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2005-3

2005-3

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Lund Institute of Economic ResearchWorking Paper Series
Knowledge Management andOrganizational Learning:
Fundamental Conceptsfor Theory and Practice
2005/3Ron Sanchez
Ron Sanchez
, Professor of ManagementCopenhagen Business School, Solbjergvej 3 - 3rd floor, DK-2000 Frederiksberg, Denmark,sanchez@cbs.dk  Lindén Visiting Professor in Industrial Analysis, Institute of Economic Research, Lund, Sweden
 Abstract
 
This paper investigates several issues regarding the nature, domain, conceptual foundations, and practical challenges of knowledge management and organizational learning. The paper first identifiesand contrasts two fundamental philosophical orientations to knowledge management -- the
 personal knowledge
orientation and the
organizational knowledge
orientation -- and illustrates the distinctivekinds of knowledge management practices that result from the two orientations. It then summarizesthree essential organizational processes in knowledge management: (i) maintaining learning loops inall organizational processes, (ii) systematically disseminating knowledge throughout an organization,and (iii) applying knowledge wherever it can be used in an organization. A general model of organizational learning -- the Five Learning Cycles model -- is introduced to represent howindividuals, groups, and the overall organization are linked in an organizational learning process. Keychallenges in managing each of the Five Learning Cycles are discussed, and examples of appropriatemanagerial interventions are proposed for each learning cycle. Concluding comments suggest howknowledge management processes reflect a fundamental shift in management thinking and practicefrom traditional concepts of command and control to more contemporary concepts of facilitation andempowerment.
Jel-codes:
M1, M53
 
Keywords:
Knowledge management, Organizational learning, Learning cycles
 
ISSN 1103-3010ISRN LUSADG/IFEF/WPS-005/3-SE
 
1
Introduction
As a growing focus of concern within management, knowledge management is anarea of research and practice that is still searching for a stable set of core concepts and practical applications. This paper undertakes to contribute to this search by addressingsome fundamental questions about the nature, domain, conceptual foundations, and practical challenges of knowledge management and organizational learning.The first section of the paper considers two fundamental philosophical orientationsto knowledge management -- the “tacit” or 
personal knowledge
orientation
versus
the“explicit” or 
organizational knowledge
orientation. I describe the deep assumptionsunderlying each orientation, and the resulting differing emphases in knowledgemanagement concepts and practices that each orientation leads to. Examples drawn fromcurrent practice in several companies illustrate the distinctive kinds of knowledgemanagement practices that result from the two orientations.The second section proposes that there are three essential organizational processesthat must be functioning well in any effective knowledge management system: (i)maintaining learning loops in all organizational processes, (ii) systematicallydisseminating new and existing knowledge throughout an organization, and (iii) applyingknowledge wherever it can be used in an organization. I also argue that an organizationthat can carry out these processes effectively must develop processes for converting personal knowledge into organizational knowledge, and vice versa, on an ongoing basis.The third section presents the Five Learning Cycles model of organizationallearning. In this general model of learning processes in an organization, five kinds of learning cycles are identified that link individuals, groups, and the overall organization inan organizational learning process. The model makes clear how new knowledgedeveloped by individuals in an organization must navigate each of the Five LearningCycles to become accepted by other people in the organization, and then how newknowledge becomes embedded in the organization and its way of working. In effect, themodel shows at the macro level how personal knowledge is converted into organizationalknowledge, and vice versa, in processes for active and continuous organizationallearning.The fourth section discusses some key challenges in managing each of the fivelearning cycles so that active learning processes are maintained at the individual, group,or organizational levels. I also suggest some ways in which managers can help to prevent breakdowns and dysfunctions from occurring in each of the Five Learning Cycles, andthereby help to sustain overall organizational learning processes. Examples drawn fromrecent research into knowledge management practices help to illustrate the nature of suchmanagerial interventions.
 
I conclude with some comments on the ways in which the knowledge management processes discussed here reflect a fundamental shift in management thinking and practicefrom traditional concepts of command and control to more contemporary concepts of facilitation and empowerment.
 
2
1. Basic Philosophical Orientations to KnowledgeManagement
The growing stream of articles on and consulting approaches to knowledgemanagement practice today reveals a wide range of recommended processes andtechniques. Unfortunately -- especially for managers looking for insights to guideknowledge management practices -- many of these recommendations often seemdisconnected from each other, and in the worst cases, various recommended approacheseven seem to be contradicting each other. Analysis of current recommendations, however,suggests that the many ideas for knowledge management being advanced today can begrouped into one of two fundamentally different views of the nature of knowledge itself and of the resulting possibilities for managing knowledge in organizations. These twoviews are characterized here as the
 personal knowledge
approach and the
organizational knowledge
approach. The basic premises and the possibilities for knowledge management practice implied by each of these two approaches are discussed below.
1
(
Figure 1
 summarizes the fundamental differences in the assumptions underlying the twoapproaches).Some important advantages and disadvantages of the two approaches toknowledge management are then discussed. 
1
See also Ron Sanchez (forthcoming), “Personal knowledge versus Organizational Knowledge Approachesto Knowledge Management Practice,” in
The Knowledge Economy Handbook,
D. Rooney, G. Hearn, andA. Ninan, editors, Oxford: Routledge.

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