From what has been discussed above, first of all, an overview of previous empirical studies of integrative model and related ones would be to a greater extent highlighted in this chapter. Next, after a brief introduction of TSMC, the writer would manage to scrutinize the intertwined but unexplored parts on the practical status of implementing knowledge management in the subject, attempting to look into how effective and convincing the results could be on the company’s innovation finance performance and customer satisfaction.
Knowledge Management Strategies Definition of Knowledge Management Strategies
Knowledge has been viewed as a strategic resource for organizations to enhance competitive advantage (Drucker, 1993) and knowledge management (KM) is a set of processes transferring data and information into valuable knowledge. These processes include knowledge creation, acquisition, organization, application, sharing, and replenishment (Zack, 1999).
Knowledge management, as a discipline, is designed to provide strategy, process, and technology to increase organizational learning (Satyadas et al., 2001). Knowledge management strategy (KMS) is defined as a high-level plan that describes and outlines the processes and organizational and technological infrastructures required in managing any knowledge gaps (Satyadas et al., 2001; Zack, 1999). KMS is a means of continually systematizing all kinds of knowledge to meet the existing and emerging needs and to categorize the diversity before exploitation.
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A clear understanding of strategic relevance of organizational resources as well as processes helps to better define knowledge management strategies and alignment with the planning, execution, and assessment of integrated organizational strategy (Teece, 2000).
Nowadays, the existing knowledge useful for creative innovation has to be developed into effective management strategies so as to well organize their valuable intellectual capabilities.
Knowledge managers also need to sketch out some fundamental principles to prop up their corporate strategies as well (Jafari et al., 2009).
The significance of knowledge management strategies can be changed over time according to the evolution of an organization. Thanks to the dynamics of globalization, more and more organizations have increasingly relied on knowledge management strategies to make their work flow more efficient, contributable to their competitiveness, success, and survival. Therefore, in this chapter the writer will explain several classifications of knowledge management strategies appropriately functioned as the research model.
Taxonomy of Knowledge Management Strategies
Several researchers have described different knowledge management strategies.
Jordan and Jones (1997) had explored the crucial dimensions of organizational knowledge and split knowledge management strategies into two types: tacit-oriented strategy and explicit-oriented strategy. In these two strategies the suitable balance between them was deliberately emphasized so as to inspire innovative ideas for better performance.
Similarly, Zack (1999) categorized the knowledge management strategies into two types:
aggressive strategy and conservative strategy. This author further argued that the firms can concentrate on their internal knowledge exhibition by a conservative strategy. In contrast to
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the conservative strategy, the firms with ambition tended to explore knowledge without regarding to their organizational boundaries.
In the same year, Hansen et al (1999) also investigated several management consulting firms. What they had discovered were two very different knowledge management strategies:
codification strategy and personalization strategy. The former, in accordance with them, indicates that knowledge is cautiously stored in databases and accessed by employees for easy use in their company. On the contrary, personalization strategy means that knowledge is closely tied to the person sharing knowledge mostly through person-to-person contacts.
Swan, Newell, and Robertson (2000) criticized information technology-driven (IT-driven) knowledge management through a discussion of two case studies in which cognitive and community strategies were presented. Regarding the diversity of categories on knowledge management strategies, most researchers asserted that the two fundamental dimensions of knowledge management strategies should be taken into considerations: human orientation and system orientation (Choi and Lee, 2002). Table 2.1 represents some of the more common classifications of KMS. Due to future knowledge needs and the plan of filling the gaps between current knowledge and required knowledge, both human orientation and system orientation should be considered when establishing knowledge management strategies (Hansen et al., 1999; Zack, 1999). Likewise, from Choi and Lee’s (2002) research the two dimensional knowledge management strategies should include system orientation and human orientation detailed as follows.
Human orientation.
Acquired by interpersonal interaction, human orientation is one of the two dimensions with emphasis to knowledge sharing. Choi and Lee (2002) believed that knowledge can be
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obtained from experienced and skilled people. Therefore, this strategy is attempted to acquire the internal and opportunistic knowledge and share it informally (Jordan & Jones, 1997). In a word, the human-oriented strategy helps to share knowledge through person-to-person contacts. Besides, this dimension is also utilized to keep dialogue lively through social networks, including occupational groups and teams (Scott, 2000). The social networks are a way of sharing and distributing tacit knowledge through the prevailing online communities.
Members of these communities may share their implicit knowledge like experience and thoughts over the web (Liebowitz, 2001).
System orientation.
System orientation is another dimension emphasizing the capability of creating, storing, sharing, and utilizing the explicitly documented knowledge of an organization. One of the characteristics of system-oriented strategies is codifying and storing knowledge. In general, this strategy has been proven effective for sharing explicit knowledge. Consistent with Bloodgood and Salisbury (2001), the system strategy can be adopted to keep track of individuals with particular expertise and enable rapid communications.
Regardless the taxonomy of human-oriented or system-oriented strategy, adopting knowledge management strategies enables organizations to generate and acquire new knowledge and drive the application. Simultaneously, they are also urged to support storing, sharing, and transferring knowledge. To sum up, knowledge management strategies are run within and across organizational operations.
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Table 2.1.
Types of Knowledge Management Strategies
The Relationship between KMS and KAs
The development of organizational knowledge assets through organizational learning and knowledge management affects organizational capabilities (Hamel, 2007; Mills et al., 2002). On the other hand, effective knowledge management strategy is considered to be a necessary successful factor to create and manage core competencies on contemporary organizations (Tiwana, 2001). Moreover, knowledge management strategy also plays a significant role in identifying, classifying, and evaluating which types of knowledge assets are suitable to interacting with one another for creating capabilities and competencies. And the interaction helps to deliver sustainable competitive advantages as it makes these assets hard for competitors to imitate (Barney, 1991; Teece, 2000).
Author Year Categories of Knowledge Management Strategies Jordan and Jones
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In general, knowledge management strategies are utilized to leverage the mentioned assets with a view to systematic improvement in the process of achieving the increasing and firm performance (Freeze & Kulkarni, 2007). Different strategic research streams address the central role of knowledge as a resource for competitiveness, pointing out that companies differ on the basis of the ownership of heterogeneous, rare and difficult-to-imitate assets (Barney, 1991; Spender & Grant, 1996; Teece, 2000). With other management strategic approaches, it is important to identify the knowledge assets. The first task is to define the core capabilities and competencies that will allow an organization to execute the strategies (Kaplan & Norton, 2004).
The Relationship between KMS and KCP
After reviewing the definition of knowledge management strategies, previous studies have revealed that the capability to create and utilize knowledge can be enabled to develop sustainable competitive advantage in an organization because of its possession of heterogeneity, uniqueness, and immobility (Barney, 1991; Grant, 1996; Zack, 1999). After setting up the knowledge strategy in an attempt to construct its knowledge system, the goal then is to maintain the valuable assets as well as to create the sustainable performance innovation. As said by Nonaka and Takeuchi (1995), a set of knowledge conversion activities can be utilized for knowledge creation. Knowledge creation itself is a continuous process whereby individuals and groups within a firm and between firms share tacit and explicit knowledge (Bloodgood & Salisbury, 2001). Knowledge creation process has become one of the necessary determinants of organizational efficiency (Song, 2008). That is to say, knowledge management strategies facilitate the significance of integrating the organizational activities, like inspection of forward identification, storage, transfer, application, and measurement of knowledge system.
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The Relationship Between KMS and KE
Chuang (2004) claimed that knowledge management strategies can be implemented to provide specific directions in running knowledge activities and knowledge management enablers. Keskin (2005) also argued that companies should take appropriate knowledge management strategies that relate to knowledge entity. In other words, knowledge enablers are regarded as a vehicle of facilitating these activities. For different situations are also required different knowledge management strategies. However, the range of different knowledge management strategies is often confusing while choosing a proper strategy for the knowledge enablers (Bloodgood & Salisbury, 2001).
Knowledge Assets The Definition of Knowledge Assets
The latter stream of research defines knowledge assets as a major part of an organization’s capabilities (Sveiby, 1997; Teece, 2000). The research seeks to help managers in managing and evaluating the internal competencies. Edvinsson and Sullivan (1996) defined knowledge assets as the dynamic properties that share the leverage information and expertise that will increase the operational level of flexibility. To effectively solve problems and make more precise decisions, the taxonomy of knowledge assets called Knowledge Assets Map is included as stakeholder resources and structural resources. The first category is considered as the relationships with external parties, while the second one is deemed as the internal actors of an organization (Schiuma et al., 2007).
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The diagram of knowledge assets provides a broader framework that allows company managers to identify their internal critical knowledge areas. However, it can only offer the static base of the knowledge asset and does not indicate how these assets lead to value creation; especially knowledge assets interact with each other and get transformed along a value creation pathway, contributable to the overall business performance and value creation (Marr and Schiuma, 2004).
Some researchers suggested that organizations should plan the dynamic transformations or causal interactions of knowledge assets (Kaplan & Norton, 2004). They divided knowledge assets into individual and organizational levels. On the individual level of knowledge asset, it includes personal knowledge and individual skills and talents, while on the organizational level of knowledge asset, it comprises infrastructure, networking relationships, technologies, routines, trade secrets, procedures, and organizational culture (Bontis et al., 1999).
In 2007, Freeze and Kulkarni began to identify the knowledge assets and framework development through four knowledge management areas: knowledge repositories, learned lessons, expert networks, and communities of practice. Cognizant Enterprise Maturity Model – CEMM (Harigopal & Satyadas, 2001) was accordingly introduced. Alavi and Leidner (2001) incorporated the capability perspective while viewing the knowledge in their research.
Such a perspective is further incorporated with both the potential of influencing the future action and the capacity of using the information in building core competencies (Wasko &
Faraj, 2005).
Competencies are identified as dynamic capabilities, stressing the exploitation of existing internal and external firm-specific competences when addressing the changing environments (Teece et al., 2000). Viewing knowledge as an ability is to recognize that the
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capabilities are firm-specific and embedded in an organization and in its processes. They are also established internally and referred to as a firm’s capacity to deploy resources, while the resources are selected and can be purchased externally in the firm (Lev, 2001). Another identification of knowledge asset is called five knowledge capabilities: expertise, knowledge documents, learned lessons, policies and procedures and data. Based on it, the firm that can be built internally for presentation and description is identified as knowledge assets.
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Table 2.2.
The Classification of Knowledge Assets
Authors Year Taxonomy of Knowledge Assets
Brooking 1996
Knowledge that can be converted into value consists of four main components: market assets, human-centered assets, intellectual property assets, and infrastructure assets.
Edvinsson,
and Sullivan 1996 Intellectual material has been formalized, captured, and leveraged to produce a higher-valued asset.
Sveiby 1997 Sources of future benefits are generated by innovation, unique organizational designs, or human resource practices.
Nonaka et al. 2000 Knowledge assets consist of experiential, conceptual, systemic, routine assets.
Lev 2001
It is composed of all knowledge-based assets, distinguishable
between organizational actors, like relationships, HR, and virtual and physical infrastructures.
Schiuma 2007
Knowledge Assets Map is revealed on the individual and organizational levels. Its four domains encompass knowledge repositories, learned lessons, expert networks, and communities of practice.
Freeze and
Kulkarni 2007
Five knowledge capabilities comprising expertise, knowledge documents, learned lessons, policies, and procedures and data are argued.
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Despite widely recognizing the importance of knowledge assets as a vital source of competitive advantage, there is little understanding of how the organizations truly create and dynamically manage the knowledge (Nonaka et al., 2000). Freeze and Kulkarni (2007) had strongly stated that to more effectively research the capabilities, flows, and identifiable points of knowledge management, it is essential to segregate different types of knowledge assets.
Therefore, to discuss the application in this study, four types of knowledge assets – experiential, conceptual, systemic, and routine assets (Nonaka et al, 2000) – are adopted and shown in Figure 2.1.
Figure 2.1. Four categories of knowledge assets. Adopted from “SECI, Ba and Leadership:
A Unified Model of Dynamic Knowledge Creation,” by I. Nonaka, R. Toyama, & N. Konno, 2000, Long Range Planning, 33(1), p.29. Copyright 2000 by Pergamon Press Ltd.
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Experiential KAs.
Experiential knowledge assets comprise the tacit knowledge that is built through shared hands-on or working experiences among employees (Nonaka et al., 2000). They contain emotional knowledge, such as care, love, trust, and physical knowledge with the inclusion of facial expressions and gestures. Other instances are skills and shared mental models. Since experiential knowledge assets are implicit in nature and are difficult to imitate, they play a critical role in gaining a sustainable competitive advantage for a firm (Hansen et al., 1999;
Becerra-Fernandez & Sabherwal, 2001). Employees in organizations empathize with their colleagues to exchange a variety of knowledge in their work and problem solving.
Conceptual KAs.
Conceptual knowledge assets consist of explicit knowledge being articulated through images, symbols, and languages. These assets based on the perceptions are held by customers and employees of an organization (Nonaka et al., 2000). Conceptual knowledge assets usually have tangible forms and are easier to articulate. Examples of this type are models, hypotheses, concepts, analogies or metaphors (Alavi & Leidner, 2001). They contain the issues of what products need to be developed and the specific design features that need to be incorporated in the products.
Systemic KAs.
Systemic knowledge assets are composed of packaged explicit knowledge, such as explicitly stated technologies, product specifications, manuals, and documented and packaged information about customers and suppliers. In general, knowledge assets are embedded in its practices in the form of routines and operating procedures (Huber, 1991). Since systemic knowledge assets are visible and tangible, they can be transferred easily. In addition, they facilitate dynamic interaction in which individual units of knowledge are combined and
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exchanged through communication and collaboration across different functional groups (Nonaka et al., 2000; Freeze & Kulkarni, 2007).
Routine KAs.
This type of asset is made of the tacit knowledge that is embedded and regulated in the actions and practices of a firm. Know-how, working practices, organizational culture, and organizational routines for carrying out day-to-day business are common examples of routine knowledge assets (Nonaka et al., 2000; Scott, 2000). With the purpose of formulating the regular knowledge assets, organizational members continuously share, integrate, and exercise habitual practices to form certain patterns of thoughts and actions. It is mostly for the reason that the interaction and coordination among organizational members are critical in conducting the routine knowledge assets.
The Relationship Between KA and KCP.
Teece (2000) stated that “they must also be exploited internally in order for full value to be realized by the owner” (p.36). Knowledge assets can’t be bought and sold and need to be built in-house by organizations. The author further argued that the nature of knowledge itself makes organizational knowledge difficult to transfer as it is embedded in the organizational process, routines, and structure.
According to Nonaka et al. (1995) who developed the SECI model, they improved the theories of knowledge creation process in 2000. Nonaka, Toyama, and Konno started doing so from the dynamic view of an organization as an entity to create knowledge by quickly and continuously responding to the external environment. For knowledge creation process, the dynamic nature of knowledge assets and the flows between the actors and the infrastructure in the organizations should be highlighted (Nonaka et al., 2000). Knowledge assets are one of
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the fewest recyclable elements that can constantly be applied to create new knowledge (Wood, 2005). Meanwhile, knowledge assets as firm-specific resources are indispensable to create values for the company. Nowadays, many companies regard themselves as rapid learning organizations in the pursuit of the objective of continuous improvement in their knowledge assets (Senge, 1990). This means that knowledge assets are fundamental levers to manage knowledge creation process for enhancing business performance and the continuous innovations of a company (Marr and Schiuma, 2004).
Knowledge Enablers Previous Empirical Studies of KE
Some researchers (Edvinsson & Malone, 1997; Schiuma, 2009; Schiuma et al., 2007) ever proposed prevalent managerial models for the identification and assessment of knowledge management. They recognized knowledge enablers as preconditions of knowledge management. Knowledge enablers are characterized as influencing factors, which can facilitate such knowledge management activities as codifying and sharing knowledge assets among organizations (Chuang, 2004; Gold, 2001). To more effectively implement knowledge management, it is vital to recognize the variables of knowledge enablers.
Knowledge enablers are defined as the influencing factors for fostering the operation of knowledge management. Stankosky (2005) also defined knowledge enablers as the structural or functional conditions in organizations, helpful for the successive implement of a knowledge management initiative. Lee and Choi (2003) and Yeh et al. (2009) pointed out knowledge enablers as the key factor to support knowledge creation process by sharing, application, and protection in the organization. That is to say, knowledge enablers are utilized
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to provide the basic infrastructure for the organizations to increase the efficiency of knowledge processes. A wide range of knowledge enablers influencing the execution of knowledge management has been collected from previous studies and is shown in Table 2.3.
Table 2.3.
Categorizations of Knowledge Enablers
Authors Year Knowledge Enablers Categories
Gold et al. 2001 Infrastructure capabilities are composed of technology, structure, and culture.
Becerra-Fernandez and Sabherwal
2001 Tasks of process or content orientation, focused or broad domain.
Nemati 2002 Culture, Structure, IT infrastructure, Organizational and Managerial, Industry Specific.
Lee & Choi 2003 Culture of collaboration, trust, and learning, Structure of centralization, formalization, People with T-shaped skills, and IT support.
Chuang 2004 Technical resource, Structural resource, Culture resource, and Human resource.
Stankosky 2005 Learning, Leadership, Organization structure, and Technology.
Hsieh 2007 Corporate culture, People, Information technology, Strategy, and Leadership.
Yang et al. 2009 Trust culture, Centralization structure, T-shaped skills, and IT support.
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In 2001, Gold argued that knowledge enablers consist of leadership, strategy, people, culture, structure, and information technology. Lee and Choi (2003) further indicated that the variables of organizational culture such as learning, trust play significant roles on knowledge creation process. Similarly, Chuang (2004) scrutinized the features of knowledge enablers, arguing organizational structure, culture, and people are positively related to competitive advantages.
Stankosky (2005) suggested that successful applications of knowledge management need the integration and balancing of four knowledge management elements comprising leadership, learning, organization structure, and technology. Zaim et al. (2007) also proved that culture, technology, organization, and intellectual capital significantly affect knowledge creation process as well.
From the previous studies, information technology support, organizational structure, and culture are most frequently used. Specifically, technology, structure, and culture are crucial factors of influencing knowledge management (Gold et al., 2001).
Illustrating the Variable of KE as the Research Model
A variety of knowledge management enablers have been addressed in the literature. Paul (2011) constructed four types of knowledge enablers: organizational culture or trust, structure or centralization, people with T-shaped skills, and IT support Shown in Figure 2.3, such a framework will be adopted in this case study.
Organizational Trust.
The culture in an organization is the most imperative feature for successful knowledge management (Gold et al., 2001). Its culture influences not only the values of knowledge
The culture in an organization is the most imperative feature for successful knowledge management (Gold et al., 2001). Its culture influences not only the values of knowledge