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The International Conference on Administration and Business

­ ICEA - FAA 2009 ­ 14 – 15 NOVEMBER 2009 ­ http://conference.faa.ro ­
The Faculty of Business and Administration
University of Bucharest

The International Conference on Economics and Administration, Faculty of Administration and
Business, University of Bucharest, Romania
ICEA – FAA Bucharest, 14-15th November 2009

CRITICAL FACTORS TO KNOWLEDGE MANAGEMENT
IMPLEMENTATION

TOCAN Madalina Cristina;
Universitatea Ecologica din Bucuresti;
mada_popa@yahoo.com

Abstract commercial wisdom to their children, master
The globalization of business, the shift from craftsmen have painstakingly taught their
production-based to a knowledge-based trades to apprentices and workers have
economy, the growth of information exchanged ideas and know-how on the job.
communications technology, the strive to However, the terminology of knowledge
become learning organizations and the management was not widely used until the
emergence of the needs for knowledge workers middle of the nineties (Chaw et al., 2003).
have made knowledge management practice In the nineties, the characteristics of the
a must today across all types and levels of business environment have changed. The
firms. However, because the concept is so increasing globalization of business, leaner
new, there exist different views among organizations, products and service
practitioners and even researchers on how a convergence and vast development of
knowledge management program can be technology implied that the issues of more
designed and implemented in organizations. efficient and effective operation of an
This paper posits that knowledge organization’s knowledge assets have
management consists of critical enablers become more important than ever before.
such as employee training, employee Drucker fittingly warned us years ago that
involvement, teamwork, employee those who wait until this challenge indeed
empowerment, top management leadership becomes a “hot” issue are likely to fall
and commitment, organizational constraints, behind, perhaps never to recover. As
information system infrastructure, Drucker has predicted, knowledge has
performance measurement, egalitarian become the key economic resource and the
culture and knowledge structure that are dominant source of competitive advantage
critical to the success of a knowledge-based today.
organization. These critical factors will The main objective of this paper is to
provide a greater understanding to the identify the best practices that would make
researchers and practitioners of the enablers knowledge management program works in
of a successful knowledge management an organization. This paper posits that
program successful deployment of knowledge
management program depends on eleven
Key words: Knowledge, knowledge critical enablers such as employee training,
management, success factors, knowledge employee involvement, teamwork, employee
management initiatives. empowerment, top management leadership
and commitment, organizational constraints,
1. Introduction information system infrastructure,
performance measurement, egalitarian
Society has recognized the value of culture, benchmarking, and knowledge
knowledge for centuries. Intellectual structure. The paper proceeds to present the
reflection on knowledge has been pursued concept of knowledge management. Than the
for as long as records of human activities are key success factors emerged from the
available. For hundred of years, owners of literature are explored. The propositions of
family members have passed off their how the presence of these key success factors

816

). Over the last several years. important? (3) How does the author intend These include expertise. It is The text must provide answers for four made up of an individual's past.ro ­ The Faculty of Business and Administration University of Bucharest influence the successful implementation of The essence of knowledge management is knowledge management in organizations are built on intellectual capital. sources. and can easily be illustrated with reuse that lies in an enterprise's collective some examples. It also knowledges production and flux. Thomas Clarke and Christina Corporate Capital includes intellectual Rollo (Th. Christina Rollo. 2001). education and to answer to this matter? (4) What is the experience. (1) What matter does the paper future. The results of several consciousness. The knowledge management can be defined as a knowledge management challenge is to strategic orientated way of motivation and discover and capture our tacit intellectual facilitation of the company’s members capital (that contained in our people). Human Capital is our greatest resource. members. we each have a future capacity and a particular 2. thus creating the right distinguish itself from its competitors and conditions for new knowledge to be created. which includes then discussed. can be management: defining and conceptualizing a viewed as a process for optimizing the phenomenon (Journal of Knowledge effective application of intellectual capital to Management 1999) considers that “the achieve organizational objectives. and corporate functional “the organizations’ dedication to develop the and organizational processes. relationships and the interactions knowledge based organization it is across these networks built on those impossible without a knowledge based relationships. Conclusions are presented at Human Capital. Just as important as things four answers might result in paper rejection. all that has create economic value” been made explicit. Literature review potential for learning.faa." surveys that probed the views of executive 817 . Social Capital and the end of the paper." gain a competitive advantage.. there are a set of existent specialized literature? This capabilities and ways of seeing and living in introductory section shall be written clearly. Corporate Capital. present and questions. Social Capital is the stuff of communications The transition to the knowledge based and more. Knowledge assets asset management and innovation. Each of us brings a unique set of cover? (2) Why is the studied matter characteristics and values from the past. experience and capabilities of its Without question. Gartner Group states. intellectual economy and society. Built on these characteristics relation between the paper and the already and values from the past. share engagement in the development and this capital through Enterprise-wide utilization of their cognitive capacities connectivity. in length. the world (such as creativity and and any confusion in communicating the adaptability). Clarke. It includes human and virtual economy.. then. etc." Dow have often become more important to Chemical says it's "providing the right companies than financial and physical assets information to the right decision maker at and are often the only way for a company to the right time. best practice transfer. All three are essential The introduction shall be at most two pages components of Enterprise Knowledge. "Knowledge Evidence that the importance of KM is a management is a coordinated attempt to tap significant issue may be found in many the unrealized potential for sharing and areas. ideas. personal increasingly become a knowledge-driven learning. and leverage Corporate Capital through the valorization of its information (that which is visible or explicit). The International Conference on Administration and Business ­ ICEA . customer intelligence. we says. knowledge management. and the awareness of it. management. to transmit includes all the data and information and utilize the knowledges with a view to captured in corporate databases. from the past and skills of the present. Uit Beijerse in “Questions in knowledge Knowledge management. has become So what exactly is knowledge management? increasingly important in today’s business The American Productivity & Quality Center environment. property. defines knowledge based management as patents.FAA 2009 ­ 14 – 15 NOVEMBER 2009 ­ http://conference.g. "Knowledge management is a business have witnessed the emergence of what has strategy. the design and functioning of the networks. both formal and informal (e. however not less than half a page.

shared knowledge. b. Roche. trustworthy teamwork. senior management support and times by two-thirds and the cost per call has commitment. (2003). The analyses of In my opinion the key success factors for KM these factors provide an important meaning are: to knowledge management through the a. (1996). 6 % of annual revenue has been variables for successful implementation of forgone due to missed knowledge knowledge management. an open organizational culture. information systems infrastructure. Over a six-year d. Thus. has realized an ROI of Perhaps the most comprehensive list of 668% on its KM programs (Swanborg & success factors has been presented by Myers. a knowledge management company’s competitiveness with improved program needs to identify critical KM and 76% believe that building and performance indicators of success factors to sharing knowledge is important for their gauge its performance. customer service have reduced average call h. Another study of In achieving this. The International Conference on Administration and Business ­ ICEA . e. knowledge-friendly culture. it was found that opportunities. capitalize on its intellectual property have c. In spite of these surveys sited above. reports identified: that its clients enjoy an average ROI of 12:1 a. performance measurement. Finally. teamwork. and over 64 % said that their ROI a. annually by instituting a best practices b. Digman asserts that the critical success f.ro ­ The Faculty of Business and Administration University of Bucharest managers are intriguing. one critical to successful knowledge management survey found that 87% of European business implementation. employee involvement. benchmarking. 2001). to organizational success. From the feel that they have missed business analyses of the models. on several studies have proposed several key average. information systems infrastructure. For example. Chevron Corporation Ryan and Prybutok (2001) propose five estimates that it saved an initial $150 success factors such as million. a firm that Moffett et al. as elucidated by Quinn et directors believe they could enhance their al. Prusak. For instance. senior management leadership and commitment. Hewlett. Knowledge management success c. Employee involvement 818 . Schlumberger Corp. fallen by 50 percent. employee training. knowledge structure. management initiatives (Davenport & e. has share and use knowledge. organizational infrastructure. factors d. important link between environmental i. implementing successful knowledge d. 2003). motivated workers who develop. evolution and examples abound of organizations ease-of-accessibility to knowledge. period since its investment of $72 million. f. for their efforts. balance of flexibility. factors is useful for structuring g. employee empowerment. company (Williams. a friendly organizational culture. 3. plus at least another $20 million a. Dow Chemical’s efforts to commitment. various information technology Packard’s knowledge efforts aimed at infrastructure. analysis and critical success factors leading j. estimated that it saves over $1 million per g. Teltech. technology infrastructure. various knowledge 500 firms conducted by KPMG illustrated management models have been reviewed so that 80 % of senior executives feel that KM that a unified framework of knowledge is strategic to their organization and 78 % management can be developed. saved it over $40 million. 1998. and Myers.faa. employee involvement. b. the Swiss pharmaceutical firm. 1997). means of knowledge transfer using day due to its KM activities. Ten key components to specializes in aiding companies to implement successful knowledge management were knowledge management programs. that their average spending Davenport have identified eight knowledge on knowledge programs is < 2 % of annual management success factors such as revenue. senior management leadership and program. c. opportunities. environmental analysis because there is an h. Hoffmann. on their knowledge efforts was unknown. The study estimated that. e. Employee training identification of core processes that are b.FAA 2009 ­ 14 – 15 NOVEMBER 2009 ­ http://conference.

a number implementation of knowledge management. This is true techniques aimed at sharing information. the most important teamwork as one of the critical factors for competitive advantage to any firm is its successful knowledge management workforce – one that must remain competent implementation. apply diverse skills and experiences towards its processes and problem-solving. The recognition of the i.faa. However. So. improve their overall organizational performance. Knowledge structure importance of employee tacit knowledge is j. lower costs and the right way to gather knowledge from faster cycle times. it allows organizations to management principles. By insufficient training to support knowledge creating teams. For the same reason. This is possess may be difficult to articulate because because one of the reasons for the failure in it is so deeply embedded in routines and effective work behaviors would be practices that are taken for granted. Creating a high involvement and commitment organization involves making choice about f. it must Employee involvement is an array of start with quality training.FAA 2009 ­ 14 – 15 NOVEMBER 2009 ­ http://conference. so they are d. It describes how employees can various disciplines can come together and contribute effectively to meeting the create new knowledge. Rapid advances and technology Open and trustworthy spirit of and improved processes have been important teamwork factors helping businesses meet this Many researchers have recognized challenge. Knowledge-friendly culture contribute more. rewards and authority. of organizations have become or are striving This is because knowledge that individuals to become learning organizations. Employee empowerment encouraging employees to share this e. A well- line purpose through training and staffed team is crucial for successful development. It refers to the degree that employees share information. They are the ones that must information to fulfill their responsibilities. because in virtually every market. through continuous training and Teams are the units that actually carry out development efforts. Employee involvement the focus of business and knowledge Employee involvement in making management application is on providing an organizational decisions is a well-researched environment in which knowledge workers of area. truly knowledge-based organization. access and apply distributed knowledge Improved performance is a strategic goal for effectively. Teamwork is an essential source organizations in order to achieve the bottom of the knowledge generation process. and self-efficacy that emerges when people Researchers found that employee are given power in a previously powerless involvement is one of the critical factors for situation. customers knowledge. but on the willingness of importance of employee training to employees to convert tacit knowledge of the knowledge management implementation work process into continuous process success. if a company wants to become a improvement and innovation. rewards and power throughout Empowerment refers to a feeling of control the organization. Visible top management leadership knowledge. It means eliminating the knowledge management implementation bureaucratic controls and creating a sense of success. Corporate leaders are realizing that freedom so that people can commit all their 819 . Performance measurement which individuals know more. Information systems infrastructure organizational design that creates a world in g. firms must continually for an organization to survive. After all. Elimination of organizational based on the assumption that successful constraints performance improvement may not only Employee training depend on how work is organized.ro ­ The Faculty of Business and Administration University of Bucharest c. organization’s objectives. The International Conference on Administration and Business ­ ICEA . do more and h. and the Numerous studies have pointed out on the skill of the worker. It is thus are demanding high quality. Training provides the work in many knowledge-intensive employees and managers the skills and organizations.. Empowerment knowledge. Open and trustworthy spirit of employee knowledge is a critical resource for teamwork competitive advantage. To meet these various levels of management and essential requirements.

A majority of business will fail if employees do not have a sense of managers believe in the powers of computers ownership in the overall aim of the and communication technologies that lead to organizational knowledge management knowledge management implementation system. It is – important to themselves and others. Only strong leadership could successfully completing the task. independence and discretion – of the organization. reveals that respondents consider knowledge management strategic to their business and Top management leadership and the most popular information technology commitment tools for managing knowledge are relational Many researchers have insisted that top databases. To realize the potential of success. organize and share survey conducted by “InformationWeek” knowledge (Martinez. organizational unmanaged and underleveraged. poor As a matter of fact. enterprise they need knowledge that will enable them leadership must provide the proper to comprehend and contribute to the environment to motivate its workers to performance of the organization. knowledge (Bhatt. knowledge management. one is the knowledge management. After all. that is. 1998). most organizational success in organizations. 2001). The International Conference on Administration and Business ­ ICEA . Structural capital and that it is no longer sufficient to leave it includes the databases. organization to implement the knowledge Top management is increasingly recognizing management process. management is unthinkable without Effective creation and sharing of knowledge information systems. In fact. communicating that over their work activities. data warehouses and are the most critical factors for a successful data sharing tools (Davis & Riggs. particularly An effective information systems in knowledge creating and culture sharing infrastructure is necessary for the activities. therefore important that senior management Empowered employees also have control over recognizes its importance. This is enable the creation. a ways to capture. 1999). process manuals. organization and because when individuals are empowered. sharing of knowledge. the success of and also a feeling of self-efficacy. Financial Post 300 firms and US Fortune Through empowerment. groupware. Further. employers can value 500 firms view information technology as their employees’ expertise and help them one of the most critical success factors for communicate their knowledge by creating knowledge management success. survey top executive of both Canadian learning and experience of their employees. they begin to take extra responsibilities to solve organizational problems by learning Information systems infrastructure new skills in their jobs. knowledge management project. The charts. Without the performance feedback that guides their work support of top-level managers. text and document search management leadership and commitment engines. Leadership is Empowered employees are given autonomy – responsible for creating the knowledge vision the freedom. strategies and effective management of knowledge is routines and anything whose value to the increasingly seen as an important basis for company is higher than its material value. provide the necessary direction. Information that the knowledge inherent in an technology can provide an edge in harvesting organization is an extremely valuable asset. According to a knowledge comes from the expertise. Leadership establishment of a broad information 820 . which will Many researchers have supported the notion eventually lead to them being more that effective and efficient knowledge competent.ro ­ The Faculty of Business and Administration University of Bucharest talents and energies to accomplish their commitment to the knowledge management shared goals process is essential.faa. They are assigned vision. If employees are to feel empowered. and building a culture that regards work that has high levels of task significance knowledge as a vital company resource. knowledge management activities is they believe that they are capable of cumbersome. Davenport points out two leadership quality has been identified as a most critical factors for the successful threat to successful implementation of knowledge management project.FAA 2009 ­ 14 – 15 NOVEMBER 2009 ­ http://conference. where an Many researchers have regarded employee enterprise will need to implement and empowerment as one of the critical factors effectively deploy a knowledge management for knowledge management implementation strategy. competitive advantage.

As an organization includes the brain of its storage forms an important part of employees. after financial performance can be misleading and having primarily focused efforts on counter productive in a development information technology. According to knowledge-friendly culture must be present Ellis. One of the recent Organizational culture as a concept is developments of intellectual capital considered to be a key element of managing measurement model by the American organizational change and renewal. decision-making Many researchers have found a positive orientation. including how it ratios or indicators for measuring encourages employees to build the management efficiency. Culture practices reflect how the organizations can measure some of its organizations view and facilitate both intangible assets and use non-financial learning and innovation. Besides financial performance. Knowledge bases and capital and the intangible assets on the Intranets are the most popular ways of company balance sheet is an example. organizational purpose. the processes knowledge management activities. innovation and productivity. Bavon defines performance measurement as the collection of information about Knowledge-friendly culture effectiveness and productivity of individuals. identity for the organization. performance measurement system as a key factor for the successful knowledge Performance measurement management implementation. the new theory of the now realizing the importance of the “soft” organization must be expanded to capture aspects of knowledge management the impact of knowledge on organizational initiatives. measuring intellectual transfer of knowledge. Society of Training and Development since knowledge management is a radical 821 . people at the right time. which in turn Performance measurement is related to the defines how the organization runs day to key areas of the organization. As such. It has helped measurable not only by traditional financial an organization to manage and leverage its measures but also by other performance knowledge systematically and actively. which provides an groups and larger organizational units. prosperity of an organization. compliance. measurement and successful knowledge There is a general agreement that a management implementation. The implementing knowledge management second set of key measures of financial reports performance is to evaluate effectiveness. inefficiency of this part will disable Thus.faa. measurements. knowledge cannot be stored. organizational knowledge base in ways that Pearson (1999) insists that effective enhance values for the customers. Thus. their know-how. legitimate base of power. Culture is a set of beliefs. A study knowledge delivery can be achieved by conducted by the American Productivity and finding the right system of measurements. Lotus Notes and global solutions geared towards profit making in communications systems for effective commercial firms. practitioners are environment. The set of beliefs includes expansion. The second One is a core set of measures to enumerate is being the utilization of the network the intellectual capital stocks that are technology infrastructure such as the common to most organizations. Most of the Internet. Knowledge must be Without information technology and measured because the intellectual capital of computers. The International Conference on Administration and Business ­ ICEA . the location of authority. it is clearly necessary to include knowledge management. the and customer knowledge that they create.ro ­ The Faculty of Business and Administration University of Bucharest systems infrastructure based on desktop Working Group reveals two perspectives. leadership style. criteria of which is critical to the development of performance. performance. relationship between performance evaluation and motivation. computing and communications. Quality Center shows that 40 companies are as well as better ways of building and known to have corporate culture that delivering the right information to the right supports knowledge sharing.FAA 2009 ­ 14 – 15 NOVEMBER 2009 ­ http://conference. such as day. Information systems have provided Regardless of the type of knowledge (tacit or knowledge management with capabilities explicit). its contribution must be that were not possible before. traditional management and or nurtured in order for knowledge measurement techniques that focus only on management implementation success.

Conclusions and implications implementation. Organizational constraints development of knowledge within an result in not only a rigid preoccupation with organization. Knowledge can be lack of incentives to be creative and lack of created individually. The International Conference on Administration and Business ­ ICEA . An hierarchical bureaucracy with few incentives open culture built around integrating to innovate. reliable. which intervention to the organization’s culture.faa. The product development and refinement knowledge-based economy (k-economy) in decisions and to come up with new. It includes knowledge about internal and has been identified that the biggest external customers. standard operating procedures. numerous sources. be problems for the knowledge management useful. knowledge management success. An implement knowledge management international survey of the approaches successfully adapted to knowledge management in 500 companies reveals that 80 percent of Elimination of organizational respondents cited “existing organizational constraints culture” as a major barrier to the Successful knowledge management implementation of knowledge-based system. They tend to create implementing knowledge management. Hierarchical bureaucracy means individual skills and experiences into every task is broken into simple parts. it is regarded as an well-established knowledge structure. up-to-date and timely knowledge can implementation. This is because organizational major barrier to effective knowledge constraints can affect negatively the transfer. Many organizations have recognition of knowledge as key and in fact brought suppliers and customers into intangible asset are making the effective the organization fold to share ideas for their management of knowledge a priority. Thus. The pressure of the emergence of suppliers are their sources of product and the global knowledge-based economy and service innovation. Specifically. suppliers as well as challenge in knowledge management is not a organizational work groups in order to technical one but a cultural one. Since organizations are striving to improve Knowledge management is emerging as a their bottom line. many of them have significant organizational and management realized the importance of customers and challenge. To create a knowledge friendly culture. Knowledge creation can be based on Bonaventura claims that rigid regulations. there must be a organization. especially with the role Organizations are striving to form strategic played by information and communications partnerships with customers so that the technology which acts as a catalyst to the relationship becomes a long-term development of knowledge. each organizational knowledge will be more has the responsibility of a different level of successful. very rapid pace. Many the constraints that impede knowledge researchers have identified knowledge management implementation success. for a knowledge be captured and created by sharing management program to be successful. ineffectiveness and environment of a company before powerlessness. knowledge with other members of work organizations must strive to eliminate all groups. suppliers and customers. another survey on 430 firms finds organizations cannot eliminate that a majority of respondents recognized organizational constraints that present in an that their internal cultures represent a organization. Knowing the importance of business phenomenon for the knowledge 822 . A culture of confidence and trust employees. and each defined by specific rules is required to encourage the application and and regulations.ro ­ The Faculty of Business and Administration University of Bucharest innovation or changes the operations of an customers and suppliers.FAA 2009 ­ 14 – 15 NOVEMBER 2009 ­ http://conference. It has become a proposition. it is Organizational constraints lead to important to consider the cultural inefficiency. implementation may not be achievable if Similarly. structure as one of the critical factor for successful knowledge management 5. and that employees’ behavior would perception and/or attitudes toward have to alter . the intelligence age is moving forward at a innovative products and services. but vertical chains of command and slow response as Knowledge structure well. in groups and on an commitment in budgeting and funding would organizational level.

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