies do not have a database to combine all documents and records. • Data stored in; reports, computer files, personal archives and heads of individuals Kıvrak, Arslan, Dikmen, Birgönül, 2008

  37. Situation in Turkey in Terms of KM and OL Applications Reuising and Sharing Knowledge; • On-the-job training, intranet, meetings and face to face interactions and e-mail are the major means to share knowledge. • Companies generally rely on the individuals experiences and use stored data in emergency cases. • Knowledge Management Strategies; • 2 companies have KM strategies and 2 of them plan to implement a strategy in the future. Kıvrak, Arslan, Dikmen, Birgönül, 2008

  38. Situation in Turkey in Terms of KM and OL Applications • Research on 8 construction companies; • Learning from other companies experiences • Monitoring competitors performance & bid prices • Strategies of competitors • Use of web to learn practices of foreign companies • Learning from foreign joint venture partners • Quality • Health and Safety Assurance • Disagreement whether practices of companies from other industries can be useful or not Özorhon, Dikmen, Birgönül, 2005

  39. Situation in Turkey in Terms of KM and OL Applications • Research on 8 construction companies; • Learning from external sources; • Management consultancy firms • Universities • Foreign organizations (World Bank, etc.) • Professional associations (TCA, etc.) • Training consultancy firms • Governmental bodies (Chamber of Civil Engineers...) Özorhon, Dikmen, Birgönül, 2005

  40. Situation in Turkey in Terms of KM and OL Applications Shares of knowledge sources in organizational memory Composition of organizational memory in terms of knowledge type Özorhon, Dikmen, Birgönül, 2005

  41. Barriers to KM and OL Implementations

  42. Barriers to KM and OL Implementations A business development manager of Company E indicated that; ...experience gained through a project cannot be transferred to another engineer via paper; new employees cannot always show the same performance by reviewing the previous experiences of their pioneers... Özorhon, Dikmen, Birgönül, 2005

  43. Barriers to KM and OL Implementations • Difficulties in measuring the value added • Focus on projects instead of organizations • Traditions and conservative company culture • Cultural differences due geographical diversity • Instable workforce (high employee turnover) Chinowsky, 2007

  44. Barriers to KM and OL Implementations • Inappropriate IT Infrastructure • Insufficient time • Insufficient funding • Lack of executive support • Lack of standard work processes Chinowsky, 2007

  45. A Case Study on KM and OL Practices • - US based engineering design company; • # of employees: 6100 • Annual Revenue (2004): 720.5 $ M • ENR Ranking (2004): 12 • KM activites since 1997 • Main focus on people since 1999 • Knowledge communities • Knowledge bases • Major investments on IT infrastructure • Increase in winning projects attributed to KM and OL Carrillo, 2006

  46. Models Developed • To assist organizations in implementing KM and to measure their learning skills, several models are developed • Learning organization maturity model(1) • STEPS Model(2) • LEONARDO(1) • Knowledge Platform for Contractors(3) Chinowsky, Molenaar, Realph, 2007 Chinowsky, Carrillo, 2007 Kıvrak, Arslan, Dikmen, Birgönül, 2008

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