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What is Knowledge Management?

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DOI: 10.4018/9781599042619.ch001

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 What is Knowledge Management? 

Chapter I

What is Knowledge
Management?
Murray Jennex, San Diego State University, USA

Abstract
This chapter defines knowledge and knowledge management (KM) and establishes its roots.
KM is not a brand new topic; organizational learning and organizational memory are related
topics that have been fields of research for many years. This chapter relates these concepts to
a relational model that shows that the three topics are related and influence organizational
effectiveness. Additionally, this chapter explains that KM has become a research area due
to a confluence of trends that have made KM necessary and technically useful.

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of Idea Group Inc. is prohibited.
 Jennex

Introduction
Knowledge management (KM) is a hot topic in many business communities. Although, the
term Knowledge Management might suggest a rather simple definition, there are plenty of
opinions on what exactly it is and how it should be used, if used at all. However, because
of the ever-increasing pace of business development, the task of effective and competitive
management of organizations becomes essential, and KM, if understood and implemented
properly, may be a useful tool for business transformation as well as the key to competitive
advantage. In this first chapter I would like to introduce the basic definitions and concepts
of KM.
I thought this would be an easy chapter to write, as it seemed that we all knew what we
were talking about when discussing KM. However, I became aware of the need to establish
a definition of KM through the publication of an expert opinion in the Business Intelligence
Journal. The editors asked three experts (this author included) about integrating KM and
data warehouses. When the issue was released, I was surprised that the three experts all had
different opinions on what KM was (Corral, Griffin, & Jennex, 2005). One expert described
the purpose of KM as disseminating knowledge quickly and KM systems as essentially
document management systems. The other expert considered KM as the process of handling
unstructured knowledge. The final view (mine) combined technical and organizational ini-
tiatives to manage structured and unstructured knowledge in order to help the organization
improve its effectiveness through improved retention and reuse of knowledge. Three experts
expressed different definitions of KM and illustrated the need to define KM so that there is
a common ground for discussion. The first step, though, is to define what is meant by the
term knowledge, since this is the central theme in KM.

Knowledge
Davenport and Prusak (1998) view knowledge as an evolving mix of framed experience,
values, contextual information, and expert insight that provides a framework for evaluat-
ing and incorporating new experiences and information. They found that in organizations,
knowledge often becomes embedded in documents or repositories and in organizational
routines, processes, practices, and norms. They also say that in order for knowledge to
have value, it must include the human additions of context, experience, and interpretation.
Nonaka (1994) expands this view by stating that knowledge is about meaning in the sense
that it is context-specific. This implies that users of knowledge must understand and have
experience with the context, or surrounding conditions and influences, in which the knowl-
edge is generated and used in order for it to have meaning to them. This also implies that
in order for a knowledge repository to be useful, it also must store the context in which the
knowledge was generated. That knowledge is context-specific and argues against the idea
that knowledge can be applied universally; however, it does not argue against the concept
of organizational knowledge. This chapter considers organizational knowledge to be an
integral component of what organizational members remember and use, meaning that
knowledge is actionable.

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 What is Knowledge Management? 

Various knowledge taxonomies exist. Alavi and Leidner (2001) and Jennex and Croasdell
(2005) found that the most commonly used taxonomy is Polyani’s (1964, 1967) and Non-
aka’s (1994) dimensions of tacit and explicit knowledge. This book uses this taxonomy for
knowledge. Tacit knowledge is that which is understood within a knower’s mind. It consists
of cognitive and technical components. Cognitive components are the mental models used
by the knower that cannot be expressed directly by data or knowledge representations and
also is known as unstructured knowledge. Technical components are concrete concepts that
can be expressed readily and also is known as structured knowledge. Explicit knowledge
also consists of these technical components that can be expressed directly by knowledge
representations. Knowledge transfer in an organization occurs when members of an organi-
zation pass tacit and explicit knowledge to each other. Information technology (IT) assists
knowledge transfer by providing knowledge repositories and methods for capturing and
retrieving knowledge. The extent of the dimension of the knowledge being captured limits
the effectiveness of IT in assisting KM. IT works best with knowledge that is primarily in
the explicit dimension. Knowledge that is primarily in the tacit dimension requires that more
context be captured with the knowledge in which context is the information used to explain
what the knowledge means and how it is used. Nonaka and Takeuchi (1995) propose four
modes of knowledge transfer and creation (known as the SECI model):

• Socialization is the process of sharing experiences and thereby creating tacit knowledge
such as mental models and technical skills. Tacit knowledge can be obtained without
using language through observation, imitation, and practice.
• Externalization is the process of articulating tacit knowledge in the form of explicit
concepts, taking the shapes of metaphors, analogies, concepts, hypotheses, or mod-
els.
• Combination is the process of systemizing concepts into a knowledge system by
combining different bodies of explicit knowledge. Explicit knowledge is transferred
through media such as documents, meetings, and e-mail and/or phone conversations.
Categorization of this knowledge can lead to the generation of new knowledge.
• Internalization is the process of converting explicit knowledge into tacit knowledge
and is closely related to learning by doing.

These four modes or processes show that the transfer of knowledge is dependent upon the
transfer of a common understanding from the knower to the user of the knowledge. Com-
mon understanding consists of the context (the story behind the knowledge, the conditions
and situations that make the knowledge understandable) and the experience (those activities
that produce mental models of how the knowledge should be used) expressed in a culturally
understood framework.

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 Jennex

Knowledge Management

Jennex (2005) defined KM as the practice of selectively applying knowledge from previous
experiences of decision making to current and future decision-making activities with the
express purpose of improving the organization’s effectiveness. Also, Jennex (2005) viewed
a KM system as that system created to facilitate the capture, storage, retrieval, and reuse
of knowledge. This perception of KM and KM systems is that they holistically combine
organizational and technical solutions to achieve the goals of knowledge retention and re-
use in order ultimately to improve organizational and individual decision making. This is a
Churchman (1979) view of KM that allows KM systems to take whatever form necessary
to accomplish these goals. For some organizations, this may mean that the KM system es-
sentially is a document management system. However, as a community, we don’t want KM
perceived essentially as a document management technology. Also, in some organizations,
KM may be used only to manage unstructured knowledge. This may meet those organiza-
tions’ needs, but again, the KM community is not comfortable accepting that KM handles
only unstructured knowledge. Another key definition of KM includes Holsapple and Joshi
(2004), who consider KM as an entity’s systematic and deliberate efforts to expand, cultivate,
and apply available knowledge in ways that add value to the entity in the sense of positive
results in accomplishing its objectives or fulfilling its purpose. The entity’s scope may be
individual, organizational, transorganizational, national, and so forth. Finally, Alavi and
Leidner (2001) in their seminal work concluded that KM involves distinct but interdependent
processes of knowledge creation, knowledge storage and retrieval, knowledge transfer, and
knowledge application.
It is important to note that none of these definitions of KM ise purely technical in nature.
They all include information system (IS) support, but they also include organizational con-
siderations, and all include an impact on organizational productivity and effectiveness. This
is important, because many experts consider KM to be a form of IS. However, while the IS
component is important, in order for KM to be effective as a change or transformation tool,
it must include more; it requires management support and an organizational culture.
A better understanding of KM is obtained by incorporating the concepts of organizational
memory (OM) and organizational learning (OL). Jennex and Olfman (2002) found that the
three areas are related and have an impact on organizational effectiveness. Organizational
effectiveness is how well the organization does those activities critical to producing what
the organization sells. OL is the process the organization uses to learn how to do these
activities better. OL results when users utilize knowledge. That OL may not always have
a positive effect is examined by the monitoring of organizational effectiveness. Effective-
ness can improve, get worse, or remain the same. How effectiveness changes influences the
feedback provided to the organization using the knowledge. KM and OM are the processes
used to identify and capture critical knowledge. Knowledge workers and their organizations
“do” KM; they identify key knowledge artifacts for retention and establish processes for
capturing it. OM is what IT support organizations do; they provide the infrastructure and
support for storing, searching, and retrieving knowledge artifacts. Figure 1 illustrates these
relationships, and the following sections expand on these concepts.

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 What is Knowledge Management? 

Figure 1. The KM/OM/OL Model (Jennex & Olfman, 2002).

Impact to Organizational Effectiveness

EEEffectiveness
Access and Use Memory to perform actions
that affect Organizational Performance
Management Org
Knowledge Users
Learning
Evaluate Events for Use of Applicable
Monitor Organizational Effectiveness Memory to perform actions that affect
and AdjustKnowledge Requirements Organizational Performance
as needed

Knowledge
Engineers
System
Designers/IT
KM OM
Drives Users to put Information
and Knowledge into their OMS

Identify and Acquire Store, Retrieve, and Search

Knowledge for future use Memory Base

Organizational Learning
Organizational learning (OL) has been defined as a quantifiable improvement in activities,
increased available knowledge for decision making, or sustainable competitive advantage
(Cavaleri, 1994; Dodgson, 1993; Easterby-Smith, 1997; Miller, 1996). Malhotra (1996)
defines Organizational Learning as the process of detection and correction of errors. In this
view, organizations learn through individuals acting as agents for them. Individual learning
activities are seen as being facilitated or inhibited by an ecological system of factors that
may be called an organizational learning system. Learning in this perspective is based on
Kolb’s (1984) model of experiential learning in which individuals learn by doing.
Huber, Davenport, and King (1998) believe that an organization learns if, through its pro-
cessing of information, its potential behaviors are changed. Huysman, Fischer, and Heng
(1994) as well as Walsh and Ungson (1991) believe organizational learning has OM as a
component. In this view, OL is the process by which experience is used to modify current
and future actions. Huber (1991) considers four constructs as integrally linked to OL: knowl-
edge acquisition, information distribution, information interpretation, and organizational
memory. In this case, OM is the repository of knowledge and information acquired by the
organization. Organizational learning uses OM as its knowledge base.
A different perspective on OL from Sandoe et al. (1998) is that organizations do not learn;
rather, only individuals learn. During work, people gain experience, observe, and reflect in
making sense of what they are doing. As they analyze these experiences into general abstrac-
tions, their perceptions on how work should be done changes. As these individuals influence
their co-workers, the “organization” learns, and the process gradually is changed. Learning
in this perspective also is based on Kolb’s (1984) model of experiential learning.

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 Jennex

Organizational Memory

Huber, Davenport, and King (1998) summarize organizational memory (OM) as the set of
repositories of information and knowledge that the organization has acquired and retains. Stein
and Zwass (1995) define OM as the means by which knowledge from the past is brought to
bear on present activities, resulting in higher or lower levels of organizational effectiveness.
Walsh and Ungson (1991) define OM as stored information from an organization’s history
that can be brought to bear on present decisions.
OM can be viewed as abstract or concrete. It is comprised of unstructured concepts and
information that exist in the organization’s culture and the minds of its members, and can
be partially represented by concrete/physical memory aids such as databases. It also is
comprised of structured concepts and information that can be represented exactly by com-
puterized records and files. Sandoe and Olfman (1992) and Morrison (1997) describe these
two forms of OM as having two functions: representation and interpretation. Representation
presents just the facts (or knowledge or expertise) for a given context or situation. Inter-
pretation promotes adaptation and learning by providing frames of reference, procedures,
guidelines, or a means by which to synthesize past information for application to new situ-
ations. Comparing to the definition of knowledge, it is obvious that knowledge and OM are
related through experience and learning. We consider knowledge to be a subset of OM and
the processes of KM a subset of OM processes.

Knowledge Management Summary

IT summary knowledge is something that is actionable; that is, it is something that users can
retrieve and apply to organizational activities. KM is the process used to make knowledge
actionable to members of the organization. It involves capturing, storing, retrieving, and
using knowledge. KM involves the creation of a KM system. The KM system includes an
environment that promotes organizational learning. In this respect, KM can be an orga-
nizational change or transformation tool, as it can help management to create a learning
organizational culture. Also, KM is a tool for improving organizational effectiveness, as it
promotes knowledge reuse to improve decision making. Incorporating the concepts of OM,
OL, and the previous discussion, this chapter proposes this working definition of KM:

KM is the practice of selectively applying knowledge from previous experiences

of decision making to current and future decision-making activities with the
express purpose of improving the organization’s effectiveness.

This definition, while perhaps not perfect, does represent the idea that when organizations
implement KM, they are doing so with the expectation that organizational effectiveness will
be improved and that organizational members will do this by acting on and using knowledge.
The remaining chapters in this book may use differently worded definitions of KM, but all
agree with this discussion and the spirit of this working definition.

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 What is Knowledge Management? 

This chapter concludes with a discussion on why KM has become an important organiza-
tional endeavor.

Why Knowledge Management?

This book is written with the assumption that KM is something that modern organizations
need to do. It is expected that readers will read with the assumption that they need to imple-
ment KM in their organizations or that KM is something important to research. However,
KM is a relatively new discipline (as discussed in the next couple of chapters), and it is
worthwhile to conclude this chapter with a short discussion on why KM has become this
important of an endeavor.
Jennex (2006) summarizes a workshop discussion at the 2006 Hawaii International Confer-
ence on System Sciences (HICSS) on the origins of KM and why KM came into prominence
in the late 1990s. The following paragraphs summarize Jennex (2006).
Many consider the popularization of the term by Davenport and Prusak (1998), with the
publication of “Working Knowledge,” as the beginning of KM. However, there was a conflu-
ence of trends in the mid-1990s that actually caused KM to become an important topic.
The first trend was the fallout from the business process reengineering (BPR) fad of the
early 1990s. This business process led many organizations to restructure their businesses
by changing processes and reducing staff. These staff reductions led to many organizations
discovering that they had lost key knowledge and were no longer as nimble and innovative
as they needed to be. This loss of knowledge provided a driver for identifying and managing
knowledge that was internal to the organization.
The second trend was technology. The mid to late 1990s saw accelerated advancement in
the capability of the personal computer. Processing speed and memory grew rapidly (and
continues to grow); also, the Internet became a practical reality, providing connectivity to
many organizations and individuals. Additionally, the Year 2000 (Y2K) date problem was
a driver for many organizations to replace older computers with current models as well
as a driver to integrate and modernize organizational infrastructures. It was this trend that
enabled KM to develop by providing organizations with technological capabilities for or-
ganizing, storing, searching, retrieving, and manipulating large amounts of structured and
unstructured knowledge.
The third trend was the explosion in content, information, and knowledge caused by the
rapid growth of the Internet and corporate intranets, data warehouses, and databases. This
explosion in the amount of data, information, and knowledge and its easy availability to
decision makers of all ranks led to a loss of information and knowledge control by manag-
ers. This loss of control served as a driver to managerial awareness that there was a problem
that needed to be solved.
The fourth trend was organizational issues of maintaining business value and reducing risk
of litigation and overall liability by managing human and intellectual capital better. A shift
in many American businesses to a service-based economy led to an increasing focus on
an organization’s skills and capabilities as well as sustaining these capabilities by retain-

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 Jennex

ing high-value employees. This served as a driver to managerial awareness that employee
knowledge was a valuable organizational asset.
The confluence of these trends led to the behaviors observed by Davenport and Prusak (1998)
and to the emergence of knowledge management as a necessary discipline. Why do we care?
One of the major concerns is the sustainability of KM. We don’t want to waste our time and
energy on a fad; we want to make sure that what we are doing is sustainable. Some of this
concern is self-serving; we want to ensure that our peers recognize the importance of our
research so that our research will be accepted and published and we can obtain promotion
and tenure. Also, we want to ensure that we have a steady supply of students wanting to
study our discipline and that these students have careers waiting for them in industry. Finally,
we want to make a difference; we want to enable organizations to continue to prosper and
better utilize their resources, as ultimately, this leads to a better society.

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